[I wrote and scheduled this post before I found out that the White House has released its plan for Opening up America Again. I could pick apart the plan, but instead I will just stick with what I already wrote, which stands up pretty well.]
What is going to happen when governors give the go-ahead to “re-open the economy”? Continue reading
The definition is that region Y has many more deaths per million than region X. Examples include:
Continue reading
[This is one of those posts that is not about the virus crisis, although it wouldn’t be at all difficult to talk about pandemic response preparation as infrastructure]
Eli Lehrer writes,
There is no evidence that America’s infrastructure is crumbling or that it is not globally competitive. Indeed, judged by its performance, our existing infrastructure works well. Rather than building more of what it already has, therefore, America should direct its new investments toward visionary projects on the scale of the transcontinental railroad, the interstate-highway system, and the internet, all of which have helped the nation achieve its status as world leader.
. . .a few examples of the types of projects that could be considered. Three in particular fit the bill: building infrastructure for automated, electric cars; transforming the power grid to make clean energy very cheap; and colonizing outer space and exploiting its resources.
I only partly agree. I do think that it would be easier to switch to autonomous vehicles if you could build the road system from scratch. Ideally, you would want to keep legacy drivers off of those roads. But how do you get from here to there? Autonomous car lanes on existing roads?
What concerns me most about the power grid is robustness. What you want is to be able to keep power going to an area even if the nearest transformer fails.
I don’t see colonizing out space as an infastructure issue. Sorry.
This site, which I use for updating, does not include the 4000 deaths that NYC added with a lag. The 3DDRR is at 1.30, but excluding New York it rose to 1.36, the highest since before Easter. For those of us who have been waiting for signs of a really dramatic slowdown of the spread of the virus. . .we are still waiting.
1. On the issue of enclosure vs. outdoors, a reader alerted me to an article from 2009, by Richard A. Hobday and Jown W. Cason about the Spanish Flu outbreak, which seems to support my idea of treating patients in the parking lot. Here is the abstract, with my emphasis provided.
The H1N1 “Spanish flu” outbreak of 1918–1919 was the most devastating pandemic on record, killing between 50 million and 100 million people. Should the next influenza pandemic prove equally virulent, there could be more than 300 million deaths globally. The conventional view is that little could have been done to prevent the H1N1 virus from spreading or to treat those infected; however, there is evidence to the contrary. Records from an “open-air” hospital in Boston, Massachusetts, suggest that some patients and staff were spared the worst of the outbreak. A combination of fresh air, sunlight, scrupulous standards of hygiene, and reusable face masks appears to have substantially reduced deaths among some patients and infections among medical staff. We argue that temporary hospitals should be a priority in emergency planning. Equally, other measures adopted during the 1918 pandemic merit more attention than they currently receive.
2. D.F. Linton made some charts that smooth the 3DDRR.
3. Sweden, which is relying primarily on private decisions for social distancing, as of this morning was at 132 deaths per million, more than all but 7 other European countries. I was forwarded information that points to immigrant populations in Sweden having a disproportionately large share of infections relative to their share of Sweden’s population.
4. Health economist Jeffrey E. Harris writes,
New York City’s multitentacled subway system was a major disseminator – if not the principal transmission vehicle – of coronavirus infection during the initial takeoff of the massive epidemic that became evident throughout the city during March 2020. The near shutoff of subway ridership in Manhattan – down by over 90 percent at the end of March – correlates strongly with the substantial increase in the doubling time of new cases in this borough. Maps of subway station turnstile entries, superimposed upon zip code-level maps of reported coronavirus incidence, are strongly consistent with subway-facilitated disease propagation. Local train lines appear to have a higher propensity to transmit infection than express lines.
From my timeline: March 4. New York Health Commissioner Oxiris Barbot: There’s no indication that being in a car, being in the subways with someone who’s potentially sick is a risk factor.
5. Speaking of New York, today is the day that about 4000 deaths showed up that had not been previously reported. As of yesterday, New York was showing only 11,586 and the number of “new death” reported to day was 606. But today the total for the state is 16,251
6. Olivier Blanchard and Jean Pisani-Ferry write,
The extraordinary operations that are under way in most countries in response to the COVID-19 shock have raised fears that large-scale monetisation will result in a major inflation episode. This column argues that so far, there is no evidence that central banks have given up, or are preparing to give up, on their price stability mandate. While there are obviously some reasons to worry, central banks are doing the right thing and the authors see no reason to panic.
Take anything Blanchard says, put a minus sign in front of it, and you have my view.
7. Pat Bayer looks at death rates in Italy and sees flat declines post-peak. Pointer from Tyler Cowen. I think I am seeing the same thing in the ex-NY data in the U.S., and I am not happy about it.
8. I listened to a bit of the Sweden update that Tyler linked to, around minutes 12 through 16. It seems that there was a lot of voluntary social distancing, including an enormous reduction in the use of mass transit. Also, many of the deaths were in nursing homes. So perhaps we are not learning as much from the “Sweden experiment” as one might hope.
Cato’s David Boaz had a good idea. He put together a timeline that shows how the private sector started to act on the virus before the government did. I would like to expand the timeline, particularly to contrast the CDC, the FDA, WHO and officials in New York with the private sector actions. I welcome suggestions. Continue reading
[Note: askblog had an existence prior to the virus crisis. I still schedule occasional posts like this one.]
A commenter asks,
Could you write an explanation of the financial / economic logic behind stock buybacks, vs. lowering debt and/or paying out dividends?
My cynical view is that 90 percent of financial strategy is either tax minimization, regulatory arbitrage (coming up with instruments to comply with the letter of regulations while violating their spirit), or accounting charades (complying with the letter of accounting rules while disguising reality).
In the case of stock buybacks, I lean toward tax minimization. I suspect that stock buybacks are the most tax-efficient use of surplus cash.
If you reduce debt, the corporation will pay more in taxes, because the interest payments on the debt were tax deductible. Incidentally, this is a pet peeve of economists, because it provides an incentive for high leverage. I think that the best thing to do is get rid of the corporate income tax, which is best describe as a swiss cheese that is mostly holes. But the holes all distort behavior in some way.
If the corporation pays me a dividend, that is ordinary income to me for tax purposes. If the corporation instead buys back stock, the income I get comes from a higher share price, which I can hold until it is taxable as a long-term capital gain.
Today it is at 1.28, and outside of New York it as 1.32
Apart from New York, the whole Acela corridor, from Massachusetts to Virginia, today saw their cumulative death totals rise by more than 10 percent.
I am seeing articles that suggests that it takes more than a day or two for deaths to be reported in these figures. Economists of a certain age might remember the phrase “long and variable lags.” If the average reporting lag is constant, then the trend is still reliable. But if the average lag is also variable–sometimes 1.5 days, sometimes 4.5 days–then the trend will be difficult to establish.
In any case, the growth rate of deaths is declining more slowly than I have been hoping for. The experts who in early April warned about a rough two weeks ahead seem to be correct.
to the extent pandemic policy is driven by biomed academics, don’t expect it to be very flexible or abstractly reasoned. And my personal observation is that, of the people I’ve seen who have had insightful things to say recently about this pandemic, most are relatively flexible and abstract polymaths and generalists, not lost-in-the-weeds biomed experts.
Read the whole post. He offers many interesting hypotheses, including an explanation for why you have to fire many of the generals who rose through the ranks during peacetime.
From the March 4 and April 8 Fed H.1 data, we learn that the Fed held $2,502 billion and $3,634 billion Treasury securities on those dates, an increase of $1,132 billion. From the Treasury debt to the minute page, we learn that debt held by the public (including the Fed) rose from $17,469 billionaires to $18,231 billion — a (huge) rise of $762 billion. $9 trillion at an annual rate. The Fed bought all the Treasury debt, printing new money to do it, and then some. On net, the government financed the entire $762 billion by printing new money and printed up another $370 billion to buy back that much existing treasury debt.
Later, he writes,
Inflation comes basically if the US hits a debt crisis.
I would say that we only get hyper-inflation if there is a debt crisis. But I believe that we can get at least a 1970s-style inflation without a debt crisis. We are keeping people home and getting them laid off, which means that they are not producing anything of value. Yet we are giving them funds as if they were still producing, which they will then spend on stuff that other people produced. Regardless of what games the Fed plays with interest on reserves, we have more money chasing fewer goods, and that means inflation.
As it stands now, inflation is being repressed by a form of price controls, in the form of laws and social norms against “price gouging.” If it weren’t for those laws and norms, prices would be soaring for the things that people want to hoard (masks, toilet paper), many grocery products, and stuff that we used to get easily from China.
In the midst of the COVID-19 pandemic that has already prompted Congress to hike spending by $2.2 trillion (with more likely on the way), and with revenue collections likely to drop in a big way as a result of the coronavirus-induced economic shutdown, the federal government is facing the prospect of a budget deficit of nearly $4 trillion this year.
4. Concerning age and obesity as risk predictors, Christopher M. Petrilli and others write,
In the decision tree for [hospital] admission, the most important features were age >65 and obesity. . .Age and comorbidities are powerful predictors of hospitalization; however, admission oxygen impairment and markers of inflammation are most strongly associated with critical illness.
The most recent NYC data show only 133 deaths out of 6589 were among people who were deemed as having no underlying conditions. The footnote in the table lists only medical conditions such as cancer or heart disease, but it does not include obesity. Also, the table includes 1422 deceased individuals who are not classified as either having or not having underlying conditions but instead are deemed “underlying conditions unknown.”
Thanks to commenters for pointers.
5. The WSJ reports,
CVS—where Mr. Lackey heads up talent acquisition—is now taking on the most ambitious hiring drive in its history. To recruit the 50,000 staffers it needs to meet a coronavirus-fueled surge in business, it is partnering with Gap Inc., Hilton Worldwide Holdings Inc. . .Delta Air Lines Inc. . . . and dozens of other companies to employ their laid-off workers. More than 900,000 people have applied for CVS jobs in just the last few weeks, including roles stocking warehouses and stores, answering phones at call centers or stepping in for CVS staff who end up sick or quarantined.
As the government and many pundits try to figure out how to make the economy revert to what it used to be, the market tries to find patterns of sustainable specialization and trade.
6. Meanwhile, Olivier Coibion, Yuriy Gorodnichenko, and Michael Weber write,
the employment-to-population ratio has declined sharply. Using the adjusted metrics described above, we find that the employment ratio fell from 60% of the population down to 52.2%, a nearly eight percentage point decline. . . this decline in employment is enormous by historical standards and is larger than the entire decline in the employment-to-population ratio experienced during the Great Recession. Given that the US civilian non-institutional population is approximately 260 million, this drop in the employment-to-population ratio is equivalent to 20 million people losing their jobs. This drop is even larger than the 16.5 million new unemployment claims over this time period.
Any model of optimal policy should be “what should we do now, knowing the lockdown can’t last very long?” rather than “what is the optimal length of lockdown?”
But we are still flying blind. I am hopeful that asymptomatic spreaders are unlikely to kill people, other than those who are very old or very obese, but this is just a conjecture. As far as I know, we still don’t know the prevalence of the doorknob effect, or the importance of viral load. We have no idea whether there are 1 million people in this country with immunity, or 20 million. We don’t know about the effectiveness of masks and scarves.
We need to replace the peacetime public health leadership, which only knows how to scold and cower, with some actual scientists determined to answer these urgent questions.
8. Maybe we do know something about the effect of enclosed spaces. Hua Qian and others write,
Home outbreaks were the dominant category (254 of 318 outbreaks; 79.9%), followed by transport (108; 34.0%; note that many outbreaks involved more than one venue category). Most home outbreaks involved three to five cases. We identified only a single outbreak in an outdoor environment, which involved two cases. Conclusions: All identified outbreaks of three or more cases occurred in an indoor environment
Pointer from Tyler Cowen. Also from Tyler and possibly related: Travis P. Bagett and others write,
testing of an adult homeless shelter population in Boston shortly after the identification of a COVID-19 case cluster yielded an alarming 36% positivity rate. The vast majority of newly identified cases had no symptoms and no fever on a single point-in-time assessment
9. From the Hollywood Reporter,
California Gov. Gavin Newsom on Tuesday announced a broad six-point plan to reopen the state’s economy and relax strict Safer at Home guidelines.
The six points sound more like conditions that must be achieved before relaxing restrictions. For example,
the ability to monitor and protect communities through testing, tracking positive cases, properly isolate and support individuals who are positive and/or exposed to COVID-19.
A few weeks ago, the focus was on avoiding hospitals becoming overwhelmed. But that is only one of the Newsom’s conditions. Somewhere along the way, we went beyond the goal of reducing infection risk as a means to preserve scarce medical resources. The goal now seems to be reducing infection risk as an end in itself. Once we accept that as a vital government objective, the default becomes indefinite infringement on liberty.
As you know, I am not a fan of models, such as the one that Tyler Cowen points to. I prefer an Ed Leamer “patterns and stories” approach.
One pattern, which Tyler agrees is significant, is that the virus is producing fatalities very unevenly across regions. For example, New York has 552 deaths per million, and Texas has 11. If you believe models, then you probably believe that Texas will catch up at some point. But I can imagine a story in which that does not happen.
Here are what I think are the causal factors for the differences.
1. Living conditions of the elderly. Consider Spain, which appears to have the highest per capita death rate of any major country (although Belgium might catch up). Wikipedia says,
Many nursing homes in Spain are understaffed because they are for-profit businesses and elderly Spaniards cannot necessarily afford sufficient care. In some nursing homes, elderly victims were found abandoned in their beds by Spanish soldiers mounting emergency response. Defense minister Margarita Robles said that anyone guilty of neglect will be prosecuted. By 23 March, a fifth of nursing homes in the Madrid area had reported cases of the virus. More than 65% of fatalities have occurred in those 80 or older, compared to 50% in Italy and only 15% in China. By 3 April, at least 3,500 Spaniards had died in nursing homes and another 6,500 contracted infections there. Thousands of elder care workers are also infected.
2. Concentrated poverty. Actually, it is not dire poverty. It is working conditions and living conditions that make it hard to socially distance.
Low income neighbourhoods in Barcelona have seven times the rate of infection of more affluent neighbourhoods. Part of the reason is that essential workers, who have kept going to work despite the epidemic, are likely to work in low-skill jobs such as supermarkets or elder care. Also, many care workers are immigrants, who lack access to unemployment benefits and live in some of the lowest category housing. Homeless people are also at risk and the charities that help them were forced to cease operations because of the disease.
3. Enclosed spaces where one might come into contact with someone with a high viral load.
I think that enclosure matters. I think some scientific papers suggest this, although I don’t have any links right now.
Actually, someone just sent me a link to Wendell Cox on exposure density which says
Exposure density, and thus infection, is likely to be less, all else equal, if common halls, elevators, crowded places and transportation facilities are avoided.
Cox says that exposure density is the likely explanation for why deaths have been much higher in New York City than elsewhere.
I am trying to come up with an explanation for why the virus has not killed thousands of homeless people in LA and SF. I think that the most plausible reason is that they live outdoors, and so do not inhale the large viral loads that you can inhale in a confined space. That is just a guess.
Note that if enclosure matters, then maybe health care workers would be safer treating patients in the parking lot than inside the hospital building.
So here are some hypotheses.
a) We will find that New York has some nursing homes that are run appallingly badly, and these will account for a significant share of the deaths there. Going forward, spikes in deaths in other locations will be tied to nursing homes that fail to maintain proper hygiene and to keep sick workers away.
b) The elderly and the very obese are vulnerable to fatal infection even from asymptomatic or mildly symptomatic spreaders. But the rest of us will have low infection fatality rates unless exposed to a highly symptomatic individual in a confined space.
c) Someone who is very symptomatic and gets into a crowded space, such as a bar or subway, can kill many people.
If these hypotheses are correct, then I believe that we can avoid a repeat of the New York fiasco with carefully targeted public health interventions and not require general lockdowns.
Keep in mind that I am not an expert and I have an aversion to lockdowns, so there are some obvious biases at work.