Michael Fumento and Nouriel Roubini

During the late 1980s, I recall being greatly influenced by Michael Fumento, the author of “The Myth of Heterosexual AIDS.” I never read his book, but when I read an earlier article he wrote and then looked at the data, it was pretty clear that people in America were not at a high risk of contracting AIDS via heterosexual intercourse.

Razib Khan says that he was also convinced by Fumento’s argument. Then Khan points out that after correctly anticipating that various epidemics would be less severe than forecast, Fumento incorrectly forecast that the coronavirus would not turn out to be a major global pandemic.  Here’s Khan’s explanation:

What’s going on here? Fumento clearly knows a lot about the spread of infectious disease. He has a historical perspective. But perhaps he has too much? I’m old enough to remember the 1990s Ebola scare, SARS, H1N1, and, the second Ebola scare. It is entirely true to assert that these were sensationalized by the press. For various reasons, all of these outbreaks did not spread into a very lethal pandemic.

COVID-19 seems to be in a different category. Fumento talks about SARS and H1N1. It is important to remember that China did not shut-down in the way it did for COVID-19. They perceived it to be different, and it was. The best of models often don’t plan out. That’s why my own early alarmism was driven by the reaction of the Chinese authorities in Hubei. They clearly thought this was very dangerous.

I still think there is room to dissent from excessive panic and the hyperventilating of the press and its amen corner among the cultural elites. But it needs to be done calmly and judiciously.

That’s also my view.

This case reminds me a bit of Nouriel Roubini, who became famous when he correctly forecast the housing collapse and subsequent recession in the 2000s.  Roubini has a long history of being relatively bearish, at least much of the time since 2003.  Thus he’s been criticized for being overly bearish during periods when, in retrospect, it was a good time to buy stocks.

It seems to me that we expect too much from forecasters.  No one can predict all the twists and turns of world history.  Successful forecasters often have one key insight, and that insight allows them to be ahead of the curve when it fits the situation and the general public lacks that insight.  For Roubini, the insight was that financial “black swans” are a bigger risk than many of us assumed.  For Fumento, the insight is that human’s often overreact to scary sounding viral outbreaks.

Most viral outbreaks are not catastrophic, and hence Fumento will be right more often than not.  The stock market has had a strong upward trajectory for a century, and hence bears like Roubini will often be wrong.

But people remember the big issues, the unusual events.  Roubini will always be remembered for his correct prediction of the Great Recession, and Fumento better hope that he doesn’t end up being remembered for getting the coronavirus wrong.

Speaking for myself, I’m more like Fumento.  I’m more likely to predict that people are overreacting to whatever comes along, as frequent readers of my blog may have noticed.  Black swans are very rare, and hence the prediction most likely to pan out is that that fuzzy outline of a bird you see flying in the distance is just a robin or sparrow, not a black swan.

Each year I predict that the Chinese economy will not crash and until it does I’ll be correct.  Of course when it does finally crash then people will remember my foolish optimism, and forget all the previous times I was right and the China bears were wrong.

I can live with that.

PS.  This Econlog post on the EMH covers similar ground from a different perspective.



31 Responses to “Michael Fumento and Nouriel Roubini”

  1. Gravatar of Gene Frenkle Gene Frenkle
    13. April 2020 at 10:41

    I read about HIV transmission in light of this pandemic and my takeaway is that there is a place for “grievance studies” in the humanities but not nearly to the degree that we have in our universities. So had we had a better grasp on the behavior of homosexual men then we could have stopped that epidemic much faster than how it tragically transpired.

  2. Gravatar of Ray Lopez Ray Lopez
    13. April 2020 at 13:12

    OMG, our host is politically incorrect when he says: “During the late 1980s, I recall being greatly influenced by Michael Fumento, the author of “The Myth of Heterosexual AIDS.” I never read his book”

    So Sumner is saying: (1) Magic Johnson is gay, and (2) Sumner judges a book by its cover (or title), without reading it?

    Like Cool Hand Luke and the fifty eggs, you have to admire Sumner for such startling prose, though you probably don’t want to emulate him.

  3. Gravatar of Todd Kreider Todd Kreider
    13. April 2020 at 13:13

    In early March, I tried to get a range of deaths after a spring and fall run from coronavirus by using what I thought were on the realistic side of percent affected and the U.S. mortality rate. Of course, I’m not an expert but high estimates are almost always wrong and came up with 50,000 to 500,000 deaths. That 500,000 number looked too high and after listening to a couple of epidemiologists, I was quite sure that at least in spring deaths would be under 100,000 and likely over 30,000.

    On March 23rd, I could see patterns in larger European countries after tracking those for a couple of weeks as well as the U.S. for the decreasing increase in the number of cases so extrapolated a 1% a day drop which ended on Earth Day at 1%. I then multiplied by a mortality range of what I was currently seeing, 1.2% to 1.7% and came up with 35,000 to 50,000 deaths. Knowing this was a shaky methodology because I didn’t know the mortality rate, I doubled the top number so again, under 100,000. Two days later, the U of Washington group predicted 81,000 with a range of 36,000 to 162,000.

    The U.S. increase in deaths patterns began to emerge so on April 7, I extrapolated that the increase in deaths would decline 1% a day, which again would be 1% around Earth Day at 40,000 with 400 deaths a day. Not surprisingly, that’s been on track for the past six days. But deaths will continue at the end of April and into May so added 20,000 with 50,000 my most likely number. Two hours later I saw the U of Washington change it’s most likely prediction to 60,000 deaths.

    It must have been clear to most epidemiologists that there would be under 100,000 deaths by June for some time.

  4. Gravatar of Ray Lopez Ray Lopez
    13. April 2020 at 13:18

    @Todd Kreider – “It must have been clear to most epidemiologists that there would be under 100,000 deaths by June for some time.” – you mean epidemiologists are also fortune tellers? R0 changes depending on group behavior. If the group stays indoors (social distancing) R0 drops below 1.0 and the infection dies.

    Analogy: a bunch of juvenile delinquents take a remedial English class, with no regard for books or the teacher. The teacher predicts failure. Much to everybody’s surprise however, these punks not only redouble their effort at learning, but end up quoting Shakespeare and winning awards for literacy. So the teacher who initially predicted failure is a dunce? I don’t think so. But that’s what you’re saying about the epidemiologists.

  5. Gravatar of ssumner ssumner
    13. April 2020 at 13:39

    Ray, Unusually idiotic, even for you.

  6. Gravatar of Lorenzo from Oz Lorenzo from Oz
    13. April 2020 at 16:11

    And utopians have disastrously bad predictive capacities. Bret Weinstein has a nice critique of utopianism (which he regards as the most disastrous idea humans have ever had) here.

    (He also has some points about free markets and ruthlessness that I am much more sympathetic to than I would previously have been since I have been looking into nutrition seriously.)

    At about 55minutes in this presentation there is a pretty horrifying discussion of how one gets a scientific “consensus”.

    Re your point of how do you know when to rely on experts and, oddly enough, your problems with certain dominant views in economics …

  7. Gravatar of Benjamin Cole Benjamin Cole
    13. April 2020 at 16:20

    So, apartment renters don’t pay the rent and 50 million Americans will be unemployed (one third of the labor force, although it probably represents one half of workers in the private sector) the end of June, if lockdowns persist, or so predicts the St Louis branch of the Federa4l Reserve.

    But it has been worth it because, according to our top credentialed epidemiologists, we might have saved an unknown number of lives.

  8. Gravatar of ssumner ssumner
    13. April 2020 at 16:55

    Lorenzo, I’ve never understood the appeal of those sorts of videos. Why not just produce a transcript?

  9. Gravatar of Benjamin Cole Benjamin Cole
    13. April 2020 at 18:29

    “If the group stays indoors (social distancing) R0 drops below 1.0 and the infection dies.”—Dr. Ray Lopez.

    Sorry, Ray.

    Mr. COVID-19 is playing the long game. He will wait for lockdowns to end. Then, as we saw in Wuhan, a single fresh case can start the whole process again.

    Some credentialed experts say the virus is on the way to becoming endemic, in the world at large. It will enter feline and canine and human populations, possibly others. COVID-19 is impossible to eradicate.

    Human populations can be vaccinated and maybe that will happen in 2021 or 2022.

    There are vaccinations already against some types of coronavirus found in poultry and bovine populations. I have not seen anyone yet report that COVID-19 will enter poultry and bovine populations and thus require “removals” until a working vaccines are deployed. Maybe we are lucky on that score, and poultry and cattle are immune to COVID-19.

  10. Gravatar of Benjamin Cole Benjamin Cole
    13. April 2020 at 18:34


    This is Michael Fumento, above.

    Really, is he wrong?

  11. Gravatar of Benjamin Cole Benjamin Cole
    13. April 2020 at 18:59

    Dr. Ray Lopez: You know, there is always a germ of truth in every panic.

  12. Gravatar of Benjamin Cole Benjamin Cole
    13. April 2020 at 20:04

    What happens when one specialist believes another specialist?

    Luigi Zingales is a prof at University of Chicago-Booth.

    He recently posited, on the basis of projections made by credentialed public-health experts:

    “Even the simplest cost-benefit analysis suggests that the US government should be willing to spend up to $65 trillion and lock down the country to avoid extra deaths.”

    Zingales also posits: “Thus, avoiding hospital congestion has the potential of saving 7.2 million lives.”



    So, President Trump had listened to Professor Zingales from the University of Chicago-Booth….

  13. Gravatar of mbka mbka
    13. April 2020 at 21:07

    Scott, and Todd,

    the problem with epidemiological (and economic!) predictions is that we are dealing with complex systems and their feedback loops. The epidemic is influenced by the anticipation of its severity and countermeasures to be taken. So it’s not like applying simple laws of physics as it were. Not to mention that actual physics is also full of complexities. It’s quite easy to imagine that past epidemics did not make it to the pandemic stage precisely because the media “over”sensationalized them and the “over”reaction nipped them in the bud. It did not happen that way with COVID-19. You could say it’s because it was a different disease. You could say it’s because the media cried wolf once too often in the past. Most likely it was an unlucky factor combination. But it’s neither simple statistics nor a simple single cause.

    To Todd specifically, the reaction of policies, politics, the general public, industry, all of these factor in the development of the epidemiology. A lot can happen to feed back in a positive or negative way on your growth model. Look at the growth curves of different countries and you see vastly different dynamics, and dynamics that change over time.

  14. Gravatar of Student Student
    14. April 2020 at 06:54

    For the record, I nailed the inflection point of the number of new cases. I projected April 9th… you might suggest it was April 7th but I’ll take that. Totally missed the total number of American deaths (over/under 1 million) because I didn’t think we would actually succeed in isolating. Going to be about 1/10th of that. I am glad to be wrong about that. Good thing I didn’t bet, I’d have lost.

  15. Gravatar of Carl Carl
    14. April 2020 at 07:31

    The confounding factor for the epidemiological models seems to be all the ways in which COVID-19 goes unseen. It is imperceptible during the long incubation and throughout the whole illness for the many asymptomatic cases. It is obfuscated because of the lack of test kits and poor test kits and, now we find out as well, that it can go unseen in survivors because some proportion of them don’t develop antibodies. And, then, of course, we have governments that have lied about the prevalence of the disease or places that may have over counted because of sloppy reporting.

  16. Gravatar of msgkings msgkings
    14. April 2020 at 07:33


    It’s going to be way less than 1/10th of that. Probably around 1/20th.

  17. Gravatar of Student Student
    14. April 2020 at 07:41


    You are right if you’re referring only to the first wave… you will need to multiple that by 2.5 or so though.

  18. Gravatar of Brian Donohue Brian Donohue
    14. April 2020 at 08:35

    Yeah, temperamentally, I’m like you, but every once in a while Chicken Little, like a stopped clock, is right.

    Taleb says you need to make allowances for such possibilities and I do. Anyway, the virus isn’t a black swan, but it is a fat-tailed event.

  19. Gravatar of msgkings msgkings
    14. April 2020 at 09:12


    I disagree on that, and as we have seen you don’t know the future any better than the rest of us. I do not think there will be a second wave of deaths as large as this first one, and I don’t really see why there would be, given what we now know and the precautions we are taking.

  20. Gravatar of Jason Jason
    14. April 2020 at 09:13


  21. Gravatar of Student Student
    14. April 2020 at 09:34


    No one knows the future and there are so many variables it’s exactly as Scott says. Again, I agree with Scott, the best bet is that things won’t change much.

    We won’t completely extinguish the virus, we will return to work when the number of cases are low (say in the mid May range), people will start acting “normal” again, it will reignite, we won’t have adequate testing in place to see it coming (though we will do better than the first time), and we will see about a 0.7 the size second wave in the late summer or fall, we will relock down, rinse and repeat, until there is a vaccine or treatment that limits deaths. At which point, we will just function as normal and let it rip because people won’t be dying like they are now. If a treatment takes 18 months to develop, that will mean about 3 waves… id guess deaths double the first wave in the end, as each ripple gets smaller as we get better at dealing with them.

    The real X factors are testing, treatments, masking/behavioral responses, and the extent to which the virus mutates…

    Will we ever have adequate testing? How long will a treatment take to develop? How much will people change their behaviors/how well do masks work? Will the virus mutate regularly like the seasonal influenza?

    I don’t see how we will be one and done.

  22. Gravatar of ssumner ssumner
    14. April 2020 at 10:08

    mbka, Yes, I agree with that.

    Jason, That’s one of the most laughably innumerate pieces I have ever read.

  23. Gravatar of msgkings msgkings
    14. April 2020 at 10:36


    I didn’t say one and done. There will be some flareups in localized clusters and we will be better at sniffing them out and stopping them before they spread too much. That’s just my take on it, as you said too many variables for any of us to be sure of anything.

  24. Gravatar of Carl Carl
    14. April 2020 at 10:40

    @Benjamin Cole
    Thanks for the link to the Fumento article, which in turn linked to a paper on Farr’s Law. As I read it, Farr’s Law posits that the behavior of a population faced with a pandemic follows a predictable pattern. In that sense, Fumento may be both strengthening and weakening his thesis by referencing Farr. I mean if a population’s behavior is predictable, then maybe the politicians were just jumping in front of the crowd and claiming to lead it when they locked us down.

    “We observe, unexpectedly, that Farr’s K can be expressed as a function of the IDEA d parameter alone, independent of , implying that epidemic trajectory is (and has historically been) more a function of control efforts and changing behavior than of the fundamental characteristics of a given infectious disease

    From: https://www.sciencedirect.com/science/article/pii/S2468042718300101#bib11

    Where does that leave us? In need of making the unknown about COVID-19 known.
    – Who has it?
    – Who has immunity?
    – What is the true fatality rate (and this will vary over time as virostatics, etc. come on line)?

  25. Gravatar of Ray Lopez Ray Lopez
    14. April 2020 at 11:25

    @Ben Cole @ Carl – you do realize the fancy sounding “Farr’s law” is nothing but the Central Limit Theorem of statistics applied to epidemics, right? Right? Right? Uh. Duh. OK. But that’s what it is. Second, Fumento is simply saying: “Let the old and vulnerable die, since pandemics mostly infect these groups”. In a nutshell, that’s it, that’s Fumento’s point. The lax Swedish strategy vs the strong lockdown Greek strategy (the former has 5x the C-19 cases as the latter, with similar sized populations).

    PS – Headline: “State Department cables warned of safety issues at Wuhan lab studying bat coronaviruses” washingtonpost.com Apr 14, 2020 1:11 PM. Don’t say “I told you so”. The cables were marked secret and from 2017. Trump is no doubt thinking of these cables when he says C-19 was a “Chinese virus”.

  26. Gravatar of Andrew Andrew
    14. April 2020 at 11:30

    I recall roubini predicting that the US would have a balance of payments crisis with a collapsing USD. He basically got lucky and moved the goal posts while claiming victory. Helps explain why he has been so irrelevant since.

  27. Gravatar of Carl Carl
    14. April 2020 at 12:07

    @Ray Lopez
    Farr was not saying let the vulnerable die. He was saying they are the most likely to die and therefore the most in need of being shielded. I was arguing that by referencing Farr’s Law, Fumento was undermining part of his own argument.

    Regarding Farr’s Law being a restatement of the Central Limit Theorem: How does that invalidate the law? It’s a phenomenological law not a mechanistic law.

    Regarding the Wuhan labs: You were saying it was a chimera virus, not that it was a natural virus that escaped the lab.

  28. Gravatar of Christian List Christian List
    14. April 2020 at 12:17


    the opening is a bit strange, but it’s nice that the Washington Post is finally picking up on the origin story. The question of origin is a really huge story, biggest story in years, if not decades. It’s strange that it wasn’t pick up before. But at last this is now the third reporter from the WP in the last days who picks up the story.

    Great soundbites, too:

    “The idea that it was just a totally natural occurrence is circumstantial. The evidence it leaked from the lab is circumstantial. Right now, the ledger on the side of it leaking from the lab is packed with bullet points and there’s almost nothing on the other side. (Exactly true: The other side got no bullet points at all, it’s more like 70:30 now that this was indeed a lab leak).

    The Chinese government has put a total lockdown on information related to the virus origins. Beijing has yet to provide U.S. experts with samples of the coronavirus collected from the earliest cases. The Shanghai lab that published the coronavirus genome was quickly shut down by authorities for “rectification.” Several of the doctors and journalists who reported on the spread early on have disappeared.”


    Let’s wait for Scott: “It’s not a huge story, why would it even matter, I just don’t care.”

  29. Gravatar of Gene Frenkle Gene Frenkle
    14. April 2020 at 12:30

    Andrew, Roubini understood the 2001-2008 American economy was dysfunctional and he was correct to focus on current-account deficits. Now with hindsight we know that the underlying problem with that economy was an energy crisis that undermined our energy intensive consumer spending economy. So the current-account deficits were a problem because our economy had no way to process high energy prices unlike an export economy like Germany or an economy with increasing energy production like Australia and Canada.

  30. Gravatar of Todd Kreider Todd Kreider
    14. April 2020 at 20:47

    mbka wrote:

    “A lot can happen to feed back in a positive or negative way on your growth model. Look at the growth curves of different countries and you see vastly different dynamics, and dynamics that change over time.”

    Very little is happening in East Asia and an epidemiologist, Michael Osterholm, who was on the Joe Rogan show, lied about that with respect to Japan, South Korea on a podcast on April 8th. The U.S. has been following the UK and France very closely per capita but delayed by a week or so. There is no way that the U.S. will fare as well as Germany or as poor as Italy and Spain. Sweden will end up doing notably better than the U.S. for this first round.

  31. Gravatar of Todd Kreider Todd Kreider
    15. April 2020 at 02:44

    Maybe Osterholm made those bold and incorrect statement based on rumors he heard without looking at the cases data for East Asia, but you’d think an epidemiologist who has tracked coronavirus for weeks would take the ten minutes to look at the data to make sure.

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