The canine culture that is Miami

The Miami Heat are bringing back some fans, with help from some dogs. The Heat will use coronavirus-sniffing dogs at AmericanAirlines Arena to screen fans who want to attend their games. They’ve been working on the plan for months, and the highly trained dogs have been in place for some games this season in which […]

The post The canine culture that is Miami appeared first on Marginal REVOLUTION.

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Richard Yetter Chappell on Lessons from the Pandemic

It’s generally recognized that our (American) response to the Covid-19 pandemic was disastrous. But I think far fewer appreciate the full scale of the disaster, or the most significant causal levers by which the worst effects could have been avoided. (Yes, Trump was bad.  But his public health disinformation and politicization of masking—while obviously bad—may prove relatively trivial compared to the mammoth failings of our public health institutions and medical establishment.) Much of the pandemic’s harm could have been mitigated had our institutions been properly guided by the most basic norms of cost-benefit analysis.

This is the opening paragraph of Richard Yetter Chappell, “Lessons from the Pandemic,DailyNous, January 19, 2021.

The whole thing is excellent. Chappell is a philosopher but the piece reads like a well-written analysis by a policy economist.

Another excerpt:

In ordinary circumstances, the status quo is relatively safe and so untested medical innovations present asymmetric risks. That is, until they are proven safe and effective, it may be reasonable to assume that the potential risks of an untested product outweigh its potential benefits, and so block public access to such products until they pass stringent testing requirements. (There are arguments to be made that FDA regulations are excessively onerous even in ordinary circumstances, but I remain neutral on that question here. I take it that there is at least a reasonable case to be made in the FDA’s defense ordinarily. No such case for the FDA’s stringency seems possible in a pandemic.)

A pandemic reverses the asymmetry of risk. Now it is the status quo that is immensely dangerous, and a typical sort of medical intervention (an experimental drug or vaccine, say) is comparatively less so. The potential benefits of innovation likely outweigh the potential risks for many individuals, and vastly so on a societal scale, where the value of information is immense. So the FDA’s usual regulations should have been streamlined or suspended for potential pandemic solutions (in the same way that any ethics barriers beyond the minimum baseline of informed consent should have been suspended for pandemic research). This should be the first thing the government does in the face of a new pandemic. By blocking access to experimental vaccines at the start of the pandemicthe FDA should be regarded as causally responsible for every Covid death that is occurring now (and many that occurred previously).

This last sentence is almost correct and similar to what Charley Hooper and I argued last month in “The FDA’s Deadly Caution,” AIER, December 16, 2020. Surely there are some deaths that would be occurring now, even without FDA intervention, due to people not taking the vaccine or due to the vaccines’ not being 100% effective

Yet another excerpt:

Closely related to the above mistake is the implicit assumption that it’s somehow better to do (or allow) nothing than to do (or allow) something imperfect. Letting the perfect be the enemy of the good in a pandemic is disastrous. Blocking quick Covid tests for having lower accuracy than slow ones is an obvious example of this form of stupidity. Deciding in advance that a vaccine must prove at least 50% effective in trials to receive FDA approval is another. (Obviously a 40% effective vaccine would be better than nothing!  Fortunately it didn’t come to that in the end, but this policy introduced extra risk of disastrous outcomes for no gain whatsoever.)

Compare Dr. Ladapo’s argument in the WSJ that “Doctors should follow the evidence for promising therapies. Instead they demand certainty.” (Steve Kirsch expands on the complaint.) Again, this is a very basic form of irrationality that we’re seeing from the medical establishment.

Misguided perfectionism has also damaged the vaccine rollout due to prioritizing complex allocation schemes over ensuring that as many people are vaccinated as quickly as possible. (Some are letting doses spoil rather than “risk” vaccinating anyone “out of turn”!)

More examples are discussed here.

Do read the whole thing.

HT2 Daniel Shapiro.

 

 

 

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The new (center) left

In recent years, the reporting at The Economist has moved somewhat to the left. Here’s a recent example:

But the assumption of rational self-interest constrains the welfare state significantly. Generous benefits, and the high taxes needed to fund them, will put rationally minded people off work, undermining economic growth and the government’s capacity to help people in need.

In practice, though, Mr Saez explained, the world works differently. . . .

Employment rates for prime-age men are remarkably similar across rich countries, Mr Saez pointed out, despite big differences in tax and welfare systems. Average tax rates in France are roughly 20 percentage points higher than those in America across the income distribution, yet about 80% of middle-aged men work in each country. (Americans do work more hours, but, as Mr Saez noted, this too reflects social choices, such as the shorter working week specified in French law.) There is strong social pressure for healthy men not to be seen as “freeloaders”, which pushes against the incentives created by higher taxes or bigger welfare cheques. Where social pressures to work are more ambiguous—as for the young or old or, in many places, women—generous benefits tend to have larger effects on employment decisions, Mr Saez noted. But this reinforces rather than undercuts the idea that social factors have important effects on economic decisions.

This isn’t exactly wrong, but it seems a bit misleading.  The tone of the article is sort of dismissive of conservative arguments that the welfare state discourages work, but the actual empirical evidence suggests that it discourages work among the young, the old, women, and among men it leads to shorter work hours.  This is one reason why per capita GDP (PPP) is far lower in Europe than in America. It’s not true that “the world works differently”; it works exactly the way that classical economic theory predicts.  The European welfare state makes Europe a much poorer place.  That may be fine (perhaps people prefer the extra leisure time), but it’s foolish to minimize the effect.

And to head off criticism, note that while some European welfare states have incomes well above the European average, so do some American states.  Lots of things affect income, not just welfare and taxes.

Over the past quarter century, the center left has shifted a bit left on public policy issues:

1990s-style neoliberalism                                2021 post-liberalism

1. Singapore style forced saving                  Expanded social insurance programs

2. Private infrastructure projects.              Public infrastructure projects

3. Progressive consumption taxes              Progressive income/wealth taxes

4. Fiscal responsibility                                   Deficits don’t matter

5. Monetary stabilization policy                 Fiscal stabilization policy

6. Low wage subsidies                                   Higher minimum wages

7.  Privatization                                                More aggressive antitrust

In 1996, Clinton ran for re-election on ideas such as “the era of big government is over” and “ending welfare as we know it.”  Fiscal stabilization policy was a complete non-starter.  We were moving toward budget surpluses, with an eye on the demographic time bomb created by lower birth rates and longer life expectancy.

Why the recent move toward a slightly more socialist approach to policy?  (Yes, it’s far from outright socialism, but for the most part the list above is not a move toward the Nordic model, at least the post-1990 Nordic model.)

Some might quote Keynes’s famous remark about how to respond to new information, but I’m not convinced that this can explain the shift.  I’m only an expert on one of the 7 areas above (stabilization policy), but in that one area I’ve seen a lots of bad arguments for the move toward fiscal policy, arguments that reflect a misunderstanding of macro theory and an ignorance of macroeconomic history.  So I have little confidence that the other 6 examples are any better justified.  Especially when I see dubious claims that a less effective policy (minimum wages) can be justified on the basis of being more politically acceptable than a more effective policy (low wage subsidies).  We have an EITC program!  And we have a new government where the Democrats have an easier time with new spending programs (requiring 50 senators) than regulatory changes (requiring 60 senators).

So what explains the shift?  I suspect it’s a mix of various factors.  Monetary policy failures like the Great Depression and the Great Recession are almost always misdiagnosed as a failure of capitalism.  The move toward an information economy has made income less equal.  The zero lower bound makes monetary policy seem less effective than it is.

More speculatively, the center right might feel increasingly comfortable viewing the center left as their “tribe”.  The days of P.J. O’Rourke’s “Republican Party Reptile” is long gone.  It’s no long cool to be associated with an ideology that has become increasingly nationalistic and anti-intellectual.  Meanwhile, the demise of communism has removed some of the taint from the left.  Media outlets such as The Economist and the Financial Times, and think tanks like the Niskanen Center, seem increasingly at home in the center left.

PS.  I used the term “post-liberal” as its relationship to liberalism is analogous to the relationship of post-Keynesian to Keynesianism. Similarly, modernism was followed by postmodernism.  In any case, neoliberalism is already taken, and neo-neoliberalism just sounds stupid.

 

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