We have nothing to fear except a lack of fear itself

Lots of people are scratching their heads about the relative strength of the stock market. By that I mean strength relative to the underlying economy, where unemployment is probably about 20%. The election odds favoring Trump are another mystery.

This twitter thread by Ryan Booth suggests the virus may be almost gone by the end of August. I won’t say I “believe” this, but I also don’t see any reason to assume he’ll be wrong.

Here’s part two of the thread.

Now of course there’s the “second wave” theory for the fall and winter. But the severity of the second wave is hugely dependent on the severity of the epidemic in late summer.

This is hard to grasp, as the severity of the first wave did not depend at all on the level of the epidemic at the beginning—one case was enough to lead to 10 million (although of course in practice there was more than one case from overseas.)

But with the first wave we made no attempt to prevent it from getting out of control until it was too late. This fall will be the exact opposite. We will madly overreact to any new outbreaks. We’ll be all over it like a **** on **** (I forgot the metaphor). Perhaps not as insanely over-reactive as the Chinese, but pretty insanely. If we have only a few cases going into September, then it’s likely we’ll be able to prevent the second wave from getting out of control, just as many other countries have already been able to do.

I’ve always assumed that we could no longer do the things the Australians and New Zealanders are doing, because Covid-19 has already become so far out of control in the US. But if the US caseload really does fall to extremely low levels in late summer, then we would be able to replicate the success of the places that are currently successful.

The thing that makes me most skeptical of this rosy scenario is that there’s a sort of natural tendency for R0 to move back toward 1.0. (Homeostasis?) As things become safer, people will react rationally and become more reckless. So we have to hope that the same Americans that are irrational scaredy-cats (i.e., excessively afraid of nuclear power, flying in planes, chemicals in food, second hand smoke, child kidnapping, etc.) will also be overly frightened of Covid-19. We need the continued irrational cowardice of Americans, now more than ever.

Please Americans, don’t let me down when we most need your innumeracy, your irrational fear of risks that you cannot see!!

Please, cower in fear.

PS. Today, NPR interviewed some guy recommending meditation as a way to control one’s fear of Covid-19. I recommend the opposite for most Americans, a nonstop diet of the most hysterical twitter threads, blogs and cable news shows.

Then life will become truly wonderful for numerate people like you and me, as we take blissful, uncrowded vacations in relative safety.

HT: Razib Khan




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44 Responses to “We have nothing to fear except a lack of fear itself”

  1. Gravatar of Benjamin Cole Benjamin Cole
    19. May 2020 at 15:48

    I am hoping once the lockdowns are completed, people will venture out and discover the risks are rather small, particularly if you are non-elderly.

    I favor robust prosperity, enabled by large-scale tax cuts and QE.

    The ratio 2% is bandied about often in macroeconomic circles. How about we shoot for 2% unemployment?

  2. Gravatar of Thrawn997 Thrawn997
    19. May 2020 at 16:53

    Regarding betting markets, you’ll find that democrats are favored to take the presidency but Trump has higher odds than Biden.

    Betting markets are factoring in the unlikely but not impossible that someone besides Biden beats Trump.

  3. Gravatar of Todd Kreider Todd Kreider
    19. May 2020 at 17:00

    “But if the US caseload really does fall to extremely low levels in late summer, then we would be able to replicate the success of the places that are currently successful.”

    I think this is extremely unlikely. Something else has been going on in Asia with pandemics for over 50 years:

    “The 1968 flu pandemic caused illness of varying degrees of severity in different populations. For example, whereas illness was diffuse and affected only small numbers of people in Japan, it was widespread and deadly in the United States.” (Encyclopedia Britannica)

  4. Gravatar of bb bb
    19. May 2020 at 17:02

    @scott,
    great post. I agree with almost every word.
    @Thrown997- I’m a big fan of betting markets, but the one area they are not very good at is predicting elections. Polling is a much better tool for this one usecase. I recommend 538. I’m still an EMH believer.

  5. Gravatar of Michael Sandifer Michael Sandifer
    19. May 2020 at 17:05

    There’s no disconnect between the stock market and economy when you consider that stock prices represent future expected earnings, discounted to infinity. This real, severe component of the crisis likely won’t last more than a year or two. The rest of the explanation for low interest rates and lower stock prices involves tight money.

  6. Gravatar of msgkings msgkings
    19. May 2020 at 17:18

    @Todd K: wasn’t the 1968 disease also originated in Asia? And again, Asians were less affected? I’ve heard many rebuttals to my idea on this, and they make sense. But again, it seems almost too logical, especially with the post you just made. I just can’t shake the idea that there’s some innate resistance to diseases that originate in your part of the world

  7. Gravatar of bb bb
    19. May 2020 at 17:49

    @msgkings,
    Interesting note- the spanish flu originated in Kansas.
    @Todd, I agree that we may not be able to reproduce results in Asia, which is why I’m fixated on Germany. I would love to have Germany’s outcome to date right now. That said, we should still try to learn as much as we can from Asia, because they are doing better collectively than the west.

  8. Gravatar of Akash Garg Akash Garg
    19. May 2020 at 17:49

    I remember during the South Korean protests there was a prediction market poll on whether the south korean leader will step down by a certain date, heavily in favor of that happening (75% to 25%). Of course, those betting were all westerners with zero understanding of south korean politics, and I know a lot of south koreans. I asked them, and they weighted the odds at 90-10 she doesn’t. First and only trade I made on that … made quite a bit.

    A western politician would step down. They’d already been disgraced, so they exit the limelight. Doing something disgraceful is bad, but it is honorable to own up to mistakes (I positive I believe of western culture). In South Korea, it is dishonorable to resign, more so in many cases than committing the act itself. Western bettors did not understand this.

    Point is, betting markets reflect the biases of those who bet. And not enough people are actively engaged for the EMH to counter those biased. Furthermore, valuing a stock is often much easier to understand than making a probability prediction. People are notoriously bad at probability, but value decisions are made every day.

  9. Gravatar of Todd Kreider Todd Kreider
    19. May 2020 at 17:59

    I only said Japan, but I’ll look up other Asian countries later. I found a WHO report on how Japan fared in the 1957 pandemic but that doesn’t give a total and instead death by age at different waves. Japanese infants, young children and the elderly were hit the hardest. Japan was much poorer in 1957 than in 1968 and the vaccine came after the waves were mostly over.

    Adding up, it looks like hundreds of deaths in infants and young children and hundreds of deaths in the elderly and not nearly as many in between.

    The abstract has: “The severity of the illness was not very great in the population as a whole, but the death-rates among infants and the aged were remarkably high.”

    The deaths per age graph is here:

    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2537746/?page=10

  10. Gravatar of ssumner ssumner
    19. May 2020 at 19:48

    Todd, How does your comment relate to this post? I never mentioned Asia.

  11. Gravatar of Brian Donohue Brian Donohue
    19. May 2020 at 21:10

    Good post. I suspect we will get a second bite at the apple in the fall and likely overreact, but what we have learned (most of all, ground level behavioral stuff) will go a long way, as well as help from whatever herd immunity we acquired in the first wave.

    As Taleb says about stuff like this “if you’re gonna panic, panic early.”

  12. Gravatar of Todd Kreider Todd Kreider
    19. May 2020 at 21:51

    “I’ve always assumed that we could no longer do the things the Australians and New Zealanders are doing, because Covid-19 has already become so far out of control in the US. But if the US caseload really does fall to extremely low levels in late summer, then we would be able to replicate the success of the places that are currently successful.”

    New Zealand and Australia are at times included with Asia and Japan, South Korea and Taiwan were “successful” countries, but it is getting clear by the example of Japan and likely South Korea, Australia and New Zealand that government policies aren’t that relevant.

    Coronavirus is here to stay in the West

  13. Gravatar of Matthew W Matthew W
    20. May 2020 at 00:25

    “But if the US caseload really does fall to extremely low levels in late summer, then we would be able to replicate the success of the places that are currently successful”

    This has been my thoughts over the last few days. It is pretty much Uk government policy to do this despite it being one of the worst affected countries. Spain and Italy are doing even better than the UK. Germany looks all but certain to contain the virus in is little time as a month or so. At this point it looks like the US will be the last western country to contain it, but I dont see why it wont figure it out sooner or later. Contact tracing just needs to ramp up.

  14. Gravatar of foosion foosion
    20. May 2020 at 01:51

    “The election odds favoring Trump are another mystery.”

    Republicans are in charge of the election mechanisms in many states and if they close enough polling stations in Democratic areas, remove enough likely Democratic voters from the rolls, etc., they can win despite lacking support among those otherwise entitled to vote and trying to vote. It doesn’t always work, but it has the potential for tipping a close election.

  15. Gravatar of Michael Rulle Michael Rulle
    20. May 2020 at 05:27

    I think the author of this is just having fun playing out scenarios of different ways humans can be counterintuitively successful at protecting themselves. But it’s just fun and games.

    I know this is not the flu—-but when you read the Hopkins site on the difference between this and the flu——it’s a technical difference—-real—-but the way to get rid of it is similar——find a vaccine and anti-viral medicines—-same social behaviors etc. plus, we now have 7 coronaviruses and 4 “flus”.

    Shouldn’t we “expect” this to go away like all the other coronaviruses and flu have gone away? Some years are just worse than others. Plus a vaccine of course. Though we never developed a vaccine in 1918—and that did go away.

    Although Hopkins says there are 300-650K flu deaths in the world a year according to WHO—the WSJ said that as of MAY 13 this year, there were double the total amount of Respiratory type deaths (intended to include COVID deaths)this year than an average year between 2000-2017. The total was 110,000. But the a average population Was 10% lower. This implied 50k Covid. The NCHS currently lists 54k deaths versus our more familiar higher number——but the former is not official for a year—they are delayed. Still, they do receive certificates within a few weeks. This article says the “higher than average deaths” did not occur until the last week of April. The week of the 13th of May, it was 30% higher than last 3 years (but middle of April it was 15% lower).

    A professor at Johns Hopkins invented the current method of estimation counting after then1918 flu.—-using “excess deaths”. We really do not “count” every cause of death—we estimate/

    So, maybe our Mr. Booth might have a good idea. Optimize the number reported to get the behavior we want. No one will ever catch on—-it’s mostly subjective anyway,

  16. Gravatar of Todd Kreider Todd Kreider
    20. May 2020 at 05:44

    @Michael Rule

    From what I’ve read, the 1918 flu strain only went away decades later when other vaccines were developed even though it didn’t come back as strongly again.

    This year’s influenza season was again unusually bad, getting close to 2017/18, which was considered America’s worst flu season in decades. Couldn’t part of the extra deaths this year be attributed to the flu and not as much to Covid-19 as is being recorded considering tests don’t need to be given in many states in order to have a Covid-19 death listed?

  17. Gravatar of Michael Rulle Michael Rulle
    20. May 2020 at 05:46

    Another oddity on counting. Likely has to do with when certain people work. In USA Tuesday is always the “local high” in deaths—-and Sunday the “local low”. Could be coincidence——but I don’t think so.

  18. Gravatar of Michael Rulle Michael Rulle
    20. May 2020 at 05:52

    @ Todd Kreider\

    I think you are likely right. Obviously Covid is real, big, and bad. But, there is a bias toward having it appear higher—I think. I was surprised to see that the NCHS numbers were lower (54k) than what we are normally used to seeing for USA. And they count using the “excess method’ as well.

    When Taiwan has .5 deaths per million and NYC 1700——there are obviously county differences.

  19. Gravatar of Anon Anon
    20. May 2020 at 05:59

    Quite a lot tweet storm that is, in gist:

    -more people will wear mask (prevent spreading, impact R)
    -businesses will put up precautions like plexiglass/masks/sanitizers/SOPs (prevent spreading, impact R)
    -hopefully some of the vaccines will work and be available in sufficient doses in < 2 months (provide immunity, impact R)
    -most susceptible are already infected/cured (no reinfection, impact R). no reinfection is a big if (or) proven because of antibodies development and thus no reinfection immediately but can happen 1 – 2 years later rather than in fall
    -the intrepid will come out while the cowards will continue to stay in, and hopefully low susceptible to get infected (built in immunity, impact R)
    -thus new normal by summer when R would have gone down.
    (adjusted to new reality)
    and won't flare up again in Fall.

    Is that correct?

    One is left scratching the head: what exactly is new?

  20. Gravatar of Todd Ramsey Todd Ramsey
    20. May 2020 at 06:30

    In today’s WSJ (but completely off topic):

    https://www.wsj.com/articles/the-day-coronavirus-nearly-broke-the-financial-markets-11589982288?mod=hp_lead_pos5

    Prof Sumner, over the last 11 years your voice, and subsequent influence, moved the Fed’s Overton Window enough that in mid-March it acted more boldly and quickly than ever before. Thank you, and keep up the good work.

  21. Gravatar of Todd Kreider Todd Kreider
    20. May 2020 at 06:42

    @Michael Rulle

    “But, there is a bias toward having it appear higher—I think.”

    With influenza, the CDC has been modeling estimates for 17 years but for Covid-19, doctors in California and Minnesota have said they received instructions from their health agencies that they don’t need to have a positive Covid-19 death in order to have that on the death certificate. (These instructions have never been given with the flu.)

    Sure enough about the time a Colorado man was found dead in a park from alcohol poisoning with a BAC of .55 (over.40 is where death is common) and listed as a Covid-19 death since autopsy revealed he had the virus at some point, the state of Colorado decided to start separating Covid-19 deaths and Covid-19 was only present deaths, which lead to a 24% drop in Covid deaths there. That’s not trivial.

  22. Gravatar of Todd Kreider Todd Kreider
    20. May 2020 at 06:43

    I forgot to add that hospitals have incentive to list Covid-19 deaths since those get more federal dollars than non Covid-19 deaths.

  23. Gravatar of Mark Z Mark Z
    20. May 2020 at 06:54

    I doubt it’s possible to maintain constant panic for months on end, eventually people get malaise and stop caring. My idea for a new quasi-normal way of life (probably won’t happen but I think it’s be cool) would be more nocturnality. Barbershops could stay open 24 hrs a day and have one barber there at all times, and some of us would just get our haircuts at 3am. With social life largely gone and so many working from home, there’s less of a reason for all of us to be on the same schedule, so why not spread business out more across the day and night? It’d be a boon for those of us that sleep weird hours anyway. I’d also like to coin the term ‘diurnonormativity’ and get officially acknowledged as an oppressed group, but one step at a time.

  24. Gravatar of ssumner ssumner
    20. May 2020 at 08:36

    Todd, You said:

    “Coronavirus is here to stay in the West”

    So Australia is not a part of “the West”? Okaaaay . . .

    Michael, The official totals underreport deaths from Covid-19.

    Anon, Try reading it again.

    Thanks Todd Ramsey.

  25. Gravatar of Carl Carl
    20. May 2020 at 08:48

    What do you think of Chairman Powell’s call for massive fiscal stimulus?
    When I raised the question of how the Fed gets money to the waiter who lost his job because of coronavirus in response to one of your previous posts, https://www.themoneyillusion.com/the-seen-and-the-unseen/, you responded

    Carl, The point is to stimulate spending so that restaurants wish to rehire waiters, not to give money to waiters (except of course unemployment comp.)

    Are you in agreement with Chairman Powell because the stimulus he is calling for is of the unemployment comp variety or do you think that the chairman is not seeing a transmission channel that allows him to get money to that waiter? Or does unemployment comp, even to the tune of $1 trillion per month, not count as fiscal stimulus? And, if unemployment comp doesn’t count as fiscal stimulus, why is unemployment comp different from other forms of government transfer payments? Most of what government does these days is make transfer payments and all government transfer payments could be considered compensation for unemployment or “underemployment” (welfare for being unemployable, social security for not having made enough from your employment for retirement, medicare for not having earned enough to pay for medical care and so forth). Should all money for transfer payments be exempt from calculations of what is fiscal stimulus?

  26. Gravatar of Brian Donohue Brian Donohue
    20. May 2020 at 09:15

    Scott,

    I just want to echo what Todd Ramsay said. I pick a lot of bones with you, but you are one of the low-key heroes of our age for your relentless work and preaching on monetary policy. Thanks.

  27. Gravatar of Todd Kreider Todd Kreider
    20. May 2020 at 09:37

    ““Coronavirus is here to stay in the West”
    So Australia is not a part of “the West”? Okaaaay . . .”

    Australia and New Zeland are at times _also_ considered part of Asia, for example with strong economic ties to China. There was the U.S. military “pivot to Asia” and Australia and NZ were included in that.

    There is a real possibility based on very low pandemic deaths in 2009/10 along with Asia has a link to why there have been only 100 covid-19 deaths this time, which is very low like South Korea and Japan. In terms of per capita deaths, Australia is right between South Korea and Japan.

  28. Gravatar of anon/portly anon/portly
    20. May 2020 at 10:05

    “But with the first wave we made no attempt to prevent it from getting out of control until it was too late.”

    Obviously we made *some* attempt. That our attempts were not very successful does not mean that we made no attempt. This is taking Yoda’s “there is no try, there is only do” thing a bit too far, in my view.

    But more to the point, given our testing snafus and no-mask policy, what if we had made not just an attempt, however poor, but a pretty good one? Would we have been able to prevent a large outbreak altogether?

    Scott Sumner assumes the answer is yes, but I am skeptical. Even countries like Germany and Switzerland, which are TMI-designated “successful” states (because they hit certain statistical benchmarks, apparently), were unable to prevent large outbreaks.

    I would also point to Singapore. Singapore is not a TMI-designated “successful” state, which in my view is somewhat strange. (Okay, not all of the successful states were listed, but if you’re getting down to Alaska and Mauritius, Singapore seems conspicuously omitted). In my view they might well be deserving of the #2 ranking, behind Taiwan and ahead of SK, even. (SK loses ranking points for ostentatiously thumbing its nose at the virus). To me the obvious lesson of Singapore is that you can do everything pretty much right and still get an outbreak.

    “If we have only a few cases going into September, then it’s likely we’ll be able to prevent the second wave from getting out of control, just as many other countries have already been able to do.”

    This seems to imply that we’ve seen the beginnings of a “second wave” in “many” countries but all I can see are a lot of countries with no real “wave,” or countries with a wave that is still subsiding, or countries with a wave that is not yet subsiding. What’s an example of a country where a “second wave” actually got started?

  29. Gravatar of ssumner ssumner
    20. May 2020 at 10:07

    Carl, Fiscal stimulus can mean anything someone wants it to mean. When I refer to fiscal stimulus I am talking about spending aimed at boosted AD, such as the $1200 checks to the public. I don’t view an ongoing program like unemployment comp as being discretionary fiscal stimulus, although it obviously does boost the deficit.

    As for why Powell favors fiscal stimulus, you’ll have to ask him. That’s the job of reporters.

    Thanks Brian.

    Todd, I have no idea what point you are trying to make. Suppose I say I “consider” America to be a part of Asia. Does that solve our Covid-19 problems?

  30. Gravatar of ssumner ssumner
    20. May 2020 at 10:20

    anon/portly, You said:

    “Obviously we made *some* attempt.”

    Actually we did not. Not in February when it really counted. We just twiddled our thumbs. Our regulatory system was mostly focused on stopping the import or production of masks, and stopping testing from occurring. And recommending that people not wear masks. That’s not much of an effort. That’s a negative effort.

    As for you citing Germany, I find that interesting. Germany’s mortality rate is about 35% of the US rate, and could well end up even lower as it’s falling much faster than here. That’s not much of a counterexample to my claim that we might have ended up with a much lower mortality rate.

    As for Singapore, they’ve had 22 deaths. Total. We are at over 93,000. So what’s your point? Are you saying they won’t be able to contain the second wave without lots of deaths?

    You asked:

    “What’s an example of a country where a “second wave” actually got started?”

    South Korea. Japan. China. Taiwan.

    And they each squashed it almost immediately.

    All waves start very small, first and second. If they are controlled effectively then they never get big.

  31. Gravatar of ssumner ssumner
    20. May 2020 at 10:30

    anon/portly. I had a brain freeze, assuming you were commenting on a different post.

    Think of it this way. If you adopt a given policy when there are only 100 cases, the result swill be far better than if the same policy is adopted when there are 10,000 cases. Even Germany was much too late.

  32. Gravatar of anon/portly anon/portly
    20. May 2020 at 10:34

    “The thing that makes me most skeptical of this rosy scenario is that there’s a sort of natural tendency for R0 to move back toward 1.0.”

    I wasn’t aware of this. What’s the evidence for this?

    The one thing I can think of is the way “new cases” curves not only looked exponential (increasing slope) on the way up, they look exponential (decreasing slope) on the way down, but then seem to “flatten” somewhat.

    Maybe that’s just an artifact of two trends colliding, like R0 locally staying fixed but countries still seeing a steady (but small) introduction of cases from outside. Or maybe an effect of variation where e.g. R0 is higher for a small subset of the population, and that subset becomes more important over time as the pandemic subsides.

  33. Gravatar of Michael Rulle Michael Rulle
    20. May 2020 at 10:47

    Scott—I know we say that we undercount—–but that is based on the “excess death” number—and it is assumed the excess deaths are from Covid—so that seems reasonable.

    But—we also know that we do not really know what excess deaths are—the base line has high variance. We assume excess deaths are known and that they are caused by Covid–and from a macro perspective it kind of makes sense. But we really don’t know what excess deaths are–its like GDP—2 years from now the number is different.

    Then, from a “micro” perspective the counting is extraordinarily subjective—–. The micro-count–the actual literal count–even with our liberal methods— is lower by 20-30 percent than the macro count (i.e.derived from excess deaths)

    I know (or I assume I know) if you were doing a studyin your field you would have a problem with our data

    BTW, this all may not matter—does it make a difference in policy if 150k or 100k die? Maybe—-but we do not have a clearpicture of the numbers

  34. Gravatar of Michael Rulle Michael Rulle
    20. May 2020 at 10:58

    go to “CDC-Covid 19-Death Data and Resources”—-shows the complexity of counting very well

  35. Gravatar of Todd Kreider Todd Kreider
    20. May 2020 at 12:14

    Scott wrote: “South Korea. Japan. China. Taiwan.

    And they each squashed it almost immediately.”

    Japan certainly didn’t, and I’d say that South Korea with 3,000 coronavirus cases when they urged people to stay home didn’t squash it almost immediately.

  36. Gravatar of anon/portly anon/portly
    20. May 2020 at 12:32

    “South Korea. Japan. China. Taiwan. [Examples of countries where a “second wave” actually got started]. … And they each squashed it almost immediately.”

    Looking at Japan’s data on Worldometer, I see nothing that can reasonably be described as a “second wave.” “Daily new cases” went up and came back down, and “daily deaths” have been roughly flat since the peak in new cases. Supposedly they don’t test all that much, but maybe that’s wrong.

    Taiwan had a tiny wave in late March, and since then a few cases have popped up here and there. Every time they get a few cases, that’s a “second wave” starting up? I say no, emphatically.

    China is obviously an unfair example, what can you really tell from their numbers?

    South Korea, I’m guessing the second wave is the recent one referenced in my “thumbing their nose” crack. (After they squashed their big outbreak, new cases went up and down for a while, so I suppose it could be in there somewhere instead).

    Fine, call that a “second wave” if you want. I’ll accept China also since I have no idea. That’s “two” at most, not “many.”

    To me a “second wave” suggests real problems are brewing, not “hey, maybe we should have put off opening up the discos just a teeny bit longer” type problems.

    There’s no point too trivial for me to argue over, is the obvious lesson here.

  37. Gravatar of Todd Kreider Todd Kreider
    20. May 2020 at 12:50

    anon wrote:”… and “daily deaths” have been roughly flat since the peak in new cases.”

    The increase in deaths per day has not been flat but has declined.

    Apr 15 to Apr 19: 10%
    Apr 20 to Apr 24: 8%
    Apr 25 to Apr 29: 4%
    Apr 30 to May 4: 3%
    May 5 to May 9: 3%
    May 10 to May 14: 3%
    May 15 to May 19: 2%%

  38. Gravatar of Todd Kreider Todd Kreider
    20. May 2020 at 12:51

    The above is for Japan.

  39. Gravatar of rwperu34 rwperu34
    20. May 2020 at 16:48

    Here’s a little tidbit to help improve your bullshit filter;

    When someone refers to a paper 11 days old that isn’t getting enough attention that is going to “shatter everything we know” about X, it is bullshit. Pure and simple. I stopped reading at that point.

    A few other counterpoints’

    1) He assumes we’re catching all the new infections. I’ve got us off by a factor of 5x, give or take. Keep in mind, it’s the infections we don’t know about that are contributing to spread.

    2) Testing hasn’t increased as much as being reported. AZ (among other states) is counting serology tests as part of our testing (roughly 25%-35%). That’s nice for research/understanding, but knowing who has antibodies does nothing to help limit the spread. This pushes positive % down too.

    3) If we’re at 100,000 new infections a day, even at an Ro of 0.7, it would take ~13 cycles to get to 1,000 new infections a day. If a cycle is a week, that’s 3.5 months to get to that point. I’ve got us at an Ro of 0.9 (again, give or take) and that is at the peak of stay at home.

    4) There are a lot of variables that will affect Ro countering each other. My official position is ¯\_(ツ)_/¯. I think your overall assessment that we’re going to hang out around 1.0 is probably the correct take. That would mean 100,000 to 200,000 new infections a day for the foreseeable future. That translates to 30,000 to 50,000 extra deaths a month.

  40. Gravatar of Christian List Christian List
    20. May 2020 at 17:11

    I hope the Western countries are over the worst. I think the USA will take the path of other Western countries, see Australia, Austria, Germany, and now even Italy, Spain. This should be possible in a country where population density is rather low and people are afraid.

    And don’t worry about not panicking enough. I remember my high school days, I was there for a year in a host family. I wanted to walk to school every day, it was really close and I was 14-15 years old. It was a white, rather rich suburb. The crime rate was not measurable, way better than in Europe. Nevertheless I was still declared crazy simply because I wanted to walk to school. People really thought that is was dangerous and that some crime could happen.

  41. Gravatar of anon/portly anon/portly
    21. May 2020 at 13:31

    “[In February] [o]ur regulatory system was mostly focused on stopping the import or production of masks, and stopping testing from occurring. And recommending that people not wear masks. That’s not much of an effort. That’s a negative effort.”

    I couldn’t agree more! I just don’t see any of this as occurring primarily “in February.”

    Could we have elected, in 2016, a president capable of either turning around this situation before February 2020, or during February 2020? Maybe. I would guess “during February” would have been impossible for even the most capable set of leaders.

    Here’s some examples of mask-skepticism from experts – not from February, from the tail end of March:

    https://twitter.com/angie_rasmussen/status/1243988679430778880

    https://twitter.com/BogochIsaac/status/1244973511170502658

    https://www.cidrap.umn.edu/news-perspective/2020/04/commentary-masks-all-covid-19-not-based-sound-data

    “Germany’s mortality rate is about 35% of the US rate, and could well end up even lower as it’s falling much faster than here. That’s not much of a counterexample to my claim that we might have ended up with a much lower mortality rate.”

    “Think of it this way. If you adopt a given policy when there are only 100 cases, the result swill be far better than if the same policy is adopted when there are 10,000 cases. Even Germany was much too late.”

    I couldn’t agree more!

    My “beef” with the Sumner approach is really when you (and Delong has done this also) compare us a place like *New Zealand*. That seems to me trivially silly. I *want* to compare us to Germany (and Europe). That seems to me quite relevant.

    “Even Germany was much too late” is *my* point. (Not that it necessarily means we didn’t do – or aren’t doing – a whole lot worse than Germany, or a whole lot worse than we should have).

    Maybe I’m just being nutty, quibbling the specifics of the critique and not so much the substance. Maybe this, from Econlog about 10 days ago, explains best why I find the Sumner Coronavirus Critique (the SCC) so off at times:

    “Scolding has value. When I was scolded as a child, I was chastened and did better for at least a brief period of time.”

    I always felt that scolding had very little value. It just taught me that my parents were a bit clueless and overly pleased with themselves, perhaps. Okay, I’d been naughty, I got it, was the interminable recitation of lame cliches really necessary? Why couldn’t they just use a cattle prod on me or something?

    (Hmm, at this point let’s avoid the topic of whether I’d be a better person without the bad attitude, in general, towards moral uplift).

  42. Gravatar of ssumner ssumner
    21. May 2020 at 17:10

    anon, I didn’t say we’d end up at R0 equals one, I meant there are forces pushing it toward 1.0.

    As for second waves, obviously if I am right and they are quickly squashed they will always be tiny. It could not be otherwise in a successful country.

    As an analogy, a successful monetary policy will offset big demand shocks in such a way that you won’t even know there ever was a big demand shock.

    I hope this doesn’t sound too cute. Seriously, if the Chinese continue to lock down every tiny blip then how will a large second wave ever get going?

    Michael, You said:

    “Scott—I know we say that we undercount—–but that is based on the “excess death” number”

    No it’s based on reported deaths, which are far higher than they would be if caseload data were accurate. The reported death rate is say 6%, while the actual rate is around 1%, maybe less.

    rwperu, Maybe. But the daily death toll is definitely trending lower in recent weeks.

    anon/portly Like many commenters, you assume that when I say we screwed up I mean the government screwed up. Well the government screwed up, but that’s not necessarily the main problem, nor have I ever said it’s the main problem. I’ve consistently said the public would not have accepted social distancing or mask wearing in February. But if we had done those things in February . . .

    And I don’t recall comparing us to New Zealand. I did have a post pointing out that many island nations are doing better, and even island states like Hawaii.

    A lot of what I do is simply pointing out that some nations are doing much better than others. Not all my posts are normative. I’ve stayed out of the Sweden debate, for instance.

    You said:

    “Why couldn’t they just use a cattle prod on me or something?”

    There’s one politician in DC that I’d . . . . no, better not go there. 🙂

  43. Gravatar of Matthias Görgens Matthias Görgens
    21. May 2020 at 21:30

    Benjamin, shooting for 2% unemployment sounds good. But it’s not something monetary policy can do.

    Monetary policy works for nominal variables. It can’t arbitrarily control real variables.

    Btw, the US doesn’t need a tax cut per se. They need a tax system that smaller deadweight losses.

    You can get smaller losses from lower tax rates. But if you pick your taxes right, you can even increase the total tax take and still have smaller deadweight losses.

    A land value tax is the prime example of a tax with no deadweight losses. Even a property tax does still pretty well, especially in places with high land values. And even better if you combine a higher property tax with lower taxes on labour and capital.

  44. Gravatar of milljas milljas
    22. May 2020 at 08:45

    Judging by the results from TJX it does not seem self imposed social distancing will occur, instead clothing deals will drive the day.

    The company reported that in stores open vs last year sales are up. While i’m no sure on ticket vs traffic, the pictures are self-explanatory.

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