I wouldn’t quite say I am for it, and I still wouldn’t myself have done it, but the decision is no longer looking like such a mistake. Since 2016, in matters of defense, Covid control, and migration, the EU has been anything but stellar. Here is the link to my Bloomberg column on this topic. Here is one excerpt:
Then there is the rise of illiberalism in Hungary, and to a lesser extent Poland, which is perhaps the EU’s biggest problem right now. The EU is seeking to withhold aid from those nations for weakening their independent judiciaries, and they are in turn threatening to veto the union’s $2.2 trillion budget and recovery package, which requires unanimous support. In response, the EU is considering approving that package outside its normal procedures.
More likely than not, a compromise will be found. But you have to wonder how long a well-functioning EU can tolerate a non-free nation such as Hungary. The EU certainly does not appear on the verge of kicking Hungary out (Germany, for one, would not welcome such a move, given its strong interests in Eastern Europe). But the challenges to the EU model presented by nations such as Hungary are much worse than they were in 2016, when the Brexit referendum was held.
Even if the EU succeeds in pushing Hungary around — and I hope it does — it is not necessarily a good outcome for the U.K. Such a policy would require weakening the EU’s unanimity requirements on many decisions, and that is something the U.K. should feel uncomfortable about. If Hungary can be pushed around, so can the U.K.
Finally, southeast England is emerging as a global technology center, especially in artificial intelligence and biomedical research. That’s great news for the U.K. But how does it square with the EU’s long-term pursuit of tougher regulations on tech companies, higher privacy standards for platforms and apps, and more stringent regulations on AI algorithms?
Will the U.K. find its interests represented by such a process? Will it be able to develop AI innovations and products without requiring prior permission from Brussels?
Of course we do still need to worry about Ireland, but perhaps this will end up being a nudge in the right direction…
At the same time, I do have serious rule-of-law reservations about undoing a deal eight years on, particularly given the fact that it appears that the advertising-supported space is doing better than I thought a few years ago: Snapchat in particular is building a great business, LinkedIn is doing much better, and TikTok is obviously on its way.
- Andy Grove famously said “Only the Paranoid Survive”, but the takeaway from many of these emails is that “Only the paranoid get sued for antitrust”; to put it another way, Facebook executives come across as worried about everything, especially Google, which, by the same token, comes across as completely asleep at the wheel (now that is a monopoly indicator if I’ve ever seen one!).
- Facebook’s stock was down less than 2% yesterday; that may reflect investor skepticism about the success of the lawsuit, but you could also argue that splitting up the company would actually unlock value: all three products would keep their audiences, but would have to monetize independently, which, given the fact that Facebook ad prices are set by auction, not artificially propped up as you would expect with an alleged monopolist, could absolutely lead to more revenue in aggregate, not less.
- Relatedly, it’s not clear that advertisers will benefit from a break-up. The entire reason why Facebook owning both Facebook and Instagram is a problem for other consumer tech companies is because advertisers benefit from a one-stop shop and don’t necessarily want to support multiple platforms.
Ben writes for-pay content on Stratechery, you can (and should) subscribe here.
In the port city of Kaohsiung, in the south of Taiwan, a migrant worker from the Philippines was caught on surveillance cameras briefly stepping into the corridor of a hotel while he was under quarantine in November.
The unidentified man wanted to leave something outside the door of a friend, who was quarantining at the same hotel, according to the Central News Agency, the official Taiwanese news agency, citing the health department.
In a video clip that circulated online, the man, wearing shorts and flip-flops, could be seen taking six lumbering strides between his room and that of his neighbor, before turning around.
The breach cost him $3,550.
Here is the full NYT story, via the excellent Daniel Lippman.
Here is the abstract:
Could North America have been settled more peacefully, with fewer property rights violations against Native Americans? To answer this question, we utilize the case of French colonists of Atlantic Canada (the Acadians) and a Native American tribe (the Mi’kmaq) between the 17th and 18th centuries in the areas around the Bay of Fundy in the modern provinces of Nova Scotia and New Brunswick. Under a relative state of anarchy, both the Acadians and the Mi’kmaq were able to minimize the relative returns to using violence by adopting rules of collective decision-making that favored consensus-building. By prioritizing consensus, distributional coalitions were faced with higher decision-making costs, making it difficult for concentrated interest groups within each society to capture the gains from fighting and spilling them over as external costs over the rest of the population. As a result, both the Acadians and the Mi’kmaq were able to reap the benefits of productive specialization and social cooperation under the division of labor.
From the FDA report:
Two doses is great but one dose already looks good even though sample is small. “Efficacy against severe COVID-19 occurring after the first dose was 88.9%.” (Added. n.b this is over the entire sample.)
Based on the number of cases accumulated after Dose 1 and before Dose 2, there does seem to be some protection against COVID-19 disease following one
dose; however, these data do not provide information about longer term protection beyond 21 days after a single dose.
This is potentially important as we could vaccinate more people in a hot-spot and potentially delay the second dose. Noting, however, that this is a post-hoc analyses and the second dose came within 3 weeks.
As expected, a bit of pain, swelling and fatigue in a minority of participants are the biggest issues. No major safety concerns. Of course, we still need to monitor long-term.
Serious adverse events, while uncommon (<1.0%), represented medical events that occur in the general population at similar frequency as observed in the study…. No specific safety concerns were identified in subgroup analyses by age, race, ethnicity, medical comorbidities, or prior SARS-CoV-2 infection.
Hat tip: Biostatistician LucyStats.
Since back in April, Michael Kremer, myself, and the AHT team have been advising governments to go big on investing in vaccines. The US, to its credit, made early purchases but they made two mistakes. First, they didn’t buy enough as the Washington Post indicates:
Last summer, Pfizer officials had urged Operation Warp Speed to purchase 200 million doses, or enough of the two-shot regimen for 100 million people, according to people knowledgeable about the issue who spoke on the condition of anonymity because they weren’t authorized to discuss the situation. But the Warp Speed officials declined, opting instead for 100 million doses, they said.
“Anyone who wanted to sell us … without an [FDA] approval, hundreds of millions of doses back in July and August, was just not going to get the government’s money,” said a senior administration official.
But last weekend, with an FDA clearance expected any day, federal officials reached back out to the company asking to buy another 100 million doses. By then, Pfizer said it had committed the supply elsewhere and suggested elevating the conversation to “a high level discussion,” said a person familiar with the talks who spoke on the condition of anonymity because they were not authorized to share the conversation.
In our discussions, we were talking about at least a $70 billion dollar program and optimally double that and we continually faced the sticker shock problem. Investing in unapproved vaccines seemed risky to many people despite the fact that the government was spending trillions on relief and our model showed that spending on vaccines easily paid for itself (the mother of multipliers!). I argued that this was the world’s easiest cost benefit calculation since Trillions>>Billions. But it was hard to motivate more spending—not just in the United States but anywhere in the world. For reasons I still don’t understand anything out of the ordinary–big spending on at-risk vaccines, spending on testing and tracing, challenge trials–was met with a kind of apathy and defeatism. As I said in July:
Multiple people [in Congress] have told me that things move slowly, no one is stepping up to the plate, leadership is absent. “Who is John Galt?,” they sigh. Ok, they don’t literally say that, but that sigh of resignation is what it feels like in the United States today at the highest levels of government.
OWS was actually the one area where there was some action. But there was a second mistake. We argued that governments shouldn’t buy doses but capacity, i.e. they should cover the cost of building a factory or production line in return for an option on doses from that line. The problem with buying doses is that if you buy without a timeline then the company takes all orders and pushes the low-priced orders to the back of the queue. If you demand a timeline, however, that puts a lot of risk on the firms, since not everything is under their control, and that’s expensive and difficult to contract for and monitor. Thus, we advocated for push funding to de-risk capacity construction for the firms. Capacity construction is well understood–double this line–and thus much easier to contract for and monitor. (Contracting on capacity is also cheaper than a traditional AMC for reasons explained here and also in my discussion with Tyler here.) The nice thing about buying capacity is that it changes the dynamic from one where countries are scrambling to buy before others do to one where early purchases increase capacity that is later available for everyone. OWS, to its credit, did fund capacity construction for Moderna but we wanted more and other governments didn’t step up to the plate.
OWS has been a success. In combination with investments from other governments and organizations like CEPI it will save trillions of dollars and many lives. It could have been better but the main takeaway is that the case for going big is still strong. We have solved the scientific problem of making the vaccine but step two is getting billions of doses in arms. If we can increase capacity enough to vaccinate millions more people next year than currently planned that would still pay for itself many times over. Increasing capacity is not impossible. China is increasing capacity for its vaccines. It will be harder to increase capacity for mRNA vaccines since the technology is new and bespoke but it can be done. We need a second Operation Warp Speed, OWS: Delivery and Distribution.
As Tyler said yesterday, Williams wants a cow! We want billions of vaccine doses quickly. It can be done, it should be done.
I am reading many people claim something like “production and distribution of the vaccine is the constraint, not FDA approval.”
There are multiple mistakes in such a view, and here I wish to focus on the logic of constraints rather than debate the FDA issue.
First, there are vaccines available right now, and it helps some people (and their contacts) to have those distributed sooner rather than later.
Second, easing the FDA constraint encourages the suppliers and distributors to hurry to a greater degree. Just imagine if the FDA were to take a few months longer to approve. The more general point is that citing “x is right now the main constraint right now” does not mean “the elasticity of x is zero.”
“Sure” wrote in the comments:
On the economics side, I am not convinced that production has ramped up as full and as fast as possible. After all there is some risk premium for expanding plants, running constant shifts, etc. and the danger of delayed approval, particularly if you are in some (mostly negligible) way to the other vaccines may not warrant the investment.
After all, approvals appear to move stocks. Do we really think the market is that dumb? If approval has an impact on market value, why exactly would it not also have an impact on the cost of borrowing, expanding, etc.? Surely somebody believes that approval will result in something different will happen than was happening the day before.
Third, “FDA vaccine approval” is a complementary good for the final vaccine service, strongly complementary in fact. If the other complementary infrastructure goods have price/quality combinations that are “too disadvantageous,” the theory of the second best implies that approval processes should be speedier and more lax than you otherwise might have thought. This is just the converse of the classic result that multiple medieval princes imposing multiple tolls on a river create negative externalities for both river users and each other. Lower those tolls wherever you can.
Fourth, let’s say there were three constraints, each absolutely binding at the current margin. Speeding FDA approval, taken alone, would have absolutely no effect. We then ought to be obsessed with identifying and remedying the other two constraints (along with approval)!
But we are not. Instead we keep on citing those (supposed) constraints in defeatist fashion. This absence of obsession with easing constraints is in fact one of the biggest reasons for thinking we can do better. We need to throw more money and talent at these problems, and we are not working hard enough on how to do that. We are just citing the constraints back and forth to each other and pleading helplessness.
As a final note, I recall that my recently deceased colleague Walter E. Williams was especially good on these issues. I recall him once saying he wanted to hire a helicopter to drop a cow into the campus central quad, just to show people that supply has positive elasticity. “I’m going to call them up and say “Williams wants a cow!””
Many people are asking me this question. I don’t mean to relitigate the question of whether the FDA should be moving faster, rather consider this an exercise in how to think about the trade-offs. I thus am going to hold the safety and quality of the vaccine constant.
To proceed, consider the distinction between processes defined by economic time and processes defined by calendar time. In Virginia it may snow in February but not in October, and that is defined by calendar time, not caused by local gdp. But for many inventory processes, they do not restock until the shelf is emptied by buying customers, and that is economic time. They don’t check to see if it is June or July.
Let us say that only economic time matters, though I will drop that assumption shortly.
Now, given how late we are in “the season,” it is easier to think about pushing the approval date back rather than moving it forward. Let’s say that the FDA postponed the December 10 meeting to January 10. Some number of people would die of Covid during that month — the current clip being around 2600 a day but changing — and then around Jan.10 some kind of vaccine-related health and economic recovery would move into fuller gear.
If only economic time matters, it seems the Dec.10 recovery and the Jan.10 recovery run about the same. The net difference between the two scenarios is the lives lost in the meantime, to oversimplify say 2000 x 30 days, or 60,000 lives plus accompanying lost jobs and gdp.
I do not think that losing those lives would somehow speed the later, Jan.10-starting recovery process, and it may in some ways render it more fractious.
On top of that, the postponed recovery period likely will imply some kind of grinding uncertainty in the meantime, and possibly intertemporal substitution from some agents (like me!) who are waiting for the change to come before going to the barber. The true net costs are thus higher than what I listed two paragraphs above.
Now, how might the introduction of calendar time alter those estimates?
First, the production of complementary goods for vaccines (say freezers, but the point is more general) may be on a clock of its own, more or less on automatic pilot and requiring time. When approval comes later, more of those complementary goods are in place, and thus the later recovery is a more powerful one. That factor tends to lower the cost of delaying approval.
(Of course to the extent those same complementary inputs depend upon economic time, that is reason not to delay approval! The sooner you approve, the sooner they will get working on getting those freezers in place, which of course boosts recovery power. Supply is elastic with respect to approval, as suggested for instance by stock market reactions to approval decisions.)
Second, the seasonal effects will differ. Ideally you want the spread of vaccines to be covering some of the more infectious and thus more difficult winter months. February is worse than March, and so on. Given the current clock, this is a big reason to be hurrying.
You might think of other ways calendar time could matter. You also might think of various non-linear effects and interactions, though I am not sure whether they would make delay more or less costly.
Overall it seems to me that the costs of approval delay are likely very high. They are not obviously overturned or minimized by citing the relevance of complementary inputs. The import of complementary inputs might be more ruled by “economic time,” or the seasonal effects may be a stronger quantitative magnitude, again favoring faster speed of approval.
I do understand this is far from a final analysis, rather it is a starting point for conceptualizing the problem.
I am getting very angry at people like Anthony Fauci who say that FDA delay is necessary or useful to alleviate vaccine hesitancy.
Fauci told Fox News that the FDA “really scrutinises the data very carefully to guarantee to the American public that this is a safe and efficacious vaccine. I think if we did any less, we would add to the already existing hesitancy on the part of many people because … they’re concerned that we went too quickly.”
The WSJ says much the same thing just with a slightly different flavor:
…this regulatory rigmarole is essentially a placebo to reassure the public it will be safe to get inoculated.
The ‘we must delay to allay’ argument is deadly and wrong.
First, we should not let public policy be guided by the most risk averse, fearful, and scientifically illiterate among us. Letting the fearful lead is a recipe for stagnation, mediocrity, and eventual collapse.
Second, there is no guarantee that the risk averse, fearful and scientifically illiterate will be convinced by extra FDA investigation and there is plenty of evidence that they won’t be. Dozens of well-done studies have found no link between vaccines and autism. The scientific evidence that vaccines don’t cause autism is very strong. Yet many people don’t care. Moreover, I bet there is a significant overlap between those who think or fear that vaccines cause autism and those who fear a COVID vaccine. Will a few weeks of extra FDA investigation win these people over? No. More science won’t end science denialism.
Third, rather than alleviating fear, FDA delay may increase fear. People may reason, if the FDA is taking this long to review the evidence when thousands of people are dying every day it must be a hard decision. Delay also makes the vaccine less useful and less obviously useful. Thus, if vaccines come too late people will say that we were reaching herd immunity anyway and that vaccines are useless.
Thus, when thinking about how much investigation the FDA should do before approving a vaccine, allaying fear shouldn’t on the benefit side of the ledger. Greater investigation does have other benefits but I think that the costs of delay exceed the benefits at this time.
The FDA is very unlikely to find reasons not to approve a vaccine later in December. But if that is the case, they should approve now. Note that in August, before the efficacy results were in, I ran the numbers and I said that the case for early vaccination wasn’t strong for most people. Now that we have the efficacy results and months of safety data and a higher death rate, I think quick approval is obviously justified.
As a Johns Hopkins scientist who has conducted more than 100 clinical studies and reviewed thousands more from the scientific community at large, I can assure you that the agency’s review can be done within 24 to 48 hours without cutting any corners. They just need to work harder.
Contrary to popular belief, the FDA process is not hands-on—it does not interview vaccine trial patients or look under a microscope at the immune cells. It’s doing a statistical analysis and looking at data. For the vaccine trial, the data set is small and straightforward. If my research team, normally tasked with analyzing data on millions of patients, was asked to review the smaller Pfizer vaccine study of 43,000 patients, it would take about one hour.
The FDA also reviews manufacturing data from Pfizer on how they made the drug. But not only can that data be reviewed in a few hours, it should have been done months ago when it was available. While the FDA was waiting for Pfizer’s long-term vaccine results to come in, the agency should have anticipated this step and done it early.
The final step of the FDA review is to look at the outcomes of the study volunteers, including rates and severity of infection and side effects in the vaccine and placebo groups. Again, there is no plausible reason why this basic analysis cannot be done in 24 hours. The FDA and external scientists have a simple task: confirm or reject the review already conducted by the trial’s independent data safety monitoring board before FDA submission.
That is from Marty Makary, who also details an ongoing history of FDA delays during the pandemic, starting with the very first Covid testing attempts from the University of Washington, which the FDA tried to nix, but continuing throughout. And:
FDA insiders say the agency and its approximately 17,000 employees were dark for the four-day Thanksgiving holiday, including those working on the vaccine approval.
For those of us who lived through the 2008 financial crisis (agencies other than the Fed were not on the ball in response), or who have studied (and indeed practiced) the economics of bureaucracy for forty years, or who know the extensive literature on how the FDA operates, will not be surprised by a lack of urgency. Or from the NYT:
Dr. Fauci said the politicization of the pandemic in his own country had led regulators to move a little more cautiously than the British, to avoid losing public support.
Sorry people, but I read that as “for political reasons we did not go more quickly.”
Here from Statnews journalists Matthew Herper and Nicholas Florko defend the FDA, going into considerable detail, do read it. Here is one excerpt, in direct contradiction to some of the above:
The agency’s staff “were eating turkey sandwiches on Thanksgiving while reviewing documents,” Peter Marks, who heads the FDA center conducting the vaccine reviews, said on a Thursday webcast run by the Journal of the American Medical Association.
Additionally, members of an FDA advisory committee that will convene Thursday to review the data and issue its recommendations, have expressed no desire to meet sooner. STAT spoke to four members of the panel and all said the agency should not try to move any faster.
My view is this: if your agency is saying “usually we move five to ten times more slowly,” it is highly unlikely their current procedures are optimized for speed. It is fast organizations that are good at moving fast, right Usain Bolt?
We’re now at the point where Covid-19 is the single leading cause of death in this nation.
Zach is author of the recent book The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes, which has been on many year-end “best of” lists. Here is the audio, transcript, and video. Here is part of the CWT summary:
Zach joined Tyler to discuss what Keynes got right — and wrong — about the Treaty of Versailles, how working in the India Office influenced his economic thinking, the seemingly strange paradox of his “liberal imperialism,” the elusive central message of The General Theory, the true extent of Keynes’ interest in eugenics, why he had a conservative streak, why Zach loves Samuel Delaney’s novel Nova, whether Bretton Woods was doomed to fail, the Enlightenment intuitions behind early defenses of the gold standard, what’s changed since Zach became a father, his next project, and more.
Here is one excerpt:
COWEN: [Keynes is] sympathetic to his own ideas and wants to promote them. But to me, there’s a discord. Milton Friedman spends, what, 45 minutes talking to Pinochet, has a very long record of insisting economic and political freedom come together — maybe even too simplistically — writes against the system of apartheid in South Africa and Rhodesia, calls for free markets there. And people give Friedman hell over that.
Keynes writes the preface for the Nazis and favors eugenics his whole life, and that’s hardly ever mentioned.
CARTER: I don’t know that the way that Keynes talks about eugenics is as salient as you suggest. The best article that I came across on Keynes and eugenics is by this guy — I think David Singerman. It’s in the Journal of British Studies. It’s a pretty in-depth look at the way Keynes came to eugenics and what he did and did not support. It’s very clear that Keynes didn’t support eugenics in the way that Americans sterilizing poor Black workers in the South were interested in eugenics.
Keynes was broadly interested in it from the perspective of birth control. This is a time when eugenics and genetics are not as clearly defined as they are today, so he’s thinking about heritability of eye colors — how he gets involved in this stuff. He never really supports anything other than birth control.
When he actually has power as a policymaker, he just doesn’t do any of this stuff. He is working on the Beveridge plan. He is working on financial stuff that is much more egalitarian than what we think of him when we think about eugenics.
COWEN: But he is chair of the British Eugenics Society for eight years late in his career.
CARTER: He doesn’t do much there. There are big debates that are happening within that society, and he’s mostly sitting them out. Singerman goes into this in much more detail. It’s been a while since I read the article, but Singerman seems to think that this is a useful way of understanding Keynes’s worldview, but not that Keynes is some guy who’s going around wanting to sterilize people and do the things that we think of with the eugenics movement in the United States.
COWEN: I don’t think he wants to sterilize people, but he has those essays on population, which are not put into the collected works. They’re not mentioned by Roy Harrod. He is greatly worried that the people from some countries — I think including India — will outbreed the people from Britain, and this will wreak havoc on prices and wages, and it’s a big crisis. He even says, “We need to worry not only about the quantity of people, but the quality of people in the world.”
A very good episode, definitely recommended. And here is Zach on Twitter.
Your daily reminder that 14,696 people have died from COVID in the United States since Pfizer applied for an EUA from the FDA.
Here is a new paper from Gavin Wright:
The Voting Rights Act of 1965 revolutionized politics in the American South. These changes also had economic consequences, generating gains for white as well as Black southerners. Contrary to the widespread belief that the region turned Republican in direct response to the Civil Rights Revolution, expanded voting rights led to twenty-five years of competitive two-party politics, featuring strong biracial coalitions in the Democratic Party. These coalitions remained competitive in most states until the Republican Revolution of the 1990s. This abrupt rightward shift had many causes, but critical for southern voters were the trade liberalization measures of 1994, specifically NAFTA and the phase-out of the Multi-Fiber Arrangement which had protected the textiles and apparel industries for decades. The consequences of Republican state regimes have been severe, including intensified racial polarization, loss of support for public schools and higher education, and harsh policies toward low-income populations.
The last sentence strikes me as misleading and inappropriate (in multiple ways), but still the research is of very real interest. Via the excellent Kevin Lewis.
Likely within a few days, here is the FT story, how about it FDA? What is your reason for waiting?
The incarceration rate has increased substantially in the United States between the 1980s and the 2000s. In this paper, I explore an institutional explanation for this growth: the fact that costs of incarceration are not fully internalized. Typically, prison is paid for at the state level, but county employees (such as judges, prosecutors or probation officers) determine time spent in custody. I exploit a natural experiment that shifted the cost burden of juvenile incarceration from state to counties, keeping overall costs and responsibilities unchanged. This resulted in a stark drop in incarceration, and no increase in arrests, suggesting an over-use of prison when costs are not internalized. The large magnitude of the change suggests that misaligned incentives in criminal justice may be a significant contributor to the current levels of incarceration in the United States.