What To Do And What Not To Do

As might have been expected the editors of the Wall Street Journal approve of some measures that have been proposed for dealing with the COVID-19 outbreak and some they do not. They approve of

  • Target the real hardship. The analogies here are unemployment insurance or disaster relief./li>
  • Make the relief immediate.

while the measures of which they disapprove are:

  • A big new infrastructure spending bill. Their point is what good does a highway built in 2022 do for the economy in 2020?
  • Don’t subsidize bureaucracies.
  • Refrain from imposing new mandates on businesses.
  • Be cautious about creating new entitlements in the guise of providing emergency assistance.

The one thing we should expect from the Congress is that they will not let a good crisis go to waste.

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Mitigating the Effects of a Severe Outbreak on the Poor

In a Wall Street Journal op-ed Michael R. Strain and Scott Gottlieb make what appear to me to be some pretty solid suggestions about some of the measures the federal government should take in the face of the incipient COVID-19 pandemic. The op-ed also contains some observations on the potential impact of a severe outbreak on the poor you might not have considered:

Congress should make direct cash payments—mailed checks or direct deposits—to low-income households in places with severe outbreaks. Hourly wage workers should not feel compelled to show up to work sick because they need to pay bills. Congress can help these Americans recover and keep other people healthy by financing their time away from work.

In states experiencing severe outbreaks, Congress should waive the requirement that people receiving unemployment insurance payments look for work. Better that such unemployed workers receive financial assistance for rent, mortgages and groceries than to risk spreading the virus by applying and interviewing for jobs. Congress should also waive work requirements in the food-stamp program.

Children in low-income families will miss subsidized meals if schools are closed. Federal subsidies to those households should be increased to account for lost breakfasts and lunches. This might help relieve some of the pressure on low-income parents, who might otherwise feel the need to go to work even if ill.

The mechanics of some of these plans aren’t entirely clear to me. For example, I’m not sure how the proposed legislation could be limited to “places with severe outbreaks”.

What is clear to me is that with some big cities closing their schools, there is no time to waste.

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I’m Puzzled

I’m a bit puzzled by the media reaction to the oil price war. Yes, it could be hard on U. S. shale oil producers. But it’s also clear it is resulting in immediate prize cuts in gas at the pump and, historically at least, low gas prices are associated with a booming economy not recession. Take a look at the statistics. The Great Recession was preceded by a sharp increase in gas prices.

A price war between Russia and Saudi Arabia could, at least in the short term, be the economic stimulus that a lot of people are calling for. Enjoy it will you can. My wife just paid 10-20% less for gas than we have been recently.

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First: Don’t Panic

The editors of the Washington Post have advice for how we should deal with COVID-19:

Avoid large crowds. Workplaces should turn as much as possible to video conferencing. Avoid big meetings and food-sharing. If you can work from home, do so.

All nonessential large social gatherings should be reconsidered and if possible postponed. Sports games might proceed without fans, but concerts may have to be delayed. Political campaigns can proceed without rallies. A St. Patrick’s Day parade is a bad idea. Cruise ships are turning out to be virus incubators — don’t take a spring break cruise. Air travel poses risks of exposure to large numbers of people: If you don’t have to fly, don’t. If you’re sick, stay home so as not to expose others. If you’re an employer, keep paying your workers who do the right thing and stay home when they’re sick.

Voting is vital to the health of our democracy, but it can be organized to minimize the risks of infection. Schools are a difficult question. They could prove to be transmission grounds. But closing schools means cutting off meals for needy students and straining life for parents — including nurses, doctors and other health-care workers. If schools are kept open, rigorous migitation measures must be enforced.

Personal hygiene won’t solve everything, but is important. In addition to hand-washing, avoid face-touching, and follow good cough and sneeze etiquette. The elderly are particularly vulnerable, according to the early studies of the virus, so extraordinary efforts should be taken to protect them from possible infection.

I think the first thing we should do is not panic. I see lots of signs that people are, hoarding being among them. Even in the worst case scenario, COVID-19 will not be the zombie apocalypse. If it marks the end of civilization, it’s only because people have chosen to abandon civilization.

It would help if the media weren’t trying to whip people into a frenzy while other institutions attempt to minimize the problem. Yes, there is a problem and, if what I think is most likely to happen which is following a very large number of infections with consequently, about 1-2% of those becoming infected dying, the virus will become endemic in the population which in turn could change our behavior forever. Some industries may not survive a change in behavior but that just tells us they were fragile to begin with.

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There Are Some Things We Are Better Off Not Knowing

At Outside the Beltway James Joyner comes out in favor of mandatory retirement ages for elected and appointed officials or at the very least periodic evaluation:

We are increasingly a gerontocracy. Maybe it’s time to get past the joking about cognitive decline and actually start doing something about the real dangers of critical decisions being made by people who are likely suffering from it. It would not be at all unreasonable to require people who want to be in those positions to be evaluated regularly and have the results part of the public record.

Bringing back mandatory retirement, while politically unfeasible, may be advisable. Many US states require judges to retire when they reach 70, for example. And while the Age Discrimination in Employment Act makes mandatory retirement illegal, it makes exceptions for Bona Fide Occupational Qualification (usually, public safety—law enforcement officers, pilots, etc.) and for “Bona Fide Executives” or those in a “High Policymaking Position” over 65.

Certainly, the President of the United States is both a bona fide executive and a high policymaking position.

Such a move would require a constitutional amendment and would be hugely controversial. Periodic evaluations are a move that sounds a lot better than it would be in practice. I’m skeptical that it could be done without being political.

What would you evaluate? Physical ability? That would probably have ruled FDR out. Memory? There are lots of completely competent people with lousy memories and individuals with serious mental or psychological problems with excellent memories (they’re called “savants”). Neurocognitive tests of the sort used by physicians tend to rely heavily on the judgment of the physician applying them. They may seem objective in nature but they aren’t. When the stakes are low that’s one thing but administering such tests to a president is something entirely different. How would we determine that the physician is applying his or her professional assessment rather than his or her prejudice or agenda?

Intelligence? There is a close correlation between the old pre-reform SAT scores and IQ. Bill Clinton’s combined SAT scores have been widely reported as 1032. That would suggest an IQ of around 110 which is about what I would expect but lots of people find that shocking. I think he would have rated extremely high on any assessment of social-emotional ability which actually matters a lot more than IQ. My own combined SAT scores correlate pretty well with my measured IQ, thank you for asking.

Psychological? I suspect that a lot of our presidents have been sociopaths or at least have had sociopathic tendencies. As many as 20% of highly successful people have been estimated to be sociopaths and presidents frequently have traits that are associated with sociopathy (craving validation and recognition from others, self-centered, high levels of entitlement, etc.).

While I wouldn’t be opposed to a maximum age for elective and appointed officials of 65, I would oppose periodic assessments. We already have them. They’re called “elections”. We also have a provision for an extraordinary evaluation of the president’s mental fitness. It’s called “the 25th amendment”.

Otherwise I think there are some things we are better off not knowing.

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What Are They Shopping For?

I wasn’t shocked but I was amused by the signs I saw displayed prominently in Costco yesterday listing the products they were putting on allocation (limiting shoppers’ purchases). They included:

Rice
Sugar
Water
Sanitary wipes
Lysol

I can understand the sanitary wipes and Lysol and maybe even rice but sugar and water? That sounds more like they’re shopping for the zombie apocalypse than for a two week quarantine.

There was lots of toilet paper and it wasn’t on allocation BTW.

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COVID-19 By the Numbers

As it turns out other people than I are also doing back-of-the-envelope calculations about COVID-19 so you don’t just have to take my word for it. Over at Bloomberg Justin Fox does it and comes up with some observations:

These fatality rates can change a lot depending on time and place and access to treatment. The Covid-19 rate is obviously a moving target, so I’ve included both the 3.4% worldwide mortality rate reported this week by the World Health Organization and the 1% estimate from a study released Feb. 10 by the MRC Centre for Global Infectious Disease Analysis at Imperial College London that factored in probable unreported cases. The authors of that study also said that, given the information available at the time, they were 95% confident the correct fatality rate was somewhere between 0.5% and 4%. Gates used the 1% estimate in his article, and when I ran it by Caroline Buckee, an actual professional epidemiologist who is a professor at Harvard’s T.H. Chan School of Public Health, she termed it “reasonable.”

In a context that includes Ebola and MERS, the Covid-19 death rates are much closer to those of the flu, and it’s understandable why people find the comparison reassuring. Compare Covid-19 with just the flu, though, and it becomes clear how different they are.

The 61,099 flu-related deaths in the U.S. during the severe flu season of 2017-2018 amounted to 0.14% of the estimated 44.8 million cases of influenza-like illness. There were also an estimated flu-related 808,129 hospitalizations, for a rate of 1.8%. Assume a Covid-19 outbreak of similar size in the U.S., multiply the death and hospitalization estimates by five or 10, and you get some really scary numbers: 300,000 to 600,000 deaths, and 4 million to 8 million hospitalizations in a country that has 924,107 staffed hospital beds. Multiply by 40 and, well, forget about it. Also, death rates would go higher if the hospital system is overwhelmed, as happened in the Chinese province of Hubei where Covid-19’s spread began and seems to be happening in Iran now. That’s one reason that slowing the spread is important even if it turns out the disease can’t be stopped.

Could Covid-19 really spread as widely as the flu? If allowed to, sure. The standard metric for infectiousness is what’s called the reproduction number, or R0. It is usually pronounced “R naught,” and the zero after the R should be rendered in subscript, but it’s a simple enough concept. An R0 of one means each person with the disease can be expected to infect one more person. If the number dips below one, the disease will peter out. If it gets much above one, the disease can spread rapidly.

and

The numbers also seem to indicate that Covid-19 is a lot more contagious than the seasonal flu. Average R0 isn’t the whole story, though. Why all the worry about MERS, for example, which with an R0 below one shouldn’t spread at all? Well, it’s extremely deadly, its R0 can rise above one in certain environments, among them hospitals, and … you can catch it from your camel.

There are also some very nice graphs in the article if you’re interested in graphs.

Let’s make a few guesses and play with some numbers. About a third of our entire species caught Spanish flu back in 1918 so let’s use that number as a WAG. Roughly a third of 7 billion people with a mortality rate between .1% and 3% gives us between 2 million and 70 million deaths.

Since I’m over 70 I can’t take the claims that only old people are dying with the nonchalance or even outright glee that some are. Considering the U. S. alone, the numbers above suggest a number of hospitalizations and deaths that are quite likely to overwhelm our health care system and legal system and might even overwhelm our economic system.

I’m also skeptical about those claims. Italy’s population pyramid might explain its higher death rate from COVID-19 but the reports from Iran and China don’t seem to comport with their population pyramids. And then there’s the question of just how much trust we can place in the reports that China is making? There have been claims emanating from Chinese sources that the outbreak in China has been much worse than the Chinese authorities have claimed and that they’re flat out lying that it’s under control. I’ll allow that those claims may be from interested parties but IMO the reality is that we just don’t know.

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Why the U. S. Won’t Control the Spread of COVID-19 By Quarantine

This post is an expanded and modified version of a comment I left in an earlier post. Here in bullet form are some of the reasons that I do not think that the U. S. will control the spread of COVID-19 using quarantine:

  • Support for quarantine measures would need to be bipartisan with both Republicans and Democrats championing the measures. Within the Democratic Party alone both Joe Biden and Bernie Sanders would need to support them.
  • Democrats’ distrust of Trump is such they would be loath to allow him the power to implement a practical quarantine. You can hear the attacks without trying very hard.
  • President Trump would need to be convinced that he has more to lose by failing to control the spread of COVID-19 through quarantine than by the decline in economic output resulting from quarantine and the attendant undermining of a prime argument for his re-election.
  • While the federal government has the authority to quarantine the United States from travel and shipments from abroad, I believe that states would need to implement most local quarantines
  • Many measures would require a nationwide declaration of martial law. Under present circumstances I cannot envision that being accepted meekly.
  • Not all companies and individuals will be willing to self-quarantine
  • Compliance is sufficiently low quarantines will not be effective. Hereabouts you just need to look at the large number of people speeding, running stop signs, turning left when “No Left Turn” signs are prominent, or going the wrong way on one way streets to recognize that.
  • Various kinds of contractual obligations would need to waived.
  • Court challenges would result in judges being moved to issue nationwide injunctions vitiating the effectiveness of quarantine.

and so on. My guess is that quarantines can be successful in small compact countries, in countries with high social cohesion, in places with high willingness to comply, and in authoritarian countries. None of those characterizations applies to the U. S. Singapore—yes (small, compact, and authoritarian). Canada—yes (higher social cohesion and willingness to comply). U. S.—no.

Consider Italy. They’re preparing to quarantine a third of the country. But they’re relatively small and compact, have higher social cohesion than in the U. S., and a more compliant population. Here in the U. S. the complaints that quarantines are racist or only directed against the poor would be heard practically immediately.

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First, Commit Suicide

National editorials or op-eds on the fiscal mess here in Illinois always catch my eye and this one at the Wall Street Journal by economist Orphe Divounguy, proposing a “simple solution” to Illinois’s problems, was no exception:

Shortly before Puerto Rico’s bankruptcy filing, The Wall Street Journal described “an exodus of workers, retirees and entire families” fleeing a deepening economic crisis. “For years, Puerto Rico borrowed more—and incurred higher fixed costs—to buy time to stave off deeper economic overhauls,” according to the Journal report. Creditors and analysts said Puerto Rico’s problems were aggravated by “government overspending and promises to unions for employee benefits that officials knew they wouldn’t have the resources to properly fund.”

The description also fits Illinois, but it doesn’t have to. Illinois’s public pension payments already consume nearly a third of the state budget, yet the unfunded liability—which the state currently pegs at $137 billion, though others put the figure much higher—continues to rise. Local government services are also being squeezed by pensions, contributing to rising property taxes that are the second-highest in the nation. Since 2000, Illinois has increased pension spending by more than 500% but cut by a third services that help students pay for college, protect children from abuse, aid the poor, and fight disease.

Moderate reforms could stabilize Illinois’s five state-run and hundreds of local pension funds, but politicians have consistently refused to consider them, preferring instead to increase taxes steadily. Illinois has a culture of trying—and failing—to tax its way out of its problems. In 2011 then-Gov. Pat Quinn approved a temporary tax hike aimed at making a dent in the state’s $8 billion in unpaid bills. By 2014, Illinois still had a $6.6 billion bill backlog, and lawmakers were calling for families and businesses to give up more money. Another permanent income-tax increase came in 2017, but again more taxes failed to solve Illinois’s problems.

The problems, in fact, got worse. In his freshman year, Gov. J.B. Pritzker signed into law 20 new taxes and fees totaling nearly $4.6 billion, including a doubling of the gasoline tax. Now Mr. Pritzker wants a progressive income tax he claims will really solve the issue. He’s asking voters to give him a green light on Nov. 3.

Mr. Pritzker is wrong to tell voters that 97% of them “will not see an increase.” Because when voters decide whether to push forward his progressive tax, they won’t get to vote on rates. As the Illinois Policy Institute reported, solving the pension issue would require a progressive income-tax hike of $10 billion. Mr. Pritzker’s current plan to tax $3.7 billion out of the state economy dedicates only $200 million to pensions.

There is hope for the people of Illinois. State pensions can be fully funded, Illinois taxpayers can save $50 billion over 25 years, and dollars can be freed to support their eroding public services. Policy makers can finally shrink Illinois’s pension liability by reducing the main driver of its growth: the cost-of-living adjustment, or COLA. Currently, the COLA doesn’t reflect any actual cost-of-living increase, since it isn’t pegged to inflation. By simply replacing the existing guaranteed 3% compounding postretirement raise with a true COLA pegged to inflation, among other modest changes, Illinois can save $2.4 billion in the first year alone. No current retiree would see a decrease in his pension check. Current workers would preserve their core benefit.

That “simple solution” would require Illinois’s state constitution be amended. That is not in doubt. The issue has been fully litigated.

Democrats control the state’s house and both houses of Illinois’s legislature and the Illinois Democratic Party derives much of its power from the support of Illinois’s public employees’ unions. The required amendment has never been proposed by any sitting politician for a simple reason: it would be political suicide. Telling a politician that the first step on the road to recovery is committing suicide is not much of a sales pitch.

I don’t expect that Illinois’s fiscal problems will start being solved until the state can no longer borrow (because no one will lend to it) and raising rates does not increase revenue either due to taxpayer flight or non-compliance. Then the state will actually default. That will be an adventure.

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How California Stole Its Own Primary Election

I found the editors’ of the Wall Street Journal’s account of how the state of California “stole its own election” darkly amusing. Here’s its conclusion:

Only two companies bid for LA’s new voting system because one condition was that it be publicly owned—i.e., socialized. One was U.K.-based company Smartmatic, which got its start developing a new system for Hugo Chavez’s Venezuela in 2004. The other had developed ObamaCare’s Healthcare.gov website, which famously crashed on its launch date. Smartmatic won. Voters lost.

Even considering uncounted votes, turnout is running lower than in the June 2016 primary. So to recap: California Democrats moved up the state’s primary to make it more relevant and reduced voting obstacles to boost liberal turnout. In the end they disenfranchised many Democratic voters, and denied Mr. Sanders the flush of his primary victory. This would be darkly amusing if it didn’t undermine trust in the legitimacy of election results.

I should point out that I’m skeptical of their explanation for the small number of bidders. I strongly suspect that the pool of qualified bidders was pretty darned small to begin with and imposing the requirement that whatever solution they came up with couldn’t be proprietary was just the last blow.

IMO the concept they’re missing is the KISS concept. Keep it simple, stupid. The more complex our voting process, the worse and less secure it will become.

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