Category: Current Affairs

Who has been loneliest during the pandemic?

That question is the topic of my latest Bloomberg column.  The wealthy can fly to the sun, meet outdoors, test regularly, and find many other workarounds.  Poorer individuals tend to be working together in public-facing service jobs.  That has a Covid downside, but it does make them less lonely.  So who are the biggest loneliness losers?

…it’s pointless to debate which group is loneliest. Still, I might argue for some sympathy for Northerners in midlevel jobs who work alone or remotely. Think of academics, accountants, middle managers.

Recommended.

Japan facts of the day

Compared with the previous year, the survey showed a drop in the number of people who wanted to work and study abroad, work with foreigners in Japan and learn foreign languages. Most notably the percentage of those who wanted to “use English for a job” declined from its 2020 peak by 10.6 points to 38 per cent.

And:

…the support for the ruling Liberal Democratic party among young people was higher than in other generations. That, said Junji Nakagawa, a professor at Chuo Gakuin University, reflected a view among 20-year-olds that the political landscape was unlikely to ever change.

Here is more from the FT, in part focusing on demographics, sobering throughout.

Where are the Variant Specific Boosters?

I wasn’t shocked at the failures of the CDC and the FDA. I am shocked that our government still can’t get its act together in the third year of the pandemic. Consider how lucky, yes lucky, we have been. Here’s Eric Topol:

…the original vaccines were targeted to the Wuhan ancestral strain’s spike protein from 2019. The spike protein, no less the rest of the original SARS-CoV-2 structure, is almost unrecognizable now in the form of the Omicron strain (see antigenic drift from prior post). While there’s naturally been much focus on the extraordinary number of mutations in the receptor binding domain and the rest of the spike protein, over 50 mutations are spread out throughout Omicron, making the prior major variants of concern (Alpha, Beta, Gamma, Delta) lightweights with respect to changes in structure that are not just linear or uni-dimensional. Each mutation can interact with others (epistasis); any mutation or combination of mutations has the potential to change the 3D structure of the virus. In this sense, Omicron is an overwhelming reboot of the ancestral strain.

Omicron is very different from the Wuhan ancestral strain and it’s only a matter of luck that the vaccines continue to work and that Omicron is likely less severe than Delta. Don’t tell me that viruses evolve to be less severe over time–that isn’t correct in theory or practice. The most one might say is that a very deadly virus may be difficult to transmit but that only closes off a small part of the evolutionary design-space. There is plenty of room for transmission and lethality to both increase. So the vaccines continue to work well. We got lucky. But for how long will our luck last? Do we really have to wait for a more transmissible, more deadly, more vaccine escaping variant before we act?

Where are the variant-specific boosters? The FDA has said they would approve them quickly, without new efficacy trials so I don’t think the problem is primarily regulatory. Why not catch-up to the virus and maybe even get a jump ahead with pan-coronavirus vaccines?

More generally, in our February 2021 paper in Science my co-authors and I argued that we were still leaving trillion dollar bills on the sidewalk by not investing in more vaccine capacity. I am sorry to say that we were right. Why the failure to invest more broadly?

Mostly I blame American lethargy. After 9/11 the country was angry and united and we had troops in Afghanistan within a matter of weeks and we had taken over the country in a matter of months. For better or worse, we acted quickly and with resolve. Yet, when the virus was killing at 9/11 levels every day the public never reached the same level of anger or resolve. Even now Congress has spent trillions on unemployment insurance, business protection, money for schools and stimulus but has not passed the American Pandemic Preparedness Plan, a pretty decent, mostly science-based investment plan.

80,000 hours ranks research and investment against Global Catastrophic Biologic Risk (GCBR) as among the most pressing and yet tractable problems to work on and yet they estimate that quality-adjusted only about a billion dollars is being spent on these risks. Moreover, COVID doesn’t even count as a GCBR, i.e. 80000 hours at least recognizes that things could be much worse.

I understand that future people don’t vote but even so I expected a little bit more foresight.

Noah Smith Substack interviews me

Here is the interview.  Here is one excerpt:

N.S.: So how would you generally describe the zeitgeist of the moment, if you had to give a simple summary? What do you think are a couple of most important trends in culture and thought right now? My impression has been that we’re sort of in a replay of the 70s — a period of exhaustion after several years of intense social unrest, where people are looking around for new cultural and economic paradigms to replace the ones we just smashed. But maybe I’ve just been reading too many Rick Perlstein books?

T.C.: I view the 1970s as a materialistic time, sexually highly charged, and America running into some significant real resource constraints, at least initially stemming from high oil prices. Mainstream culture was often fairly crass — just look at disco, or the ascendancy of mainstream network television. The current time I see as quite different. Sexually, we are withdrawing. Society is more feminized. America has far more immigrants. And we are obsessed with the virtual and with make-believe, to a degree the 1970s could not have imagined. Bruno Macaes is one author who is really on the right track here, with his emphasis on how America is building virtual and indeed often “unreal” fantasies.

I think today the variance of weirdness is increasing. Conformists can conform like never before, due say to social media and the Girardian desire to mimic others. But unusual people can connect with other unusual people, and make each other much weirder and more “niche.” For instance, every possible variant of political views seems to be “out there” these days, and perhaps that is not entirely reassuring. A higher variance for weirdness probably encourages creativity. But is it a positive development on net? We are going to find out.

Recommended throughout, and of course do subscribe to Noah’s Substack.

Debate: The Ethics of Tuberculosis Challenge Trials

On Wed. Jan 12 there will be a live online debate on the bioethics question, If wild type tuberculosis challenge studies would be useful, would they be ethical to conduct? The debate will feature debaters from the The Rikers Debate Project:

  • Jerusalem Demsas, Policy Writer at Vox.com
  • Kaamilya Finley, Senior One Team Ambassador, Deloitte & Rikers Debate Project Fellow
  • Charles Hopkins, President, National Action Network – PG County, Maryland & Rikers Debate Project Fellow
  • Brian Patrick, Activist, Artist, & Rikers Debate Project Fellow

and will be judged by a panel of experts, policy makers and interested parties including myself:

  • Gabriel Bankman-Fried, Director, Guarding Against Pandemics
  • Camilla Broderick, Community Navigator for Midtown Community Court & Rikers Debate Project Fellow
  • Ann M. Ginsberg, Deputy Director, TB Vaccines Global Health
  • Phil Krause, Former Deputy Director, FDA/CBER/OVRR
  • Jake Liang, Chief of Liver Diseases Branch & Deputy Director of Translational Research, NIDDK, NIH
  • Larissa MacFarquhar, Staff Writer, The New Yorker
  • Matt Memoli, Director, Clinical Studies Unit, IRP’s Laboratory of Infectious Disease, NIAID
  • Jerry Sadoff, Head of Early Development, Crucell Vaccine Institute, Janssen Pharmaceutical Companies of Johnson & Johnson
  • Alex Tabarrok, Professor of Economics, George Mason University
  • Nikki Teran, Senior Biosecurity Fellow, The Institute for Progress
  • Matthew Yglesias, Founder, Slow Boring

Should be fun. Admission is free and you can register for attendance here.

The background level of stress

That is a physiological or biological concept, or it may appear in the other sciences.  It rarely plays a direct role in economics, though I think it is important for understanding regime shifts.

I take any estimate of NAIRU, or indeed many other “steady-state” economic variables, as relative to a particular background level of stress.  In a pandemic, of course, that level of stress may be quite high, and to be clear much of that may stem from the policy response, not just the pandemic itself.

To be sure, I do not see the 2022 level of American stress as “permanent.”  But neither do I hold the 1998 or 2018 backgrounds levels of stress to be “permanent” or “natural” either.  If anything, those lower levels may be the historical outliers.

I think a great deal about what the forthcoming level of background stress will be, but I am quite uncertain about any prediction.  I do know I read a great number of people who either treat it as absurdly high (e.g., the climate doomsayers), or who are implicitly sure it will be quite low.

I believe this concept of background stress, if nothing else, helps you to see what a lot of apparently reasonable predictions can end up being proven wrong.

Today’s labor market report

Unemployment is at 3.9%, and can’t get much better.  In the new report just 199,000 jobs were added.  Job growth is slowing and that is a pre-omicron phenomenon.  Labor force participation has not been so low since 1977.  The great economic myth of the last thirteen or so years is that you can get the labor market to pre-Covid Trump administration levels and keep it there just by having enough “aggregate demand.”  I am all for sufficient aggregate demand, to be clear, but I don’t overrate it either.

People are starting to rethink what is going on.  All coherent stories have to involve…the supply side of the labor market.  Which is precisely what the orthodoxy had been telling you to ignore.  Average is Over.

On the Responsibility of Universities to their Students

Emily Oster in The Atlantic:

Many universities have announced a pivot to remote learning for at least part of January, among them UCLA, Columbia, Duke, Yale, Stanford, and Michigan State. The list goes on.

This move—in response to the rapid spread of the Omicron variant—feels like a return to March 2020, when virtually all U.S. universities closed for in-person learning, sending students home for spring break and telling them not to come back. At that point, keeping students away from campus was reasonable. Now, however, this decision is a mistake. It reflects an outmoded level of caution. And it represents a failure of universities to protect their students’ interests.

I agree. Despite being a big fan of online education there is a big difference between online classes developed over many years with substantial funding, like MRU’s classes, and throwing professors into teaching over zoom. College is supposed to be fun. Meeting people is part of the education. Online is great but not for everything.

I would add three points to the those that Oster makes. First, this is where the students are anyway. I gave a talk at UVA recently and everyone was masked according to policy. After the the talk we went to the Corner where the bars and restaurants were packed with unmasked revelers. Mask mandates are pandemic theatre and inconsistent with how much of the country let alone most students are already living. Similarly, going remote is also pandemic theatre and not likely to appreciably reduce interactions in the community at-large.

Second, the elasticity of substitution. It made sense to change behavior substantially when the vaccines were coming. But the vaccines have been here for some time, they are great, they work. So get vaccinated, be thankful, and get back to life.

Finally these arguments apply with at least as much strength if not more to the public schools. Furthermore, we have spent billions of dollars on pandemic preparations for the public schools. Why did we spend that money if not to open the schools?

Basta!

Is the Beijing Consensus collapsing?

From my latest Bloomberg column:

The more dramatic developments have come from China itself. China did effectively wield state power to build infrastructure, manage its cities and boost economic growth. And most advocates of the Washington Consensus underestimated how well that process would go.

But along the way, China became addicted to state power. Whenever there was a problem in Chinese society, the government ran to the rescue. The most dramatic example was the extreme use of fiscal policy to forestall the 2008 financial crisis from spreading to China.

Yet this general application of state power, even if successful in a particular instance, brought a great danger: The Chinese were left with overdeveloped state-capacity muscles and underdeveloped civil-society capabilities. Over the last several years the Chinese government has done much to restrict civil society, free speech and religion within China. Now much of the world, including but not limited to China’s neighbors, is afraid of Chinese state power.

Now, because state power has its limits, it is difficult for China to solve many of its most fundamental problems. Chinese leaders are worried about the country’s low birth rate, for instance, but lifting restrictions on the number of children has not yet helped increase the birth rate. In many societies, it is religious families that have more children, but promoting religion is not a remedy that comes easily to China today.

And how will China deal with the pending spread of the omicron variant of Covid-19? The Communist Party staked its legitimacy on the claim that it could control Covid while the U.S. could not. Soon Chinese citizens may be in for a rude awakening, especially if the Chinese vaccines are not so effective.

Recommended.

Arnold Kling’s proposal for regulatory reform

To improve our agencies’ performance, we need to think about restructuring the federal bureaucracy itself.

I propose we do so by creating two positions within the executive branch that operate in tension with each other. The first would be the chief operating officer, charged with managing the administrative agencies. The second would be the chief auditor, charged with leading a watchdog agency that monitors the administrative state for effectiveness and abuses of authority. Both the president and Congress would oversee the balance of power between the two positions.

Much like that of a private firm, the chief operating officer (COO) of the regulatory state would direct the operations of the entire executive branch, including independent agencies like the FDA, the Federal Trade Commission, the Federal Communications Commission, the Federal Reserve Board, and the Patent and Trademark Office. The COO’s charge would be to maximize operational effectiveness. He would have the authority to make decisions without the approval of the president.

Unlike presidents, who tend to enter the Oval Office without having supervised anything larger than a Senate staff, the COO should come into office with strong organizational-management experience — ideally based on having led a large, private-sector firm. This person should be familiar with the challenges of improving incentive systems, streamlining organizational processes, planning, budgeting, facilitating coordination among disparate units, articulating objectives, and aligning organizational efforts toward those objectives. He should have the authority to put this experience to work within the regulatory state.

To unravel the tangle of agencies that are the legacy of so many congressional bills, the COO should be empowered to re-organize, restructure, merge, or eliminate any existing agencies, refine their missions, and appoint their directors.

And:

With a COO in charge of managing government agencies, the roles of Congress and the president would adjust accordingly. Congress would act more like a board of directors with respect to the agencies, and the president would act more like a board chairman. The COO would assume the responsibility of presenting a plan and budget to Congress for approval, while the president would have the authority to hire and fire the COO at will. In a spirit of conservative incrementalism, we could first apply the COO model to one functional domain, such as domestic infrastructure, before extending it to the others.

The second new position — the chief auditor (CA) — would lead a powerful audit agency that provides independent evaluations of agency performance.

Worth a read in full.

Markets in everything those new service sector jobs

Brainstorming a wedding hashtag? Good luck finding one that hasn’t #beendone.

More than a decade of wedding hashtags have flooded social-media sites to help couples curate guests’ photos on their special day. But soon-to-be-newlyweds are finding it harder to identify a clever, distinctive phrase…

Wedding hashtags have historically often combined a couple’s names and wedding year or date, says Marielle Wakim, Ms. Wakim, founder of hashtag-writing service Happily Ever #Hashtagged.

“It’s so beyond #JimandPamWedding2016 at this point,” she says.

Ms. Wakim launched her Los Angeles-based business in 2016 as the wedding-hashtag trend was booming. Her prices range from one hashtag for $50 to five for $125. Some couples prefer having options or multiple hashtags for different events, such as a bachelorette party and wedding ceremony.

Clients want personalized, tailored, creative hashtags, she says. Some have had specific requests, like Disney -themed hashtags or ones that incorporate specific Chance the Rapper lyrics.

Here is the full WSJ story, via Daniel Lippman.

Solve for the Eastern equilibrium

Russia’s sabre-rattling in Ukraine has reignited the debate in Finland as to whether the Nordic country should join Nato, defying demands from Moscow that seek to limit expansion of the military alliance in Europe.

Both president Sauli Niinisto and prime minister Sanna Marin used their new year addresses to underscore that Finland retained the option of seeking Nato membership at any time.

“Let it be stated once again: Finland’s room to manoeuvre and freedom of choice also include the possibility of military alignment and of applying for Nato membership, should we ourselves so decide,” Niinisto said.

Here is more from Richard Milne at the FT.

Dan Wang’s 2021 letter

Here it is, one of the better written pieces of this (or last) year.  It is mostly about China, manufacturing, and economic policy, but here is the part I will quote:

But Hong Kong was also the most bureaucratic city I’ve ever lived in. Its business landscape has remained static for decades: the preserve of property developers that has created no noteworthy companies in the last three decades. That is a heritage of British colonial rule, in which administrators controlled economic elites by allocating land—the city’s most scarce resource—to the more docile. Hong Kong bureaucrats enforce the pettiest rules, I felt, out of a sense of pride. On the mainland, enforcers deal often enough with senseless rules that they are sometimes able to look the other way. Thus a stagnant spirit hangs over the city. I’ve written before that Philip K. Dick is useful not for thinking about Hong Kong’s skyline, but its tycoon-dominated polity: “governed by a competent but fundamentally pessimistic elite, which administers a population bent on consumption. Instead of being hooked on drugs and television like in PKD’s novels, people in Hong Kong are addicted to the extraordinary flow of liquidity from the mainland, which raises their asset values and dulls their senses.”

And then on Mozart:

Among these three works, Figaro is the most perfect and Don Giovanni the greatest. But I believe that Cosi is the best. Cosi is Mozart’s most strange and subtle opera, as well as his most dreamlike. If the Magic Flute might be considered a loose adaptation of Shakespeare’s Tempest—given their themes of darkness, enchantment, and salvation—then Cosi ought to be Mozart’s take on A Midsummer Night’s Dream.

Donald Tovey called Cosi “a miracle of irresponsible beauty.” It needs to be qualified with “irresponsible” because its plot is, by consensus, idiotic. The premise is that two men try—on a dare—to seduce the other’s lover. A few fake poisonings and Albanian disguises later, each succeeds, to mutual distress. Every critic that professes to love the music of Cosi also discusses the story in anguished terms. Bernard Williams, for example, noted how puzzling it has been that Mozart chose to vest such great emotional power with his music into such a weak narrative structure. Joseph Kerman is more scathing, calling it “outrageous, immoral, and unworthy of Mozart.”

I readily concede that the music of Cosi so far exceeds its dramatic register.

Recommended!  There is much more at the link, substantive throughout.  Though I should note I am less bullish on both manufacturing and China than Dan is.  I fully agree about Bleak House, however, and at times I think it is the greatest novel written…

The Jeff Holmes Conversation with Tyler Cowen

Jeff is the CWT producer, and it has become our custom to do a year-end round-up and summary.  Here is the transcript and audio and video.  Here is one excerpt:

HOLMES: …Okay, let’s go through your 2011 list really quickly.

COWEN: Sure.

HOLMES: All right, number one — in no particular order, I think — but number one was Incendies. Do you remember what that’s about?

COWEN: That is by the same director of Dune.

HOLMES: Oh, is that Denis Villeneuve?

COWEN: Yes, that’s his breakthrough movie. It’s incredible.

HOLMES: I didn’t know that. I’d never heard of it. French Canadian movie, mostly set in Lebanon.

COWEN: Highly recommended, whether or not you like Dune. That was a good pick. It’s held up very well. The director has proven his merits repeatedly, and the market agrees.

HOLMES: I’m a fan of Denis Villeneuve. Obviously, Arrival was great. I can’t think of the Mexican drug movie off the top of my head.

COWEN: Is it Sicario?

HOLMES: Sicario — awesome.

COWEN: It was interesting, yes.

HOLMES: He is one of the only directors today where, when he now makes something, I know I will go and see it.

COWEN: Well, you must see Incendies. So far, I’m on a roll. What’s next?

HOLMES: All right, number two: Uncle Boonmee Who Can Recall His Past Lives.

COWEN: Possibly the best movie of the last 20 years. I’m impressed by myself. It’s a Thai movie. It’s very hard to explain. I’ve seen it three times since. A lot of other people have it as either their favorite movie ever or in a top-10 status, but a large screen is a benefit. If you’re seeing the movie, pay very close attention to its sounds and to the sonic world it creates, not just the images.

There are numerous interesting observations in the dialogue, including about some of the guests and episodes.

Self-recommended!