Category Archives: virus crisis

The 3DDRR

Posted on by

The number that I use to track the virus crisis is the Three Day Death Reproduction Rate. It sounds ghoulish, and it is. It also is a lagging indicator. I wish I had some other indicator. But I do not trust case numbers, because testing criteria are undergoing constant revision.

The 3DDRR is calculated using the data from this site, which is updated every day late in the afternoon, eastern time. It gives the total number of deaths as of each date. The 3DDRR for, say, March 29, is the total number of deaths on March 29 (2428) divided by the number on March 26 (1163), which gives 2.09.

We can say that if the 3DDRR stays close to 2, then that is awful. If it stays over 1.1, then that is still pretty bad. If it is just barely over 1, say 1.002, then that is better. Getting below 1 would require resurrections.

So for all the dates from March 20 through today, we have

Date 3DDRR
3-20 2.43
3-21 2.43
3-22 2.49
3-23 2.15
3-24 2.48
3-25 2.26
3-26 2.47
3-27 2.27
3-28 2.18
3-29 2.09
3-30 1.92
3-31 1.91
4-1 1.94
4-2 1.97
4-3 1.86
4-4 1.77

The trend is in the right direction, but the 3DDRR is still disturbingly high. It would be nice to see, say, 1.5 by April 7, 1.3 by April 10, 1.1 by April 13, and 1.002 from April 16 on. That would raise April 4ths total deaths of 8314 to 17,834 (exactly, right?) on April 13, with slow increases beyond that.

That is a numerical scenario, but it is hard to know what has to happen in the real world to achieve that. Presumably it would require a continued reduction in the spread rate of the disease, along with improvements in triage and treatment.

The problem is that even in such an optimistic scenario, we won’t know how much of the lockdown policy was needed to achieve it. I keep saying that we need experiments in order to better understand the spreading process, but no one listens.

Thoughts on testing for the virus

Posted on by

There are two purposes of tests.

Individual: To tell whether a particular patient has the virus.
Social: To enable public health officials and policy makers to know the prevalence of the virus in the population.

For the individual purpose, the quantity of tests and the speed with which results can be read matters more than quality. There is hardly any point in testing someone who is unlikely to be infected. And if a hospital uses one type of test on one patient and a different type of test on a different patient, that is hardly a problem.

For the social purpose, the quantity of tests does not matter, as long as enough people are tested to produce a reliable sample. If you have to wait a week for a test result, that is ok. You want to include a representative sample of the entire population, including people without any reason to believe that they have been infected. It is important that every person tested using the same method.

What level of accuracy do you need? Suppose that 95 percent of the people who test positive are in fact positive, and 95 percent of the people who test negative are in fact negative. Is that good enough? Imagine that out of 1000 people, 40 test positive and 960 test negative. You would have:

test positive test negative
have virus 38 48
virus-free 2 912

Do you see the problem? More people who have the virus test negative for it than test positive for it. That is certainly not good for the individual purpose.

For the social purpose, you can back out the true prevalence of the virus provided you know precisely the rate of false positives and false negatives. But if you don’t know those, and if you just go by the test results, in this example you would say that only 4 percent of people have the virus, even though 8.6 percent of people actually have the virus. But at least you would be in the right ballpark. In the absence of rigorous testing, right now the estimates from different “experts” are orders of magnitude apart.

For the individual purpose, I would prefer the testing method with the lowest rate of false negatives. For the social purpose, I would prefer the test where we have the most precise estimate of the false positive and false negative rates, even if the false negative rate is a bit higher than that of some other test.

Public Service Announcement

Posted on by

For people who are new to this blog:

1. The tradition here is for respectful, constructive discussion. For five years up until the past week, I probably deleted fewer than 10 comments for violating that tradition.

2. My wife and I began a self-quarantine on March 12, which was before most people were doing so, and before almost any public official recommended it. I became a doubter of the quarantine approach when it occurred to me that a public hygiene approach could be a more cost-effective alternative. By public hygiene, I mean masks and scarves, handwashing, and efforts to frequently sanitize surfaces that are touched by many people. I will not stand for accusations that my motives are selfish.

Underlying conditions, age, and deaths in NYC

Posted on by

To summarize this table (pointer from Russ Roberts):

Of 1584 Covid deaths, 25 were people with no underlying conditions, 380 were people with “underlying conditions pending,” which I guess means that they are not sure whether or not the person had an underlying condition, and the other 1179 all had underlying conditions.

Of those with “pending underlying conditions,” 234 were aged 75 and over. So another way to look at the data is that of the 1584 deaths, 1413 either were aged 75 and over or had definite underlying conditions. That is 89 percent.

Perhaps those of us under age 75 and healthy ought to be given more freedom to go out in public, provided that we wear face covering. Also, it would help to sort out which “underlying conditions” really matter, to know who should be considered healthy.

ASK vs. EYI

Posted on by

I do not like the way that the experts are dealing with this crisis. I am at the point where I don’t care about being charitable toward them. Nassim Taleb, who is never charitable to those who disagree with him, has a shorthand that I will modify for this purpose. Expert Yet Idiot, or EYI.

  1. What should we rely on to make decisions?
    • ASK: rigorous studies and experiments
    • EYI: noisy data and models
  2. What should we use to reduce the spread rate of the virus?
    • ASK: masks and scarves
    • EYI: lockdowns
  3. What should government do to relieve individuals and small businesses?
    • ASK: provide backing for credit lines from banks
    • EYI: Massive intervention by the Fed and deficit spending

Regarding (1), we need to have an idea of the prevalence of the virus in the population. It is impossible to do this by following the data on reported cases. The amount of testing varies day by day. Different tests are used, with different rates of false positives and false negatives. The lag in reporting results can be anywhere from less than an hour to more than a week. Tests are done on non-representative samples of the population. A rigorous study would use a proper sample design and strive for uniformity in the time and method in which tests are done.

Also, there is no definitive view of how this spreads from one person to another. Experiments would be getter than guesswork.

Models do more harm than good. They rely on data and assumptions that propagate through the model, giving precise-seeming results that are in fact unreliable by orders of magnitude. UPDATE: Peter Attia has a great 8 minute YouTube on this.

For now, the only forecasting method I trust is to extrapolate the growth rate in the number of deaths for a few more weeks. Until today, deaths were doubling very steadily every three days. Today, the ratio of deaths to the total three days ago dropped to 1.86. That is the best number to track until we get something more rigorous to use.

Regarding (2), it seems intuitively plausible that lockdowns will reduce the spread rate. But it also seems intuitively plausible that having everyone use masks and scarves would lower the spread rate. Neither approach will drive the spread rate to zero, but perhaps either approach would stop the phenomenon of the superspreader–one person whose case is such that it infects many people.
The difference between masks/scarves and lockdown is that maybe I could get a haircut. That is if everyone in the barber shop had masks and scarves, and if the barber took unusual measures to clean the chair and his tools.

Regarding (3), if you have not been following this blog, scroll back through previous posts.

General update

Posted on by

1. My proposal for credit lines is looking better, because the existing approaches are starting out fouled up in red tape and confusion. See the WSJ on mortgage relief. See The American Banker on paycheck protection loans (pointer from Tyler Cowen).

2. Last night, it seemed as though the Administration was considering a masks and scarves approach. But this morning. . .crickets. I guess the opposition is still strong. [UPDATE: this evening, a recommendation to wear face covering when we go out, e.g. to grocery stores.]

3. There are stories that Asian countries that have had success with their initial approaches, including masks, are now worried that they need more social distancing, because virus spread is starting to accelerate. Pointer from a reader.

4. Maybe we are practicing Hansonian medicine* in treating the virus. Tyler Cowen passes along a disturbing letter.

The letter passes along the claim that of patients put on ventilators, 80 percent or more never recover. My guess is that doctors know the characteristics of patients with an extremely low probability of recovery. Putting such patients on ventilators and caring for those patients puts health care workers at risk. At the margin, we may be costing lives.

The letter points out that if other hospital treatments are not working well, then the whole issue of keeping the hospital system from becoming overwhelmed is moot. I suspect that we get some trial-and-error learning value from hospital treatment. Maybe that trial-and-error learning value can produce a triage approach that uses hospital resources effectively. One way to achieve the goal of getting medical resources above “the curve” is to get better at figuring out who doesn’t need treatment and who cannot be treated successfully, so that resources only are used on treatment-worthy patients.

*For those of you new to this blog, Hansonian medicine refers to a meta-analysis by Robin Hanson that finds that when two populations with different intensity of use of medical care are compared, average outcomes do not differ. Hanson’s interpretation (which I am not totally on board with) is that in a population the cases where medical intervention causes harm cancel out the cases where medical intervention helps.

The childish view of government

Posted on by

When you are eight years old and you want something, you ask your parents. When they give it to you, it seems that they are being nice and nurturing. When they don’t, it seems that they are being strict and tough.

That is the way most people think about government, and the way that journalists encourage us to treat government. When Congress gives us something we want, they are being nice. And when it doesn’t they are being mean.

Thinking about economics should allow you to see a difference. Your parents have something to give you because they worked to create something of value and earned a paycheck. The government only has something to give you because it takes it from someone else. The government cannot be “nice” to everyone at the same time.

It may be a good idea right now to raise taxes on the more fortunate people to give money to the newly unemployed. But instead, government is catering to our childish notions by giving away the money without explicitly taxing anyone. When nothing more is being produced, but we all think we have more money, the result is more money chasing the same goods. Prices will go up.

Why didn’t the 2008 stimulus cause the inflation virus to break out?* First, it was less than half as large as the recent bill. Second, the dislocation to the patterns of specialization in trade was less widespread in 2008 than what is taking place now. Third, in the years subsequent to 2008, there was downward pressure on prices from the ongoing gains to efficiency from globalization. As of now, it appears that globalization will stop moving forward, and it could in fact move backward.

*Note that I did not predict an inflation virus back then; what I did think, I believe correctly, is that the 2008 stimulus would be ineffectual, in that it would not hasten the process of creating new patterns of sustainable specialization and trade.

The government is taking, not giving

Posted on by

The logic of what I have to say is simple. Getting people to accept is not. People want to believe that government is their rich uncle. Uncle Sam just walks up to the attic, dusts off some of his fabulous wealth, and gives it to us. Try to erase that notion from your mind and pay attention.

A friend of mine does marketing for major events at Capital One Arena. Well, there is not much demand for that these days. Meanwhile, there is excess demand for Personal Protective Equipment (PPE). The economy’s job is to shift resources from producing events at Capital One Arena to producing PPE. Maybe we’ll reach a point in a year or two where resources should shift back.

Meanwhile, we have the government supposedly giving us $2 trillion. Let us see how that works in three scenarios. In the first scenario, the government can neither borrow nor print money. In the second scenario, it can borrow but not print money. In the third scenario, it can print money.

1. Must use real resources

Suppose we feel sorry for the folks who used to work for Capital One Arena, and we want to make sure that they can eat. We could form a charity, and the charity could collect food donations from other people, perhaps people who are earning income producing PPE. We could redistribute these food donations to the ex-workers from Capital One Arena.

With no ability to borrow or print money, Congress would have to act like a sort of forced version of this charity. Congress cannot create more food by magic. If it wants to feed the unemployed, it has to take food from the employed.

Apart from being nice to the unemployed, how would this help the overall economy? The Keynesian way to think about it is that the PPE producers will just hoard their incomes and not spend it on anything that would create jobs. But the unemployed workers would spend income on stuff that would create jobs. So if you take food from the employed and give it to the unemployed, their will be more spending and less unemployment.

But this Keynesian view is not necessarily correct. Even if the employed workers are savers, their saving can be put to work by firms to obtain machinery, by households to buy houses, and by students to invest in their human capital. The Keynesian world is one in which savings just disappear down a black hole. They call this the Paradox of Thrift. I call it a far-fetched story.

2. Government Borrowing

Suppose that the government does not have to take food from the PPE workers to give to the unemployed. The government can instead borrow from the PPE workers and pay them for food to give to the unemployed. This works out the same as the first case, except that some of the savings of the PPE workers now goes into government bonds. Maybe they continue to put as much as they did before into the market for machinery, houses, and human capital, or maybe they decide to put in less. If they decide that they don’t want to raise saving by the amount that the government is borrowing, then they will try to buy some of their food back. This will cause prices to rise.

3. Printing money

Suppose that the government prints money to buy food from the PPE workers to give to the unemployed. But there is nothing more being produced than before. If there is 10 percent more money for the same amount of stuff, prices will go up 10 percent.

Describing an economy in which there is a fixed amount of stuff that can be produced makes Keynesian economics seem really stupid, which I believe it is. But I can be more charitable. The Keynesian idea is that borrowing or printing will actually lead to more production. The belief is that demand creates its own supply, as it were. When the unemployed get their food (or their money), they go out and buy stuff, and other unemployed people get hired to make that stuff, giving them incomes to buy other stuff, and so on, absorbing more and more unemployed resources.

But remember how I see the economic problem here. We have resources that are in the wrong place, like workers waiting to get jobs back at Capital One Arena when what we need is help producing PPE. More borrowing or money-printing isn’t going to make the Capital One Arena jobs come back–that depends on what happens with the virus. To the extent that more stuff isn’t produced, the borrowing or printing is just going to raise demand for what is produced.

My main point is that it is more accurate to think of government spending as taking, not as giving. You can only give if you have something to give in the first place. The government does not have valuable production to give. What the government does is take.

This cannot hurt

Posted on by

According to various reports,

On Thursday, the White House said that it will likely soon adjust previous guidelines that discouraged non-health workers from wearing face masks. The change would be issued as “guidance” from the CDC, but according to the president—who continues to hesitate at exerting federal power during the COVID-19 crisis—it will not be made mandatory.

1. State and local officials could make it mandatory.

2. It is considered a supplement to lockdowns, not a replacement.

3. But my guess is that after we get through the next couple of grim weeks, maybe some locations will experiment with masks as a substitute.

4. I am sure that a lot depends on how well people follow instructions for hygienic use of face coverings. I can understand why one might not be optimistic about that.

5. But face covering doesn’t have to be perfect. It just has to work well enough to slow the spread rate.

A general update

Posted on by

I still want to participate in a movement to change the direction of the policy response to the virus crisis. The health policy leadership strikes me as inflexible and unscientific in its approach. And the macroeconomics profession is even worse. Our peacetime bureaucrats are losing the war on all fronts.

I decided after experimenting the other day that I don’t have a comparative advantage in audio-visual media. Others in the movement may prove better at that. I am thinking in terms of a different blog-like format, but more polished than this one. I do want to involve well-known thinkers I respect. I want to hear from the audience and involve them, not just talk (write) at them. Stay tuned.

Here are some comments on analysis that has recently come to my attention.

We are still nowhere on mass public face covering, but at least one country’s leader thinks it’s worth a try. And if it works there, maybe all the flak the idea gets from the health policy experts won’t stop us from trying it here.

Listening to Peter Attia and Michael Osterholm, it seems likely that our hospital system is going to run into shortages of many supplies, including medicines, masks, and chemicals necessary to carry out tests. Thanks to Tyler Cowen for the pointer.

Listening to Jay Bhattacharya and Peter Robinson, it sounds like Jay understands the principles of science. I wish somewhat like him had more power to oversee the allocation of resources for testing.

Robin Hanson found a serious error in every so-called model to predict spreading. That is, treating the spread rate, or R0, as if it were a single, physical parameter is misleading. In fact, we know that most people with the disease have R0’s well below 1, and a remarkably large fraction of cases are caused by a tiny number of super-spreaders. Robin shows that this makes it much harder to contain the virus. I trust his model more than the fancier ones out there.

I think this argues for a policy of limiting the number of people any one person can be in contact with per 10-day period. But “in contact with” may have to include doorknob effects. Of course, we still have not done the experiment to see how strong doorknob effects are.

William Galston is among at least a few people promoting the idea of a commission to investigate the government’s response to the virus crisis. I think that is a terrible idea. A commission is a symbolic gesture–an alternative to really cleaning house.

What I want to see instead is a really effective effort to lower the status of the public health experts and economic experts who created the response. Meanwhile, raise the status of outside thinkers who have been more insightful. The real commission will be what is embedded in the movement that I pray will form and in which I plan to participate.

After the 2008 financial crisis, the elites raised the status of Ben Bernanke and the Obama team without critically examining whether what they did was helpful or harmful. Not surprisingly the current Fed and the Trump economic team are pulling out the same playbook, expecting to reap the same glory.

But what have they accomplished? They have taken us much farther down the road to serfdom. We need to turn this vehicle around.