Results for “food” 2044 found
Monday assorted links
1. “We also looked Iceland-scale mass population testing (i.e. 0.7% of population per day). Such testing would be very helpful for monitoring the epidemic, but unsurprisingly it had a negligible impact on reducing transmission, because cases would be detected too late (if at all)”, link here.
2. Which workers bear most of the burden from social distancing policies?
3. This 1,000-Year-Old Mill Has Resumed Production Due to Demand for Flour.
5. BMI is very hard to predict, even with an impressive data set of socioeconomic and genetic factors.
6. Graph of excess deaths in various locales, recommended, and Sweden far from the worst. Bergamo ouch.
7. Was Portugal early to take care of the nursing home problem? And Connecticut looking for a nursing home solution (WSJ).
8. Vaccine update.
9. Solving for the equilibrium: “Some of the millions of British workers furloughed during the coronavirus lockdown will be encouraged to take a second job picking fruit and vegetables, the government has said. Giving the daily COVID-19 briefing, Environment Secretary George Eustice said only a third of the migrant workers who normally picked fruit and vegetables were currently in the country.”
10. ComedyCellar podcast with me, Coleman Hughes, Yascha Mounk, others, audio / pod: http://riotcast.com/thecomedycellar and the link to youtube: https://www.youtube.com/watch?v=fNG1FsUdXDw.
11. Which retailers generate the most physical interactions? (Big, internationally known chains) Might the same be true for restaurants?
12. “The scenario of one million Covid-19 deaths is similar in scale to the decades-long HIV/AIDS and opioid-overdose epidemics but considerably smaller than the Spanish Flu of 1918. Unlike HIV/AIDS and opioid epidemics, the Covid-19 deaths will be concentrated in months rather than spread out over decades.” Link here.
13. Spanish flu closings were short in duration and didn’t help much.
14. What community colleges do and do not know. And a list of colleges’ plans.
Friday assorted links
1. What do we know about superspreader events? And indoor transmission in China. And what Arnold Kling has come to believe.
2. “We show irradiance and in particular solar zenith angle in combination with cloudopacity explain COVID-19 morbidity and mortality growth better than temperature.” Interesting, though still more interpretation is needed there.
3. Covid-19 in Haiti. And what is Wuhan like right now?
4. In Germany, they consult humanities scholars about how to end the lockdown. And from a French philosopher. And we need blogs back for the pandemic.
5. “Southern New Hampshire University, known for being on the cutting edge of collegiate learning, plans to slash tuition for incoming freshmen as it drastically revamps how it conducts on-campus learning beginning in the fall.As part of the changes, tuition will be cut 61%, from $31,000 to $10,000 starting in the 2021-2022 academic year.” Link here.
6. No strong statistical evidence for the BCG vaccine claim.
7. Is the internet economy going to crash as the real economy shrinks? Several interesting points in that one.
8. de Rugy and Kling on government-backed lines of credit for small business.
9. Bundled insurance markets in everything: “COVID-19 insurance comes free with food delivery in Hong Kong now.”
10. Thread on the meaning of the new NY results.
11. Toward a theory of Tyrone.
12. Test different recovery levers. And Zeynep speaks sense.
Lockdown socialism will collapse
Under Lockdown Socialism:
–you can stay in your residence, but paying rent or paying your mortgage is optional.
–you can obtain groceries and shop on line, but having a job is optional.
–other people work at farms, factories, and distribution services to make sure that you have food on the table, but you can sit at home waiting for a vaccine.
–people still work in nursing homes that have lost so many patients that they no longer have enough revenue to make payroll.
–professors and teachers are paid even though schools are shut down.
–police protect your property even though they are at risk for catching the virus and criminals are being set free.
–state and local governments will continue paying employees even though sales tax revenue has collapsed.
–if you own a small business, you don’t need revenue, because the government will keep sending checks.
–if you own shares in an airline, a bank, or other fragile corporations, don’t worry, the Treasury will work something out.
This might not be sustainable.
That is from Arnold Kling. Too many of our elites are a little shy about pushing this message out there.
Thursday assorted links
1. Nicaragua still has a full calendar of sports (NYT).
2. An alternating lockdown strategy.
3. Vox on the Watney Stapp Mercatus mask plan.
4. Derek Lowe on vaccine prospects.
5. Will coronavirus change the proper CPI bundle?
6. “This paper argues that daily ‘universal random testing’, as recently proposed by Paul Romer, is not likely to be an effective tool for reducing the spread of Covid-19 and resuming economic activity. We find that more than 21% of the population would need to be tested every day to reduce the Covid-19 reproduction rate (R’) to 0.75, as opposed to 7% as argued by Romer. We show this using a corrected method for calculating the impact of an infectious person on others, when testing and isolation takes place. Our calculation allows for asymptomatic cases. Instead we propose ‘stratified periodic testing’ as an alternative strategy.” Link here.
7. Why is Detroit worse than Baltimore? And is there also a Brazilian heterogeneity? (limited information, however)
8. JPMorgan reopening plan, involves building herd immunity among the young. This is where the discussion will be headed soon.
9. How well did Italy do lowering R0 through lockdown? An informal estimate, but very important and underdiscussed.
11. Ongoing chart of Covid-19 deaths in Sweden, also accounting for reporting delays.
12. Who is this helping? (NYT): “Amazon said Wednesday that it would temporarily halt its operations in France after a court ruled the company had failed to adequately protect warehouse workers against the threat of the coronavirus and that it must restrict deliveries to only food, hygiene and medical products until it addressed the issue.”
13. YouTube talk by Sweden’s chief epidemiologist (have not heard it yet).
What does this economist think of epidemiologists?
I have had fringe contact with more epidemiology than usual as of late, for obvious reasons, and I do understand this is only one corner of the discipline. I don’t mean this as a complaint dump, because most of economics suffers from similar problems, but here are a few limitations I see in the mainline epidemiological models put before us:
1. They do not sufficiently grasp that long-run elasticities of adjustment are more powerful than short-run elasticites. In the short run you socially distance, but in the long run you learn which methods of social distance protect you the most. Or you move from doing “half home delivery of food” to “full home delivery of food” once you get that extra credit card or learn the best sites. In this regard the epidemiological models end up being too pessimistic, and it seems that “the natural disaster economist complaints about the epidemiologists” (yes there is such a thing) are largely correct on this count. On this question economic models really do better, though not the models of everybody.
2. They do not sufficiently incorporate public choice considerations. An epidemic path, for instance, may be politically infeasible, which leads to adjustments along the way, and very often those adjustments are stupid policy moves from impatient politicians. This is not built into the models I am seeing, nor are such factors built into most economic macro models, even though there is a large independent branch of public choice research. It is hard to integrate. Still, it means that epidemiological models will be too optimistic, rather than too pessimistic as in #1. Epidemiologists might protest that it is not the purpose of their science or models to incorporate politics, but these factors are relevant for prediction, and if you try to wash your hands of them (no pun intended) you will be wrong a lot.
3. The Lucas critique, namely that agents within a model, knowing the model, will change how the model itself operates. Epidemiologists seem super-aware of this, much more than Keynesian macroeconomists are these days, though it seems to be more of a “I told you that you should listen to us” embodiment than trying to find an actual closed-loop solution for the model as a whole. That is really hard, either in macroeconomics or epidemiology. Still, on the predictive front without a good instantiation of the Lucas critique again a lot will go askew, as indeed it does in economics.
The epidemiological models also do not seem to incorporate Sam Peltzman-like risk offset effects. If you tell everyone to wear a mask, great! But people will feel safer as a result, and end up going out more. Some of the initial safety gains are given back through the subsequent behavioral adjustment. Epidemiologists might claim these factors already are incorporated in the variables they are measuring, but they are not constant across all possible methods of safety improvement. Ideally you may wish to make people safer in a not entirely transparent manner, so that they do not respond with greater recklessness. I have not yet seen a Straussian dimension in the models, though you might argue many epidemiologists are “naive Straussian” in their public rhetoric, saying what is good for us rather than telling the whole truth. The Straussian economists are slightly subtler.
4. Selection bias from the failures coming first. The early models were calibrated from Wuhan data, because what else could they do? Then came northern Italy, which was also a mess. It is the messes which are visible first, at least on average. So some of the models may have been too pessimistic at first. These days we have Germany, Australia, and a bunch of southern states that haven’t quite “blown up” as quickly as they should have. If the early models had access to all of that data, presumably they would be more predictive of the entire situation today. But it is no accident that the failures will be more visible early on.
And note that right now some of the very worst countries (Mexico, Brazil, possibly India?) are not far enough along on the data side to yield useful inputs into the models. So currently those models might be picking up too many semi-positive data points and not enough from the “train wrecks,” and thus they are too optimistic.
On this list, I think my #1 comes closest to being an actual criticism, the other points are more like observations about doing science in a messy, imperfect world. In any case, when epidemiological models are brandished, keep these limitations in mind. But the more important point may be for when critics of epidemiological models raise the limitations of those models. Very often the cited criticisms are chosen selectively, to support some particular agenda, when in fact the biases in the epidemiological models could run in either an optimistic or pessimistic direction.
Which is how it should be.
Now, to close, I have a few rude questions that nobody else seems willing to ask, and I genuinely do not know the answers to these:
a. As a class of scientists, how much are epidemiologists paid? Is good or bad news better for their salaries?
b. How smart are they? What are their average GRE scores?
c. Are they hired into thick, liquid academic and institutional markets? And how meritocratic are those markets?
d. What is their overall track record on predictions, whether before or during this crisis?
e. On average, what is the political orientation of epidemiologists? And compared to other academics? Which social welfare function do they use when they make non-trivial recommendations?
f. We know, from economics, that if you are a French economist, being a Frenchman predicts your political views better than does being an economist (there is an old MR post on this somewhere). Is there a comparable phenomenon in epidemiology?
g. How well do they understand how to model uncertainty of forecasts, relative to say what a top econometrician would know?
h. Are there “zombie epidemiologists” in the manner that Paul Krugman charges there are “zombie economists”? If so, what do you have to do to earn that designation? And are the zombies sometimes right, or right on some issues? How meta-rational are those who allege zombie-ism?
i. How many of them have studied Philip Tetlock’s work on forecasting?
Just to be clear, as MR readers will know, I have not been criticizing the mainstream epidemiological recommendations of lockdowns. But still those seem to be questions worth asking.
Why I do not favor variolation for Covid-19
Robin Hanson makes the strongest case for variolation, here is one excerpt:
So the scenario is this: Hero Hotels welcome sufficiently young and healthy volunteers. Friends and family can enter together, and remain together. A cohort enters together, and is briefly isolated individually for as long as it takes to verify that they’ve been infected with a very small dose of the virus. They can then interact freely with each other, those those that show symptoms are isolated more. They can’t leave until tests show they have recovered.
In a Hero Hotel, volunteers have a room, food, internet connection, and full medical care. Depending on available funding from government or philanthropic sources, volunteers might either pay to enter, get everything for free, or be paid a bonus to enter. Health plans of volunteers may even contribute to the expense.
Do read the whole thing. By the way, here is “Hotel Corona” in Tel Aviv. Alex, by the way, seems to endorse Robin’s view. Here are my worries:
1. Qualified medical personnel are remarkably scarce right now. I do not see how it is possible to oversee the variolation of more than a small number of individuals. Furthermore, it is possible that many medical personnel would refuse to oversee the practice. The net result would be only a small impact on herd immunity. If you doubt this, just consider how bad a job we Americans have done scaling up testing and making masks.
The real question right now is what can you do that is scalable? This isn’t it.
I recall Robin writing on Twitter that variolation would economize on the number of medical personnel. I think it would take many months for that effect to kick in, or possibly many years.
2. Where will we put all of the Covid-positive, contagious individuals we create? What network will we use to monitor their behavior? We have nothing close to the test and trace systems of Singapore and South Korea.
In essence, we would have to send them home to infect their families (the Lombardy solution) or lock them up in provisional camps. Who feeds and takes care of them in those camps, and what prevents those individuals from becoming infected? What is the penalty for trying to leave such a camp? Is our current penal system, or for that matter our current military — both longstanding institutions with plenty of experienced personnel — doing an even OK job of overseeing Covid-positive individuals in their midst? I think not.
Under the coercive approach, what is the exact legal basis for this detention? That a 19-year-old signed a detention contract? Is that supposed to be binding on the will in the Rousseauian sense? Where are the governmental structures to oversee and coordinate all of this? Should we be trusting the CDC to do it? Will any private institutions do it without complete governmental cover? I don’t think so.
If all this is all voluntary, the version that Robin himself seems to favor, what percentage of individuals will simply leave in the middle of their treatment? Robin talks of “Hero Hotels,” but which actual hotels will accept the implied liability? There is no magic valve out there to relieve the pressure on actual health care systems. Note that the purely voluntary version of Robin’s plan can be done right now, but does it seem so popular? Is anyone demanding it, any company wishing it could do it for its workforce?
3. The NBA has an amazing amount of money, on-staff doctors, the ability to afford tests, and so on. And with hundreds of millions or billions of dollars at stake they still won’t restart a crowdless, TV-only season. They could indeed run a “Heroes Hotel” for players who got infected from training and play, and yet they won’t. “Stadium and locker room as Heroes Hotel” is failing the market test. Similarly, colleges and universities have a lot at stake, but they are not rushing to volunteer their dorms for this purpose, even if it might boost their tuition revenue if it went as planned (which is not my prediction, to be clear).
The proposal requires institutions to implement it, yet it doesn’t seem suited for any actual institution we have today.
4. Does small/marginal amounts of variolation do much good compared to simply a weaker lockdown enforcement for activities that involve the young disproportionately? Just tell the local police not to crack down on those soccer games out in the park (NB: I am not recommending this, rather it is the more practical version of what Robin is recommending; both in my view are bad ideas.) Robin’s idea has the “Heroes Hotel” attached, but that is a deus ex machina that simply assumes a “free space” (both a literal free space and a legally free space) is available for experimentation, which it is not.
5. Society can only absorb a small number of very blunt messages from its leaders. You can’t have the President saying “this is terrible and you all must hide” and “we’re going to expose our young” and expect any kind of coherent response. People are already confused enough from mixed messages from leaders such as presidents and governors.
6. There is still a chance that Covid-19 causes or induces permanent damage, perhaps to the heart and perhaps in the young as well. That does not militate in favor of increasing the number of exposures now, especially since partial protective measures (e.g., antivirals, antibodies) might arise before a vaccine does. This residual risk, even if fairly small, also makes the liability issues harder to solve.
7. The actual future of the idea is that as lockdown drags on, many individuals deliberately will become less careful, hoping to get their infections over with. A few may even infect themselves on purpose, one hopes with a proper understanding of dosage. One can expect this practice will be more popular with the (non-obese) young. The question is then how to take care of those people and how to treat them. That debate will devolve rather rapidly into current discussions of testing, test and trace, self-isolation, antivirals, triage, and so on. And then it will be seen that variolation is not so much of a distinct alternative as right now it seems to be.
8. The main benefit of variolation proposals is to raise issues about the rates at which people get infected, and the sequencing of who is and indeed should be more likely to get infected first. Those questions deserve much more consideration than they are receiving, and in that sense I am very happy to see variolation being brought (not much risk of it happening as an explicit proposal). That said, I don’t think Heroes Hotel, and accelerating the rate of deliberate, publicly-intended infection, is the way to a better solution.
Soon I’ll write more on what I think we should be doing, but I would not put explicit variolation above the path of the status quo.
Stopping time plus hazard pay?
You’ve previously publicized the clever solution to the Corona-crisis of “stopping time.” As others have pointed out, a drawback is that we can’t stop time for everyone. In particular, we need essential services to continue.
Separately, there is a significant case for hazard pay. In principle we could let the market sort this out. But in practice, we don’t want to spend the next month getting to the equilibrium with health care workers.
The current round of government interventions entail mounting distortions.
So perhaps a more efficient solution to all of this would be:
–stop time, but
–government sends everyone checks that can be used for food and gas and directly pays for essential services (public safety, medical, utilities)The net effect is hazard pay for essential workers—they continue to draw income, but their rent/mortgage/loan/utility obligations are frozen just like everyone else’s.
As a ballpark cost: if 25% of the economy is essential, this is about $400B/month.
Expensive, but much cheaper than alternatives.
That is from an email from Philip Bond, University of Washington.
FDA Prevents Import of Masks
The KN95 mask is China’s version of the N95 mask. 3M, America’s largest manufacturer of N95 masks, said in January that the masks are equivalent. But the FDA is not allowing KN95s into the country.
Buzzfeed: The KN95 mask is a Chinese alternative to the scarce N95 mask, but the FDA refuses to allow it into the country.
…By law, masks, along with most medical devices, can’t be imported or sold in the United States without the Food and Drug Administration’s say-so. Last week, to ease the national shortfall of protective gear, the FDA issued an emergency authorization for non-N95 respirators that had been certified by five foreign countries as well as the European Union. It conspicuously left the KN95 masks out of the emergency authorization.
The omission was all the more startling because in late February the Centers for Disease Control and Prevention said that KN95 masks were one of numerous “suitable alternatives” to N95 masks “when supplies are short.”
…Allowing the importation and use of KN95 could help to greatly alleviate the scarcity.
“The KN95 masks are far more readily available,” said Bob Tilton, who owns a New Jersey–based cosmetics packaging importer and earlier this month decided to use his familiarity with Chinese supply chains to bring in masks and other personal protective equipment to sell to hospitals. “The N95s are much harder to grab.”
Yet without the FDA’s seal of approval, importers are hesitant to order KN95 masks because they worry they’ll get held up at customs.
It’s not just the FDA that is to blame, however. America’s legal system is also to blame:
Many hospitals are refusing to accept them, even as free donations, because they fear legal liability should a health care worker get ill while using a nonpermitted device…Although some hospitals flat-out reject KN95 masks at any price on advice of their lawyers, people rounding up masks to give to hospitals have found that individual doctors or nurses will often accept the donations, given the dire need.
Consider that last bit of insanity. The ethical and common-law type rule is very simple: Do everything reasonable to protect your hospital workers. But what some feckless hospital administrators are actually doing is following “the law” even if it conflicts with the ethical rule.
What should you read during the crisis?
Agnes Callard writes (NYT):
Like many others, I have been finding my taste in books and movies turning in an apocalyptic direction. I also find myself much less able than usual to hold these made-up stories at a safe distance from myself…
If I have something to feel guilty about, I want to feel guilty. If something frightening is happening, I want to be afraid of it. Which is to say: When things are bad, I want to suffer and would choose to suffer and even seek out suffering.
Having just rewatched Bergman’s The Seventh Seal, and then The Virgin Spring, I agree at the margin, but not altogether. I would raise the following points:
1. In times of turmoil, we may have a stronger craving for art that “feels real.” But such art is in fact often especially phony. The “special effects” have to be all the better, so to speak. None of what we are consuming is a realistic experience in the first place, so perhaps we are seeking out greater artifice and fooling ourselves about its realism even more than usual.
2. Should we be watching videos of bad events in hospitals? (originally Chinese hospitals, now NYC). Some people are indeed doing this, but as a substitute for Jane Austen? How about videos of people dying from Covid-19? Videos of other respiratory diseases as the next best fill-in?
3. What about the art vs. non-art margin as a larger choice? Don’t many people with terminal diseases (more terminal than usual that is) want to go for long walks in nature? Doesn’t fiction exercise much less of a hold on elderly minds and matter most for teenagers and people in their early 20s and perhaps also women in their 40s-50s? Perhaps the implication is, during a pandemic, to move away from art and literary fiction altogether.
4. The Guardian reports that sales of long, classic novels have gone up. What do those novels have in common? Are they a kind of comfort food? Do we value their length? That they are high status? That we read them already in earlier and perhaps happier periods of life? Are they long projects we can absorb ourselves in? Those seem like illusion-laden motives for reading them, “not that there’s anything wrong with that.”
5. Perhaps we like to read especially pessimistic dystopian novels as a kind of talisman. “Tell me the worst, let’s get dealing with the fear over with, then I will feel protected that reality will not disappoint my expectations because things won’t in fact be that bad.” That is again another kind of illusion. The aforementioned Guardian link suggests that sales of dystopian novels are up in general, even if they are not about plagues and pandemics.
6. Yiyun Li said: ““I have found that the more uncertain life is, the more solidity and structure Tolstoy’s novels provide. In these times, one does want to read an author who is so deeply moved by the world that he could appear unmoved in his writing,” she wrote.”
7. If people are bored, should they then wish to experience further boredom through their choice of fiction? Or would a diversion from boredom be acceptable and indeed preferred?
Somehow I think in terms of a portfolio approach to aesthetics. In harder times you need more tugs, pulls, distractions, and offsets than usual, but they should not all run in the same direction, or they will become predictable and cease to move you.
So when it comes to fiction, take some chances in your reading and toss in some of the older classics and horror and dystopia as well, and lots of fun and warmth and those walks in nature too.
So yes make a (marginal) turn in the apocalyptic direction, but in part it is to shore up your own sappiness.
Thursday assorted links
1. Less Wrong coronavirus database (now upgraded).
2. My 2017 video on The Great Reset. And David Wright podcast on how Covid hits the poor.
3. MIE: In Beijing restaurants “many delivery orders now often include cards listing the names and temperatures of all the staff involved in preparing your food.”
4. The limits of infrastructure stimulus. And the case against airline bailouts. And database of state quarantine regulations.
5. Paul Romer’s simulations for tests and targeted isolation. And more from Romer. And a third Paul Romer simulation: even an eighty percent false negative rate helps fight a pandemic. I’ll be writing more on this soon.
6. Health and pandemics econ working group. And Senegalese music video.
8. Cheap mechanical ventilators?
9. Someone wise once told me that you get into the most trouble/controversy making statements that (pretty much) everyone agrees with. Here is my Bloomberg column on university endowments, which endorses the policies of virtually all elite universities, and by extension their presidents and boards. Or for that matter virtually all businesses that have had to opt for lay-offs.
10. The problems of post-acute care.
11. During the shutdown, the creativity pours forth (Joseph’s Machines).
Safety Protocols and Zones of Quarantine
Carl Danner writes me:
“Essential activities” has no objective definition. It implies some blanket degree of risk acceptance that can’t be accurate by any underlying calculus, i.e. as if someone has specifically weighed whether we can tolerate these particular activities because they provide enough value to offset the incremental risk of conducting them. But the reality is more likely that those conducting most activities (including “essential” ones) are now undertaking risk mitigation measures intended to reduce the chance of virus transmission to very low or nonexistent levels.
What we need instead — and the logical place for governments to go in unwinding these blanket restrictions — is a recognition that any beneficial economic activity should be allowed if undertaken using a protection protocol appropriate to its particulars and sufficient to prevent virus transmission. This would get government out of the business of choosing which businesses or occupations are essential, vital, important or whatever — including all the problems attendant to making such discretionary determinations across the entire economy for a sustained period. Without that revised approach, we could start to develop occupational licensing/certificate of need type problems as a general feature of the economy.
In other words, this part of the virus response should transition to a health and safety regulatory concern that is important, but handled like most of the others. For example, poor food hygiene can also kill you, but governments generally don’t respond by deciding which cuisines are essential and which are not. Rather, anyone willing to follow the safety rules can put up any menu they want. So it should be for economic activities of all kinds.
We should not lift restrictions until the number of new cases is declining and low and we have enough testing capacity to squash new outbreaks. But we should start to think about what safety protocols may be reasonable in the future. For example, I think we could allow any firm to reopen that does not deal with the public and where all the employees wear masks. Any workplace that disinfects twice a day and checks worker temperatures might be another appropriate allowance. Another possibility is quarantining at work. I don’t see the latter as useful for most workplaces but for say a nuclear energy plant or air traffic controllers it might be appropriate to bring in mobile homes, as they do for fracking workers in North Dakota. Going somewhat farther afield we might use cellphone data to decide on zones of quarantine, e.g. home or work or driving in between. Obviously such systems can be spoofed but the point would be to offer this as a temporary and voluntary system to move towards normalcy.
Hat tip: Michael Higgins.
Wednesday assorted links
1. “Variation in skill can explain 44 percent of the variation in diagnostic decisions, and policies that improve skill perform better than uniform decision guidelines.” Not a Covid-19 paper, but relevant of course, link here.
2. Which states are practicing social distancing the most? (NYT)
3. Human challenge studies to accelerate a vaccine.
4. My Bloomberg column on how the macroeconomics of Covid-19 do and do not resemble WWII. Oops, correct link here.
5. The idea of “group testing” actually came from economist Robert Dorfman of Harvard (who taught me history of economic thought way back when). And more on pooled tests. And Nebraska is doing pooling.
6. “Use Surplus Federal Real Property to Expand Medical and Quarantine Capacity for COVID-19.”
7. Why scaling up testing is so hard (New Yorker).
8. We still don’t know the CFR for H1N1.
9. “Overlooked is the possibility that beauty can influence college admissions.” But not for Chinese it seems.
10. Mullainathan and Thaler with some deregulatory suggestions (NYT).
12. Benjamin Yeoh on early vaccine use.
13. James Stock: “The most important conclusion from this exercise is that policy hinges critically on a key unknown
parameter, the fraction of infected who are asymptomatic. Evidence on this parameter is scanty, however
it could readily be estimated by randomized testing.”
14. Two elite factions in tension with each other (nasty stuff, please do not read).
Shruti Rajagopalan on India and the coronavirus
Overall, a lockdown in India is a good idea. Its healthcare infrastructure cannot handle even the flattest of curves, so social distancing not only flattens the curve but buys the government and private sector three weeks to increase capacity. In developed countries like the US, where capacity is high, the economic cost of shutdown is also high. But in India, the economic cost of a shutdown is lower, and the cost of a collapse in healthcare capacity because of premature stress is very high. So a lockdown in India makes sense for its conditions.
There are a few things to keep in mind to make this lockdown a success.
First, the Indian government needs to rely on its private sector healthcare infrastructure, which is many times larger in capacity and services than the government provided free/subsidized healthcare. There are 10 times more doctors in India working in the private sector than government hospitals. Especially in urban areas – where the initial outbreaks are most expected and feared – private healthcare functions very well. The government should pay for the testing and treatment of the poor and those who cannot afford, and allow those who can pay to directly get those services. During emergencies, there is a temptation to requisition private capacity, which in this case will only impose stress on the healthcare infrastructure. The government should pump a lot of funds into the health sector, but allow the private sector to provision and increase the number of beds, health workers, ventilators, masks etc. The current allocation of 150 billion rupees (about 2 billion USD) announced by Modi is too little. It’s about $1.5 per Indian. This amount needs to be increased many times over. The returns in terms of saving lives immediately, and improving healthcare infrastructure will be worth it in the long term.
Second, the government must resist the temptation to impose price controls and quantity controls and let the markets work. India has very local supply chains and all essential goods, mainly food and dairy, will be available easily. Price controls during a lockdown will only exacerbate the problem. A price is a signal wrapped up in an incentive. It signals shortages and surpluses and it also incentivizes buyers and sellers to adjust their behavior. Government imposed price controls must be avoided completely. India has banned exports of medical essentials like masks and ventilators, which is currently justified and sufficient. Indian entrepreneurs will respond to the emergency if prices are allowed to function and the dreaded Essential Commodities Act, which has significantly distorted prices in the past, and unintentionally prevented essential goods from reaching people, is kept at bay.
Third, India has lifted hundreds of millions out of poverty, but still has about 275 million living below the poverty line i.e. less than $1.25 a day. In addition to these, another 300 million are highly vulnerable to economic stress. 70% of Indians work in the informal sector, on short contracts, usually daily or weekly wage, and will have no income with a 21-day lockdown. Even after the lockdown is lifted, sectors like construction may not revive immediately. India needs to announce some kind of quasi universal income, or subsidy that is not means tested, for at least 700 million of
its 1.35 billion population. A minimum of at least Rs 2,500 a month (which is the Indian poverty line) to keep these Indians at home, and not desperate, is essential. If this has to be continued for three months, it would amount to ~2.6% of GDP. This is a stimulus which India can, under these circumstances, afford, and without which millions of poor may die because of the lockdown and not the pandemic. Without this, the chances of the success of the lockdown is low. It will also soften the aggregate demand contraction which is inevitable during a 21 day lockdown.
Finally, assume goodwill. There is a tendency to pass draconian measures in an emergency to punish the few hoarders and scamsters in any situation. The problem with bad laws that are only designed to prevent scamsters, whether it is for hospital funding, UBI-like subsidies, or removing price controls, is that it creates bad incentives for others, and discourages provisioning of goods and services by others, mostly operating on good faith. And the cost of punishing the scamsters in this emergency is too high. Assume some small percentage of people will take advantage of all this, and carry on.
The lockdown is the first step. But India must not squander the next 21 days, and prepare on a war footing to increase its healthcare infrastructure.
FDA Stops At-Home Tests
TechCrunch…the U.S. Food and Drug Administration (FDA) has updated its Emergency Use Authorization guidelines to private labs that specifically bar the use of at-home sample collection. This means startups, including Everlywell, Carbon Health and Nurx, will have to immediately discontinue their testing programs in light of the clarified rules.
The FDA issued the updated guidance on March 21, and though some of the companies had already begun to ship their sample collection kits to people, and even begun to receive samples back to their diagnostic laboratory partners, even any samples in-hand will not be tested, and will instead be destroyed in order to comply with the FDA’s request
The tests are collected at home but the tests themselves are done in certified labs under quality-control standards (CLIA). It is of course possible, even likely, that tests collected at home are not as accurate as those collected by a trained nurse. But we don’t want trained nurses to be testing everyone–they have other things to do right now. Furthermore, some of these errors will be detected at the lab and can be fixed with a retest. False negatives are possible but going to a hospital or standing in line to get a test also comes with risk. False negatives will also become apparent to the extent that symptoms worsen at which time patients can seek medical assistance. Yes, of course, delay and false reassurance are also not without risk. Welcome to the world of tradeoffs. But at this point in time we need to unleash American ingenuity and enterprise and evolve our way to the frontier as conditions improve.
We need to learn now, regulate later.
Let the Markets Work
Many people are calling for the President to use the Defense Productions Act (DPA) but the reality is that the DPA is neither especially useful nor necessary. The markets are already redirecting resources in a rapid and sophisticated manner. For the most part, the shortages were due to temporary increases in demand. The shelves are now filling. Food is plentiful. Hand sanitizer and soap is on the way or available. We are not going to run out of toilet paper. Now that the CDC and the FDA have gotten out of the way, we are producing more tests.
Honeywell and 3M are already ramping up production of N95 masks. We should arrange with China to buy more. The Federal Government is playing a useful role by buying surgical masks from companies like Hanes. Ironically, we will be importing them from Latin America.
Winston-Salem Journal: The company went from negotiating a contract with the federal government to beginning production in less than a week, according to the spokesman.
Using U.S.-grown cotton, the masks are being produced in Hanesbrands’ sewing factories in El Salvador, Honduras and the Dominican Republic.
These factories would normally be producing T-shirts, underwear, socks, sweatpants and sweatshirts.
(Note the stupid requirement to use American Cotton.)
A price is a signal wrapped up in an incentive, as Tyler and I write in Modern Principles. Compare the price system with command and control. We need ventilators. The federal government could order ventilator firms to make more but they are already doing so. The government could order other firms to get into the ventilator business but does the Federal government have a good idea which firms have the right technology or which firms have the right technology that could be repurposed to ventilator production at low cost, that is without causing shortages and disruption in other fields? Can they do better than a decentralized process in which millions of entrepreneurs respond to price signals. No.
A word here on “price gouging.” There are two kinds. The first, which has gotten some attention, is when the manufacturer/retailer holds the price constant despite increased demand and an enterprising fellow buys up stock to sell at the true market price–the ticket scalping model. “Ticket scalping” has some good features and I would not make it illegal but it has one big problem–the benefits of the increased price are not going to the producers. It would be better if the manufacturer and retailer raised their prices, the scalpers would then be eliminated and the benefits of the higher price would flow to producers giving them an incentive and resources to expand production. We shouldn’t worry too much about ticket scalping, however, because its temporary. Typically what happens is that the manufactures and retailers hold the price low for a short period of time to avoid consumer backlash, output ramps up, and then the price rises but given the increased supply by not as much as it would have in the short run. This also works fine. The bottom line is that it’s very important that manufacturer prices be allowed to rise to reflect true scarcities and to get resources flowing in the right direction. So far, we are doing that and the system is working well.
If all the trucks are fleeing from the front, we want the army to be able to requisition vehicles to move in the opposite direction. Private and social incentives do not always align and when time and certainty are of the essence command and control may be superior (as Tyler and I discuss in Modern Principles in the chapter on externalities). For the most part, however, that is not the situation we are in now. Private incentives are all pushing in the right direction of greater production. Let the market respond. The federal government is not good at command and control but it does have a role to play in redistribution for need.
America’s great strength is decentralization and markets, and right now we need our strength.