Category: Current Affairs
I did a podcast with Brink Lindsey of the Niskanen Center. Here’s one bit on the FDA’s long-history of banning home tests:
Brink Lindsey: …it’s on the rapid testing that we had inexplicable delays. Rapid tests, home tests were ubiquitous in Europe and Asia months before they were in the United States. What was going on?
Alex Tabarrok: So I think it’s not actually inexplicable because the FDA has a long, long history of just hating people testing themselves. So the FDA was against pregnancy tests, they didn’t like that, they said women they need to consult with a doctor, only the physician can do the test because literally women could become hysterical if they were pregnant or if they weren’t pregnant, this was a safety issue. There was no question that the test itself was safe or worked. Instead what the FDA said, “We can regulate this because the user using it, this could create safety issues because they could commit suicide or they could do something crazy.” So they totally expanded the meaning of safety from is the test safe to can somebody be trusted to use a pregnancy test?
Then we had exactly the same thing with AIDS testing. So we delayed personal at-home tests for AIDS for literally 25 years. 25 years these tests were unavailable because the FDA again said, “Well, they’re dangerous.” And why are they dangerous? “Well, we don’t know what people will do with this knowledge about their own bodies.” Now, of course, you can get an HIV test from Amazon and the world hasn’t collapsed. They did the same thing with genetic tests from companies like 23andMe. So I said, “Our bodies ourselves, our DNA ourselves.” That people have a right to know about the functioning of their own bodies. This to me is a very clear violation of the Constitutions on multiple respects. It just stuns me, it just stuns me that anybody could think that you don’t have a right to know, we’re going to prevent you from learning something about the operation of your own body.
Again, the issue here was never does the test work. In fact, the labs which produce these tests, those labs are regulated outside of the FDA. So whether the test actually works, whether yes, it identifies this gene, all issues of that nature, what is the sensitivity and the specificity, are the tests produced in a proper laboratory, I don’t have a lot of problem with that because that’s all something which the consumers themselves would want. What I do have a problem with is then the FDA saying, “No, you can’t have access to this test because we don’t know what you’re going to do about it, what you’re going to think about it.” And that to me is outrageous.
One of the most consequential statistic passed by without much noise.
India's total fertility rate fell below population replacement rate to 2.0, with many states far below that level, thanks to effective campaigns around family planning & contraception. https://t.co/hN65hiFEsc pic.twitter.com/fDSIMl3j5F
— Arvind Ravikumar (@arvindpawan1) May 19, 2022
Via Noah Smith.
Expect some temporary issues as we undergo scheduled maintenance.
Addendum: All done! Do see Elon’s news in the comments.
His close colleague, fellow senator Iván Cepeda, says Petro’s ideas transcend traditional left-right boundaries. “He has been inspired by many sources . . . he has a solid Marxist foundation but has also read a lot of French post-structuralism and other political traditions. He is also a serious economist . . . who has read thinkers like Naomi Klein and is in dialogue with [French economist Thomas] Piketty”.
If Petro wins in Colombia and if, as recent polls suggest, former Brazilian president Luiz Inácio Lula da Silva pulls off what would be a momentous comeback victory in October, the seven most populous nations in Latin America — Brazil, Mexico, Colombia, Argentina, Peru, Venezuela and Chile — will all be under leftwing rule.
Here is more from the FT.
Many people have stopped keeping track of where Covid is headed, if only because it is such a stressful and unpleasant topic. To be clear, under current circumstances I favor complete “Covid laissez-faire,” though with subsidies for new and better vaccines. Overall, things are not so peachy keen (NYT):
The central problem is that the coronavirus has become more adept at reinfecting people. Already, those infected with the first Omicron variant are reporting second infections with the newer versions of the variant — BA.2 or BA2.12.1 in the United States, or BA.4 and BA.5 in South Africa.
Those people may go on to have third or fourth infections, even within this year, researchers said in interviews. And some small fraction may have symptoms that persist for months or years, a condition known as long Covid.
“It seems likely to me that that’s going to sort of be a long-term pattern,” said Juliet Pulliam, an epidemiologist at Stellenbosch University in South Africa…
“If we manage it the way that we manage it now, then most people will get infected with it at least a couple of times a year,” said Kristian Andersen, a virologist at the Scripps Research Institute in San Diego. “I would be very surprised if that’s not how it’s going to play out.”
I know many of you like to say “No worse than the common cold!” Well, the thing is…the common cold imposes considerable costs on the world. Imagine a new common cold, which you catch a few times a year, with some sliver of the population getting some form of Long Covid. One 2003 estimate suggested that the common cold costs us $40 billion a year, and in a typical year I don’t get a cold even once. That 2003 estimate also does not include the sheer discomfort of having a cold.
With a pinch of Long Covid in the distribution surely the current virus is a wee bit worse than that? While many cases of Long Covid are malingerers and hypochondriacs, at this point it is clear that not all of them are. Toss in some number of immunocompromised individuals (how many?).
Even under mild conceptions of current Covid, it is entirely plausible to believe that the costs of Covid will run into the trillions over the next ten years.
Death rates are not up, but more of the unvaccinated will die off with time and the rest of us will face this steady risk and planning annoyance for — how long? Plus we’ll get lots of “colds,” some of them considerably worse than a cold. And with what risk that it might mutate again and get worse? The next generation of vaccines probably will not be directly subsidized. Which will mean much lower rates of uptake. The point of maximum Covid immunity may well be behind us. And you won’t be able to blame it all on lockdowns.
Please keep in mind that when it comes to your reactions I will read many of them as not much better than “I just don’t want to think about this, I am still in denial.”
The mismanagement of the metro system in the nation’s capitol is astounding.
WashPost: Metro’s train delays are projected to worsen as the agency abruptly yanks from service more than 70 operators who have been working without undergoing a mandatory retraining process for at least a year, officials announced Sunday.
The agency pledged corrective action in a release acknowledging that nearly half of the agency’s 500 train operators lack required recertification testing and training, while warning that staffing issues would lengthen wait times on the Green and Yellow lines from 15 to 20 minutes until the end of the month.
…Metro’s latest predicament coincides with a train shortage that has forced the agency to operate at reduced service with longer-than-normal wait times since mid-October. The safety commission ordered about 60 percent of its fleet out of service after a federal investigation into a Blue Line derailment found a defect affecting the wheels of the 7000 series, Metro’s latest and most advanced model of trains and rail cars.
Without the series’ 748 cars, Metro has been forced to rely on older models, some 40 years old and nearing retirement. The smaller, older cars, coupled with lower frequencies, have driven many passengers away because of crowding and social distancing concerns as coronavirus case numbers continue to fluctuate. Those concerns will only grow with longer wait times and fewer trains in service.
You may recall that in 2015 there was a deadly fire on the Metro which I wrote about in 2016. (post repeated below).
WTOP: A Metro worker blamed for falsifying records about the tunnel fans that failed during last year’s deadly smoke incident near L’Enfant Plaza has been granted his job back by an arbitration panel — and Metro’s largest union has just filed a lawsuit against Metro because the worker hasn’t been reinstated yet.
The union’s defense is that everyone was doing it so no one is to blame. The Union is probably right that the WMTA suffers from a culture of poor safety and responsibility but you can’t fix that culture without clear signals that the incentives have changed.
I had to take the Metro to DC earlier this week and due to track closings for safety improvements it was miserable, at least 45 minutes of delays for the roundtrip. Some 700,000 people ride the metro every day and if each is delayed by just 15 minutes total (7.5 minutes each way) then at $15 an hour that’s 2.6 million dollars worth of delay every day.
Before traveling on the DC Metro I recommend checking the twitter account @IsMetroOnFire.
Addendum: At least this time heads are rolling.
I’ve been reluctant to write about the shortage of infant formula simply because it’s so tiring to say the same thing over and over again. Obviously, this is a classic case where the FDA should allow imports of any food or baby formula approved by a stringent authority. (Here’s the US Customs and Border Patrol bragging about how they nabbed 588 cases of infant formula from Germany and the Netherlands as if it were cocaine.) Scott Lincicome has an excellent run down which covers not just the FDA but the problems caused by trade regulation and the WIC program as well.
What I want to do is focus on something less discussed: Why does the shortage vary across the country and even city by city?
I believe one reason is implicit price controls, either due to fear of regulatory backlash, regulatory constraints through other programs, or a misplaced desire not to upset consumers.
Price controls create shortages–that much is well known–but they also create a misallocation of goods. No doubt you have seen pictures from the 1970s of long lines of cars waiting to get gasoline. But there weren’t lineups everywhere at all times–rather we had the strange situation where there were shortage of gasoline in some places while, just a hundred miles away, there was plenty. Or shortages one day and surpluses the next.
Prices rationally allocate goods across space and time in response to shifts in demand and supply. If demand increases in one place, for example, prices rise, creating an incentive to bring in supplies from elsewhere. A rising price signals where supplies are needed and creates an incentive to deliver. Or, as Tyler and I put it, A price is a signal wrapped up in an incentive. A price controlled below the market price creates a shortage and it also kills the signaling and incentive function of prices. The result is allocational chaos: Shortages in some places and times and excess supply in other places and times.
In fact, price controls in a capitalist economy give you a window onto a planned economy. If you think of communism as a system of universal price controls this allocation chaos is the essence of why a communist state cannot rationally allocate resources.
Tyler and I discuss allocational chaos in our chapter on price controls in Modern Principles of Economics. See also this excellent video.
Russia has stopped publishing detailed monthly trade statistics. But figures from its trading partners can be used to work out what is going on. They suggest that, as imports slide and exports hold up, Russia is running a record trade surplus.
On May 9th China reported that its goods exports to Russia fell by over a quarter in April, compared with a year earlier, while its imports from Russia rose by more than 56%. Germany reported a 62% monthly drop in exports to Russia in March, and its imports fell by 3%. Adding up such flows across eight of Russia’s biggest trading partners, we estimate that Russian imports have fallen by about 44% since the invasion of Ukraine, while its exports have risen by roughly 8%.
Here is more from The Economist, and that is why the ruble has maintained its value:
As a result, analysts expect Russia’s trade surplus to hit record highs in the coming months.
The economic crisis is a result of mismanagement by the Rajapaksa administration (and its predecessors) as well as Sri Lanka’s vulnerability to external shocks. The pandemic and Russia’s invasion of Ukraine have had a devastating impact. The Rajapaksas pursued populist economic policies — including unaffordable fuel and food subsidies and printing money to finance them — that spurred inflation. The president was heavily criticized for a disastrous “100% organic” policy that aimed to reduce the strain on foreign currency reserves by banning the import of chemical fertilizers. The policy resulted in slashed agricultural output at a time when food supplies were already running low and prices were soaring.
Meanwhile, foreign tourism — a key source of jobs, economic growth, and foreign currency — fell after the 2019 Easter bombings and then collapsed during the pandemic. The spike in international commodity prices, which has been exacerbated by Russia’s invasion of Ukraine, has piled further economic pressure on Sri Lanka. The country relies heavily on imports of food, fuel, and other essential goods to feed the people and keep the lights on.
Here is more from GZero.
Saudi Aramco has overtaken Apple as the world’s most valuable company after higher oil prices pushed shares of the world’s biggest crude exporter to record levels while a broader tech stock sell-off weighed on the iPhone maker.
The Saudi Arabian oil company’s market capitalisation on Wednesday was $2.426tn, exceeding Apple’s $2.415tn by just over $10bn. It is the first time that Saudi Aramco has regained the top spot since 2020 and follows a broader sell-off in technology stocks since the start of the year.
Apple became the first company to hit a $3tn market cap in early January, although its shares have suffered in recent months as investors reassess lofty valuations in the tech sector in light of a reversal in monetary policy and worries that inflation will weaken consumers’ spending habits.
Here is more from the FT. It will be interesting to see what a world with higher real interest rates looks like…
I am no longer so sure, as I outlined in my recent Bloomberg column:
Until recently, my view was that any actual use of a nuclear weapon, no matter the scale, would dramatically change everything. Nuclear use would no longer be considered taboo, and the world would enter a state of collective shock and trauma. Other countries around the world would start frantically preparing for war, or the possibility of war.
But recent events have nudged me away from that viewpoint. For instance, I have seen a pandemic that arguably has caused about 15 million deaths worldwide, yet many countries, including the U.S. haven’t made major changes in their pandemic preparation policies. That tells me we are more able to respond to a major catastrophe with collective numbness than I would have thought possible.
Of course I am referring to a smaller tactical nuclear weapon, as might be used against Ukraine. India by the way lost five or so million people during the pandemic and they didn’t even fire their health minister. And:
I also have seen Trumpian politics operate through the social media cycle. Former President Donald Trump did and said outrageous things on a regular basis (even if you agree with some of them, the relevant point is that his opponents sincerely found them outrageous). Yet the rapidity of the social media news cycle meant that most of those actions failed to stick as major failings. Each outrage would be followed by another that would blot out the memory of the preceding one. The notion of “Trump as villain” became increasingly salient, but the details of Trumpian provocations mattered less and less.
Might the detonation of a tactical nuclear weapon follow a similar pattern? Everyone would opine on it on Twitter for a few weeks before moving on to the next terrible event. “Putin as villain” would become all the more entrenched, but dropping a tactical nuclear weapon probably wouldn’t be the last bad thing he would do.
To cite the terminology of venture capitalist Marc Andreessen, the tactical nuclear weapon might stay “the Current Thing” for a relatively short period of time.
Let’s hope we don’t find out.
It’s difficult to understand China’s COVID strategy. On the one hand, China has confined millions of people to their homes, even to the extent of outlawing walking outside or having food delivered. Many thousands of other people have been taken from their homes and put into quarantine centers. On the other hand, vaccination is not mandatory! I can understand authoritarianism. I can understand libertarianism. I have difficulty understanding how jailing people, potentially without food, is ok but requiring vaccinations is not. (Here’s a legal analysis of China’s vaccine policy.) Moreover, put aside making vaccines mandatory because as far as I can tell, China has only recently started to get serious about non-coercive measures to vaccinate the elderly. The Washington Post notes:
The vaccination drive has been mild compared to some of the other pandemic-control measures and did not prioritize the elderly. Some younger people have been required to get vaccinated for their jobs, but vaccination of retirees remains optional. Incentives like eggs, grains and other foodstuffs — a staple of China’s vaccination drive since last year — are now being bolstered by home checkups, mobile clinics and the widespread mobilization of public servantsto ensure the elderly get shots.
China is shutting down factories costing its economy trillions of dollars and the best they come up with to get elderly people vaccinated is egg incentives???!
It’s difficult to understand what the Chinese leadership is thinking. It’s conceivable that the Chinese vaccines are much less effective than we have been led to believe but that seems unlikely. As far as we can tell the Chinese vaccines are not quite as good as the mRNA vaccines but good enough to prevent severe disease and pass FDA approval in the United States. My best guess is that President Xi Jinping is so powerful and insulated from reality and alternative viewpoints that he is just soldiering on either oblivious to the pain and foolishness of his policies or indifferent, much like Mao before him during the great famine.
How a united Ireland would work is unclear: many voters in Northern Ireland are attached to free healthcare with the NHS, even though waiting lists for treatment are the worst in the UK, and hate the idea of paying €60 to see a doctor as is the case south of the border.
Here is more from the FT, the context is that Sinn Fein is now asking for a referendum within five years.
With its brightly coloured slides, trampolines and tunnels, the soft play area at the Hakaniemi Arena, near the centre of Helsinki, looks much like any other. The difference is that it lies 25m below ground in a cavernous space hollowed out of the Precambrian bedrock beneath the city, and is designed to withstand nuclear, biological and chemical attacks.
The clambering children may not realise it, but they are in one of the safest playgrounds on earth.
Most of the time, this is a family-friendly sports centre. Above ground, the only visible clue to its second identity is a small orange and blue triangle on the wall by the entrance that states: “VÄESTÖNSUOJA SKYDDSRUM”, or “defence shelter”. In the event of an emergency, the arena would revert to being the Merihaka bomb shelter, a subterranean living quarters where up to 6,000 people could exist for weeks, or even months…
Helsinki alone has more than 5,500 bunkers, with space for 900,000 people. Finland as a whole has shelter spaces for 4.4 million, in more than 54,000 separate locations.
I will be doing a Conversation with him, do read his whole Wikipedia page but here is part of it:
Leopoldo Eduardo López Mendoza (born 29 April 1971) is a Venezuelan opposition leader. He co-founded the political party Primero Justicia in 2000 with Henrique Capriles and Julio Borges and was elected mayor of the Chacao Municipality of Caracas in the regional elections held in July 2000. He is the National Coordinator of another political party, Voluntad Popular, which he founded in 2009…
In September 2015, he was found guilty of public incitement to violence through supposed subliminal messages, being involved with criminal association, and was sentenced to 13 years and 9 months in prison.
He served seven of those years and now is free and has left Venezuela. He is also an economist, with a Kennedy School background, and has written a book on energy issues.
So what should I ask him?