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Welcome to the Club

Ashish Jha, dean of the School of Public Health at Brown University, has had it with the FDA:

Nearly all public-health authorities in the country are urging people to get vaccines. We see the incredible results that the vaccines have had and how many lives they’re saving, and still the F.D.A. has not offered full, permanent approval of the vaccine. President Biden suggested it might take several more months. How do you understand that, or how can that be defended, if it can be?

I find it incredibly puzzling what exactly the F.D.A. is doing. The F.D.A. says that it typically takes them six months or sometimes as much as a year to fully approve a new product. And, generally, we appreciate that. There are two components to that. One is that they want to see a large amount of data, and they want to go through that carefully, and I think that’s essential. Then the second is that there’s a process, which can take a while. This is a global emergency, and while all of us want to make sure that the F.D.A. does its job, most of us also feel that just operating on standard procedures may not be the right thing to do here, and that there are things that can be sped up. Just as with the development of vaccines, we didn’t cut any corners. We did all the steps, but we did it much, much faster. The F.D.A. has to go much, much faster.

The other thing about the data—the amount of data that the vaccines have generated, the number of people who’ve been vaccinated, and the scrutiny that the data has received. I mean, my goodness, this data has been scrutinized and looked over more than—

I’d imagine it’s more than any data in modern history, right?

Any therapy, any vaccine ever. These are the most highly scrutinized medical products we have ever had, and I don’t understand what the F.D.A. is doing.

I’m pleased that Jha and others like Eric Topol are becoming frustrated with FDA delay. But take it from an OG, the FDA is doing what it has always done. What has changed isn’t the FDA but that more people are paying attention now that they have something personal at stake.

I am reminded of this story from 2016:

Mary Pazdur had exhausted the usual drugs for ovarian cancer, and with her tumors growing and her condition deteriorating, her last hope seemed to be an experimental compound that had yet to be approved by federal regulators.

So she appealed to the Food and Drug Administration, whose oncology chief for the last 16 years, Dr. Richard Pazdur, has been a man denounced by many cancer patient advocates as a slow, obstructionist bureaucrat.

He was also Mary’s husband.

…When asked specifically how his wife’s illness had changed his work at the F.D.A., Dr. Pazdur said he was intent on making decisions more quickly.

“I have a much greater sense of urgency these days,” Dr. Pazdur, 63, said in an interview. “I have been on a jihad to streamline the review process and get things out the door faster. I have evolved from regulator to regulator-advocate.”

I do hope that when the pandemic is over we don’t forget that for patients with life-threatening diseases it’s always been an emergency.

Hat tip: John Chilton.

Friday assorted links

1. “He has struggled to access inheritance payments that have been withheld for more than 15 years, as trustees claim he’s mentally incompetent to receive the money.

2. Daniel Drezner on how to address your professor.  And related ideas from Michael Strain.  And here you can find a list of British titles, hilarious.

3. Fire law incentives.

4. “In the encounters, which lasted 52 and 79 minutes, the chimpanzees formed coalitions and attacked the gorillas.”  The gorillas did not win.

5. Some Indian street food vendors are richer than you might think.

6. The new DeepMind proteins advance (NYT).  And Technology Review coverage.

7. The Icelandic literary world.

Electric shock devices on humans now allowed once again

A Massachusetts school can continue to use electric shock devices to modify behavior by students with intellectual disabilities, a federal court said this month, overturning an attempt by the government to end the controversial practice, which has been described as “torture” by critics but defended by family members.

In a 2-to-1 decision, the judges ruled that a federal ban interfered with the ability of doctors working with the school, the Judge Rotenberg Educational Center, to practice medicine, which is regulated by the state. The Food and Drug Administration sought to prohibit the devices in March 2020, saying that delivering shocks to students presents “an unreasonable and substantial risk of illness or injury.”

Although the F.D.A.’s ban was national, the school in Canton, Mass., appears to be the only facility in the United States using the shock devices to correct self-harming or aggressive behavior…

The treatment, in which students wear a special fanny pack with two protruding wires, typically attached to the arm or leg, can deliver quick shocks to the skin when triggered by a staff member with a remote-control device.

Here is the full NYT story.  You might argue this treatment can be useful in many cases, but what exactly is the error rate here?  How high an error rate should we be willing to accept?  What recourse do the victims have, noting that many probably live under guardianship?  How might you model the incentives of the staff at the facility who use this?  How well do “prison guards” behave more generally?

As a side note, I think this matter should be handled by legislation rather than the FDA.

Thursday assorted links

1. The Great Apes also have time inconsistent preferences.  And NBC Sports to cover world chess championship.

2. The Norwegian century we were never woke.

3. A case for gdp-linked bonds.

4. Taco-eating job pays surprisingly well.

5. Retroactive public goods funding, partly by Sage Vitalik.

6. Izabella Kaminska on the paradox of DeFi, original paper here.

7. Minerva, higher ed innovator, is now fully accredited.

My Conversation with Alexander the Grate

Here is the audio and transcript, recorded outside in SW Washington, D.C.  And no, that is not a typo, he does call himself “Alexander the Grate,” his real name shall remain a secret.  Here is the event summary:

Alexander the Grate has spent 40 years — more than half of his life — living on the streets (and heating grates) of Washington, DC. He prefers the label NFA (No Fixed Address) rather than “homeless,” since in his view we’re all a little bit homeless: even millionaires are just one catastrophe away from losing their mansions. It’s a life that certainly comes with many challenges, but that hasn’t stopped him from enjoying the immense cultural riches of the capital: he and his friends have probably attended more lectures, foreign films, concerts, talks, and tours at local museums than many of its wealthiest denizens. The result is a perspective as unique as the city itself.

Alexander joined Tyler to discuss the little-recognized issue of “toilet insecurity,” how COVID-19 affected his lifestyle, the hierarchy of local shelters, the origins of the cootie game, the difference between being NFA in DC versus other cities, how networking helped him navigate life as a new NFA, how the Capitol Hill Freebie Finders Fellowship got started, why he loves school field trip season, his most memorable freebie food experience, the reason he isn’t enthusiastic about a Universal Basic Income, the economic sword of Damocles he sees hanging over America, how local development is changing DC, his design for a better community shelter, and more.

And:

And:

Recommended, you won’t find many podcast episodes like this one.  It is noteworthy that Alexander has a better and bigger vocabulary than the median CWT guest.  Also, this is one episode where listening and reading are especially different, due to the ambient sounds, Alexander’s comments on the passing trains, and so on — parts are Beckettesque!

Towards a COVAX Exchange

Israel had vaccine that was about to expire before it could be administered. South Korea needed vaccine immediately to stop a surge. They arranged a deal.

South Korea said it will receive 700,000 doses of Pfizer-BioNTech’s coronavirus vaccine from Israel on loan this week, in an attempt to speed up immunisation following a surge in infections around the capital Seoul.

…Under the vaccine swap arrangement announced by both governments on Tuesday, South Korea will give Israel back the same number of shots, already on order from Pfizer, in September and October.
South Korea has quickly distributed the COVID-19 vaccines it has, but has struggled to obtain enough doses in a timely manner as global supplies are tight, particularly in Asia.

“This is a win-win deal,”  [Israeli Prime Minister Naftali Bennett] said in an earlier statement.

One of the weaknesses of the COVAX facility for distributing vaccines is that distribution is primarily based on population with all countries guaranteed that “no country will receive enough doses to vaccinate more than 20% of its population until all countries in the financing group have been offered this amount.” That’s equitable, but it has dynamic challenges: different countries may have different needs and capabilities at different points in time. A country may be given vaccines, for example, when it may not yet be ready to administer them — and that can potentially lead to waste. The Israel-South Korea deal, for example, only narrowly averted 700,000 Pfizer doses from being tossed.  Countries may also have different preferences for vaccines, as different vaccines may fit better with their healthcare systems. A fixed distribution schedule doesn’t adapt to the unique circumstances of time and place, as Hayek might have said.

It’s not surprising that COVAX chose a fixed distribution rule as many people wouldn’t trust a centralized authority to decide who gets what vaccines when. But what about guaranteeing each country a right to vaccine but allowing them to trade? Trade wouldn’t be vaccines for dollars which could introduce ethical and agency issues but vaccine at time 1 for vaccine at time 2 as in the Israel-South Korea exchange or across other factors such as vaccine type. My colleagues on the Kremer team, most notably Eric Budish, Scott Duke Kominers and Canice Prendergast, have been helping think through the design of just such a system. Prendergast designed the now-famous distribution system for Feeding America, Budish helped to design Wharton’s Course Match system and Kominers has worked on mechanisms for allocating convalescent plasma, vaccines and many other goods.

A suitably designed exchange can increase efficiency while maintaining equity. The Israel-South Korea deal reminds us that this is a priority. Greater efficiency in this context means fewer vaccine doses wasted, and more lives saved.

The Biden Executive Order on promoting competition

Here is the text, I won’t attempt a summary but here are some running comments:

1. The beginning of the piece suggests that concentration is rising in the American economy.  But this probably isn’t true.  See also these comments by me.

2. Industry concentration has not driven wages down by “as much as 17%” — that’s a porky!  OK, they say “advertised wages,” but come on…

3. I am happy to see the document take on occupational licensing.

4. Contra to the recommendation, we should not ban non-compete agreements outright.  Many non-compete agreements are perfectly normal institutions designed to protect corporate assets against IP theft, client lists for instance.  We should restrict non-compete agreements in some more sophisticated manner, still to be determined.

5. Lower prescription drug prices?  Maybe.  Do they estimate the elasticity of supply?  No.  Thus this discussion would fail my Econ 101 class.  We do know, however, that prescription drugs are one of the very cheapest ways our health care system saves lives, so this is not obviously a good idea.

6. Right to repair laws?  Again, maybe.  But show me the trade-off and cite a cost-benefit analysis.  If software gives more consumer surplus to consumers (again, a maybe), should we be wanting to tax it with contractual restrictions?  Should we be wanting to tax Tesla right now?

7. Portability of bank account information is a good idea.

8. “Empower family farmers…” — do you even need to know what comes next?  Aarghh!!!

9. The order “encourages” the DOJ and FTC to take various actions.  I won’t blame Biden for this, but we’ve way overstepped what executive orders should be doing, some time ago.  The net feeling the honest reader of this section receives is that our antitrust policies toward the large tech companies are not based in much of a notion of rule of law.

10. Should HHS “standardize plan options” in the NHIM to make price shopping easier?  Makes me nervous — diverse market offerings can be good.

11. Lots of tired and not typically true claims and insinuations about concentration in airline markets; see my book Big Business or read Gary Leff.  And shouldn’t airlines charge for bags?  Maybe yes, maybe no, but prices per item are not in general a bad thing.

12. We are warned that farmers and ranchers take in an ever-smaller share of the food dollar spent — thank goodness!  And there are a bunch of other selective, scattered observations about food prices (“corn seed prices have gone up as much as 30% annually…”), but nothing close to systematic or showing an actual market failure (corn prices by the way have been plummeting since 2012).

13. Broadband policy should indeed be improved, but this section reads as messy, should do more to emphasize the notion of competition and common carrier platforms, and how about a mention of StarLink?

14. There’s not really any point in marching through a discussion of the “Big Tech” section.

15. Is there a problem with bank concentration in this country?  Not where I live.  Maybe in some rural areas?

16. YIMBY > NIMBY would do more to limit market power than just about anything else, by the way.

17. Is there even a peep about this country’s biggest and worst-performing monopoly in K-12?  Of course not.  It is Amazon you have to worry about!

So overall this is not great economics.  It is good to see the Biden administration pick up on a few pro-competition issues, but much of the document is not clearly pro-competition either.  The reasoning and evidence are pretty much politicized from start to finish.

Book Review: Andy Slavitt’s Preventable

Like Michael Lewis’s The Premonition which I reviewed earlier, Andy Slavitt’s Preventable is a story of heroes, only all the heroes are named Andy Slavitt. It begins, as all such stories do, with an urgent call from the White House…the President needs you now! When not reminding us (e.g. xv, 14, 105, 112, 133, 242, 249) of how he did “nearly the impossible” and saved Obamacare he tells us how grateful other people were for his wise counsel, e.g. “Jared Kushner’s name again flashed on my phone. I picked up, and he was polite and appreciative of my past help.” (p.113), “John Doer was right to challenge me to make my concerns known publicly. Hundreds of thousands of people were following my tweets…” (p. 55)

Slavitt deserves praise for his work during the pandemic so I shouldn’t be so churlish but Preventable is shallow and politicized and it rubbed me the wrong way. Instead of an “inside account” we get little more than a day-by-day account familiar to anyone who lived through the last year and half. Slavitt rarely departs from the standard narrative.

Trump, of course, comes in for plenty of criticism for his mishandling of the crisis. Perhaps the most telling episode was when an infected Trump demanded a publicity jaunt in a hermetically sealed car with Secret Service personnel. Trump didn’t care enough to protect those who protected him. No surprise he didn’t protect us.

The standard narrative, however, leads Slavitt to make blanket assertions—the kind that everyone of a certain type knows to be true–but in fact are false. He writes, for example:

In comparison to most of these other countries, the American public was impatient, untrusting, and unaccustomed to sacrificing individual rights for the public good. (p. 65)

Data from the Oxford Coronavirus Government Response Tracker (OxCGRT) show that the US “sacrifice” as measured by the stringency of the COVID policy response–school closures; workplace closures; restrictions on public gatherings; restrictions on internal movements; mask requirements; testing requirements and so forth–was well within the European and Canadian average.

The pandemic and the lockdowns split Americans from their friends and families. Birthdays, anniversaries, even funerals were relegated to Zoom. Jobs and businesses were lost in the millions. Children couldn’t see their friends or even play in the park. Churches and bars were shuttered. Music was silenced. Americans sacrificed plenty.

Some of Slavitt’s assertions are absurd.

The U.S. response to the pandemic differed from the response in other parts of the world largely in the degree to which the government was reluctant to interfere with our system of laissez-faire capitalism…

Laissez-faire capitalism??! Political hyperbole paired with lazy writing. It would be laughable except for the fact that such hyperbole biases our thinking. If you read Slavitt uncritically you’d assume–as Slavitt does–that when the pandemic hit, US workers were cast aside to fend for themselves. In fact, the US fiscal response to the pandemic was among the largest and most generous in the world. An unemployed minimum wage worker in the United States, for example, was paid a much larger share of their income during the pandemic than a similar worker in Canada, France, or Germany (and no, that wasn’t because the US replacement rate was low to begin with.)

This is not to deny that low-wage workers bore a larger brunt of the pandemic than high-wage workers, many of whom could work from home. Slavitt implies, however, that this was a “room-service pandemic” in which the high-wage workers demanded a reopening of the economy at the expense of low-wage workers. As far as the data indicate, however, the big divisions of opinion were political and tribal not by income per se. The Washington Post, for example, concluded:

There was no significant difference in the percentage of people who said social distancing measures were worth the cost between those who’d seen no economic impact and those who said the impacts were a major problem for their households. Both groups broadly support the measures.

Perhaps because Slavitt believes his own hyperbole about a laissez-faire economy he can’t quite bring himself to say that Operation Warp Speed, a big government program of early investment to accelerate vaccines, was a tremendous success. Instead he winds up complaining that “even with $1 billion worth of funding for research and development, Moderna ended up selling its vaccine at about twice the cost of an influenza vaccine.” (p. 190). Can you believe it? A life-saving, economy-boosting, pandemic ending, incredibly-cheap vaccine, cost twice as much as the flu vaccine! The horror.

Slavitt’s narrative lines up “scientific experts” against “deniers, fauxers, and herders” with the scientific experts united on the pro-lockdown side. Let’s consider. In Europe one country above all others followed the Slavitt ideal of an expert-led pandemic response. A country where the public health authority was free from interference from politicians. A country where the public had tremendous trust in the state. A country where the public were committed to collective solidarity and the public welfare. That country, of course, was Sweden. Yet in Sweden the highly regarded Public Health Agency, led by state epidemiologist Anders Tegnell, an expert in infectious diseases who had directed Sweden’s response to the swine flu epidemic, opposed lockdowns, travel restrictions, and the general use of masks.

Moreover, the Public Health Agency of Sweden and Tegnell weren’t a bizarre anomaly, anti-lockdown was probably the dominant expert position prior to COVID. In a 2006 review of pandemic policy, for example, four highly-regarded experts argued:

It is difficult to identify circumstances in the past half-century when large-scale quarantine has been effectively used in the control of any disease. The negative consequences of large-scale quarantine are so extreme (forced confinement of sick people with the well; complete restriction of movement of large populations; difficulty in getting critical supplies, medicines, and food to people inside the quarantine zone) that this mitigation measure should be eliminated from serious consideration.

Travel restrictions, such as closing airports and screening travelers at borders, have historically been ineffective.

….a policy calling for communitywide cancellation of public events seems inadvisable.

The authors included Thomas V. Inglesby, the Director of the Johns Hopkins Center for Health Security, one of the most highly respected centers for infectious diseases in the world, and D.A. Henderson, the legendary epidemiologist widely credited with eliminating smallpox from the planet.

Tegnell argued that “if other countries were led by experts rather than politicians, more nations would have policies like Sweden’s” and he may have been right. In the United States, for example, the Great Barrington declaration, which argued for a Swedish style approach and which Slavitt denounces in lurid and slanderous terms, was written by three highly-qualified, expert epidemiologists; Martin Kulldorff from Harvard, Sunetra Gupta from Oxford and Jay Bhattacharya from Stanford. One would be hard-pressed to find a more expert group.

The point is not that we should have followed the Great Barrington experts (for what it is worth, I opposed the Great Barrington declaration). Ecclesiastes tells us:

… that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favor to men of skill; but time and chance happeneth to them all.

In other words, the experts can be wrong. Indeed, the experts are often divided, so many of them must be wrong. The experts also often base their policy recommendations on factors beyond their expertise, including educational, class, and ideological biases, so the experts are to be trusted more on factual questions than on ethical answers. Nevertheless, the experts are more likely to be right than the non-experts. So how should one navigate these nuances in a democratic society? Slavitt doesn’t say.

Slavitt’s simple narrative–Trump bad, Biden good, Follow the Science, Be Kind–can’t help us as we try to improve future policy. Slavitt ignores most of the big questions. Why did the CDC fail in its primary mission? Indeed, why did the CDC often slow our response? Why did the NIH not quickly fund COVID research giving us better insight on the virus and its spread? Why were the states so moribund and listless? Why did the United States fail to adopt first doses first, even though that policy successfully saved lives by speeding up vaccinations in Great Britain and Canada?

To the extent that Slavitt does offer policy recommendations they aren’t about reforming the CDC, FDA or NIH. Instead he offers us a tired laundry list; a living wage, affordable housing, voting reform, lobbying reform, national broadband, and reduction of income inequality. Surprise! The pandemic justified everything you believed all along! But many countries with these reforms performed poorly during the pandemic and many without, such as authoritarian China, performed relatively well. All good things do not correlate.

Trump’s mishandling of the pandemic make it easy to blame him and call it a day. But the rot is deep. If we do not get to the core of our problems we will not be ready for the next emergency. If we are lucky, we might face the next emergency with better leadership but a great country does not rely on luck.

Nematodes Maximize Expected Utility

https://upload.wikimedia.org/wikipedia/commons/2/28/Soybean_cyst_nematode_and_egg_SEM.jpgHot on the heels of the new paper showing that the trading behavior of mycorrhizal fungi is consistent with the predictions of general equilibrium theory we have that nematodes obey the generalized axiom of revealed preference. It would be amusing if economics turns out to work well everywhere except for humans.

Abstract: In value-based decision making, options are selected according to subjective values assigned by the individual to available goods and actions. Despite the importance of this faculty of the mind, the neural mechanisms of value assignments, and how choices are directed by them, remain obscure. To investigate this problem, we used a classic measure of utility maximization, the Generalized Axiom of Revealed Preference, to quantify internal consistency of food preferences in Caenorhabditis elegans, a nematode worm with a nervous system of only 302 neurons. Using a novel combination of microfluidics and electro-physiology, we found that C. elegans food choices fulfill the necessary and sufficient conditions for utility maximization, indicating that nematodes behave exactly as if they maintain, and attempt to maximize, an underlying representation of subjective value. Food choices are well-fit by a utility function widely used to model human consumers. Moreover, as in many other animals, subjective values in C. elegans are learned, a process we now find requires intact dopamine signaling. Differential responses of identified chemosensory neurons to foods with distinct growth potential are amplified by prior consumption of these foods, suggesting that these neurons may be part of a value-assignment system. The demonstration of utility maximization in an organism with no more than several hundred neurons sets a new lower bound on the computational requirements for maximization, and offers the prospect of an essentially complete explanation of value-based decision making at single neuron resolution.

Photo Credit: By Agricultural Research Service – http://emu.arsusda.gov/typesof/pages/soybeanOriginal source (15016 KB); Description page, Public Domain, https://commons.wikimedia.org/w/index.php?curid=646062

Hat tip: Derek Lowe.

Is blockchain puny?

Here is a new and intriguing idea (link now fixed) from StarkWare, a blockchain start-up based in Israel.  Authored by Eli Ben-Sasson, here is one excerpt:

Imagine if we accepted, for the foreseeable future, that we can only write on a given blockchain ten times per second, but instead of writing ten single transactions, made ten additions to the blockchain, each attesting to thousands of transactions. Despite the scale-up, there would be no significant rise in the number of kilobytes being added to the chain.

In short, I’m talking about a fix that would mean the same blockchains that I brazenly called puny would suddenly become mighty.

This fix is the adoption of  cryptographic proofs — a concept that captured my imagination when I was a PhD student under Professor Avi Wigderson, one of the pioneers of this area of mathematics, and when I was a postdoc under Professor Madhu Sudan, another of the founding fathers of this field. After 20 years in academia, today I am president of StarkWare (@StarkWareLtd on Twitter), a company I co-founded to move this fix from the realm of theory to reality – a reality that will scale-up blockchain to an unprecedented degree.

Currently, Bitcoin establishes integrity the way you do it with your waiter or waitress. As you sit at your table, the waiting staff present a bill with the food you ordered, taking up the role of the “prover.” You check the calculation — making you the “verifier.”

With Bitcoin, the miner of a new block is the “prover.” Every block acts as proof that the payments contained in it are valid. And the nodes, meaning the many computers which host and synchronize a copy of the entire Bitcoin blockchain, naively replay each transaction in the block to verify that it is correct.

With cryptographic proofs, instead of recording this data-heavy information to the blockchain, we write on the chain in a kind of shorthand — proofs which verify that transactions have been conducted with integrity. All the heavy computational lift, meaning the work done to obtain the proof, happens in the cloud, not the blockchain.

It is logic we’re all familiar with in other areas of life. A large company may have its flagship office in central Manhattan, but wouldn’t dream of using such prime real estate for its huge factory, where the heavy lifting takes place.

Stay tuned….

The regulatory cicada culture that is American

As millions of cicadas began emerging in Loudoun County about two weeks ago, Chef Tobias Padovano at Cocina on Market in Leesburg began foraging for the noisy insects and serving them in tacos.

That is, until last week when a customer ordered and ate the cicada tacos, only to later complain to the Loudoun County Health Department, which then forced the restaurant to temporarily stop serving them.

Victor Avitto, an environmental health supervisor with the Loudoun County Health Department, told the Times-Mirror that the cicadas needed to be sourced from an approved food source, and only then it would it be fine to serve them.

“They need to be sourced from a farm that is inspected and certified,” he said.

On Wednesday, Padovano said he found an online source for cicadas from Dubai which was approved by Avitto, allowing for the sought-after cicada tacos to again be served.

Here is the full story, via HHL.

U.S. Largest Industries, 1890

1. Transportation

2. Agriculture and Related Industries

3. Food, Beverages, and Tobacco Products

4. Metal, Metal Products, and Machinery

5. Textiles, Textile Products, and Clothing

6. Mining and Quarrying

7. Banking

8. Wood, Lumber, and Their Products

9. Leather and Allied Products

10. Slaughtering and Meat Packing

That is from the new and excellent An Illustrated Business History of the United States, by Richard Vague.  How many of you really know everything that is in here?  In that same year Buffalo was the tenth largest U.S. city.  And the most valuable import around that time (1891-1900) was sugar, with coffee #2 and “Hides and skins” #3.

The fly swatter had not yet been invented.

Just remember: picture books are usually better than regular books.

Why the lab leak theory matters

Here is Ross Douthat at the NYT:

…there’s a pretty big difference between a world where the Chinese regime can say, We weren’t responsible for Covid but we crushed the virus and the West did not, because we’re strong and they’re decadent, and a world where this was basically their Chernobyl except their incompetence and cover-up sickened not just one of their own cities but also the entire globe.

The latter scenario would also open a debate about how the United States should try to enforce international scientific research safeguards, or how we should operate in a world where they can’t be reasonably enforced.

I agree, and would add one point about why this matters so much.  “Our wet market was low quality and poorly governed” is a story consistent with the Chinese elites not being entirely at fault.  Wet markets, after all, are a kind of atavism, and China knows the country is going to evolve away from them over time.  They represent the old order.  You can think of the CCP as both building infrastructure and moving the country’s food markets into modernity (that’s infrastructure too, isn’t it?), albeit with lags.  “We waited too long to get rid of the wet markets” is bad, but if anything suggests the CCP should have done all the more to revolutionize and modernize China.  In contrast, the story of “our government-run research labs are low quality and poorly governed”…that seems to place the blame entirely on the shoulders of the CCP and also on its technocratic, modernizing tendencies.  Under that account, the CCP spread something that “the earlier China” did not, and that strikes strongly at the heart of CCP legitimacy.  Keep in mind how much the Chinese apply a historical perspective to everything.

A number of you have asked me what I think of the lab leak hypothesis.  A few months ago I placed the chance of it at 20-30%, as a number of private correspondents can attest.  Currently I am up to 50-60%.

Jonathan Hazell emails me about inflation indicators

You asked Mark Carney what the best indicators were for inflation. Let me take the liberty of giving you mine.

1) Median CPI inflation, i.e. the weighted median value of CPI inflation across products. This measure tracks the underlying signal in inflation because it filters out volatile shocks hitting certain industries (e.g. airlines or used cars now, healthcare during 2010-2015, food and energy perennially). Median CPI has a good time series correlation with unemployment, better than the other series (see Ball & Mazumder, JMCB 2019).

2) 5 year, 5 year forward expected inflation. This is what markets expect inflation will be, in 5 years’ time, for the next 5 years. This measure tracks long run inflation expectations and removes the effects of short run shocks. In US data, big changes in inflation have been caused by unanchored long run inflation expectations, not by short run shocks to demand (see e.g. Hazell, Herreno, Nakamura & Steinsson 2021). So, if inflation is going to rise by a lot, long run inflation expectations are a good leading indicator.

For now, neither measure is high by historical standards but of course that could change. I hope some of this is interesting, anyway.