Category: Current Affairs

Where we stand

I thought it useful to sum up my current views in a single paragraph, here goes:

I don’t view “optimal length of shutdown” arguments compelling, rather it is about how much pain the political process can stand.  I expect partial reopenings by mid-May, sometimes driven by governors in the healthier states, even if that is sub-optimal for the nation as a whole.  Besides you can’t have all the banks insolvent because of missed mortgage payments.  But R0 won’t stay below 1 for long, even if it gets there at all.  We will then have to shut down again within two months, but will then reopen again a bit after that.  At each step along the way, we will self-deceive rather than confront the level of pain involved with our choices.  We may lose a coherent national policy on the shutdown issue altogether, not that we have one now.  The pandemic yo-yo will hold.  At some point antivirals or antibodies will kick in (read Scott Gottlieb), or here: “There are perhaps 4-6 drugs that could be available by Fall and have robust enough treatment effect to impact risk of another epidemic or large outbreaks after current wave passes. We should be placing policy bets on these likeliest opportunities.”  We will then continue the rinse and repeat of the yo-yo, but with the new drugs and treatments on-line with a death rate at maybe half current levels and typical hospital stays at three days rather than ten.  It will seem more manageable, but how eager will consumers be to resume their old habits?  Eventually a vaccine will be found, but getting it to everyone will be slower than expected.  The lingering uncertainty and “value of waiting,” due to the risk of second and third waves, will badly damage economies along the way.

So there you have it.

There’s No Such Things as a Free L̶u̶n̶c̶h Test

In a short-sighted blunder, India’s Supreme Court has ruled that private labs cannot charge for coronavirus tests:

NDTV: “The private hospitals including laboratories have an important role to play in containing the scale of pandemic by extending philanthropic services in the hour of national crisis…We thus are satisfied that the petitioner has made out a case…to issue necessary direction to accredited private labs to conduct free of cost COVID-19 test,” the court said.

Whether the private labs should be reimbursed by the government, will be decided later, Justices Ashok Bhushan and S Ravindra Bhat said in a hearing conducted via video conferencing.

The Supreme Court’s ruling will reduce the number of tests and dissuade firms from rushing to develop and field new drugs and devices to fight the coronavirus. A price is a signal wrapped up in an incentive. Instead of incentivizing investment, this order incentives firms to invest resources elsewhere.

Nor do private labs have a special obligation that mandates their conscription–an obligation to fund testing for all, falls on all.

The ruling is especially unfortunate because as Rajagopalan and Choutagunta document, India’s health care sector is predominantly private:

…India must rely primarily on the private sector and civil society to lead the response to COVID-19,…the role of the government should be financing and subsidizing testing and treatment for those who cannot afford to pay. India’s private healthcare system is better funded and better staffed than the government healthcare system, and it serves more people. It is estimated to be four times bigger in overall healthcare capacity, and it has 55 percent of the total hospital bed capacity, 90 percent of the doctors, and 80 percent of the ventilators.

The temptation to requisition private resources for state use in an emergency is ever present—but Indian policymakers must resist that temptation because it will compromise instead of increase capacity.

Benevolence is laudatory but even in a pandemic we should not rely on the benevolence of the butcher, brewer or baker for our dinner nor on the lab for our coronavirus tests. If we want results, never talk to suppliers of our own necessities, but only of their advantages.

Fast Grants against Covid-19, an extension of Emergent Ventures

Emergent Ventures, a project of the Mercatus Center at George Mason University, is leading a new “Fast Grants” program to support research to fight Covid-19.  Here is the bottom line:

Science funding mechanisms are too slow in normal times and may be much too slow during the COVID-19 pandemic. Fast Grants are an effort to correct this.

If you are a scientist at an academic institution currently working on a COVID-19 related project and in need of funding, we invite you to apply for a Fast Grant. Fast grants are $10k to $500k and decisions are made in under 48 hours. If we approve the grant, you’ll receive payment as quickly as your university can receive it.

More than $10 million in support is available in total, and that is in addition to earlier funds raised to support prizes.  The application site has further detail and explains the process and motivation.

I very much wish to thank John Collison, Patrick Collison, Paul Graham, Reid Hoffman, Fiona McKean and Tobias Lütke, Yuri and Julia Milner, and Chris and Crystal Sacca for their generous support of this initiative, and I am honored to be a part of it.

Meanwhile, elsewhere in the world (FT):

The president of the European Research Council — the EU’s top scientist — has resigned after failing to persuade Brussels to set up a large-scale scientific programme to fight Covid-19.

In contrast:

During World War II, the NDRC accomplished a lot of research very quickly. In his memoir, Vannevar Bush recounts: “Within a week NDRC could review the project. The next day the director could authorize, the business office could send out a letter of intent, and the actual work could start.” Fast Grants are an effort to unlock progress at a cadence similar to that which served us well then.

We are not able at this time to process small donations for this project, but if If you are an interested donor please reach out to fund@fastgrants.org.

Safety Protocols for Getting Back to Work

China bent the curve, Italy bent the curve and I believe that the curve is bending in the United States. Suppression is working and the second part of the strategy of test, trace and isolate will start to come into play in a few weeks. The states are gearing up to test, trace and isolate and several large serological surveys are already underway which will gives us a much better idea of how widely the virus has spread. Ideally, we will move from test, trace and isolate to a situation where we can conduct millions of tests weekly which will take us into the vaccine time.

Before testing is fully operational, however, we will need to follow safety protocols. We can learn about what works from what essential workers are doing now. Green Circuits in CA, for example, redesigned the shift schedule:

His first move was to redesign the plant’s work schedule. The company, owned by the Dallas-based private equity firm Evolve Capital, always had the first and second shifts overlap for a half-hour. That allowed workers arriving in the afternoon to confer with colleagues as they handed off duties.

But O’Neil said they realized that would risk their whole workforce getting quarantined for 14 days, if someone got infected by the coronavirus and spent time at the factory as part of this larger group.

The solution was to create three separate teams of 40 workers each. The first shift now ends at 2 p.m., and then there’s an hour when the workspaces, tools, and breakrooms are sanitized. The third team does not work at all, but rather is held in reserve and available to jump in if an illness hampers one of the two other teams of workers.

Other safety protocols include:

  • Shift work for white collar workers as well as for blue collar workers. Including spreading work over the weekends.
  • Senior shopping hours.
  • Temperature checks, perhaps via passive fever cameras at work and public transport.
  • Mandatory masks for public transportation.
  • Masks for workers.
  • Sanitation breaks for mandatory hand washing.
  • Quarantining at work for essential workers, as the MLB is thinking of doing despite not being essential.
  • Reducing touch surfaces (even with simple things like propping up bathroom doors) and copper tape for hi-touch surfaces that cannot be eliminated.

It will take longer to reopen restaurants, clubs and sports stadiums but I believe that applying these protocols will allow many of us to work safely. We aren’t ready yet but now is the time to plan for our return.

Peter Navarro and the epistemic problem

A top White House adviser starkly warned Trump administration officials in late January that the coronavirus crisis could cost the United States trillions of dollars and put millions of Americans at risk of illness or death.

The warning, written in a memo by Peter Navarro, President Trump’s trade adviser, is the highest-level alert known to have circulated inside the West Wing as the administration was taking its first substantive steps to confront a crisis that had already consumed China’s leaders and would go on to upend life in Europe and the United States.

Here is the full story (NYT), and of course he wasn’t heeded.  I have disagreed with Navarro on most major issues, most of all on trade and quite possibly he is overpromoting chloroquine.  Still, I think we should reconsider in light of this new information.  I have not changed my mind on the previous issues, but should we not now all admit Navarro is, in expected value terms, one of the best advisors in recent memory in any administration?

How does isolation change status-seeking?

That is the topic of my new Bloomberg column, excerpt:

The plunge in status-seeking behavior is yet another way in which the lockdown is a remarkable and scary social experiment. One possible consequence is that many people won’t work as much, simply because no one is watching very closely and it is harder to get that pat on the shoulder or kind word for extra effort.

Worse yet, for many people social approbation compensates for economic hardships, and that salve is now considerably weaker. Time was, even if you were unemployed, you could still walk down the street and command attention for that one stylish item in your wardrobe, or your cool haircut, or your witty repartee. Now there’s no one on the street to impress.

Americans are learning just how much we rely on our looks, our charisma and our eloquence for our social affect. As Sonia Gupta asked on Twitter: “Extremely attractive people, I have a genuine question for you, no snark: What’s it like to not be getting the regular daily social attention you might be accustomed to, now that you have to stay inside and isolate from others?”

…To some extent this status erosion is liberating. It may cause a lot of people to reexamine perennial questions about “what really matters.” There are other positive effects: fewer peer-related reasons to go out and spend money, for instance (do you really need that new jacket, or to try all the hot new restaurants?). That will help make tighter budgets or even unemployment more bearable. Some socially anxious people may even feel they are better off.

Yet overall this is a dangerous state of affairs.

There is much more at the link.

The Economic Consequences of the Virus?

The inhabitant of New York could order by computer, sipping his morning coffee in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate with passport or other formality and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing just a credit card upon his person, and would consider himself greatly aggrieved by the TSA but otherwise much surprised at the least interference. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, exclusion and of pandemics which were to play the serpent to this paradise, were little more than the amusements of his daily twitter feed, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.

Only slightly modified.

Our regulatory state is failing us, installment #1437

The Trump administration has stumbled in its initial push to implement the $2 trillion coronavirus aid package, with confusion and fear mounting among small businesses, workers and the newly unemployed since the bill was signed into law late last month.

Small-business owners have reported delays in getting approved for loans without which they will close their doors, while others say they have been denied altogether by their lenders and do not understand why. The law’s provision to boost unemployment benefits has become tangled in dated and overwhelmed state bureaucracies, as an unprecedented avalanche of jobless Americans seeks aid.

Officials at the Internal Revenue Service have warned that $1,200 relief checks may not reach many Americans until August or September if they haven’t already given their direct-deposit information to the government. Taxpayers in need of answers from the IRS amid a rapidly changing job market are encountering dysfunctional government websites and unresponsive call centers that have become understaffed as federal workers stay home.

Here is the full piece by Jeff Stein.  And here is me in WaPo:

Cowen said it’s inexplicable why the federal government, given all the warnings and evidence from China of a spreading pandemic, did not move more rapidly.

“You know, Trump was terrible, but you can’t just pin it on him. It’s far more systemic than that. The NBA [which suspended its season on March 11] really gets so much credit. I would put the NBA in charge of fighting climate change at this point.”

The piece there is by Dan Balz.

Why I do not favor variolation for Covid-19

Robin Hanson makes the strongest case for variolation, here is one excerpt:

So the scenario is this: Hero Hotels welcome sufficiently young and healthy volunteers. Friends and family can enter together, and remain together. A cohort enters together, and is briefly isolated individually for as long as it takes to verify that they’ve been infected with a very small dose of the virus. They can then interact freely with each other, those those that show symptoms are isolated more. They can’t leave until tests show they have recovered.

In a Hero Hotel, volunteers have a room, food, internet connection, and full medical care. Depending on available funding from government or philanthropic sources, volunteers might either pay to enter, get everything for free, or be paid a bonus to enter. Health plans of volunteers may even contribute to the expense.

Do read the whole thing.  By the way, here is “Hotel Corona” in Tel Aviv.  Alex, by the way, seems to endorse Robin’s view.  Here are my worries:

1. Qualified medical personnel are remarkably scarce right now.  I do not see how it is possible to oversee the variolation of more than a small number of individuals.  Furthermore, it is possible that many medical personnel would refuse to oversee the practice.  The net result would be only a small impact on herd immunity.  If you doubt this, just consider how bad a job we Americans have done scaling up testing and making masks.

The real question right now is what can you do that is scalable?  This isn’t it.

I recall Robin writing on Twitter that variolation would economize on the number of medical personnel.  I think it would take many months for that effect to kick in, or possibly many years.

2. Where will we put all of the Covid-positive, contagious individuals we create?  What network will we use to monitor their behavior?  We have nothing close to the test and trace systems of Singapore and South Korea.

In essence, we would have to send them home to infect their families (the Lombardy solution) or lock them up in provisional camps.  Who feeds and takes care of them in those camps, and what prevents those individuals from becoming infected?  What is the penalty for trying to leave such a camp?  Is our current penal system, or for that matter our current military — both longstanding institutions with plenty of experienced personnel — doing an even OK job of overseeing Covid-positive individuals in their midst?  I think not.

Under the coercive approach, what is the exact legal basis for this detention?  That a 19-year-old signed a detention contract?  Is that supposed to be binding on the will in the Rousseauian sense?  Where are the governmental structures to oversee and coordinate all of this?  Should we be trusting the CDC to do it?  Will any private institutions do it without complete governmental cover?  I don’t think so.

If all this is all voluntary, the version that Robin himself seems to favor, what percentage of individuals will simply leave in the middle of their treatment?  Robin talks of “Hero Hotels,” but which actual hotels will accept the implied liability?  There is no magic valve out there to relieve the pressure on actual health care systems.  Note that the purely voluntary version of Robin’s plan can be done right now, but does it seem so popular?  Is anyone demanding it, any company wishing it could do it for its workforce?

3. The NBA has an amazing amount of money, on-staff doctors, the ability to afford tests, and so on.  And with hundreds of millions or billions of dollars at stake they still won’t restart a crowdless, TV-only season.  They could indeed run a “Heroes Hotel” for players who got infected from training and play, and yet they won’t.  “Stadium and locker room as Heroes Hotel” is failing the market test.  Similarly, colleges and universities have a lot at stake, but they are not rushing to volunteer their dorms for this purpose, even if it might boost their tuition revenue if it went as planned (which is not my prediction, to be clear).

The proposal requires institutions to implement it, yet it doesn’t seem suited for any actual institution we have today.

4. Does small/marginal amounts of variolation do much good compared to simply a weaker lockdown enforcement for activities that involve the young disproportionately?  Just tell the local police not to crack down on those soccer games out in the park (NB: I am not recommending this, rather it is the more practical version of what Robin is recommending; both in my view are bad ideas.)  Robin’s idea has the “Heroes Hotel” attached, but that is a deus ex machina that simply assumes a “free space” (both a literal free space and a legally free space) is available for experimentation, which it is not.

5. Society can only absorb a small number of very blunt messages from its leaders.  You can’t have the President saying “this is terrible and you all must hide” and “we’re going to expose our young” and expect any kind of coherent response.  People are already confused enough from mixed messages from leaders such as presidents and governors.

6. There is still a chance that Covid-19 causes or induces permanent damage, perhaps to the heart and perhaps in the young as well.  That does not militate in favor of increasing the number of exposures now, especially since partial protective measures (e.g., antivirals, antibodies) might arise before a vaccine does.  This residual risk, even if fairly small, also makes the liability issues harder to solve.

7. The actual future of the idea is that as lockdown drags on, many individuals deliberately will become less careful, hoping to get their infections over with.  A few may even infect themselves on purpose, one hopes with a proper understanding of dosage.  One can expect this practice will be more popular with the (non-obese) young.  The question is then how to take care of those people and how to treat them.  That debate will devolve rather rapidly into current discussions of testing, test and trace, self-isolation, antivirals, triage, and so on.  And then it will be seen that variolation is not so much of a distinct alternative as right now it seems to be.

8. The main benefit of variolation proposals is to raise issues about the rates at which people get infected, and the sequencing of who is and indeed should be more likely to get infected first.  Those questions deserve much more consideration than they are receiving, and in that sense I am very happy to see variolation being brought (not much risk of it happening as an explicit proposal).  That said, I don’t think Heroes Hotel, and accelerating the rate of deliberate, publicly-intended infection, is the way to a better solution.

Soon I’ll write more on what I think we should be doing, but I would not put explicit variolation above the path of the status quo.

Immunity Passes Must Be Combined With Variolation

I wrote earlier that “recovered individuals have a kind of superpower and would be highly desirable workers.” Antibody tests will soon be able to identify these workers and that will help to reopen the economy because not only can these workers go back to work relatively safely they can also work relatively safely with those who are not immune, thus a kind of multiplier-effect for the workplace. Hence, Italy and the UK are talking about “Immunity Passes” that would allow (we hope) immune workers to go back to work.

One factor, however, which hasn’t been taken into account is that the demand to go back to work may be so strong that some people will want to become deliberately infected. If not done carefully, however, these people will be a threat to others, especially in their asymptomatic phase. Thus, if we use Immunity Passes they will need to be combined with variolation, infecting people with small doses of the virus to create immunity under controlled conditions, as suggested by Robin Hanson.

Hat tip for discussion: Rafael Yglesias.

Stopping time plus hazard pay?

You’ve previously publicized the clever solution to the Corona-crisis of “stopping time.”  As others have pointed out, a drawback is that we can’t stop time for everyone.  In particular, we need essential services to continue.

Separately, there is a significant case for hazard pay.  In principle we could let the market sort this out.  But in practice, we don’t want to spend the next month getting to the equilibrium with health care workers.

The current round of government interventions entail mounting distortions.

So perhaps a more efficient solution to all of this would be:
–stop time, but
–government sends everyone checks that can be used for food and gas and directly pays for essential services (public safety, medical, utilities)

The net effect is hazard pay for essential workers—they continue to draw income, but their rent/mortgage/loan/utility obligations are frozen just like everyone else’s.

As a ballpark cost: if 25% of the economy is essential, this is about $400B/month.

Expensive, but much cheaper than alternatives.

That is from an email from Philip Bond, University of Washington.

The Strategy: Suppress then Test, Trace, Isolate

From internet comments I’ve seen some confusion on the suppress then “test, trace, isolate” strategy. The “flattening the curve” metaphor suggested that lockdown was all about spreading infections over time to keep the medical system operational. But more importantly, the purpose of lockdown is to reduce the infection rate, R, below 1. A virus needs hosts. Take away the hosts and it fades away. We can take away hosts by making people immune, either with a vaccine or through surviving exposure. We can also take away hosts by hiding–that’s what lockdown is for. If enough people hide, then the virus burns out and fades away.

Of course, hiding leaves us vulnerable to multiple rounds of infection. That’s where the second part of the strategy, test, trace and isolate comes into play. When the infection is running wild, as it is now, we don’t have enough tests to keep up with the virus. But after suppression we can put test, trace and isolate into effect very quickly as outbreaks flare up but before the virus runs out of control again. Increasing our test capacity dramatically makes this strategy even more viable. Thus, as V.V. Chari and Christopher Phelan write in a good op-ed:

…A wise use of the breathing room provided by mass quarantines would be to put in place the infrastructure to allow us to mimic the policies of countries such as South Korea, Taiwan, Singapore and Hong Kong. These countries have thus far controlled the pandemic at much lower economic cost…[using] aggressive but targeted quarantine policies. They quarantine people displaying symptoms, aggressively trace the people they have contacted, test their contacts, and then quarantine those who have the virus (and sometimes those who have just had contact with those who test positive), regardless of whether they are symptomatic or not.

It is a test, trace and isolate policy. These countries have not generally engaged in mass quarantines or shut down factories, shopping malls or restaurants.

After suppression, we can combine “test, trace and isolate” with mask wearing and other safety protocols and move towards reopening the economy.

Sentences to ponder, Mencius Moldbug coronavirus edition

“Anyone repeating lines like “the Trump administration has failed” is spreading an Orwellian lie. There is no “Trump administration.” There is an elected showman and his cronies, fronting for an unaccountable permanent government. The celebrities are neither in charge of the bureaucrats, nor deserve to be. Anyone can be excused for thinking either team is worse than the other. No one can be excused for confusing the two.”

That is from Mencius Moldbug, on the coronavirus, interesting throughout, though some of it quite off base I think.

Thank You Bill Gates

Bill Gates, who warned us–The Next Outbreak, We’re not ready–is getting ready for a vaccine, in fact for seven of them.

Business Insider: Gates said he was picking the top seven vaccine candidates and building manufacturing capacity for them. “Even though we’ll end up picking at most two of them, we’re going to fund factories for all seven, just so that we don’t waste time in serially saying, ‘OK, which vaccine works?’ and then building the factory,” he said.

Gates said that simultaneously testing and building manufacturing capacity is essential to the quick development of a vaccine, which Gates thinks could take about 18 months.

…”It’ll be a few billion dollars we’ll waste on manufacturing for the constructs that don’t get picked because something else is better,” Gates said in the clip. “But a few billion in this, the situation we’re in, where there’s trillions of dollars … being lost economically, it is worth it.”

This is exactly the type of planning and spending on attacking the virus that governments should be doing.

See also my post, A Solution if We Act.