1. Expressions I wish people would stop using.

Re-open the economy. It is not a binary open/close situation. Some economic activity is taking place now. Much of the economic activity that was prevalent pre-crisis will never return. And most of all, no signal from a government official is going to enable “back to normal.” This isn’t like the games of tag we played when I was 6 years old. There is no “All-ee All-ee Infree.”

Stimulus. The government is reallocating capital and redistributing wealth. For better or worse, the Fed is telling banks where to lend and where not to lend. The point of giving people relief checks now is not to “stimulate” them to go back to eating in restaurants, attending conferences, flying overseas, or going to sporting events. If they don’t spend on anything other then rent, utilities, and groceries, that’s fine.

2. Worst-legislation-in-history watch:

Congress did not include relief for the mortgage industry in its $2 trillion rescue package — even as lawmakers required mortgage companies to allow homeowners up to a year’s delay in making payments on federally backed loans.

Sounds like Wesley Mouch wrote the CARES act.

3. James Stock and others write,

what is the share of infections that are undetected under current testing guidelines? To answer this question, we turn
to COVID-19 testing data from Iceland. . . Our primary estimates for the fraction of infections that are undetected range from 88.7% to 93.6%.

But is the trend in the U.S. for testing criteria to be tighter or looser? Some anecdotes suggest looser–that is, when someone calls in with symptoms, they are told that as long as symptoms are mild to stay home and not come in for a test. If that means that we are testing a smaller sample of the symptomatic, then the number of reported cases understates the number of people with the virus by even more than the above estimate would suggest.

4. Jeremy Stein and others write,

Under our plan, the government would provide payment assistance to enable impacted businesses to meet their recurring fixed obligations—including interest, rent, lease, and utility payments—during the health emergency. A key advantage of our plan is that it can be easily implemented and administered. Firms would apply for grants up to a maximum limit determined by their recurring fixed obligations, measured using items on the front page of the firm’s 2019 corporate tax return. Both to protect taxpayers and for reasons of fairness, firms—especially the largest firms—that receive temporary BCI assistance would be required to gradually repay most of these benefits over time. Large firms that receive assistance would also face temporary restrictions on their ability to pay dividends and repurchase shares, as well as limitations on executive compensation.

Note that the phrase “would be required to gradually repay most of these benefits” more like a compbination of a grant and a loan than like a pure grant. This is sort of like my credit-line idea, only more complicated. And even slightly more complicated means creating painful difficulties with implementation. People don’t seem to anticipate the way that as you try to improve an idea on paper you can make it seriously degrade in practice. As in the the worst legislation in history.

5. Some people are insinuating that virus deaths are over-reported. I will not consider this a serious issue until I see more evidence.

Of course “cause of death” is not a black-and-white issue. Someone could be diagnosed with congestive heart failure in February and be counted as a virus death in March. But in another case, the person who signs the death certificate could refuse to report a death as virus death only because the person was not tested the virus. If the CDC has issued guidance against making the latter reporting error, then I see that as sensible advice, not a conspiracy to inflate the numbers.

For a variety of reasons, the category “underlying conditions” is too broad. If nothing else, it would help to differentiate underlying conditions that typically lead to death within 6 months from other underlying conditions. i would only want to revise downward the estimate of virus deaths to the extent that more than, say, 5 percent are in people who had less than 6 months to live, anyway.

I think I need to make this case more clearly.

Consider three scenarios.

1. Back to normal. Everyone behaves the way they did before the virus hit.

2. Baseline scenario. Everyone makes individual decisions, except that government dictates wearing of masks in crowded public places, such as subways. I expect under this scenario that many of us would telework as much as possible, avoid travel, stay home a great deal, and practice social distancing. Those would be our choices.

3. Lockdowns. The government orders certain businesses and schools to close. It restricts people’s freedom to move.

For me, (1) is irrelevant. If you insist that the only alternative to (3) is (1), then I won’t pay attention to what you have to say.

The relevant margin is between (2) and (3). Under either of those scenarios, I expect much less virus spreading than under (1). By the same token, I expect a big drop in economic activity under either scenario.

Suppose that the lockdown produces a significantly lower spread rate than the baseline scenario. Does that mean a much lower death rate? That would only be true if we can do a better job of treating people later than now.

The cry of “Flatten the curve!” was based on the presumption that having enough hospital beds and ventilators was crucial to saving lives. Now that we have had a chance to observe the way that cases progress, this argument seems less compelling. It seems that survival chances depend a lot more on patient characteristics than on medical treatment. My impression is that if anything, we are putting too many patients on ventilators. Too often, ventilators constitute futile care, keeping patients alive for only a few weeks.

Our personal policies are as follows.

a) My wife and I will continue to stay at home by ourselves, except for very infrequent trips for groceries.

b) When we do go out, we will wear masks except if we are on walks (or bike rides, in my case)

c) If I get the disease, I only want to be put on a ventilator if there is a decent chance of a good outcome.

[UPDATE] d) I hope we that the two of us have had the virus already and that we are immune. If we find that to be the case, then of course we will be willing to go back to normal. Or if better treatments become available.

In what I call the baseline scenario, other people would be free to have different policies. I prefer that to the lockdown scenario.

The 3DDRR edged up again, to 1.53. Excluding New York, it rose to 1.54, from 1.47 on Monday and 1.50 yesterday. I would say at this point that there is no definite trend, whereas before yesterday it was clearly trending down.

1. Finland starting a random-sample test. I guess they have more money to do this than we do.

2. Tyler Cowen is soliciting proposals for anti-virus research that he will fund quickly.

3. The Competitive Enterprise Institute lists regulations that hamper the response to the crisis. I have to say that I am not one of those expecting libertarians to come out ahead after this. Everyone is going to say that the crisis serves to prove that their ideology is correct.

4. Ross Douthat on what the experts do not know.

most of the institutions that we associate with public health expertise and trusted medical authority have failed more catastrophically than Trump has.

I will be surprised if progressives ever concede that.

The ostensible purpose of the CARES act is to help distressed individuals and small businesses. But much less than half of the spending in the act is directed at those groups. And in practice, the funds are dribbling out, because of poor design and bureaucratic read tape. My credit-line idea could have been implemented with a few lines of computer code at banks.

Meanwhile, the really significant feature of the CARES act is a government takeover of the capital market. The government is authorizing the Fed to lend $5 trillion to businesses, which is more than the entire private-sector lending market in 2019.

If Congress had put President Trump in charge of deciding which businesses get loans and which ones don’t, I assume that more people would agree with me that it is the worst piece of legislation in U.S. history. The only difference now is that instead of replacing the private capital market with a central planner in the Oval Office, the CARES act replaces the private capital market with a central planning bureau at 20th and C Streets, NW.

Before I get to that, I must report that my claim that the worst is behind us is not looking as good today. For the U.S. as a whole, as of the afternoon update the 3DDRR was 1.52, essentially unchanged from yesterday. Excluding NY, it was 1.50, slightly higher than yesterday’s 1.47

A commenter points to a piece by Zvi Mowshowitz.

My prior at this point is that the difference between a low and high initial viral load of Covid-19 is large. The theory makes too much sense. But with high uncertainty.

…We should be studying with experiments how Covid-19 spreads, and how likely each method is to work, using controlled experiments. Yes, this involves infecting individuals. Considering how many lives are at stake and the ability to test using young healthy volunteers who are then isolated, I fail to see how anyone who objects on the basis of ‘ethics’ knows what that word means, or why we should listen to them.

. . .it does not seem so hard for most of us to avoid direct out-of-household interaction with highly symptomatic people.

That last point raises many questions.

1. The people most likely to give you a high-load infection are the people you live with. Almost by definition, you cannot avoid them. Are you ready to re-open schools and let your kids come home with infections?

2. If the trick to this whole thing is to avoid people who might give you a high-load infection, then can you do that on a normal rush hour on the NY subway?

3. What the heck do we do about nursing homes, where a lot of people with low defense factors live in the same place?

1. Roman Frydman and Edmund Phelps write,

The government’s approach is ill-suited to the crisis. The stimulus isn’t merely the wrong dose, but the wrong medicine altogether.

Instead of boosting public employment or seeking to stimulate demand, lawmakers should focus on mobilizing the private sector to combat the public-health crisis. We don’t dispute the need to improve America’s highways, airports and other infrastructure. But that would do nothing to address the specific causes of today’s crisis: self-imposed lockdowns to stop the spread of disease.

The CARES Act will live in infamy as one of the worst pieces of legislation every enacted. The portions of it that were supposed to address short-term liquidity needs have been nullified by complexity and bureaucratic snarls. But you can bet that the portions that reflect rent-seeking and irrelevant agendas will be implemented much more effectively.

And the politicians in Washington think that this is only the appetizer. They are preparing the next course.

2. Gary Cohn and Glen Hutchins write,

The Fed will be operating at an unprecedented scale, reportedly lending as much as $5 trillion, which is more than its entire balance sheet before the crisis. It will also be engaging in a practice in which it has little experience: targeting capital to individual companies in commercial industries. This is an important and complex task that requires great care and speed.

The Fed’s ability to identify and implement appropriate tools will be critical to its success in this new role. It is vital that the central bank succeeds in mitigating the pandemic’s damage to the economy. It is also important the Fed avoids the stigma that followed the 2008 “bailouts.” This will require a thoughtful approach to staffing, process and disclosure that ideally would be implemented at the outset.

They are cheerleading for the Fed, which I am sure is what you have to do if you want to stay in mainstream journalism or economics. We have become more Chinese than China, in that the centralization of capital allocation is more rigorous here and the Distributed Information Suppression Complex is more effective than China’s much cruder control over news.

3. A reader forwards a pointer to paper by Ke, et al.

Here, we argue that because death and the cause of death are usually recorded reliably and are less affected by surveillance intensity changes or delay in confirmation than case counts, the time series of death counts reflects the growth of an epidemic reliably, with a delay in onset determined by the time between infection to death. Based on this idea, we designed a simple 88 methodology to disentangle the epidemic growth from confounding factors, such as underreporting, delays in case confirmation and changes in surveillance intensity. We fit models to both case incidence data and death count data collected from eight European countries and the US in March 2020. We show that in most countries, the detection rate of infected individuals is in general low, and COVID-19 spreads very fast in these countries

In other words, they agree with me that the death rate gives you a way of looking at the spread rate through a rear-view mirror. I don’t know why they even bother to look at confirmed-case data at all.

4. Another reader sent me a link to an article behind an FT paywall (https://www.ft.com/content/9ee6f251-f3ee-4d42-8cac-e372f8564088) that says that Iran has adopted a credit-line approach similar to what I have suggested. Who says I have no influence?

Note to commenters: feel free to correct me on any of this, preferably with links to definitive sources. I will post corrections here.

There are two stages to the virus disease. In the first stage, one gets flu-like symptoms. In the second stage, if it occurs, an immune response coats the lungs, reducing oxygen flow do the blood. I believe this is called ARDS, although sometimes I see it referred to as pneumonia. The second stage is by far the most deadly.

UPDATE: This article makes me think perhaps in three stages: flu-like; pneumonia; ARDS. But it doesn’t change the main point.

On the defensive side, we know that risk of death goes up with both age and obesity. As I understand it, obesity is a big risk for the second stage. I do not know whether being young is protective for the first stage, the second stage, or both. Perhaps it does not matter which.

On the offensive side, it seems intuitively reasonable that a more aggressive virus attack, meaning you inhale more of the virus, is more likely to cause worse symptoms at the first stage. It seems intuitively reasonable that having worse symptoms at the first stage is more likely to trigger the second stage.

This reminds me of an Avalon Hill war game, in which you move counters, and when a battle occurs, the winner is determined by the attacker’s attack factor, the defender’s defense factor, and a roll of the dice.

I view Robin Hanson’ variolation idea through the lens of that metaphor. Our current approach is either to have a mass retreat or a mass advance, not bothering to look at attack factors or defense factors. It seems to make more sense to choose our battles where we can be confident of low attack factors and high defense factors.

[UPDATE, April 16. This post was a bad call. Sorry.]

I am posting this at 11 AM eastern time, and I am about to go on a bike ride. By the time I come back, I may regret saying this. But I think that the worst is over on the virus crisis. The trend of the 3DDRR is going to be down, perhaps even faster than my optimistic scenario.

If I am correct, then many questions remain. The big one is whether things would turn bad again if we opened up more sectors of the economy. I wish we had a better way to test that other than experimentally lifting lockdowns.

UPDATE, 2:20 PM. a commenter suggests that New York might be distorting the figures. I took totals for the U.S. and subtracted the numbers from New York. Then I calculated the 3DDRRxNY, that is, the rate for the U.S. excluding New York. It is lower than NY. And also declining. I’ll keep my eye on 3DDRRxNY, but so far I stick with my call.