Posts tagged: coronavirus

Economic vs Human Costs Under Conditions of Uncertainty (Not Risk)

We are presently suffering from a once-in-a-lifetime viral pandemic, and the only way to keep millions from dying is to shut down large parts of the economy. The economic costs are staggering, but we might keep hundreds of thousands of people alive, and millions more from bad health, lung damage, and the like. A lot of people, especially some conservatives and libertarians, are chafing under the restrictions. Their concerns are reasonable: the costs of the shutdowns are staggering! But I fear this is tempting many into conclusion-driven reasoning: “Oh, the reasons for the shutdown are based on bad models, but the economic costs are real, so let’s relax and stop freaking out before we destroy ourselves economically.” People are desperate for some degree of certainty so that we can figure out how to avoid paying all of these costs.This is part of what has driven the recent, severe, and frankly well-earned embarrassment of Richard Epstein for making predictions. He was almost certainly reasoning backwards: economic destruction and lost liberty are bad, and so the viral threat necessitating those costs must be being overblown. I’ve seen this all over Facebook as well.

But there’s also an error in the other direction. “Economic” costs are human costs. Human beings suffer, and often die, when they are poorer and out of work (though oddly it looks like human morality in the US has fallen off a cliff this year). Folks mocking people for caring about the economic costs aren’t taking the economic costs seriously enough and seem to prefer dehumanizing their opponents to figuring out a constructive solution.

Here’s the trouble for both sides, though: we lack the information necessary to determine, or even begin to determine, who is correct. And that’s because there’s a lot we don’t know about COVID-19, in particular its true fatality rate and how widespread it is at present. Because of that, we don’t have a sense for how many people could die, with estimates between a few thousand to millions. If we knew that social distancing would save a million lives in the US, the “economy” side of the debate would be wrong, and if we knew social distancing would only save ten thousand lives in the US, the “human” side would be wrong.

But we not only lack certainty, we don’t even know the probabilities of these outcomes. We are in the condition that Frank Knight dubbed uncertainty. We don’t know that there’s, say, a 20% chance of 1 million people dying, a 60% chance of 100,000 people dying, and a 20% chance of 10,000 people dying. Even in that case, we could make trade-offs, and we could debate which trade-offs were correct.

Until then, we’re all going to desperately grasp for knowledge of probabilities, but we must be careful not to manufacture probabilities without the very best information available. Until then, well, we should … Well, I’m not exactly sure because I don’t know the probabilities. I guess extreme caution is called for? Precautionary principle, save us all!


Why Won’t Trump’s Approval Ratings Change?

Wars are known to create a rally around the flag effect, where presidential approval skyrockets, as does trust in government. This was true for George H. W. Bush, and for George W. Bush after 9-11, so in political conditions not wholly unlike ours.

So far, Trump’s approval rating seems locked in, though we saw a bit of an uptick yesterday. Regardless, few people approve of him more or less than they did before the virus shut everything down. It seems like our political tribalization is preventing any movement in approval ratings. Remarkably, we were fairly polarized in 2001, but W still got a huge effect, and now Trump gets next to nothing.

So what’s going on? Why did 9-11 help W but the new coronavirus hasn’t helped Trump much?

Here’s my best guess. In the case of 9-11, everyone came to have the same beliefs about it pretty quickly (and this months before 9-11 was falsely tied to Iraq). The human death toll was immediate and visible, and the culprits were visible in many ways as well. Moreover, it was expected that there would be a military response, and so people geared up to support the troops and whomever was going to lead them.

Things are different with the virus. First, beliefs about the virus remain somewhat polarized. Second, the human death toll is not immediate and is far less visible, and cannot easily be tied to a human culprit. Moreover, while we all have to change our behavior to beat the virus, we aren’t going to war. People aren’t going to get shot and killed fighting against an enemy so the bonding effect is smaller.

And yet, you would still expect something of a rally, right? What else is going on? Trump was already quite unpopular, far moreso than W, and people’s beliefs about him are extremely polarized, more than they were about W, even following the 2000 election. Further, Trump has had an inconsistent response to the virus, which I think has dampened the rallying effect as well. But if his behavior is more consistently seen as positive, then we should expect a modest rallying effect. I can imagine his approval rating getting up to 60% or s0, though that would surprise me somewhat. But it could go above 50% for a few weeks. It might be enough to win the election depending on how things go, but right now both Trump and Biden are below 50%!

“The Chinese Virus”

I posted this on Facebook the other day, but I thought I’d share it on the blog. I thought it might be worth offering some thoughts about why Trump and now many conservatives are calling the new coronavirus the “Chinese” virus. In my view, it is not *because* of racism, even if the term has racist consequences by leading Americans to, say, harass Chinese Americans. And the term wasn’t picked because it is “accurate” because Trump could have picked a bunch of other accurate names, like the CCP virus.

Here are a few possible reasons, some of which have occurred to Trump, but all of which have likely occurred to his elite supporters:

1. One of Trump’s longtime fears is China’s growing economic power. He’s been talking about this for decades. I think Trump and elite Trumpers want us to commercially decouple from China because he thinks it is bad for the US. By blaming China for the virus, he makes decoupling more politically viable. It was unthinkable a month ago. Now things are different. Fox is talking about being all pharma production back to the US. And some on the left seem sympathetic.

2. Trump and elite Trumpers wants to isolate China politically and weaken Xi because they think China isn’t a mere economic threat, but a political one too. If the world blames China for the virus, and indeed there are some grounds to blame the Chinese government, then that could weaken them greatly.

3. Trump and elite Trumpers recognize that Trump can win re-election if there’s a rally around the flag effect over the virus. If he can get the country to blame China rather than him, or to blame a visible foe rather than just an invisible virus, he may make the rally around the flag effect more likely. It might work too. If some of the blue tribe can be convinced that China is a bigger threat right now than the red tribe, they might be willing to vote for Trump.

Along these lines, I expect Trump is going to go after Biden hard for purportedly pro-China trade policy under Obama. Biden wants to remind us of Obama-era normalcy to boot Trump, but now Trump’s most potent line of attack is that Biden and Obama made us more dependent on China than we should have been. I’m not saying I agree with that, but I can imagine it being an effective line.

I want countries to be economically interdependent because I think it promotes peace and prosperity. But I sort of get not wanting the Chinese Communist Party, one of the most evil organizations in the world, to be able to deny us all our pharmaceuticals if they decide they want to. I don’t think they’d do it, but they’re engaged in mass murder and concentration camps right now, so maybe we should mistrust them.