Déjà vu All Over Again
In light of the recent Senate hearing featuring Anthony Fauci being harangued by Senator Rand Paul, his longtime nemesis, one would understand if you thought you were in a time warp and it was 2020 again. It seems we are not done litigating the Covid pandemic and the government’s response to it.
That is not altogether a bad thing as the passing of time can hopefully give us a more balanced perspective of these events. On the other hand, many of the people commenting on these events are the same ones who participated in the events as they unfolded. So, there is always the risk of these actors rolling out a narrative that protects their image or pushes their perspective in a way that is not necessarily historically accurate.
Much of the hearings were, like most congressional hearings, pure theater. This consists of a lot of virtue signaling to the base of both parties. Very little useful information is ever transmitted during these made for television melodramas. This was true of the hearings conducted by Senator Paul. I say that even though I in large part agree with Senator Paul’s focus on getting to the truth of how Covid developed and what, if any role did US support for lab testing contribute to this.
Separate from the theatrical nature of the hearings, what can we conclude about the Covid pandemic and the governmental response to it?
A Question Fauci Can’t Answer
At the aforementioned hearing Anthony Fauci sat before the Senate Homeland Security and Governmental Affairs Committee and said virtually nothing. He invoked his 5th Amendment right under the constitution to remain silent. As a matter of law, we cannot infer legal guilt from the exercise of a constitutional right. Yet, Fauci has had more than 250 appearances before Congress over more than 40 years. These appearances have covered HIV, Anthrax, Ebola, and Zika. He is easily the most recognizable physician in the U.S. He did this after Senator Paul released over a thousand pages of his diary entries, that he foolishly kept on government computers. These entries covered the years 2019-2022. Needless to say, many of these entries were vaingloriously cringe worthy.
Set aside all the theater. The truly interesting question was never whether this one man is a villain. I am not particularly interested in his legal guilt or innocence. As an aside it should not be a crime to lie to a Congress that habitually lies to and steals from the citizenry. No, the interesting question is what happens to a society when the power to define acceptable risk, and the power to fund the research that creates risk, and the power to investigate whether that research went wrong all come to rest in the hands of one man in one official capacity. This is the thing that most people have forgotten, and it is the part that matters most.
There Was Already a Planned Response
Before 2020 there was a well settled body of pandemic guidance. It was in writing. It had been peer reviewed and was quite unglamorous. It was largely ignored by the public because that is what happens to unglamorous peer reviewed dull as dishwater scientific tomes. They go unnoticed, that is, until an emergency hits.
In 2006, D.A. Henderson, who was the epidemiologist who led the eradication of smallpox and was regarded as the leading authority on the subject, co-authored a paper on disease mitigation during an influenza pandemic. The conclusions of this paper were skeptical of non-pharmaceutical interventions; skeptical to the point of bluntness. The conclusion was that large-scale quarantine of healthy populations was rejected. Travel restrictions were considered ineffective and costly. Closing schools for prolonged periods was treated as a measure whose social damage would exceed any benefit. The reasoning was not just technical and scientific. Henderson, et al. argued that the goal during an outbreak is to preserve the functioning of society, because a society that stops functioning generates its own casualties.
The World Health Organization reached very similar conclusions in October 2019. It offered guidance on non-pharmaceutical interventions for an influenza pandemic. They concluded that large scale contact tracing, quarantine of exposed persons and border closings were not recommended under any circumstances.
In fairness, there is a qualification here. The consensus was not totally non-interventionist. The CDC in 2017 offered community mitigation guidelines that did suggest school closings of up to 12 weeks in a severe pandemic. Nonetheless, it did not recommend an open-ended action with no sunset date. It did so because it weighed collateral damage on the same ledger as the one counting deaths prevented. That weighting was crucial. It requires a look at the tradeoffs of any mitigation policy. This view of tradeoffs is the essence of ethical reasoning. Ethical reasoning was one of the first casualties of the pandemic. This is the perspective that was ignored.
The Knowledge Problem In Real Time
The question arises, why would a career official like Anthony Fauci so radically depart form the guidance his own field produced? I imagine that part of the answer is a very human one. He was afraid. The data was looking awful, and the numbers were climbing daily. That is a fair assessment I think and should be considered.
Ethical reasoning, which sits next to economic thinking, offers a sharper diagnosis. This is a classic Hayekian “Knowledge Problem”. The crux of this insight as it applies to the pandemic is that a single mother will weigh her child’s education against her own exposure risk with information no bureaucrat possesses. A restaurant owner knows the marginal value of a ventilation upgrade versus a shutdown or loss of business. Multiply these examples by 300 million or so, and you get a calculation no committee or Disease Czar like Fauci can perform.
Fauci tried to perform it anyway.
Consider just two instances to highlight this. In his January 2024 transcribed interview with congressional investigators, he admitted that the 6 foot distancing rule, perhaps the most intrusive of all the mitigation measures, had no trial data or scientific evidence behind it. It was made up. Again, in a December 2020 interview with the New York Times, he admitted revising his stated herd immunity threshold upward because he judged the public was ready for a higher number. The second admission is the one a free market critic should focus on. This is not a scientific error. This was a blatant misrepresentation based on what the Disease Czar thought the public could “handle”. In both of these moments Fauci stopped being a reporter of evidence to a self-governing populace and began operating as a manager of societal beliefs.
Let’s look at another economist’s insights-Frédéric Bastiat. His contribution is the notion of the seen and the unseen. What is seen are the Covid deaths counted nightly on the television. What is unseen are the missed cancer screenings, bankrupted small businesses whose customers where shunted off to big box retailers because they were considered “essential”; the learning loss now becoming visible in degraded standardized test scores; the overdose deaths of despair. These were never recorded on the public ledger, and one wonders if they crossed Fauci’s mind at all. The reality is that a bureaucrat like Fauci might be punished by the system for visible deaths, but he will never be for invisible ones. This is not simply a personal failing (though it is that), this is an incentive problem. It would not have produced a different result even if a different medical authoritarian was in charge.
There was no competition. In a market, a bad forecast is priced and the errant forecaster disciplined with a loss. In a public health monopoly, a bad forecast is reclassified as an “evolving guidance”, and the errant forecaster’s budget gets bigger.
The Laboratory Question
The more troublesome issue is the one that is too often ignored. The National Institute of Allergy and Infectious Diseases (NIAID) was Fauci’s employer. Under his direction they funded EcoHealth Alliance, which in turn sub awarded a portion of this funding to the Wuhan Institute of Virology to do coronavirus research. It is an open question whether that work met the federal definition of “gain-of-function” research. The National Institute of Health (NIH) is that it did not. Critics have claimed that they are splitting hairs in a Clintonesque what is the definition of is is manner. It would seem that by most plain English definitions it was gain of function research.
All this is important because the federal government halted funding of certain types of gain-of-function research in 2014. Congress then replaced the pause in 2017 with a different review protocol. This protocol was administered by the same agencies that funded the research. In 2024 The Department of Health and Human Services barred EcoHealth Alliance from administering this program and barred its president Peter Daszak. This should not be considered a trivial bureaucratic action-it was substantial.
Here we must be somewhat circumspect. There is to date no clear evidence that what was developed at the Wuhan lab is genetically close enough to the Covid virus to be considered a progenitor. Obviously, Chinese reluctance to be open about this hampers any investigation. The intelligence community is split; In January 2025, the CIA admitted a low confidence assessment favoring a lab related origin, which sees them in agreement with the FBI and the Department of Energy. Meanwhile other agencies such as the National Intelligence Council lean toward a natural origin. The WHO advisory group also leans toward a natural (zoonotic) origin based on their view of the evidence. The WHO scientific advisory group concluded in June 2025 that a natural origin of Covid was the most likely. Peer reviewed work in Science magazine in 2022 and Cell magazine in 2024 argue for the natural origin hypothesis. Many virologists find this persuasive. While this history is important and worth investigating, at the end of the day neither theory is proven nor disproven. Importantly, the case against Fauci does not depend upon it.
The case is not so much against Fauci per se as it is against the structural arrangements in which Fauci operated. This is not to deny human agency and what Fauci did as a human actor. This is especially relevant in that Fauci was part of whole of government effort to squelch free speech and “jawbone” into silence any who had opinions outside the government narrative. All of this is commonly referred to as authoritarianism.
But I digress. The structure was that one official oversaw and directed the funding decisions for cutting edge research performed in a foreign country. Then that same official shaped some of the earliest narratives about the pandemic’s origin. This same official then directed the national response. This same official then received a preemptive presidential pardon in January of 2025 and now refuses to testify. No free market would tolerate such an arrangement. No one lets the auditor serve as the chief financial officer. The ratings agency does not get to hold the bond it is rating. The objection here is not that Fauci is guilty. The objection is that the system was constructed so that we cannot find out one way or the other.
Where to From Here?
The solution to all of this is an actual free market in information and solutions to human problems.
We can start by at least separating the funding of dangerous research from the adjudication of the risks. No agency, especially a governmental one, should investigate its own behavior. When this is done we can then price the risk through legal liability and insurance. An underwriter who had to quote a premium on a laboratory playing with potentially dangerous pathogens would produce a more honest risk assessment in a week than 10 years of internal review committees would. Having actual skin in the game is quite clarifying.
Also, this has the advantage of effectively employing federalism. It is not that any one state will get a pandemic response correct, but that variation produces better information. Sweden, Florida, and South Dakota diverged from New York and California, and those differences produced comparative data that a one size fits all top down solution would have wrecked. Decentralization is not a path to disorder; it is a path to discovery. Of course, the best decentralization is a totally free market absent any and all coercive government. But hey, we are shooting for basic harm reduction here.
The strongest case against everything that I wrote above deserves a final word. Fauci faced an unfamiliar disease with no vaccine available. The doubling of cases was being measured in days. He may have sincerely felt an obligation to act before all the facts were available. Many of his critics were wrong as well. They misjudged lethality, seasonality and how fast it would burn out. These are legitimate concerns and should not be dismissed out of hand.
Still the purpose of a rule-or better yet-the rule of law, is that it binds you exactly when breaking it feels justified. Henderson and his colleagues wrote a playbook exactly for the moment when scared officials would want to abandon it. That was the point of the planned response. The next time the planning should be done by a free people cooperatively working on the problem to find the best solutions. The Fauci folly is that centralized command and control works as poorly in the medical field as in economics.
Praise Be to God
