Category: Uncategorized
Covid career advice for young workers
Given COVID-19 and its accompanying economic issues, what do you think people in their early-mid 20s should be doing or thinking about right now in terms of saving, spending, career planning, etc.? What’s overlooked or wrong in the most obvious or common advice? (I.e., “sit tight”, “spend some money at local businesses”, “give to charity”, “learn a new skill”, etc.) Obviously, employment status matters and different skillsets, talents, etc. affect what one can and should do. Candidly, I’m not sure how best to disaggregate young workers in relation to my questions.
That is an email from Gregory Irving. I am not sure my point here is “overlooked,” but if I had to offer one piece of advice it would be this:
“Right now it is harder than usual to build out your “soft network” of acquaintances, loose ties, and other people who could help you or become your future partners. You just can’t go out and meet people in the old ways. Yet in spite of this greater difficulty, virtually everyone’s allocation of time has shifted pretty dramatically. So there ought to be entrepreneurial opportunities to build up soft networks in ways that would not have been possible pre-Covid. Try to take advantage of those opportunities.”
What do you all say?
The new economics of chess
I just finished watching one of Chess24.com’s Magnus Carlsen-affiliated rapid on-line chess tournaments, when today (a day later?) I see that another tournament has started. And with Magnus himself playing, as well as other world-class players. Note that Magnus both plays in these tournaments as the #1 attraction, and he owns an equity share in them, albeit with other investors.
So I’ve been trying to model the production of chess services in my mind.
I start with the point that viewers care much more about live, fresh games than games from a week ago. Many sports of course operate on this same basis.
The second point is that most chess players have a relatively low opportunity cost of time, Rogoff and Kasparov excepted, plus some chess players can substitute into poker for profit (and may have quit chess already). In fact what they do in their spare time is to…play chess! Often with each other, and often on-line. So if you offer to pay them some amount for doing basically the same, they will sign up. Especially during a pandemic when many of them are trapped under relatively severe quarantines.
It is also the case that a chess player can play many days in the year, perhaps not every day, but you really can play a lot without tearing your rotator cuff.
It then seems the equilibrium is a much higher supply of chess tournaments, especially since on-line play removes some of the previous barriers to entry, such as needing a venue and some physical infrastructure.
You might even end up with a kind of Malthusian equilibrium, where the supply keeps on expanding to meet a fairly low marginal cost.
But this is a “superstars” kind of competition, and so the returns will go to the scarce factor. That scarce factor is Carlsen himself, who garners far more attention than any other player. And as noted he is an equity holder in this venture and as a player he has been winning the #1 prize money. Over time, you might expect the returns of some of the other players — maybe in the top ten but not so famous or glamorous — to approach the Malthusian level. Perhaps much of the public doesn’t care if Magnus plays #9 or #16, who in any case are only a small number of rating points apart.
Notice how well Magnus Carlsen understands reputation and internet production. He keeps on posting “Banter Blitz” videos on YouTube, which show him playing speed chess on-line and commenting on the games as they proceed. He dramatically expanded the supply of chess tournaments, which he earns income from. He already was “the scarce factor,” and he has dramatically expanded the supply of attention aimed his way. He understands that successful internet production is frequent production.
On-line chess viewing is way up (NYT) with the pandemic, and also because of these efforts.
Do not underestimate Magnus Carlsen. He has been #1 in classical chess, rapid, and blitz, all at the same time. He is a huge YouTube star in chess. He has won a tournament about chess trivia, and he has been #1 in fantasy football for the whole world (not an easy feat).
And now he is bringing an economic revolution to chess, with himself as the #1 labor and equity earner at the same time.
Will Covid-19 expose the ghost firms?
That is the topic of my latest Bloomberg column, here is one excerpt:
Demand for in-restaurant dining is likely to fall as well, though estimates vary. Since the average small business carries less than a month’s worth of liquid reserves, and the wait for a vaccine is likely to be at least a year, many restaurants will simply be unable to survive the shrinking of the market.
I call these places ghost restaurants because they are still walking around, so to speak, visible to us and listed on Yelp, but not really alive and without much of a future.
In a few months’ time, a significant number of these ghost enterprises will be gone. My drive around Northern Virginia, rather than being rich with culinary choice, will soon become fairly desolate — and the overall economic landscape will indeed be much emptier.
What else in our current capital structure might qualify as “ghost”?
And this:
And while an all-but-certain death awaits some businesses, others can look forward to mere stagnation. If you are a 23-year-old entrepreneur, how easy will it be to build up the network of “soft ties” that will help you launch the next phase of your career?
As many marginal businesses are going under, it is quite possible that the public-health situation will improve. Civic spaces will repopulate as commercial ones depopulate, giving urban landscapes a confusing feel. And because there will be fewer businesses to choose from, it will be all the harder for those remaining to enforce social distancing.
Many Americans have been clamoring lately for more freedom, and those desires are understandable. But as they emerge from lockdown, they might well be disappointed to discover that, above all else, what people will be exercising is the freedom to go out of business.
If you start by using the word “ghost” (better than zombie, in this setting), don’t be surprised if the column turns out a bit gloomy!
Tuesday assorted links
1. Richard Flanagan on the Australian response (NYT).
2. BuildAtmos.com — Home building, simplified.
3. Short essay on how an ex-CDC person sees things. From my point of view off base, but fascinating in any case and of course you should read that side of the story.
4. Why not more deaths in Pakistan? And poverty vs. age as mortality predictors in India.
5. Does voting by mail provide a partisan advantage?
6. How health care will change.
7. Wiblin podcast with Lipsitch.
8. Pizza arbitrage.
Does coronavirus mean the end of traditional education?
I will debating/discussing the topic “Does coronavirus mean the end of traditional education?” @ the Cambridge Union. A bit disappointing not to be in the hallowed hall but should be interesting nonetheless. The debate will be live-streamed at 2pm ET on Wednesday.
Will a move towards digital, decentralised teaching transform a model that once seemed so entrenched? Will the loss of exams become permanent for many? In an online panel with the Cambridge Union, four world-renowned figures share their perspective on what the future holds for education in the wake of the coronavirus pandemic.
Speakers:
Justine Greening served as Secretary of State for Education under Theresa May, following stints at International Development and Transport. Having left Parliament, Greening now chairs the Social Mobility Pledge.
Stephen Toope is Vice-Chancellor of the University of Cambridge. He previously held the same position at the University of British Columbia, and is perhaps best known for his regular emails to the Cambridge student body.
Alex Tabarrok is a Professor of Economics at George Mason University. Together with Tyler Cowen, he is best known as the co-founder of Marginal Revolution University, a free online platform for studying economics.
Shirley M. Tilghman was the nineteenth President of Princeton University, serving for twelve years until 2013. She is globally recognised for her scholarship in molecular biology.
Lord David Willetts, former Minister of State for Universities and Science under David Cameron in the UK.
Early distancing can be very potent
Finally a rainfall paper that perhaps you can believe in!?:
We test whether earlier social distancing affects the progression of a local COVID-19 out-break. We exploit county-level rainfall on the last weekend before statewide lockdown. After controlling for state fixed-effects, temperature, and historical rainfall, current rainfall is a plausibly exogenous instrument for social distancing. Early distancing causes a reduction in cases and deaths that persists for weeks. The effect is driven by a reduction in the chance of a very large outbreak. The result suggests early distancing may have sizable returns, and that random events early in an outbreak can have persistent effects on its course.
Here is more from Rolly Kapoor, et.al. Here is a relevant Twitter thread, via Gaurav Sood.
Monday assorted links
1. Chess set markets in everything I can’t even tell if this is a joke (short video).
2. The situation in Kano, Nigeria’s second largest city, seems to be taking a turn for the worse (NYT).
3. The complexities of Ronan Farrow (NYT). Amazing (but good) that they ran this.
4. Selection pressures and colliders in Covid-19 research, or is smoking really good for you?
5. “Bali’s unique governing structure of village committees has been credited with stemming the virus’s spread.
“The villages have a very strong influence on the community. Whatever the elders in the villages said, people will abide,” Ngurah Wijaya, adviser to the Bali Tourism Board, told Bloomberg News. “This has enabled the government to impose its policies down to the community level effectively.”
Villages’ awareness of residents’ whereabouts has also proved useful in contact tracing, and the island has banned outsiders since March.” Link here.
6. What will Canadians (and others) do for public restrooms?
7. If you go by recent past history: “The overall estimated PoS for an industry-sponsored vaccine program is 39.6%, and 16.3% for an industry-sponsored anti-infective therapeutic.”
Emergent Ventures prize winners, third cohort
I am happy to announce two further winners of the Emergent Ventures prizes to fight Covid-19.
The first is to Statnews.com for their excellent and intelligent reporting on public health, including the coronavirus, with the latter articles being ungated.
This is not only a prize for past achievement, but also resources to allow them to continue into the future. As most of you know, journalism is a highly precarious enterprise these days.
And to be clear, this is a one-time prize and it involves absolutely no editorial control or influence over what they publish.
Here is a recent NYT article on Statnews.com. the headline reads: “The Medical News Site that Saw the Coronavirus Coming Months Ago.”
The second winner is Tina White and Covid Watch, for their work on track and trace apps, you will note that Tina and her group were earlier winners of a (smaller) Emergent Ventures fellowship. This is an Early Response prize, for their critical and timely work to boost the quality of these apps and to make them more privacy-friendly and more palatable to civil liberties concerns. Here is some coverage:
https://reason.com/podcast/this-app-protects-privacy-while-tracing-covid-19-infections/
Here is the second cohort of prize winners, here is the first cohort. And here is an update from Celine, from Curative Inc., from the very first cohort of winners:
Quick update on Curative, the COVID19 testing co – they are currently running 6% of entire US COVID19 testing capacity – from being a sepsis co six weeks ago
— Celine Halioua (@celinehalioua) May 15, 2020
Emergent Ventures is pleased to have been their very first funder, and to have consummated the entire grant process, including the wire of funds (at the time critical for materials purchase), in less than 24 hours.
How bad is Covid-19 risk compared to other risks?
I’ve had about five of you write me about this point in the last day. Hundreds of thousands of people worldwide die from falls each year, what about car accidents, cancer, heart attacks, etc.? Why is this new risk so special?
I think you need to keep clear monthly vs. yearly rates of death. Covid-19 very likely has killed over 100,000 Americans over the last two months or so.
It either will continue at that pace or it won’t. Let’s say that pace continues (unlikely in my view, but this is simply a scenario, at least until the second wave). That is an ongoing risk higher than other causes of death, unless you are young. You don’t have to be 77 for it to be your major risk worry.
Alternatively, let’s say the pace of those deaths will fall soon, and furthermore let’s say it will fall by a lot. The near future will be a lot safer! Which is all the more reason to play it very safe right now, because your per week risk currently is fairly high (in many not all parts of America). Stay at home and wear a mask when you do go out. If need be, make up for that behavior in the near future by indulging in excess.
A few of you also have asked me how all this Covid history has changed my view of the world. If nothing else, I am realizing that people are worse at intertemporal substitution than I had thought.
Sunday assorted links
1. “About 100 surrogate babies are waiting for parents to pick them up in the country, about half of them at BioTexCom’s facilities, the Ukrainian Parliament’s human rights commissioner, Lyudmila Denisova, told The Associated Press. The numbers could rise to the thousands, she said, if coronavirus travel restrictions are extended.” Link here.
4. NASA releases principles for moon governance.
5. Analysis of the Delhi lockdown. And a lockdown counterfactual for Sweden, not a huge difference given what already was baked in.
6. “…the path that individual job-losers follow back to stable employment often includes several brief interim jobs, sometimes separated by time out of the labor force.” A new Hall and Kudlyak paper on job market recovery, in my view shows the importance of matching.
Further pandemic viewing
Next will be more Kurosawa and Ozu, and a rewatch of Dirty Harry…
Saturday assorted links
1. Heckman vs. Chetty? (The Economist)
2. The Cannonball Run record has been obliterated.
3. Fracking spread gonorrhea but not through prostitution. (Is that good or bad news?)
4. Derek Lowe on monoclonal antibodies and vaccines.
5. Andrew Sullivan on Samuel Pepys.
6. Africa against the coronavirus is doing better so far than many people had expected.
8. If you read this Apple/Google app track and trace piece carefully, you will learn who is really for privacy and who is not, rather being just anti-corporate. Here is good commentary on said story.
From Lockdown to Liberty
and I have a piece in the Washington Post talking about a Federalist plan to move from lockdown to liberty. You won’t be surprised to learn that it involves testing, testing, testing. I know, you have testing fatigue. So do I. It’s important, however, to not give up on testing too early. We are really only 6-8 weeks into the US crisis and while everyone is frustrated at the slow pace I think we will start to see leaps in capacity soon as major labs come online.
The piece makes two points. First moving too quickly can kill grandma and the economy:
The dangers of reopening without disease control — or a coronavirus vaccine or therapeutic breakthrough — are illustrated by events at the Smithfield Foods meatpacking plant in Sioux Falls, S.D. Smithfield offered workers a bonus if they showed up every day in April. Normally, bonus pay would increase attendance. But in a pandemic, encouraging the sick to haul themselves into work can be disastrous. The plan backfired. Hundreds of Smithfield employees were infected, forcing the plant to shut down for more than three weeks. If we stay the current course, we risk repeating the same mistake across the whole economy.
Second, we need a Federalist approach to testing.
The only way to restore the economy is to earn the confidence of both vulnerable industries and vulnerable people through testing, contact tracing and isolation.
There is already a bipartisan plan to achieve this; we helped write it. The plan relies on frequent testing followed by tracing the contacts of people who test positive (and their contacts) until no new positive cases are found. It also encourages voluntary isolation, at home or in hotel rooms, to prevent further disease spread. Isolated patients would receive a federal stipend, like jurors, to discourage them from returning to workplaces too soon.
But our plan also recognizes that rural towns in Montana should not necessarily have to shut down the way New York City has. To pull off this balancing act, the country should be divided into red, yellow and green zones. The goal is to be a green zone, where fewer than one resident per 36,000 is infected. Here, large gatherings are allowed, and masks aren’t required for those who don’t interact with the elderly or other vulnerable populations. Green zones require a minimum of one test per day for every 10,000 people and a five-person contact tracing team for every 100,000 people. (These are the levels currently maintained in South Korea, which has suppressed covid-19.)
Most Americans — about 298 million — live in yellow zones, where disease prevalence is between .002 percent and 1 percent. But even in yellow zones, the economy could safely reopen with aggressive testing and tracing, coupled with safety measures including mandatory masks. In South Korea, during the peak of its outbreak, it took 25 tests to detect one positive case, and the case fatality rate was 1 percent. Following this model, yellow zones would require 2,500 tests for every daily death.
…A disease prevalence greater than 1 percent defines red zones. Today, 30 million Americans live in such hot spots — which include Detroit, New Jersey, New Orleans and New York City. In addition to the yellow-zone interventions, these places require stay-at-home orders.
One virtue of this plan is that conforms with the common sense of people where they live. People in New York have seen their friends die and understand that stricter rules make sense. People in Montana haven’t seen the crisis up close and so their common sense and our testing strategy require less stringent rules.
We do need testing even in low-prevalence areas, however, and we need to be able to mobilize a lot of testing and tracing quickly to cap flare ups.
One danger of the current situation is that many of the places which have not yet been hit hard by COVID-19 are also the places with the most natural danger as they have lots of elderly with comorbidities.
Read the whole thing.
Addendum: The plan is described in more detail in Pandemic Resilience: Getting it Done. A live map of the US and how different places are faring is here and the COVID vulnerability index is here.
Is the coronavirus making UBI look better?
My last Bloomberg column was co-authored with Garry Kasparov, here is one excerpt:
Another positive sign for UBI is that most Americans seem keen to return to their workplaces. One fear has been that UBI would lead to a couch-potato culture, with people choosing to stay at home even when they’re finally able to leave. But blue-collar service workers are continuing to brave the front lines even when faced with reasonably high risks of infection. They are not trying to get fired so they can collect unemployment. White-collar workers, meanwhile, are feeling restless and unproductive. Working from home may become more common, but most people seem eager to get back to the office — especially if the alternative is a combination workplace/schoolhouse.
And:
…the crisis is serving up a very different and inferior bargain than the one many original UBI supporters advocated. Institutionalizing emergency measures designed to respond to Covid-19 would be irresponsible. It would entrench UBI without the prerequisite productivity boom from artificial intelligence and automation. (For some time it appeared the opposite might happen — namely, an AI boom but no UBI.)
I can report that Garry was a real pleasure to work and co-author with. Here is my earlier Conversation with him.
On the all too frequent split between theory and practice
I know some people who react very fearfully each time a package comes to the door, or when a jogger passes ten feet away.
Maybe those people are right to have that response! (Suspend judgment for the time being.) But if they are right, and the risk is real rather than truly tiny, it is hard to imagine lockdown working. We can’t eliminate all risk, and we will end up with a fairly high percentage of the population infected fairly quickly. After all, danger is almost everywhere (in this view). If you run a pretty high risk of getting infected over the next month or two anyway, you might as well go buy some shoes at Nordstrom for your trouble.
What is noteworthy is that these fearful people tend to be very supportive of lockdown.
On the other side of the coin, some individuals defend the Swedish model. Presumably they believe that herd immunity can be achieved relatively quickly, and with a high upfront cost the medium- and long-term can be fairly safe, with a net gain overall.
Yet if you accept those presuppositions (suspend judgment for the time being), in fact you ought to behave in a very fearful manner. Just stay at home and wait until herd immunity arrives in late summer or whenever, and then go out and have all of your fun. Let the Nordstrom shoes wait!
Yet advocates of the Swedish model also seem quite interested in going out and frolicking in the shorter run.
In reality, mood affiliation may be playing a role here. People side with either “caution and fearfulness,” or with “openness and boldness,” and then both their theories and behavior follow accordingly.
In reality, the Swedish model advocates ought to behave quite cautiously and lockdown advocates should be willing to take more chances.