Month: December 2020
At the same time, I do have serious rule-of-law reservations about undoing a deal eight years on, particularly given the fact that it appears that the advertising-supported space is doing better than I thought a few years ago: Snapchat in particular is building a great business, LinkedIn is doing much better, and TikTok is obviously on its way.
- Andy Grove famously said “Only the Paranoid Survive”, but the takeaway from many of these emails is that “Only the paranoid get sued for antitrust”; to put it another way, Facebook executives come across as worried about everything, especially Google, which, by the same token, comes across as completely asleep at the wheel (now that is a monopoly indicator if I’ve ever seen one!).
- Facebook’s stock was down less than 2% yesterday; that may reflect investor skepticism about the success of the lawsuit, but you could also argue that splitting up the company would actually unlock value: all three products would keep their audiences, but would have to monetize independently, which, given the fact that Facebook ad prices are set by auction, not artificially propped up as you would expect with an alleged monopolist, could absolutely lead to more revenue in aggregate, not less.
- Relatedly, it’s not clear that advertisers will benefit from a break-up. The entire reason why Facebook owning both Facebook and Instagram is a problem for other consumer tech companies is because advertisers benefit from a one-stop shop and don’t necessarily want to support multiple platforms.
Ben writes for-pay content on Stratechery, you can (and should) subscribe here.
Some assorted thoughts:
In the big picture, the efficacious of a vaccine doesn’t matter per se what matters is getting to herd immunity. If you have a less efficacious vaccine you need to vaccinate more people but herd immunity is herd immunity, i.e. vaccines mostly protect people not because they are efficacious but because we reach herd immunity. I’ve never had measles mostly because I have probably never been challenged with measles not because I have been challenged but due to a vaccine I fought it off. The AZ vaccine at 70% efficacious will work just fine. (One potential issue, as Josh Gans notes, we don’t yet have data on transmission reduction which could vary by vaccine.)
As I mentioned in The Vaccine Works Fast, the first shot of the Pfizer vaccine seems to work well enough so that one *might* consider delaying the second dose a few weeks to get the first dose out more widely. In fact, the accidental low-dose, standard-dose regime for the AZ vaccine had people getting the second dose 7 to 8 weeks after the first dose and that was the 90% efficacious regime. We don’t have full-information but the exact timing of the second-dose does not seem critical, although everyone should get a second dose.
A related point is that we could mix and match vaccines. The UK will run a trial on this question. Mix and matching has two potentially good properties. First, mix and matching could make the immune system response stronger than either vaccine alone because different vaccines stimulate the immune system in different ways. Second, it could help with distribution. It’s going to be easier to scale up the AZ vaccine than the mRNA vaccines, so if we can use both widely we can get more bang for our shot. (As Tyler has noted the British have really stepped up on rational trial design.)
The mRNA vaccines are getting the press but for the world as a whole the AZ, Chinese, Russian and similar more traditional vaccines are going to be the big players because facilities exist for scaling them up around the world.
Addendum: Countries in the world that now have a vaccine: the UK, Canada, Bahrain, China, Russia. One country without a vaccine: the United States. The US FDA advisory committee is meeting today. You can watch here.
In the port city of Kaohsiung, in the south of Taiwan, a migrant worker from the Philippines was caught on surveillance cameras briefly stepping into the corridor of a hotel while he was under quarantine in November.
The unidentified man wanted to leave something outside the door of a friend, who was quarantining at the same hotel, according to the Central News Agency, the official Taiwanese news agency, citing the health department.
In a video clip that circulated online, the man, wearing shorts and flip-flops, could be seen taking six lumbering strides between his room and that of his neighbor, before turning around.
The breach cost him $3,550.
Here is the full NYT story, via the excellent Daniel Lippman.
- We believe COVID-19 herd immunity (>60% of population immune) will be reached in the US by late summer/early fall 2021 (Sep-Nov 2021).
- At the time herd immunity is reached, roughly half of the immunity will be achieved via natural infection, and the other half will be achieved via vaccination.
- New COVID-19 infections may become negligible before herd immunity is reached. Our current best estimate of when daily community transmissions will drop below 1,000 per day is summer 2021 (Jul-Sep 2021).
- Summarizing the above findings, our best estimate of a complete “return to normal” in the US is late summer 2021 (Aug-Oct 2021).
- We estimate around 30% of the US population (~100 million) will have been infected by the SARS-CoV-2 virus by the end of 2021. This translates to a final US COVID-19 death toll of roughly 500,000 (+/-100k) reported deaths.
From mathematician Gary Cornell:
For people 65 to 74, while the average number (92.9%) looks great, the confidence interval is not. It says that what we can say is that there is a 19/20 chance that the efficacy is between 53.2 to 99.8. This kind of confidence interval says that didn’t have enough cases in this group to really say much at all and so the confidence range is too large to be really useful.
And when we get to people over 75, what they describe isn’t a confidence interval, it’s a joke. A confidence interval of -12.1 to 100 is a lot like saying they threw a bunch of darts at a dart board at random and did everything from hit bystanders (i.e. the vaccine made things worse) to perfect protection. They simply didn’t have enough cases to say anything meaningful and so what they say is just totally useless.
But I don’t want to end on a depressing note! My friends who think about these questions feel pretty strongly that while the vaccine will likely be less effective in people over 65 than it is in younger people, the dropoff won’t be great enough to make a big difference. For example, if it is 20-25% less effective in these age groups (which they think is the worst case scenario), you still get a vaccine that is roughly between 70% and 75% effective – which is still pretty darn good.
Still I wish they had enrolled enough people >65 to have a better signal!
There is much more useful information at the link.
1. I am happy to see StatNews expanding, they were earlier winners of an Emergent Ventures prize.
3. 64 reasons why Paul McCartney is underrated. The funny thing is, I could come up with yet another 64. Ian Leslie doesn’t even mention that McCartney ended up as an excellent classical music composer (after some effort and also false steps). Or how about his shrewd business acumen in buying up musical rights at the correct time?
8. Japan to fund AI matchmaking to boost birth rate. What would Malthus say?
David is co-CEO of Standard Industries, the world’s largest roofing company, and also a major presence in chimney supply, among its other activities. He asked me many good questions, I asked him about how roofs would develop and whether there was a great stagnation in chimneys. I also asked him his views about the analytic-synthetic dichotomy and whether numbers were real (he almost did a career in philosophy). Here is the link.
Here is the abstract:
Could North America have been settled more peacefully, with fewer property rights violations against Native Americans? To answer this question, we utilize the case of French colonists of Atlantic Canada (the Acadians) and a Native American tribe (the Mi’kmaq) between the 17th and 18th centuries in the areas around the Bay of Fundy in the modern provinces of Nova Scotia and New Brunswick. Under a relative state of anarchy, both the Acadians and the Mi’kmaq were able to minimize the relative returns to using violence by adopting rules of collective decision-making that favored consensus-building. By prioritizing consensus, distributional coalitions were faced with higher decision-making costs, making it difficult for concentrated interest groups within each society to capture the gains from fighting and spilling them over as external costs over the rest of the population. As a result, both the Acadians and the Mi’kmaq were able to reap the benefits of productive specialization and social cooperation under the division of labor.
The drop-off [in expected vaccine deliveries] is a product of manufacturing problems, bottlenecks in the supply of raw materials and other hurdles in ramping up clinical-trial production of 5 liters of protein-based vaccine at a time to commercial-scale fermentation of 2,000-liter batches, the companies and the Trump administration said.
Note that Operation Warp Speed, for all its wonders, creates some bad incentives. A pre-purchase, whatever other advantages it may bring, is also a kind of indirect price control. And when price controls are present, quality declines ex post, as in many other procurement problems. But the companies do not wish to lower the quality of their vaccines, so instead they have “slack” incentives to boost quality along other parts of the supply chain.
Here is a simple analogy. Let’s say the government did a pre-purchase of left shoes, at the price of a left shoe/right shoe combination. But to get the upfront money the company only had to produce a left shoe. There might be a relative shortage of right shoes.
So there is pre-purchase for “the vaccine,” but not for “all of the complements to the vaccines.” (Listen to Alex!) The companies are getting paid for the vaccines no matter what. So their incentive to be speedy with the complementary infrastructure — whether producing it themselves or contracting for it in Coasean fashion — just isn’t as strong as it would be for a social optimum.
The more you rely on pre-purchase, the more you have to worry about what is happening on the fringes of that activity. And you can expand pre-purchase to the initial complements, and probably should, but of course in doing so new fringes arise as well.
China has drastically curtailed the overseas lending programme of its two largest policy banks, after nearly a decade of ambitious growth which at its peak rivalled that of the World Bank, new research indicates.
Lending by the China Development Bank and the Export-Import Bank of China collapsed from a peak of $75bn in 2016 to just $4bn last year, according to data compiled by researchers at Boston University and seen by the Financial Times.
Here is the full FT article. People used to ask me what I think of Belt and Road Initiative (they don’t any more), and there is my answer.
From the FDA report:
Two doses is great but one dose already looks good even though sample is small. “Efficacy against severe COVID-19 occurring after the first dose was 88.9%.” (Added. n.b this is over the entire sample.)
Based on the number of cases accumulated after Dose 1 and before Dose 2, there does seem to be some protection against COVID-19 disease following one
dose; however, these data do not provide information about longer term protection beyond 21 days after a single dose.
This is potentially important as we could vaccinate more people in a hot-spot and potentially delay the second dose. Noting, however, that this is a post-hoc analyses and the second dose came within 3 weeks.
As expected, a bit of pain, swelling and fatigue in a minority of participants are the biggest issues. No major safety concerns. Of course, we still need to monitor long-term.
Serious adverse events, while uncommon (<1.0%), represented medical events that occur in the general population at similar frequency as observed in the study…. No specific safety concerns were identified in subgroup analyses by age, race, ethnicity, medical comorbidities, or prior SARS-CoV-2 infection.
Hat tip: Biostatistician LucyStats.
Since back in April, Michael Kremer, myself, and the AHT team have been advising governments to go big on investing in vaccines. The US, to its credit, made early purchases but they made two mistakes. First, they didn’t buy enough as the Washington Post indicates:
Last summer, Pfizer officials had urged Operation Warp Speed to purchase 200 million doses, or enough of the two-shot regimen for 100 million people, according to people knowledgeable about the issue who spoke on the condition of anonymity because they weren’t authorized to discuss the situation. But the Warp Speed officials declined, opting instead for 100 million doses, they said.
“Anyone who wanted to sell us … without an [FDA] approval, hundreds of millions of doses back in July and August, was just not going to get the government’s money,” said a senior administration official.
But last weekend, with an FDA clearance expected any day, federal officials reached back out to the company asking to buy another 100 million doses. By then, Pfizer said it had committed the supply elsewhere and suggested elevating the conversation to “a high level discussion,” said a person familiar with the talks who spoke on the condition of anonymity because they were not authorized to share the conversation.
In our discussions, we were talking about at least a $70 billion dollar program and optimally double that and we continually faced the sticker shock problem. Investing in unapproved vaccines seemed risky to many people despite the fact that the government was spending trillions on relief and our model showed that spending on vaccines easily paid for itself (the mother of multipliers!). I argued that this was the world’s easiest cost benefit calculation since Trillions>>Billions. But it was hard to motivate more spending—not just in the United States but anywhere in the world. For reasons I still don’t understand anything out of the ordinary–big spending on at-risk vaccines, spending on testing and tracing, challenge trials–was met with a kind of apathy and defeatism. As I said in July:
Multiple people [in Congress] have told me that things move slowly, no one is stepping up to the plate, leadership is absent. “Who is John Galt?,” they sigh. Ok, they don’t literally say that, but that sigh of resignation is what it feels like in the United States today at the highest levels of government.
OWS was actually the one area where there was some action. But there was a second mistake. We argued that governments shouldn’t buy doses but capacity, i.e. they should cover the cost of building a factory or production line in return for an option on doses from that line. The problem with buying doses is that if you buy without a timeline then the company takes all orders and pushes the low-priced orders to the back of the queue. If you demand a timeline, however, that puts a lot of risk on the firms, since not everything is under their control, and that’s expensive and difficult to contract for and monitor. Thus, we advocated for push funding to de-risk capacity construction for the firms. Capacity construction is well understood–double this line–and thus much easier to contract for and monitor. (Contracting on capacity is also cheaper than a traditional AMC for reasons explained here and also in my discussion with Tyler here.) The nice thing about buying capacity is that it changes the dynamic from one where countries are scrambling to buy before others do to one where early purchases increase capacity that is later available for everyone. OWS, to its credit, did fund capacity construction for Moderna but we wanted more and other governments didn’t step up to the plate.
OWS has been a success. In combination with investments from other governments and organizations like CEPI it will save trillions of dollars and many lives. It could have been better but the main takeaway is that the case for going big is still strong. We have solved the scientific problem of making the vaccine but step two is getting billions of doses in arms. If we can increase capacity enough to vaccinate millions more people next year than currently planned that would still pay for itself many times over. Increasing capacity is not impossible. China is increasing capacity for its vaccines. It will be harder to increase capacity for mRNA vaccines since the technology is new and bespoke but it can be done. We need a second Operation Warp Speed, OWS: Delivery and Distribution.
As Tyler said yesterday, Williams wants a cow! We want billions of vaccine doses quickly. It can be done, it should be done.
From Andreas Fagereng, Magne Mogstad, and Marte Rønning
Abstract: We show that family background matters significantly for children’s accumulation of wealth and investor behavior as adults, even when removing the genetic connection between children and the parents raising them. The analysis is made possible by linking Korean-born children who were adopted at infancy by Norwegian parents to a population panel data set with detailed information on wealth and socio-economic characteristics. The mechanism by which these Korean-Norwegian adoptees were assigned to adoptive families is known and effectively random. This mechanism allows us to estimate the causal effects from an adoptee being raised in one type of family versus another.
Here is a (possibly gated) link.
1. Darmon Richter, Chernobyl: A Stalker’s Guide. This year’s best travel book? And do you get the joke in the subtitle? It has an unusual flair, excellent photos, and will make the updated “best of the year” list.
2. Martin J. Sherwin, Gambling with Armageddon: Nuclear Roulette from Hiroshima to the Cuban Missile Crisis. a very well-done book about mankind’s biggest problem and risk — what more could you want? I didn’t find much shocking new in here, but a very good overview for most readers.
3. Stephen Baxter, Ages in Chaos: James Hutton and the Discovery of Deep Time. Yes that is Baxter the excellent science fiction author and here is his excellent book on both the history of geology and the Scottish Enlightenment. What more could you ask for?
4. Diana Darke, Stealing from the Saracens: How Islamic Architecture Shaped Europe. Among its other virtues, this book makes it clear just how much valuable architectural the world lost in Syria. I had not known that the Strasbourg Münster was the tallest medieval structure still standing in the world. Good photos too.
5. John Darwin, Unlocking the World: Port Cities and Globalization in the Age of Steam 1830-1930 (UK link only, I paid the shipping costs). I felt I knew a good bit of this material already, still this is a well-researched and very solid take on one of the most important factors behind the rise of globalization and international trade, namely the fast steamship and how it enabled so much urban growth for ports.
6. Charles Koch, with Brian Hooks. Believe in People: Bottom-Up Solutions for a Top-Down World. The best of the three Charles Koch books, interesting throughout, and much more personal and revealing than the generic title would imply. I read the whole thing.
There is Deirdre Nansen McCloskey and Alberto Mingardi, The Myth of the Entrepreneurial State, a book-length reply to Mariana Mazzucato. For me it was too polemical, though I agree many of Mazzucato’s claims are overstated.
Vladimir Nabokov’s Think, Write, Speak:Uncollected Essays, Reviews, Interviews, and Letters to the Editor is an entertaining read. It is good to see him call out Pasternak’s Zhivago for being a crashing bore. And to call Lolita a poem, repeatedly.
Kevin Vallier, Trust in a Polarized Age, I agree with the argument, and it is a good example of a philosopher using social science empirical work.
And Simon Baron-Cohen, The Pattern Seekers: How Autism Drives Human Invention. OK enough, but underargued relative to what I was expecting.
I have only browsed them, but two very good books on Roman history are:
Anthony A. Barrett, Rome is Burning: Nero and the Fire that Ended a Dynasty.
Michael Kulikowski, The Tragedy of Empire: From Constantinople to the Destruction of Roman Italy.