Month: April 2021
My podcast with the excellent Nicholas Colin
Here goes, the topic was Europe only, mostly fresh material. Forty-four minutes. On Apple, and on Spotify.
“RCTs for me but not for thee”?
Zeke Emanuel, a professor of healthcare management at the University of Pennsylvania and a former coronavirus adviser to US president Joe Biden, said: “I understand they wanted to be transparent, but did they really have to announce a complete pause? “My concern is this will unnecessarily undermine confidence in the vaccine, and possibly all [Covid-19] vaccines. Are people going to know the difference?”
Amesh Adalja, a senior scholar at the Johns Hopkins Center for Health Security in Baltimore, said: “The damage is done, this is going to be hard to resume. All [the CDC] can do is say how rare this is, show how safe and efficacious the J&J vaccine is. But this action is going to be hard to reverse.”
Here is the full FT piece. Since lives are at stake, how about this for a proposal? The FDA is allowed to suspend the use of any positive expected value vaccine only after running an RCT on their underlying theory of credibility and public risk communication in the relevant context. (NB: asking about attitude change is not nearly good enough!) And after they run the RCT, they have to wait three weeks to schedule the meeting on evaluating the data. After all, that is how long it takes, right?
Estamos de acuerdo?
By the way, one reader wrote to me: “I submit to you that the credibility of the FDA on the relative safety of various vaccines may be a minor issue in the pool of issues that prevent the level of vaccinations we would like to see.” Do we even know if that is true or false?
From the comments, on FDA credibility
Wednesday assorted links
1. Once again, the world is more right-wing than you think. Even Stanford academics. And these ants shrink their brains for a chance to become queen (NYT).
2. World’s longest rabbit theft moral hazard? (NYT): “Darius was insured for $1.6 million and traveled with a bodyguard, according to NBC’s Today show in a 2010 article.” Note that his status as the world’s longest rabbit already was under threat from his own descendants.
3. MIE: $4,000 Star Wars armchair (why?).
4. “Today in Markets in Everything, from the Netherlands: informal insurance for curfew violations via Whatsapp:
For a €10 prepaid fee, the owners of the Whatsapp group will wire you €95 (the fine for violating the curfew) after sending in a picture of the fine. It will also provide ‘safe’ routes through the city where policing is light.”
The Covid culture that is Australia
Health Minister Greg Hunt has refused to guarantee Australia’s borders will open even if the whole country has been vaccinated against COVID-19.
Australia’s borders have been shut since March 2020 and will remain closed until at least the middle of June, leaving more than 36,000 Australians trapped overseas, unable to return due to caps on the number of quarantine spaces.
The closure also bans citizens from leaving the country unless they have an exemption or are travelling to New Zealand.
Mr Hunt suggested at a news conference in Canberra on Tuesday the international border closures could last much longer and stay in place even if the entire population had been vaccinated against the coronavirus.
“Vaccination alone is no guarantee that you can open up,” Mr Hunt said.
“If the whole country were vaccinated, you couldn’t just open the borders.”
“We still have to look at a series of different factors: transmission, longevity [of vaccine protection] and the global impact – and those are factors which the world is learning about,” he said.
Really people? Via Chris.
Hearing: “Vaccinations and the Economic Recovery”
I will be testifying to the JEC of Congress today at 2:30 pm est.
Witnesses:
Dr. Paul Romer
Nobel Prize Winning economist and NYU Professor
New York, NY
Dr. Céline Gounder, MD, ScM, FIDSA
Clinical Assistant Professor of Medicine & Infectious Diseases, NYU School of Medicine & Bellevue Hospital
CEO of Just Human Productions
New York, NY
Dr. Alexander Tabarrok
Bartley J. Madden Chair in Economics at the Mercatus Center and Professor of Economics George Mason University
Fairfax, VA
Dr. Belinda Archibong
Assistant Professor, Economics
Barnard College, Columbia University
New York, NY
Link here.
“Free-floating credibility” is underrated
The presence of a minuscule risk for some of the adenovirus platform Covid vaccines means that the FDA has put a hold on J&J and still won’t approve AstraZeneca.
In response to critics, the FDA says that their credibility is on the line. If they allow vaccine use to proceed, and a modest number of people die as a result (with a big increase in net lives saved), the FDA and its defenders claim that people will lose faith in the FDA. Yet that is exactly the wrong thing to say, it is self-serving, and it exacerbates the problem at hand.
When the FDA announces that they have to ban a vaccine because its credibility is on the line, that very announcement puts their credibility on the line. It is a simple two-line proof. Either they are lying about whether their credibility is on the line, in which case they have wrecked their credibility with the lie. Or they are telling the truth, in which case by definition their credibility is indeed on the line.
One lesson is that you should not try to extend your credibility too far, because you will end up unduly constrained.
For purposes of contrast, consider alcoholic beverages. At the federal level they are regulated by the Alcohol and Tobacco Tax and Trade Bureau (who are they again?), and also various state and local authorities.
As a result of this unusual, Prohibition-rooted distribution of authority, alcohol does not come with nutritional labeling.
Now, in that setting, if a bunch of kids die from binge drinking, the credibility of the Bureau is not much damaged. The Bureau does not have to ban alcohol on the grounds that if it does not, the credibility of the Bureau will be ruined. The Bureau simply never put its credibility on the line in this manner.
Now you might favor a tighter regulation of alcohol for some reason, but you could achieve such regulation without tying up the credibility of the ATTT Bureau in knots. Similarly, the Department of Transportation regulates road safety (again with state and local authorities as well), but it has not put its credibility on the line when 40,000 or so Americans die each year on the roads. Again, maybe they should enforce tougher safety standards, but they shouldn’t tie their credibility to getting road deaths down to one hundred, and indeed they do not. They end up with more degrees of regulatory freedom.
Let’s say I were to announce that my credibility as a public intellectual were to depend at how I would fare at darts on British pub night. That would be a big mistake, for multiple reasons. It is like with the FDA. If I am lying about that credibility tie, I hurt my credibility as a public intellectual. If somehow I am telling the truth, well let’s just hope everyone else stays home that evening because my credibility is going to take a beating.
What I call “free-floating credibility” is underrated.
And that is precisely what defenders of the FDA destroy when they…defend the FDA. They make the FDA worse.
NB: You are “out of your lane” commenting on this analysis unless you have studied game theory with Thomas Schelling.
Vaccine fact of the day
Moderna and BioNTech shares jumped 10.5 per cent and 6.1 per cent, respectively, on Tuesday as the vaccine makers benefited from news of the J&J pause.
Norway’s health authorities estimated that their vaccination plans could be delayed by eight to 12 weeks if they could not use either the J&J or the Oxford/AstraZeneca vaccine.
The biggest short-term loser here is Europe, not the United States. Nor will this help Australia reopen. But does the American median voter or median FDA senior bureaucrat care? What will the CVS liability lawyers advise from here on out? What will the French anti-vaxxers think?
Here is the full FT article.
Tuesday assorted links
1. John Naisbett has passed away.
2. Suicides down for 2020, misery loves company?
3. What it is like to be in a human challenge trial. The argument that the muon results are for real.
4. Eric Weinstein on geometric unity. Is he right? Is that the right question?
5. “Dowbak utilizes the mechanics of the smart contract imbedded in the NFT to create a self-generating Genesis piece which will continue to create new, discreet NFTs over the course of approximately one year.” With sixty bids, the current value is well over $2 million, do take a look at the image. And it is stochastically not a Crusonia plant: “However, Dowbak has also introduced the element of chance into the work’s algorithm through another self-referential twist–REPLICATOR can also jam. A jam comes in the form of a unique “Jam Artwork,” which will stop a generation from continuing to replicate, curbing exponential growth.”
6. In Houston, autonomous cars are delivering Domino pizza.
7. DC’s rising libertarian star.
You may not agree with this, still it is a sign of how much progress green energy has made
Yes this is being asserted with a straight face and indeed it might be true!:
To reliably achieve deep decarbonization of the US power sector, a candidate policy must perform robustly across a range of possible future trajectories of demand, fossil fuel prices, and prices of new wind and solar capacity. Using a modified version of the NREL ReEDS model with scenarios that span different trajectories of demand, fuel prices, and technology costs, we find that some recently proposed policies can robustly achieve 80% decarbonization (relative to 2005 emissions) or more by 2035, but many do not. The two robustly successful policies are a tradeable performance standard (TPS) and a hybrid Clean Electricity Standard (CES) with a 100% clean target, partial crediting of gas generation, and a $40/mton CO2 alternative compliance payment (ACP) backstop. Both are nearly as cost effective as the emissions-equivalent efficient policy. A $40 carbon tax nearly achieves the robust 80% threshold and, in most scenarios, drives deep decarbonization. A 90% CES (without partial crediting) fails to achieve robust 2035 decarbonization because it need not drive coal out of the system. Simply extending renewable energy tax credits, which are set to expire, does not drive significant decarbonization in most scenarios, nor does relying on increased ambition in green-leaning states.
That is from a new NBER paper by James H. Stock and Daniel N. Stuart. The big problem remains global, of course, not to mention the political economy of these reforms, which are unlikely to be popular even in the Democratic Party and also would face massive regulatory hurdles at federalistic levels. Still, ten years ago I would not have expected to be at a point where such claims could be made by well-respected economists.
Where is (non-state capacity) libertarianism evolving?
That is the topic of my latest Bloomberg column, here is one bit:
I would say that the purer forms of libertarianism are evolving: from a set of policy stances on political questions to a series of projects for building entire new political worlds…
Much of the intellectual effort in libertarian circles is concentrated in two ideas in particular: charter cities and cryptocurrency.
Very recently a “charter city” was inaugurated in Honduras, with its own set of laws and constitutions, designed to set off an economic boom. Entrepreneurs are seeking to create such cities around the globe, typically as enclaves within established political units. The expectation is not that these cities would reflect libertarian doctrine in every way, but rather that they would be an improvement over prevailing governance, just as Hong Kong had much better outcomes than did Mao’s China.
A milder version of the charter cities concept is the YIMBY (“Yes In My Backyard”) movement, which is not founding new cities but seeking to transform existing ones by deregulating zoning and construction and thus building them out to a much greater extent.
Another area attracting energetic young talent is cryptocurrency. Bitcoin gets a lot of the attention, but it is a static system. The Ethereum project, led by Vitalik Buterin, is more ambitious. It is trying to create a new currency, legal system, and set of protocols for new economies on blockchains.
Unlike Bitcoin, Ethereum can be managed to better suit market demands. Imagine a future in which prediction markets are everywhere, micropayments are easy, self-executing smart contracts are a normal part of business, consumers own their own data and trade it on blockchains, and social media are decentralized and you can’t be canceled. The very foundations of banking and finance might move into this new realm.
Consistent with these developments, the most influential current figures in libertarianism have a strong background as doers: Elon Musk, Peter Thiel, Buterin and Balaji Srinivasan, to name a few, though probably none would qualify as a formal libertarian. All of them have strong roots outside the U.S., which perhaps liberated them from the policy debates that preoccupied American libertarians for so long.
The piece is 1200 words or so, 50% beyond the usual, plenty more at the link.
Ideology and performance in public organizations
We combine personnel records of the United States federal bureaucracy from 1997-2019 with administrative voter registration data to study how ideological alignment between politicians and bureaucrats affects the personnel policies and performance of public organizations. We present four results. (i) Consistent with the use of the spoils system to align ideology at the highest levels of government, we document significant partisan cycles and substantial turnover among political appointees. (ii) By contrast, we find virtually no political cycles in the civil service. The lower levels of the federal government resemble a “Weberian” bureaucracy that appears to be largely protected from political interference. (iii) Democrats make up the plurality of civil servants. Overrepresentation of Democrats increases with seniority, with the difference in career progression being largely explained by positive selection on observables. (iv) Political misalignment carries a sizeable performance penalty. Exploiting presidential transitions as a source of “within-bureaucrat” variation in the political alignment of procurement officers over time, we find that contracts overseen by a misaligned officer exhibit cost overruns that are, on average, 8% higher than the mean overrun. We provide evidence that is consistent with a general “morale effect,” whereby misaligned bureaucrats are less motivated.
They seem to be saying (among other things) that government is worse under Republican administrations because Democrats in the bureaucracy are not as loyal to their missions? That is a new NBER working paper by Jorg L. Spenkuch, Edoardo Teso, and Guo Xu.
Monday assorted links
1. The economics of Substack and Ghost (NYT).
2. Short SNL video if The Woke invaded Star Trek. And “Atomic Superyacht to Offer $3 Million Eco-Tours With Scientists” (Bloomberg).
3. Exaggerated, but an update on Sweden (and Uruguay). And perspective from Andreas Backhaus. And excess pessimism from some experts.
4. “Now, great economists often change their views over time, as they should when new information arrives. Mundell, however, changed his whole intellectual style; if you were to read his Nobel lecture without knowing who wrote it, you might never have guessed that it was the same man who devised those crisp little models several decades earlier.” Paul Krugman on Mundell.
5. Antibodies through injection, seems to work.
Integrate Crypto with the India Stack
In India Should Embrace Not Ban Cryptoc I said “the irony is that India has one of the world’s most advanced identity and payments systems, the India stack” and by integrating the India stack with crypto India could take in important step and leapfrog slower to adapt countries. Now iSpirit, the team behind the India Stack, are pushing the idea. They note that the technology developed for India’s Goods and Service Tax can help by providing verified invoice data that can be used for lending.
India’s Goods and Services Tax (GST) helps to address this by generating invoice and payment data in a format suitable for credit underwriting and risk analysis. The GST data also enables a small enterprise in a large value system to provide data and visibility across the supply chain; for example, one can track the progress of parts from a small parts supplier to an auto component manufacturer to a large passenger car maker all the way through to distributors, sub-dealers, and retail sales.
The digital version of an SME’s sales and purchase invoices ledger thus amounts to informational collateral on both the company and the larger ecosystem within which it sits, that could become the basis for extending credit, as an alternative to the hard asset or collateral-based financial system. This is similar to how Square Capital and Stripe Capital already function in the West.
In addition to credit-based financing, the trustworthy records furnished by GST’s informational collateral can also support equity or quasi-equity financing, to support growth without increasing debt. These might take the form of direct equity investments in small businesses, or even personal micro-equity investments in individual consultants or students.
India’s innovation: use new pools of crypto capital to address long-standing financing needs
Accompanying the iSpirit post is a great manifesto by Balaji Srinivasan that explains the India Stack, crypto, and how they fit together.
The first step in understanding Crypto IndiaStack is to understand IndiaStack itself. It is a set of national APIs for payments, identity, KYC, e-signature, and document verification that scales to a billion people. Here’s a quick overview of the IndiaStack APIs:
… crypto is now bigger than Bitcoin. It also includes newer blockchains like Ethereum, which have enabled the new world of decentralized finance or “defi” for short. This new space is growing at an astonishing pace, with >25X year-over-over growth. It’s putting Wall Street on the internet and changing the very foundations of how money is represented and invested around the world. And most importantly for our purposes, defi is making huge pools of capital newly available to any Indian with a digital wallet, in the same way the internet made huge swaths of information available to any Indian with a cellular phone.
…defi is to finance what the internet was to information.
By adding both a digital rupee and crypto support to IndiaStack, we could turn every phone into not just a bank account but a bonafide Bloomberg Terminal, giving every Indian the ability to make both domestic and international transactions of arbitrary complexity, attracting crypto capital from around the world, and leapfrogging the 20th century financial system entirely.
How do we get there? In four easy steps:
- Understand what a digital rupee is.
- Add digital wallet support to IndiaStack.
- Add crypto assets to the IndiaStack digital wallet.
- Extend IndiaStack APIs with crypto concepts.
Read the whole thing.
Addendum: On defi see also my earlier piece on Elrond.
Why I am not entirely keen on the Great Barrington Declaration and AIER
More people are asking me about my attitudes toward Great Barrington and AIER, including David Henderson in this post (which also has a good transcript of my remarks to Russ Roberts). Earlier I wrote a conceptual critique of the Great Barrington Declaration, but today I would like to make some more targeted remarks. I didn’t do this when speaking to Russ because I feel they require direct quotation and documentation, which one cannot easily do in a podcast. And in general I don’t like to write posts “attacking people” (way oversupplied on the internet), but in this case libertarian sympathies are so split that a kind of a wake-up call is needed.
Let me first say that if you are libertarian, and would like a libertarian response to the pandemic, and you find Alex and me not libertarian enough, read the Ryan Bourne book from the Cato Institute. You may not agree with everything in there, but it has no “gross errors” and no “biomedical weirdness.” And people, the Cato Institute really is libertarian. They once hired David Henderson as chief economist.
As for the AIER, read this Jeremy Horpedahl thread and click through appropriately, here is the Sam Bowman-produced part of the thread. Conspiracy theorist and shall we say “speculative thinker” Naomi Wolf is now a senior researcher at AIER, please do read her tweets. 5G conspiracy theories? Vaccine nanoparticles that make you travel back in time? “Not kidding” she wrote, and the general weirdness extends far beyond that, to some of her books as well. Or try this “externality denialism” from just a few days ago: “Your vaccine status makes no difference to others.” Her pinned tweet casts suspicion on Bill Gates, and refers to “global treason.”
I say it is a mistake to let such a group set the libertarian agenda or indeed any agenda, even if you favor very rapid reopenings and are very critical of lockdowns. I implore you to think very seriously about what is going on here.
Going back to the GBD proper, which again is sponsored by AIER, here is co-author Sunetra Gupta:
“What we’ve seen is that in normal, healthy people, who are not elderly or frail or don’t have comorbidities, this virus is not something to worry about no more than how we worry about flu,” professor Gupta told HT.
Nope, almost 600,000 U.S. deaths later. Or how does this Gupta claim look?:
‘Why would you arrest transmission?’ she asks. ‘To wait for a vaccine? You cannot get rid of it.’
What would Benjamin Netanyahu say? Or Gupta in May: “Covid-19 is on the way out.”
The best of them is probably Jay Bhattacharya, with whom I often agree, and who, as far as I can tell, has no track record of blatantly false predictions. Yet even he cannot avoid a tinge of biomedical weirdness.
Why was Bhattacharya on the advisory board of the anti-vax group Panda? I am reluctant to play the “guilt by association” game here, but I think there is a broader pattern of these writers simply being wrong about the science, and their associations reflecting that.
I agree with his WSJ critique (with Kulldorff) of vaccine passports. Still, he comes up with some literally true but misleading sequences such as:
The idea that everybody needs to be vaccinated is as scientifically baseless as the idea that nobody does. Covid vaccines are essential for older, high-risk people and their caretakers and advisable for many others.
I wonder why cannot he bring himself to say that “the average social value of a 16-year-old getting vaccinated is strongly positive”? (And we are running significant tests to lower the remaining uncertainty, and if it is merely adenovirus platforms you worry about well say that.) Instead he has to walk around the issue and play down the value of near-universal Covid vaccination. You might think that is all the fault of the editorial chopping board, but it seems to be a broader and more consistent pattern with this group.
Take Hulldorff’s now-famous tweet “Those with prior natural infection do not need it [Covid vaccines]. Nor children.” “Need?” — OK, I get it, demand curves slope down. But again, his tweet is not nearly as good or as accurate a message as “the average social value of a 16-year-old getting vaccinated is strongly positive.” There is good evidence that the vaccines provide better protection than does natural infection, especially against the Covid variants, and it is established that infected younger persons can carry Covid to the unvaccinated, of which there will always be quite a few, most of all globally. Furthermore, non-vaccine methods of achieving herd immunity are looking worse, due to the spread of variants and areas such as Manaus, which seem to have high rates of reinfection. And have I mentioned that hospitalization rates for the young are rising? (We are not sure why.)
Is it so great that 38.9% of Marines are refusing to take the vaccine? (no). Or have these writers looked into the huge success that is Gibraltar?
Why take this weird, hinky attitude toward the science for no good reason? It’s as if — when it comes to vaccines — they deliberately talk in an Alice in Wonderland universe without self-awareness of that fact.
No matter what your associations may or may not be, getting people vaccinated with quality vaccines is the #1 issue right now and it is the path back to liberty most likely to succeed and prove sustainable. If you are not really enthusiastic about that, I think, frankly, that you are out to lunch.
That is from Sure. So what is the best piece on FDA credibility? (Yes, I know the work of Daniel Carpenter and have a CWT with him coming out and we do address this directly.) And what has the FDA itself done to study the issue of its own credibility?