Category: Current Affairs

New York City estimate of the day

In only a year, the market value of office towers in Manhattan, home to the country’s two largest central business districts, has plummeted 25 percent, according to city projections released on Wednesday, contributing to an estimated $1 billion drop-off in property tax revenue.

JPMorgan Chase, Ford Motor, Salesforce, Target and more are giving up expensive office space, and others are considering doing so. Jamie Dimon, chief executive of JPMorgan Chase, the largest private-sector employer in New York City, wrote in a letter to shareholders this week that remote work would “significantly reduce our need for real estate.” For every 100 employees, he said, his bank “may need seats for only 60 on average.”

Here is more from The New York Times.  And this is with vaccination proceeding apace, and recovery well within sight.  It is going to be a very different New York City.

Atul Gawande and Zeke Emanuel Now Support Delaying the Second Dose

Many people are coming around to First Doses First, i.e delaying the second dose to ~12 weeks. Atul Gawande, for example, tweeted:

As cases and hospitalizations rise again, we can’t count on behavior alone reversing this course. Therefore, it’s time for the Biden admin to delay 2nd vax doses to 12 weeks. Getting as many people as possible a vax dose is now urgent.

Now urgent??? Yes, I am a little frustrated because the trajectory on the new variants was very clear. On January 1, for example, I wrote about The New Strain and the Need for Speed (riffing off an excellent piece by Zeynep Tufekci).  Still, very happy to have Gawande’s voice added to the cause. Also joining Gawande are the power trio of Govind Persad, William F. Parker and Ezekiel J. Emanuel who in an important op-ed write:

If we temporarily delay second doses …that is our best hope of quelling the fourth wave ignited by the B.1.1.7 variant. Because we did not start this strategy earlier, it is probably too late for Michigan, New York, New Jersey and the other Northeastern states. But it might be just in time for the South and California — the next places the more infectious strain will go if historical patterns repeat.

…Drug manufacturers selected the three- or four-week interval currently used between doses to rapidly prove efficacy in clinical trials. They did not choose such short intervals based on the optimal way of using the vaccines to quell a pandemic. While a three- or four-week follow-up is safe and effective, there is no evidence it optimizes either individual benefit or population protection.

…Some complain that postponing second doses is not “following the science.” But the scientific evidence goes far beyond what was shown in the original efficacy trials. Data from the United Kingdom, Israel and now the Centers for Disease Control and Prevention shows that first doses both prevent infection and reduce transmission. In people with prior infection, experts are beginning to recognize that a second dose could provide even less benefit. Following the science means updating policies to recognize new evidence rather than stubbornly maintaining the status quo.

Emanuel is on Biden’s COVID-19 task force so consider this op-ed running the flag up the flagpole. I predict Topol will fall next.

I would be surprised, however, if the US changes course now–too many people would then ask why didn’t we do this sooner?–but dose stretching is going to be important for the rest of the world. Why aren’t we doing more to investigate fractional dosing? Even if we went to half-doses on the second dose–the full second dose appears to be strong–that would still be a significant increase in total supply.

Addendum: I have argued for sending extra doses to Michigan and other hot spots such as NJ. Flood the zone! The Biden administration says no. Why? Production is now running well ahead of distribution as more than 50 million doses have been delivered but not administered. It would be a particularly good idea to send more single-shot J&J to reach hard to reach communities–one and done.

Some of the Covid-era deregulations will stick

Lawmakers in Texas and at least 19 other states that let bars and restaurants sell to-go cocktails during the pandemic are moving to make those allowances permanent. Many states that made it easier for healthcare providers to work across state lines are considering bills to indefinitely ease interstate licensing rules. Lawmakers in Washington are pushing for Medicare to extend its policy of reimbursing for certain telehealth visits. States also are trying to lock in pandemic rules that spawned new online services, from document notarization to marijuana sales.

Deregulation has long been a central tenet among Republican politicians, but many of the coronavirus-inspired changes have gained bipartisan support…

In February, California State Sen. Scott Wiener, a San Francisco Democrat, co-authored legislation with a Republican lawmaker to make permanent the coronavirus-era suspension of liquor laws that prohibited drinking in sidewalk extensions known as parklets and other outdoor dining spaces used by multiple vendors. If approved by two-thirds of the legislature and signed by the Democratic governor, it would take effect in September.

State legislatures in Connecticut and Arkansas also are weighing bills to extend outdoor dining allowances made during the pandemic.

Mr. Wiener said he has spent years studying ways to modernize the state’s liquor laws, some of which are 100 years old.

Here is much more from Aaron Zitner and Julie Bykowicz at the WSJ.  For the pointer I thank Greg Roemer.

When will China move against Taiwan?

That is the topic of my latest cheery Bloomberg column, here is one excerpt:

It’s not as if all of a sudden one morning the news will be filled with reports of bombs falling on Taipei. China has other options: It might occupy the islands of Quemoy and Matsu, just off the coast of China but claimed by Taiwan. Imagine China taking the islands, possibly with zero casualties, and then calling both Taipei and Washington to discuss what should happen next. Taiwan would have to think long and hard.

It would hardly be new for China to target Quemoy and Matsu. In 1958 Taiwan defended those islands with U.S. support after a Chinese incursion. An uneasy stalemate followed. There was also a crisis in 1954-55, again with inconclusive results. A possible confrontation today, in view of growing Chinese military and economic power, requires a fundamentally different calculus.

And this:

The most common argument against imminent Chinese action is that “time is on China’s side.” The size of China’s economy relative to America’s is likely to rise over time, along with China’s relative military prowess.

But China’s GDP as a share of global GDP may already be near a peak, depending on how well the rest of the world does. China has also to worry about the rise of India, the continuing rearming of Japan and a possibly recalcitrant Southeast Asia. Meanwhile, the Communist Party itself may face increasing fractures and lose some of its grip on power. If China is going to take significant action against Taiwan, now may be the easiest time to do so.

The evolution of military technologies would also seem to argue for Chinese action sooner rather than later. Even a very powerful China might find Taiwan difficult to conquer in 20 years. At the current moment, Taiwan’s defense capabilities seem especially run down.

Momentum is another reason why China might decide to act soon. China recently changed the status of Hong Kong, and has taken increasingly concrete steps to tighten its grip on Xinjiang, in both cases facing an international opposition that is modest and manageable.

Once countries start down such an aggressive road it is sometimes difficult for them to stop. Both the Chinese military and the organizational infrastructure of the Communist Party are currently geared toward “solutions,” activism, and the notion of bringing everyone into the fold. China is used to receiving foreign criticism, and its leaders seem to be consolidating their power. Because of its success in halting the spread of the pandemic, the party currently enjoys a status that it might find hard to regain.

Is it possible for the party to put the brakes on this process and restart it 20 years later? Maybe — but again, the view that China is prepared for imminent action on Taiwan is a plausible one.


Has Covid ushered in a new era of U.S. regional decentralization?

That is the topic of my latest Bloomberg column, and here is the opener:

The homogenization of America — through national TV and politics, cheap transportation and big online or nationwide businesses such as Walmart and Amazon — is a longstanding story. Regardless of how true it is, or ever was, a new truth is emerging from the pandemic: In the last year, the differences among the U.S.’s states and regions have become increasingly apparent — and they are more temperamental than political.

I recently spent two weeks in Miami Beach, and the mood was festive. On the street, many people wore masks, but once they entered the packed restaurants and clubs, the masks came off and the partying started. (Disclosure: I am vaccinated, and was an observer, not a participant.) The midnight curfew was by no means always respected.

That scene might make you recoil in horror, and many observers predicted catastrophe for Florida’s policies. But Florida’s death toll is close to the national average, and Governor Ron DeSantis is extremely popular. The state’s lockdowns were never very strict, its schools have been open since August, and Miami’s NBA team is welcoming fans, albeit with seating restrictions. The economy has been booming for some time, in part because people who wish to spend money or organize get-togethers have been drawn to Florida.

And my sense is that most Floridians feel vindicated. I spoke to several people who admitted they had had Covid earlier in the year and described the experience with a giggle or a smirk, as if it were nothing serious. Just last week DeSantis announced that Florida would have nothing to do with plans for vaccine passports…

San Francisco is one obvious point of contrast. The schools still have not reopened, with no clear date in sight, even though the teachers have been offered vaccines. (Meanwhile, the school board decided to rename many of its schools.) Large public gatherings are rare, and inside dining has been largely prohibited. Like Florida, the city can boast of very low death rates from Covid, and like Floridians, many San Franciscans seem proud of their course.

You might think this is all because Florida is a Republican-leaning state. But Donald Trump won only 51.2% of the vote there last year, and Joe Biden won Miami-Dade County by seven percentage points…

Overall the Southeast would seem to be a big winner, as the psychological effects of low rates of unemployment may prove more durable than the effects of high rates of casualties.

There is much more at the link, including a comparison of Virginia and Maryland.

Failure is the Mother of Success

New paper from Jeffrey E. Harris:

The decades-long effort to produce a workable HIV vaccine has hardly been a waste of public and private resources. To the contrary, the scientific know-how acquired along the way has served as the critical foundation for the development of vaccines against the novel, pandemic SARS-CoV-2 virus. We retell the real-world story of HIV vaccine research – with all its false leads and missteps – in a way that sheds light on the current state of the art of antiviral vaccines. We find that HIV-related R&D had more than a general spillover effect. In fact, the repeated failures of HIV vaccine trials have served as a critical stimulus to the development of successful vaccine technologies today. We rebut the counterargument that HIV vaccine development has been no more than a blind alley, and that recently developed vaccines against COVID-19 are really descendants of successful vaccines against Ebola, MERS, SARS-CoV-1 and human papillomavirus. These successful vaccines likewise owe much to the vicissitudes of HIV vaccine development.

In Praise of Tyler Cowen and Patrick Collison

Here’s a great video on FastGrants, the fast funding-institution started by Tyler and Patrick Collison to fund COVID research at a speed that could make a difference on the ground. And it did.

Lots of other people stepped in with funding including Arnold Ventures, The Audacious Project, The Chan Zuckerberg Initiative, John Collison, Crankstart, Jack Dorsey, Kim and Scott Farquhar, Paul Graham, Reid Hoffman, Fiona McKean and Tobias Lütke, Yuri and Julia Milner, Elon Musk, Chris and Crystal Sacca, Schmidt Futures, and others.

The list of funded people and projects is long and impressive and while the grants were fast, the payoff is going to last well beyond the pandemic.

Thanks, Tyler and Patrick!

In praise of Alex Tabarrok

Here’s a question I’ve been mulling in recent months: Is Alex Tabarrok right? Are people dying because our coronavirus response is far too conservative?

I don’t mean conservative in the politicized, left-right sense. Tabarrok, an economist at George Mason University and a blogger at Marginal Revolution, is a libertarian, and I am very much not. But over the past year, he has emerged as a relentless critic of America’s coronavirus response, in ways that left me feeling like a Burkean in our conversations.

He called for vastly more spending to build vaccine manufacturing capacity, for giving half-doses of Moderna’s vaccine and delaying second doses of Pfizer’s, for using the Oxford-AstraZeneca vaccine, for the Food and Drug Administration to authorize rapid at-home tests, for accelerating research through human challenge trials. The through line of Tabarrok’s critique is that regulators and politicians have been too cautious, too reluctant to upend old institutions and protocols, so fearful of the consequences of change that they’ve permitted calamities through inaction.

Tabarrok hasn’t been alone. Combinations of these policies have been endorsed by epidemiologists, like Harvard’s Michael Mina and Brown’s Ashish Jha; by other economists, like Tabarrok’s colleague Tyler Cowen and the Nobel laureates Paul Romer and Michael Kremer; and by sociologists, like Zeynep Tufekci (who’s also a Times Opinion contributor). But Tabarrok is unusual in backing all of them, and doing so early and confrontationally. He’s become a thorn in the side of public health experts who defend the ways regulators are balancing risk. More than one groaned when I mentioned his name.

But as best as I can tell, Tabarrok has repeatedly been proved right, and ideas that sounded radical when he first argued for them command broader support now. What I’ve come to think of as the Tabarrok agenda has come closest to being adopted in Britain, which delayed second doses, approved the Oxford-AstraZeneca vaccine despite its data issues, is pushing at-home testing and permitted human challenge trials, in which volunteers are exposed to the coronavirus to speed the testing of treatments. And for now it’s working: Britain has vaccinated a larger percentage of its population than the rest of Europe and the United States have and is seeing lower daily case rates and deaths.

Here is more from Ezra Klein at the New York Times.

Mistrust of the CBO is unfortunately a growing bipartisan avocation

That is the topic of my latest Bloomberg column, here is one excerpt:

Recently the CBO issued a working paper considering what would happen if U.S. government expenditures were to consume an additional 5% to 10% of GDP. The results are pretty grim: By 2030, because of higher taxes and higher borrowing, the level of GDP would be 3 to 10 percentage points lower. The largest losses are suffered by young Americans, who would go through more of their lives with a lower capital stock, leading to lower wages. Worse yet, the losses are highest when the spending is financed by progressive taxation — a very popular idea in today’s Democratic Party.

As with the CBO’s minimum-wage analysis, you may not agree with every aspect of this study. The authors themselves note that it neglects any productivity gains that might follow from the expenditures. Still, these estimates represent a real challenge to those who favor more government spending.

This analysis has mostly been ignored rather than attacked, which is unfortunate for those of us who would prefer a robust debate. In the meantime, “If you can’t even convince the CBO” seems like a good standard of proof for Democrats to accept — and one they themselves insisted on not very long ago.

For the pointer to the new CBO study I thank Corey Frederick Kallen.

Personal bankruptcies have declined during the pandemic

The number of people seeking bankruptcy fell sharply during the pandemic as government aid propped up income and staved off housing and student-loan obligations.

Bankruptcy filings by consumers under chapter 7 were down 22% last year compared with 2019, while individual filings under chapter 13 fell 46%, according to Epiq data. After holding above 50,000 filings a month in 2019 and in the first quarter of 2020, bankruptcy filings have remained below 40,000 a month since last March when the pandemic hit.

By contrast, commercial bankruptcy filings rose 29%, with more than 7,100 businesses seeking chapter 11 protection last year, according to Epiq…

Economists and bankruptcy lawyers say federal suspensions of evictions, home foreclosures and student-loan obligations have helped limit bankruptcies—though they worry bankruptcy rates could go up after aid ends. Household spending also dropped as people stayed home, canceled travel and socially distanced to avoid the coronavirus. Several rounds of government aid padded incomes with direct payments to households and enhanced unemployment benefits. The personal saving rate rose.

Here is more from the WSJ.

What should I ask Pierpaolo Barbieri?

I will be doing a Conversation with him, here is the opening part of his Wikipedia page:

Pierpaolo Barbieri (Buenos Aires, May 17, 1987) is an economic historian, researcher, Executive Director at Greenmantle[and founder of Ualá, an Argentina-based personal financial management mobile app. He is the author of the book Hitler’s Shadow Empire: The Nazis and the Spanish Civil War. He has been featured in publications like Financial Times, New York Times, Foreign Affairs, El País, and The Wall Street Journal.

Ualá has been highly successful as of late in the payments space, including with the unbanked, and here is Pierpaolo on Twitter (mostly Spanish language).

So what should I ask him?

How might depopulation reverse itself?

That is the topic of my latest Bloomberg column, drawing upon an earlier discussion by Robin Hanson.  The problem is this: if families find that having three or four kids just isn’t that fun, and women wish to focus more on their careers, which forces might be capable of reversing that trend?:

One possibility is that a shrinking population itself will bring self-reversing mechanisms. For instance, a Japanese population half its current size would make Japan an emptier place, presumably lowering land prices. Some families would find it easier to afford a larger apartment in central Tokyo and perhaps decide to have more children.

But that mechanism seems more likely to reduce population decline than to reverse it. Living space is only one of many factors behind decisions about family size. And as population declines, the stock of houses and apartments will decline too, so in the longer run the amount of space per family may not increase by very much…

Another factor in declining fertility, especially in the U.S., is single parenthood. If a potential mother is facing a fertility decision without another full-time parent on the scene, she is more likely to choose to have fewer children. As population falls, will single-parent families become less common? It is hard to see why. Whether the issue is a lack of marriageable men, unstable family norms or women who simply prefer to go it alone, there is no particular reason to think those factors will disappear in an era of population decline.


What might be some other intervening factors to restore fertility? Perhaps tender and loving robots will make it much easier to raise young children. Or maybe, as populations fall to much lower levels, a sense of moral panic will set in. Families might decide to have more children, feeling that the very survival of their country is at stake. A more elaborate and dystopian scenario would be that corporations take over empty parts of the globe and pay for the raising of children there, in return for a share of their future income.

Here is Ross Douthat’s Sunday column on broadly similar issues, each column was written independently of the other.  As I interpret his discussion, he is more (potentially?) optimistic about ideological and religious forces reversing the decline than I am, in any case an interesting contrast of approach.  By the way, here is Robin Hanson’s proposal for how to escape the problem, more economistic than either Ross or myself.

A quiet war, with mutual option values on both escalation and further Clubhouse comments

‘Neither Israel nor Iran want to publicly take responsibility for the attacks because doing so would be an act of war with military consequences,’ Hossein Dalirian, a military analyst affiliated with Iran’s Islamic Revolutionary Guards Corps, told The New York Times in a Clubhouse discussion on Thursday.

Here is the full NYT article.