Relevant and even prescient commentary on news, politics and the economy.

An Update on Shadow Government

An Update on Shadow Government

Not only is the current level of testing for the coronavirus insufficient, the tests themselves are flawed.  Read this summary by infectious disease specialist Michael Osterholm and a coauthor for particulars.  Their key policy conclusion is

A blue-ribbon panel of public health, laboratory and medical experts, ethicists, legal scholars and elected officials should be convened immediately to set out a road map with realistic goals for testing and contact-tracing.

If we had a reliable government, it would get this done, but we don’t.  Concretely, one of the main jobs of a shadow government organized by Democrats would be to assemble this group and give it a regular, high profile platform.

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We Need a Shadow Government

We Need a Shadow Government

Republican rule in the US is a horror show.  We get incoherent ramblings from our president on injecting bleach into our veins, calls for the states to file for bankruptcy from the Senate majority leader, a veto of modest IMF support for developing countries hammered financially by the virus, and a complete absence of guidance on the most crucial aspects of public health.

We already know this.

The greater tragedy is that the Democrats are barely better.  Their program, to the extent it makes sense to speak of one, is protecting the immediate interests of their key constituents.  This begins with the financial sector, and since the Republicans share the same commitment, their multi-trillion dollar bailout zipped right through.  Small business is also important to both parties, if not quite as much, and upwards of a billion will wend its way to them—via the banks, of course.  Lots of health sector money flows to the Democrats, and Pelosi and Schumer found a way to bail them out too.  Beyond this it has been hit or miss.  The unemployed will get greater wage replacement, even above 100% for the bottom end of the labor market.  There may be future money for the states.  A few billion for testing, and that’s about it.

What all this adds up to is top-heavy interest group protection.  It’s not a plan.

The irony is that informed opinion has largely converged in the two key areas of public policy.  To overcome the pandemic we need four things:

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Does Google’s Search Algorithm Protect the New York Times?

Does Google’s Search Algorithm Protect the New York Times?

Yesterday morning, after reading the Sunday New York Times, I posted two pieces on EconoSpeak within a few minutes of each other.  One was a short, cute little item (a visual grab from the paper) entitled “The Art of Juxtaposition”; the other was a longer, more substantial takedown of a deficit hysteria “analysis” I called “The Usual Deficit Blather from the New York Times”.

As usual, I monitored the posts through the day to see if they were being picked up anywhere.  This has become largely an exercise in nostalgia, since with the fading of the economics blogosphere there isn’t much to track.  What happened next was interesting, however.

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The Usual Deficit Blather from the New York Times

The Usual Deficit Blather from the New York Times

The Times today ran a truly execrable article warning us that, once the virus has passed, we will suffer dire consequences from the runup of government debt.  As most readers know, this argument is theoretically illiterate, derived from the false comparison between household and government debt.  We’ve been through this many times before, and I have nothing to add.

I do want to focus on one sentence, however, to illustrate how intellectual blinders can lead to absurd conclusions.

To quote the author, Carl Hulse, “In other words, the bill will come due, as it always does.”

Does it?  Check out total Federal debt measured as a percent of GDP:

As you can see, it skyrocketed during the 1940s, when the US went to war against Germany, Italy and Japan.  By the time the war was over it was at an all-time high.  Yes, we had to borrow to produce all the war materiel and send millions of troops around the world; no one doubts that.  But after V-E and V-J, how were public finances affected?

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World Chess Championship Ends

World Chess Championship Ends

The two best chess players in the world faced off this month, undeterred by lockdowns, travel bans or any other restrictions.  They never had to see each other either.

It helped that they were both computer programs.  The former champ, Stockfish, is the strongest of the traditional type of program, designed by humans and invested with all the fine points of judgment the best human players can translate into code.  Because of its tremendous calculating abilities, it is rated far higher than the top flesh and blood competitors: 3600 to 2800+ for Magnus Carlsen and his closest challengers.  (The numbers are measured on the Elo scale, named for physicist and chess enthusiast Arpad Elo, who developed it over 50 years ago.  Players’ scores rise and fall based on how they do against other rated players.  I had the pleasure, long ago, of sipping homemade cordial at Arpad’s modest home in Milwaukee.)

But the new top performer is lc0, Leela Chess Zero, a pure implementation of machine learning.  No one told it how to calculate or evaluate; it played millions of games with itself and learned through experience how to make the best moves.  As a result, it has odd blindspots (poor appreciation for fortresses, for instance) but also finds strategies no human would ever consider.  It has a rating a little higher than Stockfish’s, and the gap will be wider still after the latest match.

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CNN’s Slavish Service to Trump

CNN’s Slavish Service to Trump

I had to do a double-take when I saw this news item.  First came the headline, “Pence won’t let public health officials appear on CNN unless Trump’s disinfo briefings run in full”.  I thought, this is horrible: the administration is holding Fauci and Birx hostage to force CNN to cover not only them but also Trump in his daily blatherings.  But no, it was exactly the other way around.  Pence was keeping them from being interviewed on CNN unless the network also covered their regular briefings.  What CNN has been doing instead is broadcasting the Trump portion and then cutting away when people who actually have something to say step forward.

Bad enough that Trump has a high profile daily outlet for his ravings; it’s incredible the media would treat this as news and CDC updates as disposable filler.  I guess they think they are doing the guy a favor by giving him free media so he doesn’t have to buy as much.

This has been a peeve of mine for some time; see here and here.  We expect Fox to offer itself as a mouthpiece for Trump, but why should the self-designated “enlightened” wing of journalism be just as craven?  Yes, the owners care more about ratings than the political consequences of their coverage, but why do working journalists go along without a peep?  What would it take to get through to them?

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Lessons from the Pandemic

Lessons from the Pandemic

First, all who produce things we need or want are “essential workers”.  Health care practitioners are essential, but so are the people who stock pharmacies and grocery and hardware stores or staff customer service phone lines.  Truck drivers are essential.  Farmworkers who pick the crops we plan on eating are too.  Nothing demonstrates whose work matters in this world better than a pandemic that threatens to pull them off the job.

Second, because they are essential, whatever these workers need is what we all need.  If they need a bus to get to work, we all need that bus.  If they need childcare, we all need it.  Obviously, if they need healthcare or time to stay home and get over an illness or tend to their kids, that’s our need too.  And if they need a paycheck that provides secure housing, covers their expenses and gives them a chance to recharge their batteries periodically, we all need them to have it.

A virus does not respect the boundary of skin, the line we draw between ourselves and others.  It tells us that “we” is not just an idea or an attitude, but real economic and physical interconnection.  It’s true that we are not all in the same boat, that the burden of this pandemic falls unequally according to how much money we have, what neighborhood we live in and how much respect we get from those with power over us.  But those inequalities were always in front of us if we were willing to look.  It’s the interconnectedness that is suddenly starkly visible.

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The Climate Crisis and the Green New Deal

The Climate Crisis and the Green New Deal

The Covid-19 pandemic won’t last forever, and at some point we will have to return to figuring out how to respond to the climate crisis.  (What a depressing opening line.  No, I have no desire to live in a world of permanent crisis.)  Is the answer a Green New Deal?  Challenge has just published my analysis of this; you can find the link here.

Abstract: The Green New Deal, an attractive agenda of increased investment in energy efficiency and renewable energy sources, is not remotely sufficient to stabilize global warming at a non-catastrophic level. Such a policy needs to be accompanied by direct measures to curtail the use of fossil fuels, although this may complicate the intended messaging.

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Richard Epstein: Peak Dishonesty

Richard Epstein: Peak Dishonesty, Econospeak

Epstein is the doyen of libertarian legal theorists. Larry Tisch Professor of law at NYU and a senior fellow at the Hoover Institution, he has vast influence throughout the conservative world, including the White House.

His latest jag is calling for an early end to isolation policies to contain the coronavirus. In a nutshell, his argument is that the virus responsible for this pandemic exhibits a range of toxicities, and that evolutionary forces will naturally and fairly quickly shift this distribution toward milder strains. He claims that happened earlier with HIV, which is now (in his view) no longer much of a threat. He thinks epidemiologists are essentially charlatans, promulgating an approach to modeling viral transmission and severity that ignores his superior understanding.

He was interviewed by Isaac Chotiner of the New Yorker (hat tip: David Dayen), who gave him a hard time about his self-certainty that he is right and all the health professionals are wrong. But that’s not what I want to talk about.

Here is an excerpt from the transcript as published by the New Yorker:

Epstein: ….I do think that the tendency to weaken is there, and I’m willing to bet a great deal of money on it, in the sense that I think that this is right. And I think that the standard models that are put forward by the epidemiologists that have no built-in behavioral response to it—

Chotiner: And you’re not an epidemiologist, correct?

Epstein: No, I’m trained in all of these things. I’ve done a lot of work in these particular areas. And one of the things that is most annoying about this debate is you see all sorts of people putting up expertise on these subjects, but they won’t let anybody question their particular judgment. One of the things you get as a lawyer is a skill of cross-examination. I spent an enormous amount of time over my career teaching medical people about some of this stuff, and their great strengths are procedures and diagnoses in the cases. Their great weakness is understanding general-equilibrium theory.

That last sentence brought back memories.

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