It’s Good To Be King

Illinois Gov. J. B. Pritzker has issued a directive to fine businesses in which mask requirements are being violated. WGN News reports:

Pritzker said his administration is filing new emergency rules to require businesses and schools to enforce the mandatory face mask rules — or be fined.

The governor issued a statewide mask mandate on May 1 for most people in most public settings, but enforcement has been an issue.

According to Pritzker’s office, businesses that don’t comply with the mask mandate will be given a written notice warning. If they don’t voluntarily comply, businesses will then be given an order for patrons to leave the property “as needed to comply with public health guidance and reduce risks.”

Currently, the governor said the only way to enforce the rules is by revoking a business’ license. He thinks this is the way to go to try and get more compliance. The legislation he signed Friday will help front line workers and those trying to make sure people follow the states distancing and mask mandates.

Some critics call the proposed rules a slap in the face.

Perhaps not coincidentally the governor is facing an order to appear or face criminal prosecution over his abuse of emergency powers. From ABC 7 Chicago:

CLAY COUNTY, Ill. (WLS) — Governor JB Pritzker has been ordered to appear in court over a legal challenge involving his statewide action during the coronavirus pandemic.

The governor is accused of violating a ruling that states he does not have the authority to extend an emergency order beyond 30 days.

Weeks ago, a judge in downstate Clay County sided with Republican State Representative Darren Bailey regarding the legal challenge.

Pritzker is facing a warrant for his arrest unless he shows up in court next week to explain why he should not be found in contempt.

The governor retorts that it’s a political stunt. He’s right. It is political. And it could easily be sidestepped by conforming with the law, seeking the approval of the legislature for his actions or getting the legislature to change the law granting him emergency powers.

Although the number of cases of COVID-19 being diagnosed in Illinois has been rising, the number of deaths due to the disease has remained flat for over a month. The resources of health care facilities are not being strained in any area of the state by COVID-19 patients. The only explanation I can come up with for the governor’s actions is that he is willing to destroy Illinois’s economy and society in the pursuit of an impossible goal—halting the spread of SARS-CoV-2 in the absence of a safe, effective, affordable vaccine.

5 comments

COVID-19 Is Straining A Lot of Things

At Bloomberg Noah Smith has noticed that COVID-19 (or governments’ response to it) is not just threatening our lives, health, livelihoods, and social fabric. It’s challenging economic doctrine as well:

The big question is when, if ever, this aggressive government action starts to incur negative consequences, such as rapid inflation. Macroeconomists should be investigating this question vigorously. But so far, interest in the question has seemed strangely muted among mainstream academics.

Before the financial crisis of 2008, the dominant academic model of the business cycle held that there was a tradeoff between inflation and unemployment — a new version of what’s known in economics as the Philips Curve. By managing interest rates, mainstream theorists argued, the central bank would navigate serenely between the rocks of inflation and the shoals of unemployment. There was not much room for government debt in that model.

The 2008 recession seemed like it might present a huge challenge for this paradigm, but most macroeconomists met the challenge by simply patching up the old models. They shoehorned in a financial sector, and allowed that when nominal interest rates approached zero, fiscal stimulus along with quantitative easing would have to be brought in.

But that still left the question of what the limits of stimulus and QE would be. Mainstream economists realized that because the government can use monetary policy to lower interest rates and even finance government borrowing directly, there would never be a real risk of sovereign default; if private investors stopped buying Treasuries and rates started to rise, the Fed could pick up the slack. The only real constraint on government action was the possibility of inflation, if the Fed created too much money.

He presents a few graphs to support his point but, for one reason or another, neglects to include what I would think is the one that’s most interesting:


As you can see from the graph above there’s a lot more money than just one year ago. Where’s the inflation? There are several possibilities. Maybe we’re in a “Wile E. Coyote” moment, suspended in mid-air, just waiting for the inevitable crash landing, as depicted in the illustration at the top of this post.

There are rather clearly increases in some commodity prices, e.g. gold, but not in others, e.g. oil, wheat, or in the DJIA. Maybe inflation is there and showing up just in a few places. Note that graph of M3—the enormous increase in the money supply over the last few months isn’t that large when placed in perspective.

Mr. Smith does consider my greater fear—hyperinflation:

Instead of spinning theories that effectively just say that hyperinflation will happen at some unknown point, macroeconomists could look at countries that do experience hyperinflation, or come close but manage to avert it. They should use these historical and international examples to learn lessons about when and where and why this sort of catastrophe happens, and how it can be prevented. But the seminal work on hyperinflation continues to be economist Thomas Sargent’s 1982 paper “The End of Four Big Inflations.” This paper, in addition to being four decades old, draws all its examples from Central European economies in the aftermath of World War I — very different circumstances than the economies of today.

New work on hyperinflation is urgently needed. One key question is whether runaway inflation happens slowly enough that the government can reverse course in time, or whether it’s instantaneous and catastrophic. Another question is whether direct monetary financing of new government borrowing is a trigger for hyperinflation. A third is whether and how capital flight is involved. A fourth is how the type of government spending changes whether markets expect deficits to be temporary or permanent. There are many other important questions besides these.

I can answer the first of those questions. The historic record suggests that the onset of hyperinflation is likely to be sudden. I can’t answer the other three questions.

Something else that the federal government’s response to COVID-19 is challenging is what I have deemed “folk Keynesianism”—the idea that you can spur economic growth just by putting more money into people’s pockets. That hasn’t happened, either. That doesn’t surprise me because you can’t spur greater personal consumption by putting money into people’s products while preventing them from buying by closing down retail stores and doctors’ offices and expect to maintain the health of the economy at the same time.

12 comments

Race, COVID-19 Mortality, and Why Is the U. S. Mortality So High?

There is a strong racial disparity in the mortality due to COVID-19. Blacks and Hispanics have much higher mortality rates than whites. For just how great a disparity, consider these findings by APM Research Lab:

  • Black Americans continue to experience the highest overall actual COVID-19 mortality rates— more than twice as high as the rate for Whites and Asians, who have the lowest actual rates.
  • Adjusting the data for age differences in race groups widens the gap in the overall mortality rates between all other groups and Whites, who have the lowest rate. Compared to Whites, the latest U.S. age-adjusted COVID-19 mortality rate for:
    • Blacks is 3.7 times as high
    • Indigenous people is 3.5 times as high
    • Pacific Islanders is 3.1 times as high
    • Latinos is 2.8 times as high
    • Asians is 1.4 times as high.

I realize that it is an article of faith for some that the disparity is entirely due to racism in one form or another but that does not seem to be the case. As I have pointed out before, the findings of an NBER researcher found that the disparity remained even when you controlled for education, occupation, commuting patterns, or access to health care.

As I have said for some time, I think that differences in susceptibility and mortality due to COVID-19 are multi-factorial and include not only age, access to health care, income, and occupation but that there are non-occupational behavioral and genetic factors as well. I think we need to address all of the controllable factors that lead to increased numbers of blacks dying of COVID-19 and not just those we’re comfortable with. We also need to consider the possibility of racial variation in treatment strategies. Taboos do no one any good.

In Illinois the deaths per 100K population for blacks has been 141 while for whites it has been 35. That’s just about the same for whites as Ireland or the Netherlands although not as good as Germany. In California the death rate due to COVID-19 among whites has been about the same as Germany’s. But the death rate in Illinois per 100K population has been worse than that of not just any European country but any country in the world. What that suggests is that, if Illinois is to lower its death rate due to COVID-19, we need to pay more attention to racial disparities not less.

5 comments

Ready Or Not

So, are you ready for the meanest, dirtiest presidential election since Andrew Jackson was on the ticket? That’s what I think we’re heading for.

If I didn’t care about the country, it would be fun.

9 comments

They’ll Never Do It

Reminding us of the incident, 46 years ago, when John Rhodes, Hugh Scott, and Barry Goldwater advised President Nixon that there weren’t enough votes in the Senate to prevent his being impeached, Chicago Tribune columnist Eric Zorn wonders when Illinois House Speaker Michael Madigan will face his “Nixon moment”:

So when are leading Illinois Democrats going to have their Nixon Moment with veteran House Speaker and state Democratic Party chair Michael Madigan?

Last month, Commonwealth Edison agreed to pay a $200 million fine after federal prosecutors charged the utility with orchestrating a bribery scheme that provided jobs, contracts and other perks to allies of “Public Official A,” whom the feds identified as the speaker of the House.

Madigan, who controls the movement of legislation through his chamber, has not been charged and has categorically denied wrongdoing, saying in a statement that he “has never made a legislative decision with improper motives.”

He may never be charged, of course. He’s famously cautious in what he says and how he acts, and the documents in the ComEd case quote one of his close associates agreeing with the nod-and-wink expression, “that which is understood need not be mentioned.”

Madigan may even have been oblivious to the slimy machinations going on all around him. More unlikely things have happened, though I can’t think of any off the top of my head.

It will almost certainly take years for the truth to come out.

But right now, Madigan is a Nixonian albatross on his party. His adjacency to scandal threatens every Democratic lawmaker in a close race this fall, and the idea that the imposition of graduated state income tax rates would put more money under Madigan’s control is animating opposition to the Democrats’ so-called Fair Tax amendment. To pass, that amendment needs approval from a supermajority of voters in November.

I don’t believe it will ever happen. For one thing there probably aren’t three clean people in the Democratic leadership and certainly none with the courage to confront Speaker Madigan with the bad news. He knows where the bodies are buried. They’d rather let the speaker take the Illinois Democratic Party down with him than change things as they are.

6 comments

Wishful Thinking Is Not a Plan

William Galston has a plan for winning the war against COVID-19. From his most recent Wall Street Journal column:

In March, President Trump rightly labeled the fight against the pandemic a “war.” But we are losing this war. By one estimate, more than 400,000 Americans are infected each day. Only about 60,000 are detected through tests. Many of the rest are asymptomatic and can infect others, risking an exponential spread of the disease. After falling in the late spring, the daily death toll is rising again.

We have relied on poorly coordinated efforts among 50 states and thousands of local jurisdictions to solve a national problem. No one is ensuring the nationwide availability of testing supplies. Many states lack adequate testing capacity, resulting in delays that render the results useless. Outbreaks in each state have been traced to other states, distant and contiguous. The virus does not respect borders.

To win this war, it must be fought the way the U.S. has fought other wars—as a united nation. The president must lead the fight, and every battle starts with a plan. Here is the best plan I have heard so far, from scientists and business leaders brought together by No Labels, a bipartisan organization that I helped found.

The national goal should be testing every American once a week for four weeks. Those who test positive should quarantine for 10 to 14 days until they are no longer infectious. Americans and others arriving from abroad should be required to submit to the same testing and quarantine. Those who test negative could return to work, send children back to school, eat at restaurants, and attend events. They could do so with the confidence that everyone else at these places had tested negative. By the fall we could be on our way to snuffing out the pandemic in the U.S., saving lives and reopening the economy and society.

There’s a model for this idea. In March, the Broad Institute of Harvard and MIT converted its lab into a Covid-19 testing facility that can perform 700,000 tests a week and in theory could do five times as many using pooled testing. This facility uses off-the-shelf, interchangeable instruments and supplies. It has a 15-hour turnaround time from receipt of a sample to notification of results, at a cost of $20 to $30 a test. It was converted from an existing lab in two weeks.

To reach scale, we would need to convert between 100 and 500 existing university or pharmaceutical-company labs to testing facilities. Each would require approximately 10,000 square feet of lab space, $10 million in equipment, and 200 employees working in shifts.

The testing strategy would begin with a shallow nasal swab that, unlike the much-feared deep nasal swab, is painless and easy to administer. It would be conducted in a nationwide network, including pharmacies, other retailers and doctor’s offices. After the swabs are placed in bar-coded tubes, their shipment to testing centers would be coordinated by the National Guard in partnership with private airlines and shipping companies. After tests are completed, results would be sent in coded form, electronically whenever possible, to the individuals tested.

The cost of this unprecedented effort is difficult to estimate, but some line items are clear. Setting up the centers would cost between $1 billion and $5 billion. Each of the four rounds of weekly tests would cost an additional $6 billion to $9 billion. Transport costs would be negotiated with private shipping companies, with an additional allocation for the Defense Department. Some provision for information systems would be needed as well.

Only Washington can provide the funding, leadership, coordination and legal architecture this plan would require. It would call on America to summon the spirit we displayed at the outset of World War II. The alternative is waiting for a safe and effective vaccine to become widely available in the U.S. Meanwhile, social life will be disrupted, many schools won’t reopen, and the economy will be hobbled. A national war against this insidious disease is the better course.

The problem with this plan is neither in coordination nor cost. It is that it is wishful thinking. We can’t even get people not to drive drunk. We don’t even know who is in the country. How could we determine that everyone has been tested? There will inevitably be a large underclass, tens of millions of people or more, among whom SARS-CoV-2 will continue to circulate. Those people will be serving you in the restaurants, cooking for you, cleaning up after you, cutting your lawn, tending your children. As long as that’s the case no such plan can ever work, not even at the margins.

5 comments

What Would We Wish We Had Done?

I find myself largely in agreement with the editors of the Washington Post, unsurprising since they’re now saying much what I’ve been saying all along:

VACCINE OPTIMISM is understandable in these days of anxiety about the virus. Almost every day, there are upbeat reports about a vaccine starting a new phase of clinical trials, and the worldwide research effort spans technologies old and new. Surely a safe and effective vaccine must arrive before too long — as promised, in “warp speed,” such as later this year or early next?

A dose of realism would be prudent. Vaccines are truly remarkable medicine and have proved effective in stopping diseases such as measles and polio. But they are not simple to discover, manufacture or distribute. Many research efforts fail. The first clinical trial for an HIV vaccine was in 1987, and there still isn’t one, despite much hard work. As Carolyn Y. Johnson reported in The Post on Monday, once a vaccine is found to be safe and effective, the process will be at the beginning, not the end. Vaccines must be manufactured to exacting standards. Distributing the vaccine fairly to people in the United States and around the world will strain health networks, the supply chain, public trust and global cooperation. This may take months or, quite likely, years.

Another reason for caution is that the vaccine timeline depends on human physiology. It may take a while to build up the antibodies to fight the novel coronavirus. A second inoculation may be required. Immunity could be short-lived or partial. Also, it is possible that the first vaccines to win approval may not be perfect, and not work all the time on everyone.

That last is one area of disagreement. I think that a vaccine whose benefits are extremely short-lived or, worse, unpredictable in its prophylactic effect would actually be worse than no vaccine at all.

They conclude:

Let’s suppose it is summer of 2022, and there is still no vaccine. What would we wish we had done today? Let’s do it.

Okay, what would that be? And should we be preparing for a vaccine at all? My speculation is that of materials and personnel personnel will be the graver bottleneck. Maybe I’m overestimating that since nowadays every Walgreens is offering flu vaccinations.

I think we should be preparing for the eventuality that a practical vaccine for SARS-CoV-2 is never developed. What would we be doing in that case? I don’t know but I know what we should not be doing. We should not be threatening to close down businesses due to a rising test positivity rate as long as the risk of a system failure in the health care system is nominal as is the case in Illinois.

18 comments

I Have Seen the Future and It Is COVID-19

I wish more people recognized the reality of what Sarah Zhang says in her piece in The Atlantic on the most likely scenario for COVID-19:

The coronavirus is simply too widespread and too transmissible. The most likely scenario, experts say, is that the pandemic ends at some point—because enough people have been either infected or vaccinated—but the virus continues to circulate in lower levels around the globe. Cases will wax and wane over time. Outbreaks will pop up here and there. Even when a much-anticipated vaccine arrives, it is likely to only suppress but never completely eradicate the virus. (For context, consider that vaccines exist for more than a dozen human viruses but only one, smallpox, has ever been eradicated from the planet, and that took 15 years of immense global coordination.) We will probably be living with this virus for the rest of our lives.

I have thought that since January. The conclusion I draw is not that we’ll be in lockdown forever but that we’ll accept a higher level of risk. And that will be true whether a vaccine is developed and effective treatments are found or not.

It’s also why I think that elected officials like Illinois Gov. Pritzker, who has been warning about the need to tighten up on the restrictions he’s (illegally) imposed despite the reality that there are no signs that COVID-19 is threatening the health care system but there’s loads of evidence that the restrictions are hurting people financially, are either fools, cowards, or malicious. I don’t think he’s a fool.

8 comments

It’s Just Tyranny Gussied Up in Philosophy

I encourage you to read Andrew Sullivan’s essay on the “roots of wokeness”. Here’s its peroration:

My view is that there is nothing wrong with exploring these ideas. They’re almost interesting if you can get past the hideous prose. And I can say this because liberalism can include critical theory as one view of the world worth interrogating. But critical theory cannot include liberalism, because it views liberalism itself as a mode of white supremacy that acts against the imperative of social and racial justice. That’s why liberalism is supple enough to sustain countless theories and ideas and arguments, and is always widening the field of debate; and why institutions under the sway of Social Justice necessarily must constrain avenues of thought and ideas. That’s why liberalism is dedicated to allowing Ibram X. Kendi to speak and write, but Ibram X. Kendi would create an unelected tribunal to police anyone and any institution from perpetuating what he regards as white supremacy—which is any racial balance not exactly representative of the population as a whole.

For me, these theorists do something less forgivable than abuse the English language. They claim that their worldview is the only way to advance social progress, especially the rights of minorities, and that liberalism fails to do so. This, it seems to me, is profoundly untrue. A moral giant like John Lewis advanced this country not by intimidation, or re-ordering the language, or seeing the advancement of black people as some kind of reversal for white people. He engaged the liberal system with non-violence and persuasion, he emphasized the unifying force of love and forgiveness, he saw black people as having agency utterly independent of white people, and changed America with that fundamentally liberal perspective.

When he says “liberalism” he means Enlightenment values not progressivism. I’m not as optimistic as Mr. Sullivan. He sees what’s presently emerging is liberalism clawing its way back from the pit. I don’t believe that accommodation with the “woke” is possible. Those of us who continue to believe in Enlightenment values can submit to the authoritarian tribunals which will police the new and ever-changing cacophony of “wokeness” or we can betray Enlightenment values by suppressing the “woke”. There is no living with them; there is no middle ground and they cannot leave us alone. Allowing others to believe as they wish is an Enlightenment value.

15 comments

What Difference, At This Point, Does It Make?

There is a video of George Floyd’s arrest making the rounds that begins somewhat earlier than previous videos. In this video Mr. Floyd is saying “I can’t breathe” before he is arrested and before a chokehold applied to him. The claim has been made that Mr. Floyd had taken fentanyl, one of the likely side effects of fentanyl overdose is cessation of breathing, and that’s what killed him.

Does it make any difference? I don’t believe that a single individual who has taken to the streets in protests could be convinced by any evidence that Mr. Floyd was not killed by the Minneapolis police in the course of an arrest.

It would certainly make a difference to the impending court cases. I have little doubt than an acquittal will result in another round of demonstrations and riots.

18 comments