Comparing Apples to Oranges: America versus Europe in the Response to COVID

I have listened to pundits and medical experts on networks from PBS to DW speak at length on the failures of America to adequately deal with the pandemic in comparison with European countries. Most recently, one of these sources cited Americas high fatality numbers as compared to other western European countries and specifically criticized the American system of states and federalism as presenting an unworkable patchwork of policies. One cited the per capita death rate as the highest of all. In both cases the point is misleading.

The direct nation to nation comparison of the US and specific European countries, without any differentiation as to their economic condition or level of population, is the most invidious of the two assertions. Setting aside concerns about how the counting is done, America, taken as one undifferentiated mass, does look worse in absolute numbers, but such one-to-one comparison commits the classic error of contrasting apples to oranges.

To make a meaningful comparison, we need to construct a proper basis by looking at countries that are similar in terms of economic organization and development. Then we have to combine those into a unit of population similar to the US. When that is done the figures don’t look all that different.

The US has a population at roughly 330 million people. Of the most advanced economies comparable in development, none of the western European countries separately comes anywhere close to that figure, but if we cobble together what could be called the big five, we can arrive at a unit that is acceptably close:

Germany : 83 million

UK: 68 million

France: 65 million

Italy: 60 million

Spain: 47 million

Total: 323 million

Now let us look at each country’s separate COVID death numbers:

US: 542,000

 

And each of the big five European countries:

Germany: 75,000

UK: 126,000

France: 92,305

Spain: 72,900

Italy: 105,000

Total: 471,205

 

If one then runs the per capita number that gives results for the US at approximately .0016 and for the European big five, .0014, a difference of only .0002. And now consider that in the US, the rate is slowing as we approach herd immunity through natural exposure and vaccination. Europe is again on the increase and has significantly botched its vaccine delivery. This doesn’t speak particularly well for the central administration in Brussels.

As for the per capita rate, the UK still has that record at, .0018 despite very severe lockdowns. New York has one of the highest rates in the US at .0025, and it was one of the sates with comparably severe lockdown policies.

From the numbers, it is hard to be happy with any country’s performance, but they do not indicate a failure of federalism. As we approach the end of the pandemic, there will be plenty of data to run through, but I suspect the more centralized forms of command and control will leave a lot to be desired. I for one would not advise putting all our apples in one basket—nor our oranges for that matter!

 

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Public Health Is Not What Many Think It Is

Many people seem to think that that “public health” is a scientific white knight. For sure, many medical experts in the public health movement do have real scientific knowledge, but the science stops there. The rest is essentially a political movement.

The Reason Foundation just published my primer on public health: “Public Health Models and Related Government Interventions: A Primer.” A few excerpts:

“In many respects,” says a major textbook of public health, “it is more reasonable to view public health as a movement than as a profession.”

With its wide definition, ideology, and scope, public health is as much as, or more of, a political movement than a field of scientific inquiry. Elizabeth Fee agrees with “the idea that public health is not just a set of disciplines, information, and techniques but is, above all, a shared social vision.” This  hared social vision is not founded on the respect of the preferences of all individuals and an attempt to find social institutions that can best reconcile them, but on the idea that some experts, or perhaps a democratic majority that agrees with them, should impose their values and trade-offs on other individuals in society. The progress of public health appears closely tied to the collectivist ideologies that developed in the 19th century. At the beginning of the 20th century, medical educator Harvey Jordan of the University of Virginia predicted that in light of eugenics and “the general change from individualism to collectivism,” medicine would be transformed into public health, and that physicians would upgrade from “doctors of private diseases” to “guardian of the public health.”

One factor in the drift of public health toward total government care has been a non-scientific conception of society.

The ideological content of the public health movement is visible there: a priori, they believe the issue is a matter of collective choice, that is, of imposing a politically determined opinion and behavior on those who don’t agree, instead of leaving it to individual choices. There is no recognition of the existence of two distinct facets of human activity: it is one thing for science to determine (at least provisionally) what are the health consequences of different actions; it is another thing to impose one course of action on those individuals who would make different trade-offs. In the perspective of this paper, truth is a matter of scientific inquiry; choice is a matter of individual preferences (with some exceptions).

Few economists should fail to see how anti-scientific this ideological movement is in matters relating to society, politics, and economics.

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Proactive and reactive policies

New York magazine has a good article on Covid-19:

“Basically, going back to January, they’d be like, ‘China’s not going to control it; 80 percent of the population is going to get it; all efforts to contain it are going to fail; we have to learn to live with this virus; contact tracing and testing make no sense; this is going to be everywhere; right now we need to build up hospitals’ — which they didn’t even do. But they really didn’t think it was stoppable,” she says. “And then all of a sudden you started to see, in February, South Korea stopping it, Taiwan stopping it, and China stopping it. Then, in March, New Zealand. And then Australia. And then there’s this realization of, ‘Oh, wow. Actually, it is controllable.’”

At the beginning of March, South Korea was averaging more than 550 new daily confirmed cases, compared with just 53 in the U.K. At the end of the month, South Korea had 125; the U.K. was at 4,500 and climbing. “In the UK we have had nine weeks to listen, learn and prepare,” Sridhar wrote angrily in the Guardian, berating the British regime for failing to establish basic systems for supplies, testing, and contact tracing.

Later they point out that things are not quite that simple:

Francois Balloux, an infectious-disease epidemiologist and computational geneticist at the University College of London, goes further. “It’s not obvious that different measures taken in different places have clearly led to different outcomes,” he says. “There’s a lot of idiosyncrasy, and I think it’s simplistic to say that the countries that have controlled or eliminated the virus did things extremely differently. If you just list, for instance, the interventions that places like New Zealand or Australia have implemented, they’re not drastically different — in stringency nor duration — than in some other places. The country that had the strictest lockdown for longest in the world is Peru, and they were absolutely devastated. I think the slightly depressing message,” Balloux says with a sigh, “is that there is not just a set of policies that will bring success and can just be applied to any place in the world.”

So how can we reconcile these two conflicting narratives?  First we need to distinguish between public policy and behavior.  I suspect that the relatively low level of Covid deaths in some areas of the US (Washington, Oregon, Utah, Northern New England and even the SF Bay area of California) has more to do with culture than public policy.  People behave differently in different parts of the US.  If death rates in the Pacific Northwest and northern New England are similar to those in Canada, is it so far-fetched to believe that their culture also resembles Canada more than it does much of the rest of the US?

But the big international differences may require an additional explanation.  Reading the NY magazine article, I was immediately reminded of the global recession of 2008-09.  I’ve argued that the recession was caused by tight money policies, especially in the US and Europe.  But why was Australia able to avoid a recession?  Their central bank didn’t do any QE, and didn’t even cut interest rates to zero.

In fact, what to the average person looks like an “easy money” policy is often the exactly opposite.  It’s precisely because Australia had a more expansionary policy early in the recession that they were able to avoid some of the more “reactive” policy measures employed elsewhere during the 2010s.  Similarly, the US was a bit more (proactively) aggressive than the ECB during 2009-10, and as a result the ECB ended up being forced to do aggressive (reactive) QE and negative interest rates in the middle 2010s.

So if you see news stories of positive interest rates in Australia during the global recession of 2008-09, do not conclude that easy money is not stimulative.  And if you see news stories of restaurants being open in Taiwan, Australia and New Zealand during the Covid pandemic, do not conclude that social distancing is not helpful.  Rather the positive interest rates are a sign that Australia took proactive steps to prevent a deep fall in NGDP growth, and the open restaurants are a sign that they got on top of the pandemic early on, with an aggressive policy aimed at driving Covid rates down close to zero.

There’s another interesting comparison between Covid and the 2008-09 recession.  In both cases, bloggers were often ahead of the experts in diagnosing the problem and recommending appropriate policies.  Bloggers pointed out that the Fed’s October 2008 decision to begin paying interest on reserves would have a contractionary effect.  Today, that criticism is widely understood as being correct.  Indeed in his memoir, Ben Bernanke acknowledges that monetary policy was too tight after Lehman failed.  Similarly, bloggers like Alex Tabarrok and Tyler Cowen have been consistently right in their criticism of the public policy response to Covid.

PS.  The US is currently at 1670/million Covid deaths.  Canada is at 595/million, or halfway between Utah and Oregon.  Here are the lowest 7 states:

Note:  The 15 highest Covid death rates are in both northern and southern states, as well as both urban and rural.

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Did Price-Gouging Laws Increase Covid Deaths?

An interesting working paper was published this month by economists Rik Chakraborti (Christopher Newport University) and Gavin Roberts (Weber State University), “How Price-Gouging Regulation Undermined COVID-19 Mitigation: Evidence of Unintended Consequences.”

These price controls created shortages, which, according to economic theory, would have been more severe in the 42 states that already had price-gouging laws on the books or (inexplicably for an economist) rushed to legislate them after Covid hit. The federal Defense Production Act, invoked by Donald Trump, added more biting price controls on pandemic-related supplies (such as personal protection equipment) but is not considered in the Chakraborti-Roberts paper.

The authors used a database of cellphone-tracked mobility to calculate “average exposure of smartphones to each other within commercial venues.” Comparing states with and without price-gouging laws between January 22 and May 3, 2020, the econometric study confirmed that these laws were associated with more physical visits to commercial venues (especially from individuals in the lowest income quartile), as people were frantically looking for sanitizer and other goods in shortage. This increased shopping is likely to have increased contacts and infections. After controlling for state population density (which can have a compounding effect on infection), lockdown orders, and other factors, the econometric estimates suggest that price-gouging laws explain at least 25% of the early-April, first-wave Covid deaths in states with such laws.

We’ll have to see if these results are confirmed by other studies but they make economic sense. The regulatory welfare state may not be as nice as we thought, at least in its consequences. As for intentions, an old saying in many languages suggests that the road to hell is paved with them.

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Should AstraZeneca Vaccine Be Paused?

Millions of people in dozens of countries have received the AstraZeneca Covid vaccine with few reports of ill effects, and its prior testing in tens of thousands of people found it to be safe.

But recently, blood clots and abnormal bleeding in a small number of vaccine recipients in European countries have cast doubt on its safety, although no causative link has been found between the patients’ conditions and the vaccine. The reports have prompted more than a dozen countries to either partly or fully suspend the vaccine’s use while the cases are investigated. Most of the nations said they were doing so as a precaution until leading health agencies could review the cases.

This is from Denise Grady and Rebecca Robbins, “Should You Be Concerned About Blood Clots, Bleeding and the AZ-Vaccine?,” New York Times, March 15, 2021.

The countries that have paused include Germany, Italy, France, Spain, Denmark, Ireland, Norway, the Netherlands, and Iceland.

This makes no sense, but it is, unfortunately, not so unusual for governments to substitute their own risk assessments for those of their sheep citizens.

There’s such an obvious solution: have the governments of those countries warn people that there might be blood clots, tell them the data, and leave them free to choose. I guarantee that millions of Europeans would be willing to take the small risk of blood clots and go ahead and get vaccinated.

Oh and, by the way, my solution applies to the United States, whose government is even worse: the Food and Drug Administration has not yet allowed people to take the AstraZeneca vaccine.

Economist Thomas Sowell is famous for saying “There are no solutions. There are only tradeoffs.” I don’t agree. I’ve just given a solution, one that lets people make their own tradeoffs.

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The Pandemic in Europe and America

The pandemic evolution now appears to be more worrying in Europe than in America, as illustrated by the graph below reproduced from yesterday’s Wall Street Journal (Marcus Walker, Bertrand Benoit, and Stacy Meichtry, “Europe Confronts a Covid-19 Rebound as Vaccine Hopes Recede,” March 12, 2021). In France, for example, after two very long and restrictive (even tyrannical) national lockdowns, ICUs are close to 80% capacity. The Wall Street Journal explains:

Europe’s efforts continue to suffer from the EU’s slowness in procuring and approving vaccines, production delays at vaccine makers, and bureaucratic holdups in injecting available doses.

The “production delays at vaccine makers” are most likely due to the fact that the EU government has not purchased them in time while, of course, there as in America, individuals and private organizations cannot purchase them.

Those who have read Ayn Rand’s famous novel may wonder if Atlas is shrugging more visibly in Europe than in America. As for those Europeans who put all their faith in an omniscient and all-powerful welfare state, they seem deeply disappointed (although they may be asking for more). In Germany, 30% don’t trust the competence of Angela Merkel’s center-right government and trust even less her center-left parliamentary allies.

The progression of new covid variants in Europe may be an immediate culprit, but a major reason for that is that European governments, under the punctilious EU government, have been slower than the US government in making vaccines widely available to the public.

Yet, the vaccine rollout in America has not been a marvel of federal or state planning. Four months after Pfizer announced the completion of its clinical trial, three months and a half after it started delivering doses to the United States, and three months after the vaccine was approved by the FDA, only 10% of Americans are fully vaccinated and another 10% have received a first dose (according to data from the Wall Street Journal). As far as we can see, this was, although not exactly warp speed, fast enough to prevent the variants from outrunning the building of herd immunity. This relative American success was achieved with much fewer restrictions to individual liberties than in most European countries. Federalism and popular resistance have been a big advantage.

It is notable that Pfizer and its partner BioNTech were not full-fledged participants in Operation Warp Speed. Pfizer did not accept research funding to develop its vaccine. The New York Times explained (“Was the Pfizer Vaccine Part of the Government’s Operation Warp Speed?” November 10, 2020):

In July [2020], Pfizer got a $1.95 billion deal with the government’s Operation Warp Speed, the multiagency effort to rush a vaccine to market, to deliver 100 million doses of the vaccine. The arrangement is an advance-purchase agreement, meaning that the company won’t get paid until they deliver the vaccines. Pfizer did not accept federal funding to help develop or manufacture the vaccine, unlike front-runners Moderna and AstraZeneca.

Pfizer CEO Albert Bourla made that clear (see “Leading Covid-9 Vaccine Makers Pfizer and Moderna Decline Invitations to White Summit ‘Vaccine Summit’,” Stat, December 7, 2020):

Bourla later defended the decision to decline federal research and development funding, citing a desire to “liberate our scientists from any bureaucracy” and “keep Pfizer out of politics.”

Except perhaps for that, the pandemic does not provide a strong confirmation of the benefits of American free enterprise. There may be more free enterprise in America than in Europe, but it’s a matter of degree. In America too, the distribution of the vaccines has been basically a governmental affair. And think about the “price-gouging” laws that have prevented market price adjustments in 42 states, not counting the Defense Production Act at the federal level. (See Rik Chakraborti and Gavin Roberts, “Anti-Gouging Laws, Shortages, and Covid-19,” Journal of Private Enterprise 35:4 (2020), pp. 1-20.)

Perhaps the administrative-welfare state, in both Europe and America, is not as good as we thought?

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The case against COVID lockdowns, well argued.

On the website of the Center for Study of Partisanship and Ideology, a newly formed (2020) organization which I’ll make a point of following closely, there is a very good article by Philippe Lemoine (a Ph.D. candidate in philosophy at Cornell University). Lemoine is making the case against lockdowns. I am biased in favor of such a position, so I may be easily persuaded, but I think Lemoine argues it very well, in a tone which is sensible and takes into account the- understandable- worries of pro-lockdown people, and so may persuade others who have a different view. His reasoning is nuanced; he points out that policy decisions aren’t the only thing that affect the way the pandemic is progressing. He tries to do something which should be obvious but has so far been unthinkable: discuss costs and benefits of different non-pharmaceutical measures, instead of interpreting measures as a proxy of a broader political worldview.

There are many insights in this piece but let me just single out one:

if you look at the data without preconceived notions instead of picking the examples that suit you and ignoring all the others, you will notice 3 things:

• In places that locked down, incidence often began to fall before the lockdown was in place or immediately after, which given the reporting delay and the incubation period means that the lockdown can’t be responsible for the fall of incidence or at least that incidence would have fallen even in the absence of a lockdown.
• Conversely, it’s often the case that it takes several days or even weeks after the start of a lockdown for incidence to start falling, which means that locking down was not sufficient to push R below 1 and that other factors had to do the job.
• Finally, there are plenty of places that did not lockdown, but where the epidemic nevertheless receded long before the herd immunity threshold was reached even though incidence was increasing quasi-exponentially, meaning that even in the absence of a lockdown other factors can and often do cause incidence to fall long before saturation.

Read the whole thing. HT Don Boudreaux and CafeHayek.

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Boris Johnson’s reopening plan

On Twitter, Ryan Bourne links to a series of tweets by Ben Riley-Smith, the political editor of the Daily Telegraph, on Boris Johnson’s reopening plan. Ryan’s comment is: “Why are the UK guidance and laws so much more specific and prescriptive than anywhere else? Absurd level of micromanagement”. If you read Riley-Smith’s tweets (which, if I understand correctly, are based upon political rumor), you will indeed be left with a similar question.

It is notable, and troubling, how much “planning” has been going on in these matters. This is the consequence of an approach of fighting the pandemic in which most governments renounced early on the idea of using rules, as general as possible in these difficult times, and choosing instead a discretionary approach. Discretion has two benefits: on the one hand, it allows for faster adaptation as the pandemic situation evolves. On the other hand, it makes it easier for people in power to claim credit for whatever advancement recorded in the struggle with the virus.

But by using prohibitions and bans, rather than rules, and emphasizing the government’s power to impose and revise plans for the whole of society, we are wasting the opportunity to mobilize knowledge and creativity on a larger scale. Your grocer is not an epidemiologist, and his opinions on the virus’ variants, for example, are unlikely to be particularly well-founded. But if you tell him that he can have a certain number of people per hour / per square meter in his shop, or that he can stay open provided he copes with a certain degree of social distancing, he is likely to busy himself in contriving ways to keep open and complying with the rule at the same time.

Since the virus is a collective problem, governments have all somehow assumed that there can be no bottom up solutions. But the “struggle against the virus”, by any practical purpose, is in fact a series of attempts and actions aiming at keeping our lives together and similar to what they were before, as much as possible despite the pandemic. These attempts and actions could benefit a great deal from bottom-up, trial-and-errors endeavor. Governments have chosen to do without them. This may increase the costs of non pharmacological interventions, but it also means that we won’t benefit from tinkering solutions. It is an old story: the government assumes its experts have superior knowledge. When it comes to the virus, it is likely to be true. When it comes to how to adapt our lives to the fact the virus exists, perhaps no.

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Serbians’ Freedom to Choose

Serbia has adopted an approval mechanism for vaccinations, giving citizens the option to choose which vaccine they want to get and in which location they want to get vaccinated.

This makes Serbia the only country in the world where citizens can choose the vaccine type, between shots from Pfizer-BioNTech, China’s Sinopharm or Russia’s Sputnik.

This is from Sara Mageit, “Serbia reaches one million vaccines with help of AI framework,” Healthcare IT News, February 23, 2021.

There are 6.9 million people in Serbia, of whom over one million have received their first dose of vaccine. That’s 14.5 percent of Serbia’s population.

Let’s compare that with the United States.

64 million doses have been distributed in the United States. 64 million is 19.4 percent of the U.S. population, which makes the U.S. look better than Serbia. But that would be if everyone who got a shot here got just one shot. Such a policy would be quite sensible. But it’s not the one that U.S. governments have chosen. 13.3 percent of the U.S. population have received at least one dose. 13.3 percent of 330 million is 43.9 million people.

So 20.1 million people in the United States have received 2 doses and 23.8 million have received 1 dose.

Since 2 doses isn’t much better than 1, a reasonable comparison would be between our 13.3 percent and Serbia’s 14.5 percent. In other words, almost a dead heat (because getting 2 doses is slightly better than 1 dose.)

Interestingly, 14 U.S. states plus the District of Columbia have populations in which the percent having received at least one vaccination exceeds 15 percent. 3 states (Colorado, Iowa, and Wisconsin) have exceeded 14% but not 15%.

 

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Charley Hooper on Masks

I posted recently about the discussion between Phil Magness and Jeremy Horpedahl about mask mandates to deal with COVID-19. My sometimes co-author and former student Charley Hooper wrote the following on masks in a recent email. He’s given me permission to share it. The bottom line: the evidence in favor of masks, let alone mandates, just does not seem to be there.

Here’s Charley:

The only randomized controlled trials conducted to study the effects of wearing masks and washing hands show that those two preventative techniques don’t significantly reduce the spread of the influenza virus. In some studies they help a bit. In other studies, they hurt a bit.

“Although mechanistic studies support the potential effect of hand hygiene or face masks, evidence from 14 randomized controlled trials of these measures did not support a substantial effect on transmission of laboratory-confirmed influenza.”

[Source: https://wwwnc.cdc.gov/eid/article/26/5/19-0994_article]

Why did I mention influenza and not COVID? COVID-19 is supposed to be transmitted by the same mechanism as influenza and influenza has been around long enough to be better studied.
The Xiao study referenced above contains this shocking admission: “It is essential to note that the mechanisms of person-to-person transmission in the community have not been fully determined. These uncertainties over basic transmission modes and mechanisms hinder the optimization of control measures.” Scientist don’t have a handle on how the flu transmits throughout the community. If you don’t know that basic fact, it’s pretty hard to effectively prevent the transmission of influenza! By extension, I think it’s safe to say that scientists don’t understand how the SARS-CoV-2 virus is transmitted.
The influenza virus can last about five minutes on a human hand. (“Virus survived on hands for up to 5 min after transfer from the environmental surfaces.”) I suspect that the SARS-CoV-2 virus lasts about the same length of time on hands.
Therefore, if you don’t wash your hands but also don’t touch your eyes, nose, or mouth shortly after touching an infected surface. you should be fine.
There was one randomized controlled trial of the use of face masks to prevent COVID-19. The study was conducted in Denmark in April and May 2020. The results were not statistically significant but showed that the mask group suffered a 1.8% infection rate while the control group suffered a 2.1% rate (95% confidence intervals = 46% reduction to 23% increase due to masks). In other words, masks helped but were not a panacea.
Other studies show the benefits of wearing masks, but they are correlational, population-based studies that identify relationships but don’t necessarily prove cause and effect. I’m not saying that masks don’t work. I’m instead highlighting some of the scientific uncertainty around the use of masks. With this uncertainty, COVID absolutism is unjustified and harmful.
The rule seems to be that the less people understand about something, the more adamant their beliefs.

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