I want to commend to your attention Lionel Shriver’s polemic in The Spectator, particularly this passage:

I am steeped in dread. I foresee months, if not years, of inane gesturing towards ‘safety’ that makes no appreciable difference to the nation’s health, but does manage to 1) ruin everyone’s enjoyment; 2) perpetuate the socially poisonous notion that one’s neighbour is a threat to one’s very life; 3) maintain an atmosphere of the extraordinary, in which the state may violate civil rights at will; 4) lay waste to what little might otherwise have remained of this country’s economy. The lockdown has been bad enough. Post-lockdown could be worse.

Is there any real science behind this two-metre rule? Or is it an arbitrary convention we’re now stuck with? Recent research suggests that Covid is surprisingly nosocomial (what a wonderful word): spread in the healthcare settings of care homes and hospitals. We’ve also learned that most infections result from the close-up, sustained exposure that we never get with strangers in supermarkets. Yet the two-metre rule that’s consigned us to half-mile queues for Tesco will soon make everywhere else unbearable, too.

concluding

I predict that few of the tedious, costly, time-consuming measures about to be levied on the British public in the coming months will be based on science. We’ll be obliged to make loud gestures of showy compliance, most of which will make no difference to who sickens and who dies, but which will nevertheless irretrievably deep-six this country’s economy and make our daily lives an unremitting misery.

Let me answer his question. The empirical evidence supporting the “two-metre rule” is scanty at best. It’s based on modeling. It has been criticized for being far too lenient (an 8-metre rule has been proposed) or too strict. I suspect it was arrived at as a compromise between no social distancing and the obviously unworkable 8 metres.

I have no idea what policies are best suited for the United Kingdom’s circumstances and won’t offer any suggestions. Here in the U. S. it appears that the number of new cases of COVID-19 reported daily has been declining since April 24 while the number of new deaths due to the virus reported daily has been declining since April 21.

It remains the case that the New York City metropolitan area accounts for fully half of all cases and all deaths due to COVID-19 and that the majority of those have been in nursing homes and other care facilities.

Here in Illinois the number of new cases or the number of new deaths seem more closely related to vagaries in reporting than to any underlying disease activity. I think you either must conclude that the measures adopted to oppose the spread of the disease have been a flop or that other changes are obscruing what is actually going on.

I’m skeptical of R. J. Lehman’s suggestion at RealClearPolicy that we need federally subsidized business interruption insurance:

About once a generation, the U.S. insurance market encounters a crisis that demands a federal response. In the 1960s, it was severe uninsured flooding. In more recent memory, it was the catastrophic terrorism of September 11th. Yet another protection gap has been revealed in recent weeks, as the COVID-19 pandemic shutters thousands of businesses across the country.

Business owners have responded to the unexpected — and, in many cases, mandated —interruption in business by filing claims on their business insurance policies. However, most of these have been denied, as existing policies simply don’t include coverage for cases like this.

Certainly, some of those denied claims will be disputed. In fact, a spate of lawsuits has already been filed. Ultimately, it will be up to the courts to scrutinize the nuances of contractual exclusions for pandemics and determine whether a virus can count as a “physical loss.” Even if some of these suits prove successful, insurers will simply redraft their policies to make the exclusion more explicit in the future.

This may be the reality, but it cannot be the end of the story. If private insurers won’t provide businesses with this sort of protection in future pandemics, then the federal government must.

The reason I’m skeptical is that every example he cites is an example of moral hazard and the heightened level of public risk that ensues from the federal government’s insensitivity to it.

The flooding in the 1960s is the easiest one. There should be no federally-subsidized flood insurance. It encourages the behavior we should wish to avoid—people building in flood plains. The more you indemnify people against the consequences of their own folly, the more they will engage in folly.

The attacks on 9/11 didn’t just materialize out of thin air. They were a consequence of our stationing troops in Saudi Arabia at the end of the Gulf War and our maintenance of the “no-fly” zone over Iraq. Those in turn were the price of assembling the coalition that were our allies during the Gulf War and that in turn was a consequence of our intervention on behalf of Kuwait. Each step in that chain was deemed the less risk-filled alternative. Those calculations were clearly wrong. The net effect was to offload risk from the Kuwaitis to Americans and the cost of those risks tell us clearly that the calculations were wrong. It doesn’t seem to me that you reduce risk by assuming more risk but that’s what’s being proposed. IMO the key question is not how do you mitigate the risk but how do you ensure that those making the decisions have more incentives that are better-aligned with reality? I think they need to have more “skin in the game”.

The present circumstances are more complex. I think that the author’s point that mitigating the risk was beyond the ability of any insured or any insurer is a good one but it makes some assumptions. The fact is that greater exposure to pathogens that may result in a pandemic is a risk of globalization. Some very smart people have been telling us for quite a while that the risk was being understated, e.g. Bill Gates. Is the correct strategy to indemnify insurance companies against the risks of what may not be nearly as rare an occurrence as they had assumed. Additionally, the discontinuity wasn’t caused by the virus but by the regulatory response to the virus. Are acts of government insurable risks? I don’t think so.

There are times when I question the sanity of economists and economics writers more generally. After articles predicting deflation, isn’t it time to put up or shut up? Where’s the deflation?

That’s what I thought of when I read this piece by Brian Chiappatta at Bloomberg:

For years, Fed officials fretted that consumers’ inflation outlook was almost too stable at historically low levels. Vice Chair Richard Clarida, for one, follows University of Michigan data that surveys expected price changes during the next five to 10 years. That gauge fell to 2.2% in December, a record low. A year earlier, when it was at 2.6%, he called it “within — but I believe at the lower end of — the range consistent with price stability.” Since 2012, expectations have fluctuated in a tight window of 2.2% to 3%, including 2.6% in a report released Friday. The central bank generally views 2% as its target rate.

The coronavirus pandemic has shaken American households to their core in any number of ways. At best, it’s acclimating to working from home and adjusting day-to-day behavior. At worst, the most economically vulnerable individuals are suddenly unemployed and unsure when — or if — they’ll be rehired.

Right now prices are going in every direction. Yesterday I filled my gas tank for the first time since March. I paid about the same price at the pump as I did then. The price went down, then it went up again. Where will it go now? I have no idea.

Food prices, particularly for meat, are skyrocketing. After years of stability the price of a steak has tripled over the last couple of months. Where will prices be in a year? I have no idea and I don’t think anyone else does, either.

Also, it bothers me when they talk about “inflation” or “deflation” when what they mean is that prices are going up or down. When I was in school inflation was thought to be a monetary phenomenon. When wages and prices go up, that’s inflation. When some prices go up, some go down, and wages go down, which is what really seems to be happening, calling that “inflation” is a misnomer.

The federal government has already decided to expand the M1 money supply (physical currency, demand deposits, travelers’ checks and the like) by about 20% and the M2 money supply (M1 + savings deposits, money market securities, mutual funds, etc.) by 12% since January. And they’re preparing to do it again.

Issuing a lot of credit and declining demand for the dollar don’t sound like the raw materials of deflation to me but what do I know?

Let’s start listing the real life experiments that are being carried out during this distressing, disastrous, and in some ways exciting period. I’m not talking about the trials of vaccines or treatments for COVID-19 although those count, too. I’m talking about social, economic, and policy experiments.

We are testing John Maynard Keynes’s theory of government action in a severe economic contraction or, at least the folk variant of that prescription.

We are testing the central proposition of Modern Monetary Theory. Or, again, at least the folk variant of it.

We are testing remote education.

We are testing telemedicine.

We are testing “work from home”, whether offices are really necessary for productivity.

We are testing Americans’ ability to act in a way that is at the least unfamiliar and may even be against their basic natures.

We are testing whether business lockdowns and social distancing with very little else in the way of policy responses can be maintained over an indefinite period and whether they are effective ways of slowing the spread of disease.

And that’s just scratching the surface. I’m pretty pessimistic about all of these experiments.

When you compare two analyses, one from FiveThirtyEight and other from Pew Research, something interesting emerges. FiveThirtyEight lists the industries hardest hit by the lockdowns and when you combine that with Pew’s list of employment of illegal migrant workers by industry you get this:

Mexicans and Central Americans could return to their countries of origin and I suspect that many will, not the least because they do not qualify for social services here. Other nationals may face a real problem. There’s no work; they can’t leave; and they can’t stay.

I would add that even foreign workers here legally may face a problem. If they’re laid off long enough they will lose their legal status.

You know, I really wish I had the time or energy to start using data mining techniques, especially such techniques that employ neural networks, to analyze the enormous amount of data about COVID-19. I strongly suspect that at this point we have the data to know a lot more than we do.

The big news story in Chicagoland yesterday was that Cook County has become the single county in the U. S. with the most diagnosed cases of COVID-19. The Sun-Times reportage on this:

Cook County has surpassed Queens County in New York as the U.S. county with the most coronavirus cases based on Sun-Times analysis of the latest public data.

There have been 58,457 total cases of COVID-19 recorded in Cook County, which includes all of Chicago and many of its suburbs, after officials added 2,051 new cases in the last 24 hours. Queens, by comparison, added only 336 cases over the same time frame to bring its total to 58,084.

Cook County still has a lower rate of COVID-19 per capita given its population (5.1 million) is more than twice as large as Queens (2.25 million). But Queens also has a much higher population density with 20,500 people per square mile compared to 5,500 per square mile in Cook County, which can make social distancing measures more challenging to maintain.

furnishes a little context for this but not nearly enough. Let me try to remedy that. Cook County is second only to LA County in population in the U. S. Not only is it twice as populous than Queens, it is nearly ten times the size in total area and land area.

According to the IDPH, the mortality per million population in Cook County is about 700. I don’t know the exact mortality rate in Queens but my back-of-the-envelope calculation suggests it’s no less than 2,100/million—at least three times that here. Despite that there’s an opinion piece in the NYT today claiming that population density is unrelated to the prevalence or mortality of COVID-19. That’s balderdash. It’s density, folks. Population density is not the only factor but it’s an important one.

Cook County is the home to more than half of the deaths due to COVID-19 in the entire state. Not including Cook County Illinois’s mortality rate due to the virus would be about the same as Iowa’s or Wisconsin’s which is to say quite low.

I also think that there’s a lot less to the reported statistic than meets the eye. A lot more tests for SARS-CoV-2 have been conducted here, too. You’re bound to find more cases that way. Cook County’s health care system is more likely to be overwhelmed by the rash of shootings on the South and West Sides of the city than it is by COVID-19.

Despite the headline of his Washington Post op-ed, “We need to enter the fifth stage of coronavirus grief: Acceptance”, I don’t think that Tom Frieden has reached that stage yet. Everything he discusses in the op-ed is a way of avoiding contracting the virus.

I think that genuine acceptance would be something quite different: acknowledging that completely eliminating risk is impossible and if you get the disease, you get it.

Continuing on in the same vein as yesterday, Josh Rogin’s Washington Post column today notes that the entire world is coming to a realization that should have been obvious all along:

The Chinese government’s gross mishandling of the coronavirus pandemic is changing attitudes on China across countries and inside governments around the world. The question is whether the United States can take advantage of this moment to work with allies and partners to help them reset their relationships with Beijing — for their own protection as well as ours.

Despite the Chinese Communist Party’s worldwide propaganda campaign, attitudes across the globe are souring as people realize how the Chinese government’s misguided policies have made their suffering worse. Beijing’s early coverup, its ongoing refusal to share critical scientific information and honest data, and its use of aid and economic levers to reward political loyalty or punish critics are shocking to all. The Communist Party regime will do anything to protect its own interests, regardless of the damage to public health.

concluding

What would really help countries such as Britain make the right decision on Huawei and China overall would be a U.S. commitment to work with them on a safe 5G alternative.

Then the Trump administration should go to every other country that is waking up to the reality and risks of dealing with China and propose better cooperation in pushing Beijing to stop its coronavirus-related and various other misbehaviors.

The Faustian bargain many countries made to do business with China is costing them dearly. But only through a truly international, competitive strategy can the United States ensure the world finally understands the true nature of the CCP and the dangers it poses to our people.

One can only wonder at the Chinese authorities’ truculent responses to Australia, Britain, and the U. S. I think they have fully observed the guidance that the most useful equipment with which to face life is effrontery. They have erred; they have compounded their error by deliberate prevarication and now are assuming a stance somewhere between injured innocence and truculence.

I think this suggests that the Chinese authorities realize they are in a weak position that is likely to become worse.