Covid Caution and Curry

On March 17, my favorite NBA player, Steph Curry shot a 3-pointer and then, as is his wont, backpedalled. The problem: he was backpedalling off the sideline instead of down the court and there was no barrier to stop him. In a normal game, there would have been some normal barrier to stop his going backward, whether the barrier be other chairs that players were sitting on or something else.

But because of Covid cautions, there are large spaces between chairs and so as Steph went backward, he didn’t stop until his tail bone came in hard contact with some metal stairs. Go to this link and page down to the 38-second video if you want to see what happened. But be prepared to watch something painful.

Why do I highlight this in an economics blog? Because it illustrates in microcosm the failure to make reasonable tradeoffs to deal with Covid-19. We know that Covid-19 is not particularly risky for young people and especially for young people without co-morbidities. NBA players are not a random sample; their physical fitness certainly puts them in the top 1 percent and maybe even in the top 0.1 percent of people their age, let alone of all ages. (And maybe in the top 0.01 percent.) The probability that Steph Curry would get badly sick from Covid, even if he didn’t get the shot, is really low. But the NBA did not make the tradeoffs the way I would have. I’m not challenging their right to do so: it’s their arena, pun not intended. I’m challenging the bad thinking behind their decision.

We often hear from the behavioral economists like Richard Thaler and  behavioral legal scholars like Cass Sunstein about “availability bias.” The idea is that people pay attention to what’s most prominent, not to what’s most likely. Where oh where are Thaler and Sunstein? Shouldn’t this be their moment to shine by pointing out how absurd some of these policies are?

 

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Cost/Benefit Analysis or Rock, Paper, Scissors

President Reagan began regulatory reform with Executive Order 12291, titled simply “Federal Regulation”; President Clinton watered it down with EO 12866; and President Trump beefed it up with EO 13771 (“Reducing Regulation and Controlling Regulatory Costs”) and EO 13777 (“Enforcing the Regulatory Reform Agenda.”) The executive orders required a cost/benefit analysis to assure that the costs of major regulations would be compared with their benefits. But on his first day in office, President Biden revoked those executive orders with his own memorandum titled “Modernizing Regulatory Review.” If you read the memorandum carefully, you’ll see that the word “modernizing” is inapt. Indeed, the memorandum would more accurately be labeled “Replacing Cost/Benefit Analysis with Rock, Paper, Scissors.”

This is from David R. Henderson, “Open Season For New Regulations,” Defining Ideas, February 4, 2021.

Another excerpt:

But even if that weren’t a problem, there are two other major problems. First, notice that the OMB is being put in a position not so much to screen regulations as to propose them. Does this mean the agencies will quit proposing regulations and passively await direction from the OMB? No way. Indeed, the memorandum reads as if President Biden is proposing that OMB be a cheerleader for new regulation. He states that he wants OIRA to “play a more proactive role in partnering with agencies to explore, promote, and undertake regulatory initiatives that are likely to yield significant benefits.” Rah, rah, sis boom bah.

The second major problem is one that anyone with much experience dealing with bureaucracy will probably notice: with so many possible criteria, regulators will have running room to implement regulations they like because those regulations pass some criteria even while they fail others. The regulators might, for example, choose a regulation that promotes public health and safety but at the expense of economic growth. Without cost/benefit analysis as a guide, how will they trade off between these two criteria? Any way they like.

Note also the disappointment I express with Cass Sunstein’s take. He should know better.

Read the whole thing.

 

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