Legislate In Haste

Repent at leisure. Forbes reports that there is, surprise!, a provision in the CARES “stimulus” act that we might want to be corrected:

While wealthy Americans are not eligible for the comparatively measly $1,200 stimulus checks that are now being disbursed to many Americans, they are on pace to do even better. 43,000 taxpayers, who earn more than $1 million annually, are each set to receive a $1.7 million windfall, on average, thanks to a provision buried in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

You may or may not be surprised that some of the language conveniently inserted into the $2.2 trillion-dollar Coronavirus Aid, Relief, and Economic Security Act (CARES) skews heavily in favor of the wealthy. The provision doling out literally millions of dollars is aimed at a limitation that was created in 2017 when Republicans overhauled the tax code. It “temporarily suspends a limitation on how much owners of businesses formed as “pass-through” entities can deduct against their non-business income, such as capital gains, to reduce their tax liability,” according to The Washington Post.

and

“For those earning $1 million annually, a tax break buried in the recent coronavirus relief legislation is so generous that its total cost is more than total new funding for all hospitals in America and more than the total provided to all state and local governments,” said Doggett. “Someone wrongly seized on this health emergency to reward ultrarich beneficiaries, likely including the Trump family, with a tax loophole not available to middle class families. This net operating loss loophole is a loser that should be repealed.”

Policy is hard and it’s a lot easier to enact flawed legislation in a panic than it will be to amend that legislation once enacted into law.

IMO there are serious constitutional questions about the legality of the CARES act, e.g. the pesky Origination Clause in the Constitution. That there was an emergency and how could you possibly expect our legislators to know what was in the law for which they voted are not good excuses.

12 comments

China’s Coronavirus Cover-Up

At Newsweek Jason Lemon reports that a group of “international policy experts and politicians” have penned an open letter criticizing China’s response to the COVID-19 pandemic:

A group of international policy experts and politicians strongly criticized China’s government in an open letter about its coverup and mishandling of the coronavirus pandemic, referring to the botched response as a “Chernobyl moment.”

The letter was published Tuesday on the website of Canada’s Macdonald-Laurier Institute, a national public policy think tank based in Ottawa. It was signed by more than 100 policy experts, lawmakers and academics who hail largely from North America, Europe and Oceania.

“While the exact source and spread of the virus are not clear yet the question of origin is highly important, for the people of China and for all humankind: only by understanding how this global disaster could emerge we can prevent it from happening again,” the letter argued.

It went on to say that the origins of the global pandemic “are in a cover-up by CCP [Chinese Communist Party] authorities in Wuhan, Hubei province.”

To my eye there were few if any Americans among the signatories but they did appear to be notable neoconservatives. I do not believe this will be the last such declaration. It may well turn out that SARS-CoV-2 will be the least of China’s problems. As one commentator noted, the CCP has taken an axe to their own business model.

18 comments

Not Exactly a Roadmap

It’s not exactly a roadmap but it’s a start. California Gov. Gavin Newsom outlined six criteria for reopening the Golden State:

California’s six indicators for modifying the stay-at-home order are:

  • The ability to monitor and protect our communities through testing, contact tracing, isolating, and supporting those who are positive or exposed;
  • The ability to prevent infection in people who are at risk for more severe COVID-19;
  • The ability of the hospital and health systems to handle surges;
  • The ability to develop therapeutics to meet the demand;
  • The ability for businesses, schools, and child care facilities to support physical distancing; and
  • The ability to determine when to reinstitute certain measures, such as the stay-at-home orders, if necessary.

Since I have been calling for just such criteria to be promulgated, I found this an encouraging first step. I was disappointed, however, because none of the criteria were quantified. Without that you cannot determine whether progress is being made. That’s the sort of commitment that I think is needed rather than simple aspirational goals. Does anyone actually disagree with any of them? The devil is in the details.

7 comments

Seasonality, Susceptibility, and Transmission of SARS-CoV-2

If you’re following the scholarship relating to the present pandemic at all closely, you should find this paper from Science very illuminating. Be aware that it’s pretty technical. In the paper they explore the effects of seasonality (the tendency of a virus to return on a seasonal basis) and susceptibility (which includes but is not limited to acquired immunity) on prevalence. Here’s a snippet from the conclusion:

In summary, the total incidence of COVID-19 illness over the next five years will depend critically upon whether or not it enters into regular circulation after the initial pandemic wave, which in turn depends primarily upon the duration of immunity that SARS-CoV-2 infection imparts. The intensity and timing of pandemic and post-pandemic outbreaks will depend on the time of year when widespread SARS-CoV-2 infection becomes established and, to a lesser degree, upon the magnitude of seasonal variation in transmissibility and the level of cross-immunity that exists between the betacoronaviruses. Social distancing strategies could reduce the extent to which SARS-CoV-2 infections strain health care systems. Highly-effective distancing could reduce SARS-CoV-2 incidence enough to make a strategy based on contact tracing and quarantine feasible, as in South Korea and Singapore. Less effective one-time distancing efforts may result in a prolonged single-peak epidemic, with the extent of strain on the healthcare system and the required duration of distancing depending on the effectiveness. Intermittent distancing may be required into 2022 unless critical care capacity is increased substantially or a treatment or vaccine becomes available. The authors are aware that prolonged distancing, even if intermittent, is likely to have profoundly negative economic, social, and educational consequences.

or, as others have put it more succinctly, we need to ensure that the cure is not worse than the disease.

There is an enormous number of things we simply don’t know. In the past I have suggested that the closest analogy we have to SARS-CoV-2 is the seasonal flu and that’s the assumption on which this paper is predicated but we just don’t know. The paper is silent, as it should be, on whether “highly-effective distancing) or contact tracing are practical in the United States. I incline towards believing that neither can be due to our physical and population size, the structure of our society, and our low degree of social cohesion.

I strongly believe that investigations of this sort should inform policy which is not to say that experts should be making the policies. Relying on science and putting policy decisions in the hands of scientists are not identical. Indeed, effective policy cannot be left to the experts.

6 comments

Update on Abbott’s Rapid COVID-19 Test

Abbott has updated its information on its rapid COVID-19 test:

  • Through Saturday, April 11, we have shipped 566,000 of our rapid ID NOW tests to all 50 states, Washington DC, Puerto Rico and the Pacific Islands. The majority of these tests have been sent to outbreak hotspots and we’ve asked that customers prioritize frontline health care workers and first responders.
  • We’re currently manufacturing 50,000 tests per day, plan to increase ID NOW manufacturing capacity to 2 million tests a month by June and are working to expand beyond that.
  • We have shipped more than 1 million tests to customers across the U.S. We’re also shipping these tests to customers throughout the world.
  • There are approximately 200 m2000 instruments in hospital, academic center and reference labs throughout the U.S.

I’m having a bit of trouble reconciling the numbers I’m seeing not just here but in other things I’ve read. In particular I had previously read that there were 18,000 ID Now devices installed in the U. S. There’s a big difference between 200 and 18,000. Is there more than one model? I researched that and couldn’t identify one. Is there a predecessor model with a larger user base? Capability and compatibility may be issues.

Whatever the case scaling up to 2 million tests per month by June sounds like a lot but isn’t particularly hopeful if your objective is testing everyone in the U. S. let alone everyone in the world and the thought of scaling up other, less automated testing approaches is even more discouraging.

That doesn’t even start to address the issue of false negatives and positives which originally led me to stumble across Abbott’s update. I’ve read that the number of false negatives is 30% which is being interpreted as multiple tests per individual are needed.

13 comments

Fasten Your Seatbelts

In his latest Wall Street Journal column Walter Russell Mead articulates the case that China is still misleading not just the rest of the world but its own people on SARS-CoV-2:

As the world struggles to contain the coronavirus outbreak without triggering a new Great Depression, China is withholding vital information that would save lives and significantly alleviate the economic catastrophe that now threatens to immiserate hundreds of millions of people around the world.

This isn’t the old coverup, when Communist Party bumbling and deceit allowed a local outbreak to turn into the worst global disaster in decades. The new coverup is even more brazen. China continues to falsify vital information about the epidemic on a massive scale.

The evidence comes from many sources. In a classified report to the White House, the U.S. intelligence community has concluded that China underreports both deaths and the total number of cases. The Economist magazine compared China’s reported statistics with those from other countries and found that numbers changed dramatically in response to political events, such as the firing and replacement of local officials. Using conservative figures and assumptions, a report by Derek Scissors of the American Enterprise Institute estimates 2.9 million total cases in China, rather than the total of about 82,000 Beijing reports. If Mr. Scissors is right, the number of cases that China has concealed is greater than the total number of cases reported in the rest of the world.

These data matter. Without accurate information about the number and location of cases, including asymptomatic cases from China, it is much harder for the rest of the world to understand basic facts about the disease and its spread. And the absence of accurate information from China makes it much more difficult to know when it is safe to lift lockdowns.

The near-total shutdown and gradual restarting of a complex modern economy is something that has never been done before. No one could reasonably expect Beijing or any other government to get everything or even most things right on a first effort, but access to real information about what is happening in China could save many other countries from making costly mistakes. Just as in December and January China’s official culture of secrecy unleashed a terror on the world, so now that same culture weighs down the world’s efforts to cope.

and then gets to the meat of the piece:

What worries Beijing most is public opinion at home. The two sources of the Chinese Communist Party’s legitimacy—its technocratic skill and its ability to increase China’s prestige abroad—are challenged both by the epidemic and the government’s flailing response to it.

After seven decades in power, the party still depends on a governance system that combines arbitrary rule, brutal repression, eye-popping corruption and massive levels of deception, fraud and abuse. The coronavirus outbreak, concealed as long as possible from the higher-ups by the usual self-dealing cliques of local officials, cruelly exposed the gap between the imposing image Beijing seeks to project and the gritty, unsavory realities of one-party rule.

To divert public attention, China’s rulers reverted to their standard playbook: concealing information, squelching discussion of the disaster, and whipping up nationalist sentiment. The trouble is that the steps Beijing saw as necessary to shore up its power at home have dramatically worsened China’s economic prospects and its international reputation.

China, which became a major world power by using and sometimes abusing free-trade rules and global supply chains, has now taken an ax to the roots of its own business model. If the cost of doing business in China includes increased exposure to ruinous shocks like the pandemic, “Made in China” doesn’t pay. And if Beijing can lie so vociferously and implausibly about the pandemic, can private investors or foreign governments ever rely on its promises?

Let’s see. A regime that by its very construction cannot be trusted and whose actions impose risks on the rest of the world whose costs run into the trillions of dollars and hundreds of thousands of lives. Those are risks greater than any prospective benefit, at least to the rest of the world.

Res ipsa loquitur as Cicero put it. The thing speaks for itself. There is really only one reasonable response. As long as the Chinese Communist Party rules China, China must be ostracized.

Fasten your seatbelts, we’re in for a bumpy ride.

6 comments

Science, Experience, and Hope

I agree with the general thrust of the Washington Post’s latest editorial. Reopening the economy will be an enormous task:

Tom Frieden, former director of the Centers for Disease Control and Prevention, has usefully outlined four tasks. First, wide-scale testing must be deployed to know who is sick and who is not. Second, those infected must be isolated from the healthy and susceptible. Third, everyone who had been in contact with the sick must be traced. Fourth, those contacts have to be isolated to prevent further spread. All four have to be accomplished to box in the virus, he says.

Where I differ from them is more in this paragraph:

Unfortunately, there are stubborn, unresolved problems with all four. It will be catastrophic if the next phase unfolds with the kind of chaotic supply shortages and lack of leadership we have seen over the past few months. Diagnostic tests, to see whether people are sick, have been running at about 140,000 a day reported by the states, only a fraction of what is needed for phase two. Serological testing, to see who has recovered with antibodies that might confer immunity from reinfection, has never been done at this scale. Many tests are in the works, but technical and biomedical uncertainty remain, including regarding how long the antibodies last and how strongly they may protect. Former Food and Drug Administration commissioner Scott Gottlieb and former FDA chief of staff Lauren Silvis have suggested that employers ought to take on some of the burden for testing, bringing it into workplaces, making it more routine and widespread.

Rather than the universal testing that they seem to imagine I have been advocating a well-designed, systematic system of sampling. Much depends on what level of certainty and risk you require. If you require 100% certainty and 0% risk, we will never reopen the economy, at least not until a vaccine and treatments are found for SARS-CoV-2 and COVID-19. At some point the food supply chain will break down and we will have much, much more serious problems than hospitals strained beyond their capacity. There will never be a large enough supply of tests and their precursors, enough compliance with directives, or enough people to trace contacts for the entire human population many times over which is what such certainty and risk avoidance would require.

Once you decide you’ve willing to settle for something less than 100% certainty and 0% risk, the matter becomes a political issue rather than a technical one.

Science tells us that we may be able to develop an effective vaccine for SARS-CoV-2. Experience tells us that either we will not or that it is likely to take a long time to do so, longer than we have. Hope tells us that we will.

I think we would be prudent to rely on experience but different people take that to mean different things. I guess that’s why I have been harping so much on the slow pace of recoveries and finding a treatment more effective than supportive care.

10 comments

Working As Designed

I welcome the reports of interstate pacts, like those among California, Washington, and Oregon or among New York, New Jersey, Connecticut, Pennsylvania, Delaware, Rhode Island and Massachusetts mentioned in this article at CNN:

States on the country’s East and West coasts are forming their own regional pacts to work together on how to reopen from the stay-at-home orders each has issued to limit the spread of the novel coronavirus.

The first such group to be announced came Monday on the East Coast. Democratic New York Gov. Andrew Cuomo said his state, New Jersey, Connecticut, Pennsylvania, Delaware, Rhode Island and Massachusetts each plan to name a public health and economic official to a regional working group. The chief of staff of the governor of each state also will be a part of the group, which will begin work immediately to design a reopening plan.
Later on Monday, the West Coast states of California, Washington and Oregon also announced they are joining forces in a plan to begin incremental release of stay-at-home orders. Governors of the three states will collaborate on their approach to getting back to business in “in a safe, strategic, responsible way,” as announced by California Democratic Gov. Gavin Newsom.

I don’t see them as indicating some grave failure of the federal government but rather as indicating that our system is working as designed. States with common interests work together to pursue those interests. Could that pursuit be facilitated by the federal government? Maybe. It could also be impeded by the federal government.

There will be many lessons drawn from our experience with SARS-CoV-2. I would hope that one of them is that redundancy within limits is beneficial and conducive to resilience.

2 comments

The Paradox

At The Hill Kevin Naughton explains how, paradoxically, adversarial major media outlets may be President Trump’s greatest allies in his re-election bid:

There is no doubt that the country is going to go into a significant recession of undetermined length and casualties will be high.

However, the bar for “success” has been set very low — not just by Trump, but primarily by the media outlets he disdains. Every end-of-the-world report depresses public expectations. Since politics is all about perception, the anti-Trump media have done the president an immeasurable service in their criticism. Trump doesn’t have to do a good job against the coronavirus — he just has to do a barely competent job to exceed expectations.

With new estimates bringing the expected mortality toll down to approximately 60,000 and a collapse of the health care system — even in hard-hit regions — looking to be a much more remote possibility, Trump is set up to declare a victory of sorts. Certainly, there could easily be more flare-ups or a return of the virus in force in the fall, but Trump may well win an expectations game his opponents set up perfectly for him.

Determining responsibility for the spread of the pandemic in the United States is like “Murder on the Orient Express” — everyone did it. Whether it is the Chinese (blamed by 90 percent of Republicans and 67 percent of Democrats) or a World Health Organization whose main competence appears to be toadying to China, Trump has two easy targets on which to focus his considerable bile.

And, while the Trump administration was not ahead of the curve in preparation, neither was the rest of the world. The European Union failed to act, even as an outbreak began sweeping Italy. Japan looked to have successfully avoided a major contagion, only for it to hit in the past week. Outside of South Korea and Taiwan, hardly any developed country has escaped an outbreak.

Trump is helped in the United States by the failures in the New York City region. The states of New York, New Jersey and Connecticut account for approximately half of all confirmed cases (Note: “confirmed cases” is certainly a severe undercount of the total, but assuming that the American states and other developed democratic nations have roughly the same error rate, “confirmed cases” can be used for comparison purposes). The late response by New York politicians, scandalously encouraging people to go out and not disrupt their lives, allow Trump to drop blame for half the epidemic on leaders in a state that did not and will not vote for him.

For every attack levied at Trump, he has a response that may resonate with enough voters to either win the argument or sufficiently muddy the waters.

Moreover, the major media outlets are overwhelmingly located in New York City, Washington, and Los Angeles. That their views are disproportionately based on what’s happening in New York is not entirely surprising under the circumstances.

If the major media outlets had maintained a professional detachment, they would not have assumed the role of foil for Trump they have assumed. However, with the New York Times running front page op-eds and editorials opposing Trump as early as 2016, nearly every crawl on CNN bearing an anti-Trump message, and with the outlets putting their weight behind every foray into impeachment efforts (which began as early as June 2017), that ship sailed long ago.

9 comments

COVID-19 May Bury Illinois

The editors of the Chicago Tribune point out, correctly, that COVID-19 did not create Illinois’s problems and, although an infusion of cash may allow Illinois’s politicians to kick the can down the road for a little while longer, as Illinois spends money it doesn’t have while concurrently losing revenues, the federal response to COVID-19 can’t save Illinois:

Last year, Gov. J.B. Pritzker’s Office of Management and Budget offered a grim fiscal assessment: “Even with the balanced budget for fiscal year 2020, the underlying structural deficit of the state’s budget has not been addressed. Sizable deficits in the general funds budget are projected for fiscal years 2021 through 2025.” The governor hoped to change the picture by getting voters to approve a constitutional amendment allowing a graduated income tax. But its approval in the November election is hardly guaranteed nor a prescription for fixing state government.

The budget forecast, however, is far worse now than it was just a few weeks ago. The coronavirus pandemic has required a long list of unforeseen expenditures to cope with the public health crisis. At the same time, by closing businesses and forcing most people to stay home, it has crushed economic activity and slashed revenue.

A new report by the University of Illinois System’s Institute of Government and Public Affairs offers a scary preview of how the fiscal landscape will look after this earthquake. In its best-case scenario, revenues would drop by a total $4.3 billion in the 2020 and 2021 calendar years. Worst case? $14.1 billion. The IGPA also anticipates a big jump in outlays for public health, Medicaid and various human services.

As if these consequences weren’t bad enough, the state’s public pension program will suffer as well. At the end of fiscal year 2018, the report notes, the state had only about 40% of the funds needed to cover its long-term obligations. Now, it says, “recession-induced declines in asset values could result in a sharp and sudden increase in unfunded liabilities.”That means more and more revenue will have to be diverted to supporting government retirees instead of providing services to the general population.

Illinois already has the worst bond rating of any state, a product of its endless fiscal mismanagement. After getting a negative rating from S&P Global Ratings, it could see its bonds sink to junk status — making it the first state to earn that badge of shame since the 1930s.

If the federal government had its wits about it, they wouldn’t let this crisis go to waste. They would compel Illinois legislators to do what they will never do under their own steam—amend the state’s constitution to allow the state to rewrite its public employee pension programs, if not for current retirees at least for present public and future public employees in exchange for short term bailout funds.

Sadly, it doesn’t and Illinois politicians will do everything in their power to blame their own bad decisions over the last 40 years on Washington.

22 comments