Marginal tax rates

One in four low-wage workers face marginal net tax rates above 70 percent, effectively locking them into poverty. Over half face remaining lifetime marginal net tax rates above 45 percent. The richest 1 percent also face a high median lifetime marginal tax rate – roughly 50 percent.

That is from a new NBER paper by David Altig, Alan J. Auerbach, Laurence J. Kotlikoff, Elias Ilin, and Victor Ye.

Did crazy Republican tax-cutters defund the regulatory state for decades?

Minton is the author of a newly released study showing just how far the CDC has strayed from its core mission. In addition to combating dangerous infectious diseases like HIV and malaria, the CDC now also studies alcohol and tobacco use, athletic injuries, traffic accidents, and gun violence. While those things can indeed be important factors to public health, Minton notes, they don’t seem to fall within the agency’s original mission.

They do, however, explain why the CDC’s budget has ballooned from $590 million in 1987 to more than $8 billion last year. If the agency had grown with inflation since 1987, it would have a budget of about $1.3 billion today. Total federal spending, meanwhile, has grown from a hair over $1 trillion in 1987 to $4.4 trillion last year—which means that the CDC’s budget has grown faster the government’s overall spending.

That is by Eric Boehm at Reason.  Via J.

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.”

8. “Current advice to national statistical offices from the IMF, Eurostat and the UN is shown to result in downward bias in the CPI and upward bias in real consumption.

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 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  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:

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:

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.

The economics of college vs. the economics of private tutors

How can you possibly justify a $200,000+ college expense? How can you justify a $100,000+ college expense?

This is not necessary.

The average tenure hopeful adjunct makes $40 an hour. If you were to employ her as a private tutor at the cost of $60 an hour, and had four hours with her a week, and did that for 14 weeks (that’s the length of an average college course folks) that is about $3,400.

Were you to employ three such professor-tutors, that would be about $10,200, or a bit over $20,000 a year. In four years you would have racked up $80,000 in costs. But this is still $30,000 less than the total for the ‘cost conscious’ universities. It is a quarter of what you would pay for Trinity.

Remember: this $80,000 is for private tutoring, where individual attention would give you far and away a better and more thorough education than the 300-kids-in-a-lecture-hall style of classes that dominate undergraduate education today.

But it can get even cheaper. Let’s say you take the general principle of group classes from the university. Say you can find four other people to take all of these other classes with you. Just four. Well that equals out to $680 per class, or $16,000 a person for four years of classes.

To be fair, add in $1,000-$2,000 for textbooks and a subscription to JSTOR, for a total of about $17,000 to $18,000 for four years.

That is from Scholars Stage from 2018, still relevant today.  (He went to the very reasonably priced Brigham Young University.)  As I’ve said before, contemporary university study should have more of both on-line education and private tutoring, and less of what comes in between.

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.

2. Drive-in van Gogh exhibit.

3. Avi Schiffman update.

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.

7. Weather and transmission rates.

8. “Major League Baseball told players their prorated salaries would contribute to an average loss of $640,000 for each game over an 82-game season in empty ballparks…

The economy that is New Brunswick (that’s Canada, not New Jersey)

Middle and high school students to process lobster after temporary foreign worker ban

With lobster processing set to begin Sunday, desperate New Brunswick seafood plants are turning to high school and even middle school students to fill the gap left by temporary foreign workers.

The decision by the Higgs government to block foreign workers amid the coronavirus pandemic has left processors in the province saying they have only about half the workforce they need, while counterparts in Nova Scotia and Prince Edward Island are ready to go “full tilt.”

“[The province] pulled the rug from under our feet,” said Russel Jacob, owner of Westmorland Fisheries in Cap Pele…

Middle school students must have permission from their parents and will make about $13 an hour.

High school students will be paid about $15 an hour.

Jacob expects they will not perform nearly as well as the experienced foreign workers.

Here is the full story, via Eric Hendry.

My initial point of course was one about the value of immigrants.  But might it also be said that a significant chunk of the rising unemployment in New Brunswick is voluntary?  Admittedly not everyone is sufficiently able-bodied to perform the work, but if junior high school students can do it…that means that many of the unemployed adults are simply unwilling to take these jobs?  Is one allowed to say that these days?  It doesn’t have to mean the government should do nothing about the broader economic crisis.

Good critique of the herd immunity strategy

Herd Immunity sounds promising for a once-in-a-lifetime disease. But if immunity only lasts 12 to 24 months, that’s a, several time per decade disease, which sounds like a less attractive deal.

Let’s say the Infection Fatality Rate is just 0.5% per run to Herd Immunity, which would be achieved at, say, 60% of the US population of 330 million or about 1,000,000 deaths each time.

Let’s say it takes one year of widespread illness and dying to reach herd immunity and then the whole process starts over again 18 months later. That’s four times per decade. But it could be even more frequent than that.

That raises the question of how bad the next several runs to herd immunity would be. My guess is the IFR would decline because you are progressively killing off the the most vulnerable so the disease faces diminishing returns the next several times through. Perhaps people even get more resistant to the disease each time they have it.

Plus, obviously huge resources will be devoted to improving therapy each time. If a million plus people die in America the first run to herd immunity, we will attain a huge sample size of data of how to treat people, which should prove useful in lowering the death toll in subsequent waves.

But then again maybe not. Maybe people get progressively more worn down each time they catch it?

Now it could be that the timing of a vaccine works out perfectly and we get to Herd Immunity the first time about a year before a vaccine arrives so we don’t have to do it all over again and again.

But then again, how do we know herd immunity will happen all that fast? You want it to arrive slowly enough that the hospitals aren’t overwhelmed, but not so slowly that the economy never gets to revive from most people being (briefly) immune. But what if lots of people want to hunker down and avoid being a sacrificial lamb? This sounds like a Herd Immunity strategy might blunder into a worst of both worlds, with huge numbers being made deeply ill but the economic downturn dragging on for several years as scores of millions hunker down and don’t spend a lot of money pursuing an active social life.

Advocates of a Herd Immunity strategy really need to get out their spreadsheets and do the math of how this would turn out to be a good thing. Perhaps it is the best alternative, but, please, show your work.

Here is the link from Steve Sailer.  Via Kyle.

Why the FDA is banning the Gates-connected testing kits

Now we know:

An F.D.A. spokesperson said home collection kits raised additional concerns about safety and accuracy that required the agency’s review. The issue in the Seattle case appears to be that the test results are being used not only by researchers for surveillance of the virus in the community but that the results are also being returned to patients to inform them.

The two kinds of testing — surveillance and diagnostic — fall under different F.D.A. standards. In a pure surveillance study, the researchers may keep the results just for themselves. But coronavirus testing has largely revolved around getting results returned to doctors who can share the results with patients.

Here is the full NYT story, via Paul Novosad.  Just stunning.  Here is Alex’s earlier post on the episode.

Saturday assorted links

From Lockdown to Liberty

Puja Ahluwalia Ohlhaver 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.