Category Archives: virus crisis

Testing a vaccine

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A follow-up/clarification to my earlier post:

I believe in what I call the Avalon-Hill model of how the virus affects people. That is, it depends on a combination of viral load and patient vulnerability. Accordingly, I would like to see a vaccine tested on various combinations of these factors. That means that the experimenter should control the viral load rather than leave it to chance in the context of selection bias (people who volunteer for the trial may be behaving in ways that reduce their probability of being exposed to high viral load).

In principle, that means assigning a high viral load to some high-risk subjects in both the control group and the placebo group. That could discomfit the experimenter, not to mention the experimental subjects.

But if you don’t do that, what have you learned? If the most severe cases in the real world come from people exposed to high viral loads, and almost no one in your trial was exposed to a high viral load, then you have at best shown that the vaccine is effective under circumstances where it is least needed.

Virus update

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1. I remain a vaccine skeptic. Consider these two recent reports.

First

Out of 170 adult volunteers in the nearly 44,000-subject trial who developed Covid-19 with at least one symptom, 162 received a placebo, while eight got the vaccine, Pfizer and BioNTech said.

Second

Ninety-five people in a 30,000-subject study developed Covid-19 with symptoms; of those, 90 had received a placebo and only five Moderna’s vaccine.

OK. Assume half received the placebo (Does anyone know the actual percent that received the placebo?). So with no vaccine, 162 out of 22,000 got the disease in the Pfizer study. That is less than 0.75 percent. 90 out of 15,000 got the disease in the Moderna study. That is 0.3 percent.

Extrapolate that to the entire population. Of 330 million people, if 0.5 percent get the disease, that would be 1.65 million people. If the fatality rate is 0.5 percent, then that would mean just over 8000 deaths, which is about one week’s worth in reality. If the whole country were like the sample that received the placebo, this disease would never have made it into the public consciousness.

Another way to look at it: The Pfizer study followed participants for more than three months, starting in late July. During that time, more than 6 million new U.S. cases were reported, or about 2 percent of the entire population (the percentage would be even higher if you exclude children from the numerator and the denominator). So more than twice as many people got it in the general population as got it in the placebo sample studied by Pfizer.

Still another way to look at it: the number of cases that emerged in the placebo population was less than what can emerge from a single super-spreader event. Apparently, there were zero super-spreader events in either study. So these studies tells us nothing about the ability of the vaccine to work against a super-spreader. I also suspect that they tell us almost nothing about the ability of the vaccine to work for vulnerable populations.

Maybe the vaccines are 90 percent effective, in which case it is easy to recommend them. Maybe they are 0 percent effective, in which case it is easy to dismiss them. But what if in reality they are 50-70 percent effective? That would create a dilemma. From a central planner perspective, you want everyone to take a vaccine even if it is only 50 percent effective, because that would dramatically slow the spread of the virus. But meanwhile, a lot of individuals who got the vaccine will still get sick and die. That would put the agencies in charge in an awkward position, without any credibility left to deal with the next pandemic.

2. While I am being contrarian, let me go after the “keep R below 1” theory. That is the theory that if we can get the reproduction rate below 1 and keep it there, we can eradicate the disease. Ergo, even a mostly-ineffective intervention, such as an inaccurate test, or an unreliable vaccine, or a mostly-useless lockdown, if it brings R below 1, can achieve eradication.

My problem with “keep R below 1” is that it is a representative-agent model. That is, it treats everyone the same, with identical probability of getting or spreading the disease. But in fact people differ greatly in terms of vulnerability and in terms of propensity to spread the disease. Inferences that “scientists” draw from the representative-agent model are generally bogus. I don’t trust anyone who would make policy based on a representative-agent model, and that includes anyone who uses the “keep R below 1” theory.

3. I am still not impressed with “the science.” They (scientists) are still arguing over the extent of asymptomatic transmission. They are still arguing about the effectiveness of masks. Katya Simon, to whom Tyler Cowen provides a link, writes,

Implement indoor mask mandates for public spaces. Outdoor mask mandates are ridiculous. COVID19 does not appear to transmit outdoors. Enjoy our great outdoors!

Heather Heying and Bret Weinstein say the same thing. But Cambridge Massachusetts, which is where a lot of leading-edge biological research takes place, is a paragon of outdoor mask-wearing.

They are still arguing about the effectiveness of lockdowns.

They are still arguing about how long immunity lasts.

They are still arguing about long-term effects.

I believe that they are still arguing about the mechanism by which the virus causes illness.

All of this reinforces my doubts that a vaccine will prove as effective in practice as it has in trials.

Note that many of the issues about which there are arguments could be clarified, if not completely settled, by careful controlled experiments. As I pointed out more than 6 months ago, experiments would be really useful, but the people you would count on to do them are not willing to do so.

Experimental results are signal. Pronouncements that are not based on experiments are noise. Don’t tell me to “listen to the science” when what I am being asked to listen to is noise.

4. So where are we today? As of the other day, the average daily death totals were higher than at any time since early May. (Tyler Cowen shows a chart.) Unless you are more impressed than I am about the vaccine test results, it is appropriate to be a virus pessimist right now.

I think that there is at least a 25 percent chance that we will be as fearful of the virus a year from now as we are now. And if our fears have declined, this may be due mostly to a change in reporting about the virus. Perhaps someone with congestive heart failure who dies with the virus will no longer be counted as a virus death. Perhaps the press will no longer report cases of long-term damage from the virus. Should such a change in reporting take place, a cynic might call it the “Biden effect.”

House prices up

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The WSJ reports,

In nearly two-thirds of the metro areas tracked by NAR, prices posted double-digit gains. The biggest gainers were Bridgeport, Conn., where the median price rose 27.3%, and Crestview, Fla., up 27.1%.

My thoughts:

1. The NAR tracks the median price of homes sold, which depends on the mix of homes transacted. If the demand surge is for bigger homes, some of the rise in the NAR measure represents a mix shift.

2. I assume that not all of the real estate market is healthy. Apartment rents are probably down, at least in places like NY and SF. Commercial real estate is probably in bad shape.

3. The economic impact of the virus is probably very uneven. Affluent people who have kept working from home are spending less and banking their salaries, which can now go into housing. But job losers are not getting into the housing market.

4. Maybe we are starting to see some inflationary consequences of lockdown socialism.

Remote capital

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Paula Jacobs reports,

virtual Israeli folk dancing has proved a valuable solution during COVID-19, allowing a popular pastime to continue safely, while creating a global dance community. So even when in-person sessions resume, it’s likely that virtual dancing is also here to stay.

This is an example of what I call “remote capital.” That is, people have learned to do things remotely. Even if fears of the virus go away tomorrow what we would see is a blend of pre-virus in-person activities and remote activities. Live Israeli dance sessions likely will include a Zoom feed for dancers in other locations.

Corporations with offices in multiple locations will at the margin substitute remote conferences for some in-person get-togethers. Perhaps Boards of Directors will meet twice a year in person and twice a year virtually. Although much of education on Zoom is not satisfying, my guess is that students will vote with their feet against large in-person lectures.

Virus update

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1. Timothy Taylor has a useful discussion and links regarding the issue of whether lockdowns have a large effect over and above voluntary changes in behavior.

2. The president told me [Marc Siegel] in a late July interview that he was more excited about therapeutics in the short term even than vaccines. Does that mean he reads my blog?

3. The average daily death rate has trended up recently.

4. Robin Hanson writes,

those virus harm estimates come from assuming a $7M value for each of these lives lost, and that I say does seem crazy.

He refers to estimates by David Cutler and Larry Summers of the direct harm caused by the virus vs. the indirect cost of prevention measures. The thrust of Robin’s post is that the cost of the prevention measures was probably higher than the cost of the virus, and that we are “over-preventing” COVID. I want to question that conclusion.

We should be cautious about employing the notion of “lost GDP.” There are two states of the world, one in which some activities have little or no perceived risk and the other in which those activities have a significant perceived risk. The value of “output” for those activities differs under those two states of the world.

Note that most of the prevention measures were voluntary. Many of us are making decisions to restrict travel, social activities, and in-person shopping. Our revealed preferences indicate that the GDP that we are thus giving up is worth less to us than the value of risk prevention.

Think of it as a relative price shift. Valuing today’s output at yesterday’s relative prices can be misleading.

Virus update

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1. Kling was wrong. Regarding the drop in” deaths from the virus relative to cases, Tom Chivers writes,

it’s almost certainly not because the virus has mutated or anything. “There are some things we know are definitely not true,” says Beale. “We’re convinced that the virus itself isn’t substantially different, that there’s no ‘milder form’ of the virus.” The little package of RNA in its protein-and-lipid wrapper is essentially the same now as it was at the beginning of the outbreak.

Pointer from Tyler Cowen.

2. Maybe the high death rate in the U.S. is not something that would have been prevented by a different President (on this issue, my view is being reinforced). Andrew Biggs writes,

U.S. policymakers also suffered under the handicap that Americans entered the Covid pandemic in much poorer health than citizens of other developed countries. For instance, over 27,000 U.S Covid deaths list diabetes as a comorbidity, accounting for 16% of total Covid-related fatalities. But what if instead of having the highest diabetes rate among rich countries the U.S. had the same rate as Australia, with less than half the U.S. level? The same holds for obesity, listed as a comorbidity in 4% of Covid cases. Forty percent of Americans are obese, the highest in the developed world and over twice the OECD average. U.S. death rates from heart disease are also higher than most European and Asian countries. Hypertension is listed as a comorbidity in 22% of Covid deaths. If Americans simply had the same health status as other high-income countries, it is likely that tens of thousands of lives could have been saved.

Pointer from Bryan Caplan.

3. Timothy Taylor has links to more economics papers on the virus than anyone has time to read.

4. What if the virus had made its appearance in 1990?

–I don’t think people would have self-quarantined. We didn’t have the infrastructure for low-cost direct-to-home delivery. We didn’t have the technology to allow people to work from home.

–I don’t think we would have had lockdowns. We didn’t have a generation of people raised to believe that it was unsafe for children to play without adult supervision. Shelter-in-place orders from the government would have been too unpopular for elected leaders to contemplate.

–We would not have been promised a vaccine. No one could have announced “We already sequenced the virus genome!” as if that meant a vaccine was coming any day now.

–We would not have had all of the treatment options available today.

–Our population would have had a lower proportion of high-risk individuals–fewer elderly, obese, and diabetic individuals.

–We would not have had social media to fill our heads with statistics and model forecasts and expert pronouncements to keep the virus foremost in our minds.

In short, I suspect we would have come out about the same in terms of population death rate, maybe a little more or maybe a little less. The economic consequences would have been much less. And it would not have blown up into a national trauma. For the trauma, we can thank the fact that we now live in the Digital City.

UPDATE: after writing the foregoing, but before posting, I came across Vaclav Smil comparing the current pandemic to those in 1957 and 1968,

Why were things so different back then? Was it because we had no ­fear-reinforcing 24/7 cable news, no Twitter, and no incessant and instant case-and-death tickers on all our electronic screens? Or is it we ourselves who have changed, by valuing recurrent but infrequent risks differently?

Business closures

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CNBC reports,

According to Yelp data, permanent closures have reached 97,966, representing 60% of closed businesses that won’t be reopening.

This is what they attribute to the coronavirus. I wonder what the “excess deaths” measure would show. That is, even without the virus, some businesses would close.

My guess is that these are mostly excess deaths, and it will take quite a while for new entrepeneurial activity to employ the people whose jobs have been lost in the process.

The latest virus puzzle

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Tyler Cowen writes,

many of the herd immunity theorists strike back and ask “where are the deaths“? But that is not the right question for testing herd immunity claims. Those claims were about transmission slowing down, and those claims should be true about Covid-19 cases whether or not more people are surviving in the hospital.

Why are cases spiking but deaths not spiking? Here is a set of hypotheses, in my subjective order of likely importance.

1. The strains that are circulating are less deadly.

2. The people who are getting it are less frail. See the discussion of “dry tinder” in Daniel Klein’s essay. And also enough folks finally got the memo about protecting people in nursing homes.

3. The treatments people get now are helpful, whereas six months ago they were ineffective/harmful.

4. Testing protocols are finding more of the milder and asymptomatic cases that they were missing before.

5. The long and variable lag between cases and deaths has become longer and more variable.

And note that the average daily death rate still stands above 700, which is outside of the range for a normal flu, at least on an annual basis.

No follow-up

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1. Back in late June, I was surprised to receive an email from a White House staffer who was unknown to me asking if I would consider a job as a member of the President’s Council of Economic Adviser. I said yes, although I don’t think I sounded very enthusiastic.

My perception is that the CEA is not a significant body. At least since the Clinton Administration, it seems to me that whatever power over economic policy that is not wielded by the Fed or Treasury is wielded by an Economic Council under the President that is not the CEA.

Even though the CEA job might be meaningless from an influence perspective, it could be an opportunity to meet various people in government and to travel and speak to various groups. But in a COVID world, those benefits are reduced and/or offset by costs. That is what made it hard for me to sound enthusiastic.

Working for the Trump Administration would make me a pariah among some people. I see that as a mark against those people, not against me.

Anyway, I spoke with the staffer on the phone and he said I would be interviewed the following week. That was the last I heard of the matter–no interview ever took place.

Meanwhile, last month I accepted another position, in the child care sector. One of my daughters moved in with her husband and their new baby. They view us as the child care providers least likely to bring the virus into the family. I saw no reason to question their judgment. I really enjoy babies. These days when people ask how I am doing, I say that I am having a good pandemic.

2. Last month, I wrote an essay about economic policy in the current environment and sent it to a think tank. Never did hear back, so I will paste it in here. Continue reading →

A simple solution for the virus?

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UPI reports,

A commercially available nasal antiseptic solution “inactivates” COVID-19 just 15 seconds after the coronavirus is exposed to it, effectively preventing the infection from developing, according to a study published Thursday by JAMA Otolaryngology-Head & Neck Surgery.

It works in test tubes, but needs to be proven to work on humans. In theory, it could make my outlandish prediction that we will give up on a vaccine come true. But have we already invested too much financial, political, and cultural capital into “wait for a vaccine” to adopt an alternative?