Streetwise Professor

October 22, 2020

“It’s Easy to Win an Argument With Milton, When He Isn’t There”

Filed under: CoronaCrisis,Economics,Politics,Regulation — cpirrong @ 6:30 pm

Raghuran Rajan is a smart guy who has done excellent and rigorus work, and is a gentleman to boot. But even such as he are capable of saying dodgy things, as in his comments to the FT on Friedman’s social responsibility article, in which he said the covid pandemic has exposed flaws in Friedman’s argument:

First, Covid-19 has threatened some companies with the extinction of shareholder value, subjecting businesses to a shock that, despite government intervention, has put their existence in question. “At this point,” Prof Rajan told me, “the best thing [a company with thin resources] could do is focus those resources on survival, because in surviving, it provides a decent job for its workers, it continues making that widget which people buy. It lives for the future.

Not all companies came into the crisis with thin resources. For the tech companies, nursing war chests replenished by tech-hungry consumers in lockdown, this should be a chance to go beyond bare Friedmanite requirements

Amazon, for instance, could “do more for its various suppliers, some of whom may be struggling small and medium business units”, said Prof Rajan. “It could find ways to provide them more credit to last through the pandemic that will get it more loyalty, because people will know it can be a source of insurance, rather than just a platform.”

. . .

This sort of action exposes the “missing part” of Friedman’s thesis, said Prof Rajan. He failed to recognise that “implicit equity stakes” — such as the commitment of a company to the partnership with its workers, suppliers or customers — are “as important, sometimes, as the explicit equity stake”

These things are missing how, exactly? Essentially Rajan is arguing that there are gains from trade to be realized to a corporation from adjusting explicit and implicit contractual terms with “stakeholders” such as workers, suppliers, and customers, in response to an economic shock like covid. But note: such adjustments would enhance the corporation’s profits, by allowing it to capture some of those gains from trade.

Indeed, according to the Friedman norm, such companies, acting as profit maximizers, would benefit not just themselves, but their workers, suppliers, and customers. Thus, rather than being some lacuna in Friedman’s framework, what Rajan emphasizes is precisely why profit maximization in the price system should be encouraged, as Friedman did. It provides an incentive for corporations to engage in mutually beneficial transactions, regardless of the underlying circumstances. That is, profit maximization guides optimal responses to circumstances, even crappy circumstances. Nay, especially crappy circumstances.

Or perhaps I should say “in the contractual system.” For what is involved here is negotiating contracts that maximize joint surplus. As Coase tells us, absent transactions costs, firms and their counterparties will do just that, and profit maximization (or utility maximization by workers, say) is exactly the engine that powers that result.

So the only way to make this critique coherent is to argue that transactions costs could somehow be reduced by reshuffling organizational forms or control rights. This Rajan does not do. Nor has anyone who burps up the term “stakeholders” and proclaims “QED!” Not that I have seen anyways.

As I said in my earlier post: if you are so smart, why aren’t you rich? Why haven’t you–or anyone else–come up with an alternative organizational form that allows the creation and capture of gains from trade that corporations leave on the table?

Indeed, the most coherent restatement of the “stakeholder” argument is that corporations have failed because they aren’t maximizing profits because they are failing to structure transactions with stakeholders that exhaust all gains from trade.

I’m tempted to cut Raghuran some slack because his remarks are impromptu statements made to reporter, rather than in an academic article–or even a blog post. But the fact that something in an FT article is far more likely to resonate than a weighty academic tome or even a not-so-weighty academic blog post arguably cuts the other way: one should be on particular guard against expressing flabby thoughts, when said thoughts may be read by millions–and hence mislead millions. And, to be honest, Raghuran’s thoughts about the errors of Friedman’s thought during times of pandemic are very flabby indeed.

In reading all these critiques of Friedman, 50 years on, I’m reminded of something George Stigler said. “It’s easy to win an argument against Milton when he isn’t there.”

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October 7, 2020

The Real Pandemic: Mass Munchausen’s Syndrome by Proxy

Filed under: CoronaCrisis,Economics,Politics — cpirrong @ 6:21 pm

It’s more than fair to say that we are experiencing a pandemic, but not the one you hear about ad nauseum. No, the pandemic is not a virus, it is a pandemic outbreak of Munchausen’s Syndrome by Proxy which focuses its obsessions on the virus.

Munchausen’s Syndrome by Proxy is a mental illness in which the sufferer fantasizes that others–usually people in their charge, such as children–are suffering from serious illness and require drastic medical intervention.

Observe what has happened over the last 7 months, and what if anything is increasing in intensity today. The obsession with Covid-19. The monomaniacal focus on “cases” (usually the result of hypersensitive tests prone to false positives), with the belief that people who test positive are sick, and huge numbers of those who become sick will die.

Given the actual experience over the last several months, these beliefs are wildly exaggerated–imaginary, fantasized illnesses, with fantasized severity, just the kind of thing that a sufferer of MSbP does.

And there’s more to the diagnosis. MSbP sufferers subject the people whom they imagine are ill with suffocating attention and unnecessary, and often harmful, health-related interventions. You know, like lockdowns; draconian restrictions on movement, social contact, and other features of everyday life; the shutting down of schools and colleges; and strident demands to wear masks–even between bites of your meal if you are in California.

Look at so many governors and mayors, e.g., Gretchen Whitmer of Michigan, Gavin Gruesome–excuse me, Newsom–in California, J. B. Pritzker in Illinois, or Tim Walz in Minnesota. (I could go on. And on. And on. Believe me.) They constantly invoke their power over you. But it’s for your own good! Trust them! Mommy is protecting you! And if you object, you will be punished! How dare you defy Mommy’s tender mercies, you ungrateful brats? If you do, you will be punished! To get your minds right and realize just what danger you are in, and why you need to listen to Mommy and do exactly as she says!

And if it were only limited to “authorities” who make Cartman look pleasant. You probably have neighbors or co-workers who have the Syndrome. Or you run into them in the grocery store. Or maybe it’s the fatso in the pharmacy checkout line. (Yeah, that’s an allusion to a personal experience, but no worries: I doubt said fatso can read.)

It was already bad enough before Trump was diagnosed with Covid. Then a super-virulent strain of the Syndrome appeared, through some Darwinian mechanism apparently. As soon as I saw his first remarks from the hospital–that he had learned a lot about Covid, and he was going to share that information and experience with us–I knew he would say exactly what he did say: it can be a serious illness, but the vast majority of people can beat it, and we shouldn’t let it dominate our lives.

And I knew that this would kick the MSbP crowd into apoplexy. They want a narrative of doom and gloom. They want people to be afraid. They want people to defer to them, and to depend on them, and most importantly to obey their commands. You could get really sick–ALL OF YOU! You could die–ANY OF YOU! Don’t listen to anyone who tells you otherwise! They don’t have your best interests at heart, like Mommy does. And put in your earplugs (so you don’t hear the Bad Orange Man), put on your eye shades (so you don’t read the Great Barrington Declaration), you know where to put the cork (aka the mask that makes it impossible for you to speak intelligibly).

So anything that contradicts the narrative triggers a mass attack of the Munchausens.

Is Covid like the seasonal flu, as Trump said? Well, the more data that comes in, the more it appears that yes it is a danger on the order of magnitude of a bad seasonal influenza strain–the kind we have endured multiple times in the past without draconian measures that cratered economies. And ironically, the data strongly suggest that it is less of a danger to children than the garden variety seasonal flu.

But it is beyond cavil that it is nothing remotely like the last great pandemic disease, Spanish Influenza of 1918-1919. But that doesn’t stop severe cases of MSbP like Gov. Gretchen Ratched from justifying their actions by reference to that episode, and invoking laws passed during that real pandemic to control your life today.

In normal times, most of the objects of MSbP sufferers are children, who have limited power to resist. Often medical professionals are the ones who identify a MSbP situation, and intervene to protect the object.

But today, adults are overwhelmingly the objects. And too many medical professionals enable MSbP (and may indeed be sufferers themselves–just look at the lunatic Twitter timelines of many medicos FREAKING OUT over Trump’s remarks and behavior, i.e., acting like someone suffering the flu, or a cold).

Given the coercive powers of the most important MSbP sufferers, the said governors, mayors, bureaucrats, etc., this pandemic–the MSbP pandemic–is wreaking untold havoc. We need more people to say we aren’t going to take it. We need more people to push back. We should not be in the thrall of the mentally ill.

But alas, we are. Because there are so goddam many of them, and they infest the executive branches of government at every level.

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September 12, 2020

I’m So Old I Can Remember When Trying to Prevent Panic Was Considered a Hallmark of Leadership

Filed under: China,CoronaCrisis,Politics — cpirrong @ 12:27 pm

In what perhaps may become a new feature, in response to a Twitter request by @Esq_SD, here are my thoughts regarding (a) the new Woodward book, and (b) the Israel-UAE (and now Israel-UAE-Bahrain) peace deals.

With respect to the Woodward book, I wouldn’t read his has-been droning on a dare, a bet, or for a date with Gisele Bündchen. So all I can do is respond to the alleged bombshell in the book, namely that “Trump lied [about COVID] and people died!”:

“To be honest with you…I wanted to always play it down. I still want to play it down, because I don’t want to create a panic.”

This is a completely defensible, and indeed laudable, course to take. Panic makes bad situations worse. Panic kills. Always.

Historically, those in authority who have panicked, or more importantly through intemperate word or deed, caused those who they led or governed or ruled to panic, have created disaster. Those who contributed to maintaining calm even in dire straits have often proven instrumental in overcoming those circumstances.

I’m so old that I can remember being taught in school about a president who said “the only thing we have to fear, is fear itself”–and that he was admired for saying so.

But now, that president’s political heirs are saying in effect “the only thing we have to sell is fear.”

I am reminded of the first lines of Kipling’s If:

If you can keep your head when all about you   
    Are losing theirs and blaming it on you,

Kipling thought this was admirable. It’s now apparently worthy of contempt.

And ain’t it an accurate description of the situation Trump faces?

My criticism–more of a lament, actually–is that Trump did not succeed in stemming panic. Even before Trump spoke to Woodward on 19 March, I had started to call the policy response to COVID-19 a “panicdemic.”

And it only got worse from there. And in certain quarters, the panic continues unabated. This is particularly appalling, given that perhaps, given the ignorance of the early days, there were grounds for fear in March. But given all of the evidence amassed in the past six months, it is now beyond obvious that those fears were vastly overblown.

Yet the fear mongers keep mongering. Just look at the UK, where BoJo (whose erratic behavior makes Trump look like Seneca the Younger) has clamped down again. Or Victoria, in Australia (I’m being specific as an acknowledgement to Ex-Global Super-Regulator on Lunch Break’s admonition that there is more to Australia than Melbourne), or New Zealand, both of which have adopted the insane eliminate-the-virus strategy

The panicked policy responses have wreaked havoc, and inflicted far more damage than the virus itself. So would that Trump’s efforts to tamp down the panic been far more successful. But I certainly will not join the baying chorus attacking him for going against character, and choosing understatement over hyperbole.

As for the Mideast peace deals. What? You haven’t heard about them? Well, that’s understandable, because the media has been speaking sotto voce on the subject. And that tells you just how epochal the deals are.

They obviously can’t say the deals are a bad thing. They clearly are a good thing, but they can’t say that, because that would be a boon for Trump, and we can’t have that, can we? Especially with an election in 7 weeks. So the media silence (and the silence of the Democrats) is as ringing an endorsement as one could imagine.

You can bet your bottom dollar that if Obama had shepherded such a deal to completion, the media would be singing his praises from the rooftops. (As if Obama ever could have achieved this, given his inveterate hostility to Israel and his obsession in consummating a deal with Iran.) But since Trump’s fingerprints are on it, the most substantive diplomatic realignment in the Middle East in decades is all but ignored.

As is the deal in another allegedly intractable conflict, between Kosovo and Serbia. Richard Grenell’s scathing takedown of the press for its indifference to and palpable ignorance of the the importance of the rapprochement was fully justified. (Ironically, Grenell would check various intersectional boxes, but one box that he checks–Trump Republican–puts him beyond the pale of the pale.)

These two achievements also give the lie to the oft-repeated slander that the Trump administration is isolationist, withdrawing America from the world, and in particular, abandoning the Middle East.

Letting Syria go to shit–stay shit would be more accurate–is not abandoning the Middle East. It is prudent to avoid getting involved in . . . what’s the word that Democrats always used to throw around? . . . ah . . . quagmires, that’s it. Drawing down in Iraq–after largely vanquishing ISIS–is prudent. Economy of force and concentration on strategic priorities is prudent: getting involved and staying involved everywhere is strategic idiocy.

It is particularly ironic that Trump has been routinely savaged as a war monger, yet he–in the teeth of furious opposition from the Pentagon and the State Department apparatchiks other elements of the Deep State–has steadfastly–and patiently–whittled away at American military presence in fruitless conflicts, and used diplomacy to advance American interests and reduce conflicts, thereby avoiding additional military commitments.

We are well into a new era of great power rivalry, specifically with China. Prudent strategy focuses on those arguably existential conflicts, and avoids peripheral ones, or attempts to mitigate them through diplomacy. The peace deals, the drawdowns in Iraq and Afghanistan, and the waging of asymmetric conflict against China (cf., TikTok, Huawei, visas to Chinese students, prosecuting academics who whore for China) are all elements of such a prudent and foresightful strategy. Trump’s adoption thereof is more likely instinctual than intellectual, but his instincts are correct and he has had the fortitude to pursue them despite the inveterate opposition of the idiots in the Establishment. These policies do not represent an abandonment of American influence, but a concentration on The Objective.

Clauswitz–and Sun Tzu–would understand, even if the DC Mandarins are clueless.

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September 2, 2020

Bullshit Data, Part II: The Government We Deserve?

Filed under: CoronaCrisis,Economics,Politics — cpirrong @ 6:25 pm

Two big covid-related stories have come out in the past few days. The first is that the CDC announced that only about 6 percent of those counted among the covid-19 death toll had no other cause of death listed. The vast majority of those counted as covid casualties had other co-morbidities, notably respiratory problems, diabetes, and obesity. Indeed, the average number of co-morbidities was 2.6 across the 150,000 or so deaths.

Some, like Trump, immediately seized upon this as evidence that only 9000 people had died from covid. We can’t have that, now can we? So immediately the usual suspects, notably Fauci and the media, pushed back, claiming that no, 150,000 is the true death toll. Media outlets in particular began “fact checking” the claim. (Quis custodiet ipsos custodes?)

Anyone who has done serious science, especially social science, knows that proving causation is difficult. Even defining what is meant by “to cause” is difficult to pin down. So arguments about how many deaths covid has caused are more likely to generate heat than light. In particular, in common parlance the idea of causation is zero/one, on/off: X caused Y, or it didn’t.

It’s better to think in terms of probability, e.g., what is the impact of covid the probability someone dies. A fair reading of the CDC report is that covid increases materially the probability that an aged, unhealthy, and especially aged unhealthy person dies prematurely, but it has a minor impact on the probability that an otherwise healthy person dies. (Even that conclusion is dicey, due to the lack of control groups, but leave that aside.)

Even though such a characterization could support an assertion that covid “caused” 150,000 deaths in the US, it is a devastating indictment of past, present, and likely future covid policy, in the US and elsewhere. Why? Because it means that one-size-fits-all-shut-everyone-in policies are grotesquely costly.

If covid is a very slight risk to healthy individuals, but a big risk to unhealthy ones (especially the elderly) then measures should be targeted at the at-risk population, leaving the rest of us to go about our daily lives pretty much normally. The indiscriminate, draconian measures involve huge pain for little gain, and arguably no gain relative to targeted policies.

As death rates–even based on the dubious policy of categorizing the death of anybody with covid as being from covid–have fallen, the bondage fetishists in government and the media have pivoted to another metric: covid cases, i.e., positive test results.

And that brings me to the next big story, one from the NYT no less: because of the nature of the standard testing method, polymerase chain reaction (PCR), it is possible to return a positive test when you are not presently sick, and/or not contagious–and never were!

According to the Times:

The PCR test amplifies genetic matter from the virus in cycles; the fewer cycles required, the greater the amount of virus, or viral load, in the sample. The greater the viral load, the more likely the patient is to be contagious.

This number of amplification cycles needed to find the virus, called the cycle threshold, is never included in the results sent to doctors and coronavirus patients, although it could tell them how infectious the patients are.

In three sets of testing data that include cycle thresholds, compiled by officials in Massachusetts, New York and Nevada, up to 90 percent of people testing positive carried barely any virus, a review by The Times found.

Think of it like distillation: the tests aren’t making wine, they’re making 199 proof stuff.

In other words, the case numbers are bullshit, if they are intended to measure how many sick, or more importantly, how many contagious people there are. A large fraction of the positives are in no danger, and pose no danger to others. (In previous posts, I outlined other reasons why case numbers are bullshit, e.g., the nature of the test regime, and changes therein over time.)

Put this together with the first story–that the risk of death from from covid among the healthy is small–and the one-size-fits-all policies that are currently justified based on the number of positive test results look even more insanely destructive. If you are healthy and get it, you are unlikely to die: if you have a positive test result, you are highly unlikely even to be sick or make anyone else sick. So why continue highly restrictive policies imposed on virtually everyone (particularly in places like California, let alone Australia and New Zealand which have descended into police states) based on something (a positive test result) that indicates negligible risk?

Thus it is particularly insane that very low risk populations (primary and secondary students, college students, professional athletes, college athletes) are subjected to severe limitations on their normal activities based on “spikes” in positive tests. The hysteria among college administrators is particularly idiotic: they are freaking out and cracking down over such spikes. University life has not returned to anywhere resembling normal even at universities, which, like mine, are formally “open” and offering some in person classes: on what are usually the busiest days of the year, the first couple of days of the semester, the UH campus is still a ghost town. (Not that I am surprised about the idiocy of administrators, mind you. Thirty years in academia means that I am anything but surprised.)

The bullshit nature of death coding–if someone tests positive for covid and dies, it is coded as a covid death–raises another serious question when combined with the hypersensitivity of the test results: the incremental impact of covid positivity on mortality may be smaller than the official numbers suggest, even among at-risk populations, because the “dose” of virus that generates a positive test may be far too small to have a meaningful health effect even on the sick.

Here’s where things get even more interesting. It is clear that there have been large numbers of excess deaths (i.e., deaths above historical averages) during the covid period. Indeed, the number of excess deaths exceeds the number of official covid deaths, leading some to conclude covid deaths have been undercounted.

But the ubiquity of testing in hospitals, plus the extreme sensitivity of tests, makes it highly likely that covid did not materially contribute to many of the deaths officially counted as covid casualties. Presumably a lot of the people who died after testing positive had too little viral load to suffer from the virus.

Which would mean that the difference between excess deaths and covid deaths is likely an underestimate of excess mortality attributable to the “non-pharmaceutical interventions” (e.g., lockdowns). Indeed, if deaths counted as covid are overstated because of the hypersensitive tests, excess deaths minus covid deaths undercounts the deaths attributable to lockdowns, including the deaths for which the economic collapse was a materially contributing factor.

In other words, if covid is listed for some as a cause of death, for others “government policy” should be. (And of course, for some, e.g., nursing home residents in NY, “both” would apply.)

In one of my early posts, where I was among the first to raise serious doubts about the prudence of lockdowns, I said that it was a matter of trade offs. Trade-offs not just between death and income/wealth, but between deaths from one cause and deaths from another. It is now becoming clear that tens of thousands, and perhaps over 100,000, of the excess deaths are not the result of covid infection, but from the policy responses to covid.

Yet throughout the country, and indeed throughout the world, with a few exceptions, these realities regarding the true risks and the meaninglessness of tests are not causing those in power to slacken their grip. States of emergency continue throughout the US, especially in places like California, Michigan, New York, Illinois, and Rhode Island. Travel quarantines exist worldwide. (Though why the Europeans are keeping out Americans but letting in Chinese is totally beyond my comprehension.)

Why? Well, for one thing, admitting this now would be to confess that the previous measures were unnecessary, cruel, and excessively destructive of life and economic welfare. This is not a good look for politicians:

Not to admit error is human. Especially for the subspecies of humanity (I’m being generous) called politicians and bureaucrats. But I think there is something more sinister going on here.

They like the power over our lives. They are intoxicated by the power over our lives. They revel in the power over our lives. And they are goddamned if they are going to give up that power over our lives.

Especially when so many people ovinely submit to them running roughshod over our lives and our liberties. If Joseph de Maistre was right, and we get the government we deserve, the governments we have now speaks very poorly of us indeed.

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August 27, 2020

Is-Ought on the Streets

Filed under: CoronaCrisis,Politics — cpirrong @ 10:19 am

The Cancel Klan is going after Tucker Carlson. Again.

His thought crime? This:

“We do know why it happened, though. Kenosha devolved into anarchy because the authorities abandoned the people,” Carlson said. “Those in charge, from the governor on down, refused to enforce the law. They’ve stood back and watched Kenosha burn. Are we really surprised that looting and arson accelerated to murder?”

For which he was accused with advocating vigilantism.

Rather than judging him on the basis of one part of a 7+ minute monologue, watch the entire thing:

The criticism of Carlson is a classic example of the is-ought fallacy. Carlson was, in essence, saying what is–explaining the reason for what is–by solving for the equilibrium. It’s not rocket science. It’s not game theory that requires elaborate equilibrium concepts or refinements.

It’s very basic: when authorities fail to keep peace and order, people will act in what they perceive to be self-defense. When the civil law breaks down, the law of the jungle–the state of nature, under some theories–takes over.

What’s amazing is that this sun-rises-in-the-east insight is considered an incitement. In fact, it is a lament. It is clear that Carlson is hardly happy at the prospect. Nor am I. He is not advocating it. Nor am I. He is saying, merely: you reap what you sow.

Is that so complicated?

And America’s cities are sowing a grim harvest of violence and despair as the result of two very bizarre and seemingly incompatible failures of the governing classes: the complete abdication of law and order in many major cities, combined with the draconian exercise of government power allegedly intended to achieve the (entirely futile) goal of eradicating covid-19.

That is, the governing classes in myriad states and cities have completely inverted the proper roles of government. They fail to exercise power and authority to perform their proper functions, but exercise the full power of the state to perform functions which are not just improper, but counterproductive. They kneel before the lawless, and crush the law-abiding under their heels.

The signs are everywhere. Look at Portland, which has been devastated by riots for nigh on to three months. Every night. (NB: protests happen during the day; riots happen at night.) The response of Oregon authorities–to shriek at the attempts of the Federal government to protect Federal property, and a complete unwillingness to get the riots under control. The mayor–with a sickly ironic choice of words–says that the riots will “burn out” eventually.

Yeah, Nero of the Columbia (ironic!): they will burn out figuratively because the city you allegedly govern will be burned out. Literally.

Or consider my hometown, Chicago, which has seen spasms of bacchanalia of violence over the past months. The looting has devastated the Magnificent Mile shopping district.

In a richly symbolic act, on several occasions the city raised the bridges over the Chicago River to prevent marauding looters from the South Side easy access to the ritzy north side of the river. Like a besieged medieval town raising the drawbridges over the moat in an attempt to stymie invading barbarians:

The devastation of riots and looting is tag teaming with the devastation wrought by the insane lockdown policies of local governments who compensate for their surrender of the streets by oppressing you, and the myriad restaurants, sellers of personal services (e.g., hair care), and small retailers that you patronize.

It was recently reported that 50 percent of the businesses in San Francisco have closed. Most will probably never reopen. If you live in the various Lockdown Lands–e.g., California, NY–you see boarded up store after boarded up store. 5th Avenue has become a shuttered ghost town. So have many other places.

Homelessness has exploded in many places–again, largely as a result of the abdication of civil authorities. San Francisco and Austin are two prominent examples.

It is so hard to build, so easy to destroy. I first went to NYC in the late-1970s, and traveled there a lot on business in the mid-1980s. It was a dangerous, dirty, dystopian place. In the late-1980s, the rejuvenation began. Notably, the first and crucial step of the process was restoration of public order, a process that hapless administration after hapless administration (crowned by the king of haplessness, David Dinkins) claimed was impossible. But the Giuliani administration started a virtuous cycle that made the city an attractive place to live (for people who like that kind of living) and a major destination for tourists.

And those three decades of progress have been erased, in a little over three months, due to a failure to keep order (e.g., the release of thousands of criminals back on the streets) and the imposition of a crushing order on the law abiding, especially law abiding small businesses. Crime has skyrocketed, and people–productive people–are leaving, almost certainly never to come back.

These are the wages of the most colossal government failure in American history. Failure from coast-to-coast; failure in the large cities on the coasts in particular.

You can cancel Carlson for pointing out the obvious, but you can’t cancel the obvious: when the duly constituted institutions of collective action fail to protect the lives, liberty, and property of large numbers of people, large numbers of people will take individual action, or emergent, unsanctioned, spontaneous collective action, to do what governments have failed to do.

In short, governments ought to protect lives, liberty, and property. When they do not, people will do so themselves. And that’s just the way it is.

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August 5, 2020

Counting the Cost of Covid Hysteria

Filed under: CoronaCrisis,Economics,Politics — cpirrong @ 1:30 pm

The covid hysteria continues. There’s really no other word for it. Responses to it have slipped the bonds of reason, and reasoned debate.

There are many manifestations of the hysteria. I will focus on two–hydroxychloroquine and lockdowns.

Hydroxychloroquine has been a hot button issue ever since Trump gave an equivocal endorsement of it months ago. The most recent demonstration of how radioactive it has become was a rally of sorts by practicing physicians in DC whose endorsement of a therapy regimen including hydroxychloroquine, antibiotics, and zinc unleashed a frenzy of criticism, retribution, and censorship.

The most ebullient endorsement of the therapy regimen came from a Houston physician, Stella Immanuel. Now normally Dr. Immanuel would check important boxes in Progland–she’s an African American (literally, born in Ghana) female. But her praise for hydroxychloroquine unleashed a fury of abuse on her. In addition to being a physician, Dr. Immanuel is a devout Christian who believes in demons, and who focuses on spiritual as well as physical health. These views became the focus of criticism, in the style of ad hominem attacks that have become the staple of what now passes for public discourse. The substance of what she said, and her empirical claims–that her treatment using hydroxychloroquine had impressive clinical results–were ignored altogether.

Well, that’s not quite right. Her views were not ignored, exactly. They were actively censored by the only authorities that currently matter–Facebook, Google/YouTube, and Twitter–who consigned the video of her impassioned presentation (which had received around 14 million views) to the Memory Hole. This blatant censorship was accompanied with the by now familiar paternalistic tut-tutting from our tech overlords that Dr. Immanuel’s views were not consonant with the pronouncements of government authorities (e.g., the CDC) and the WHO. (Bodies, it must be emphasized, which have covered themselves in ignominy in the past months, but why should that matter, right?)

If Facebook, Google/YouTube, Twitter have arrogated for themselves the role as enforcement agents for government ukasis, shouldn’t they be subject to the First Amendment, namely its prohibition of infringement on free speech?

I further note that if conservatives had unleashed such a stream of invective against a leftist African American woman the screams of racism and sexism from the very leftists currently imprecating Dr. Immanuel would shake the heavens. But if the left didn’t have double standards, it would have no standards at all.

But Dr. Immanuel should consider herself lucky. She’s still employed One of her fellow physicians on the Supreme Court steps, Dr. Simone Gold, was fired for her temerity in speaking out by her employer of 25 years.

This further illustrates the double standards issue. For months “front line” medical personnel, doctors and nurses, have been lionized, and cloaked with moral and intellectual authority because of their experience, and the risks they ran. It has not been as maudlin in the US as in the UK, with its clap for the NHS nonsense, but the near beatification of health care professionals has been a thing here. But now we have “front line” medical professionals with experience–by now far more experience than those lionized in March or April–speaking against the Party Line, and they are no longer sanctified–they are demonized. (Maybe Dr. Immanuel was onto something.) Block anti-lockdown protests in your scrubs–Hero! Express views on a treatment that contradicts the authorities while dressed in your white coat–charlatan who must be silenced!

The fact is that the evidence on hydroxychloroquine is on balance favorable, and at worst equivocal. Especially if given in the early stages of symptomatic covid, and crucially if given in conjunction with other medications, notably zinc, it does appear to reduce the risk of death. Further, as a drug that has been dispensed billions of times over decades for a variety of conditions its risks are known, and relatively benign.

So what’s the downside of employing the therapy? It offers some prospect of beneficial clinical results. There is not a readily available alternative that has proven superior. The downsides are modest.

One could get the idea that some people don’t want a treatment.

One of the critics of the studies of hydroxychloroquine is the insufferable, and insufferably arrogant, Dr. Anthony “Where’s the Camera?” Fauci. He caviled a study (described at the above link) at the Henry Ford Hospitals, claiming that it was flawed because it was not a controlled random experiment, but an observational study. Well, a controlled random experiment would be preferable, but observational studies can provide valuable information if done properly, as it appears the Henry Ford study was. Further, most of the anti-hydroxychloroquine studies, including the notorious, fraudulent Lancet study, were observational. Further further, Dr. Fauci’s main claim to fame was a study done in the 1980s that happened to be . . . an observational study.

The Insufferable Fauci provides a segue into the next subject of hysteria–lockdowns. Fauci claimed that the US record in combatting covid is inferior to that of Europe because this country did not lockdown as thoroughly.

Bullshit.

This man who claims to be all about the data and evidence can make such statements only by ignoring the data and evidence. There have been numerous studies of how cross-jurisdiction variations in various metrics (deaths, cases, etc.) of the severity of covid outbreaks vary with the timing and severity of lockdowns. (One example is here, but there are many more.) The basic answer is: likely not at all, but at most, hardly at all.

At best the evidence supports the view expressed early in the outbreak (but curiously discarded) that restrictions on social interactions could affect the timing of the progression of the disease, but not its ultimate toll. That is these policies can affect the shape of the curve, but not the integral under the curve.

Why? Because virus gonna virus. A point that I made early on, and many bona fide experts did as well.

But we are seeing continued calls for a resumption of–indeed, and intensification of–lockdowns. One example is the state of Victoria in Australia (where Melbourne is located). The state has gone into a severe lockdown–with little effect on the spread of the virus. In the United States, Fauci insinuates that more intense lockdowns should be considered, and other figures go beyond insinuation. Minneapolis Fed president Neil Kashkari (like Fauci, a long-time apparatchik who has risen to a position of prominence and power despite little demonstrable record of actual achievement) has called for a “really hard” six-week lockdown. You know, to “save the economy.”

We’ve already seen the economic cost of less than really hard lockdowns. In the US, economic output contracted by 9.5 percent, and unemployment skyrocketed. And we’re the lucky ones. In Europe, the contraction was ~12.5 percent. Please spare us any more rescues.

And again, despite variations in the timing, design, and severity of the lockdowns that wreaked this economic devastation, the progress of the illness was remarkably similar. Sweden did worse than Denmark, but better than France and other European countries–and it suffered only an 8.5 percent hit to GDP.

I could go on and recount other manifestations of hysteria. Masks, for instance. But this post is already long enough.

The ultimate question is why the hysteria? This is a subject deserving of books (plural) not blog posts. In the US, the answer is largely political. As Thomas Sowell noted in Conflict of Visions, views on a wide variety of issues are highly correlated, and this is demonstrated in spades by covid. The left is virulently (pun intended) anti-hydroxychloroquine and pro-lockdown (and mask). The right the reverse. This divide is only aggravated by the pro- and anti-Trump divide.

Related to this is the interest of the governing class. The Faucis and Kashkaris and Democratic governors and mayors and county executives of the US (and their foreign equivalents) quite like the vast powers that they have arrogated in the name of public health. They have achieved unchecked authorities that they could only have dreamed of in January. Why should they want to stop now? And why should they want to tamp down hysteria, when it has worked out oh-so-well for them? Of course they don’t–hell, they have every incentive to stoke it, and by all evidence they are doing so with a hearty assist from the hopeless media.

The cost of this hysteria has been high, economically, and in terms of the collateral damage (including health and mortality) of economic collapse. The benefit is imperceptible. And that is almost certainly why our tech overlords are hell-bent on suppressing those who dissent.

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July 18, 2020

School’s Out Forever?

Filed under: CoronaCrisis,Economics,Politics — cpirrong @ 4:04 pm

As summer marches inexorably towards fall, the latest battle in the Covid Wars is being fought over the reopening of primary and secondary schools. Democratic politicians, and teachers unions, are leading the charge to forestall face-to-face instruction. The battle cry among teachers appears to be “I don’t wanna die.”

Er, you’re not gonna die. Nor are the children.

One of the few pieces of almost uncontested evidence about Covid-19 is that children are at very low risk of contracting the illness, let alone dying from it. Nor do they pose major threats to passing the virus on to adults.

In the back-and-forth over “is Covid-19 worse than a bad flu,” when it comes to school-age children, the answer is that flu is worse than Covid-19, not the other way around. Yet schools have remained open, flu season after flu season.

Recognizing this, many nations have reopened schools, with no reports of resurgences tied to schools.

But in the US, the education establishment, and Democratic politicians, are largely united in opposing reopening. Some school districts (e.g., in Houston) have postponed resumption of normal instruction until November. (Right when the flu season kicks in. Smart!) Others are suggesting that school’s out, if not forever, for 2020-21.

Given the hectoring and lecturing about SCIENCE! from these very same people, the utter disregard for the evidence is striking.

There is only one rational justification for this refusal to run such a slight risk (and again, a risk that is likely less than during normal winters): traditional instruction provides virtually no value! Revealed preference at work, boys and girls.

Are the education establishment and Democratic politicians willing to stipulate to that? If so, we can save a helluva lot of money paying for teachers and brick-and-mortar schools. For the distance learning model is essentially home schooling plus (and not plus very much). Given the histrionics over home schooling emanating from the education establishment, this haste to adopt the home schooling plus model to avoid an immaterial risk is rather amusing.

In fact, although home schooling does work for some (I know several examples, including a home school family that produced a Harvard physics PhD, a Princeton BA and MA, and another Princeton grad who was a world-known ornithologist at age 13), for most Americans it is impractical because parents are employed, and even for families with a stay-at-home parent, less effective than in-person instruction for myriad reasons.

Meaning that the education establishment is willing to sacrifice the educations and futures of millions of American kids, to avoid . . . pretty much nothing.

In other words there is a huge disconnect between the rhetoric regarding the importance of public education that we are usually bombarded with, and the unseemly eagerness of the public education establishment and its political handmaidens to dispense with the core functions of public education. The disconnect is all the more glaring because the justification offered by the supposed followers of the SCIENCE! is flatly contradicted by the actual science.

So what is to explain this disconnect? I have two hypotheses.

  1. This is all about the 2020 election. The Democrats believe that preventing a return to a semblance of normalcy (and you can stick “the new normal” up a warm, moist, orifice) will boost the odds of defeating Trump. Relatedly, they also believe that keeping the panic alive by stoking fears enhances their electoral prospects.
  2. Teachers really like getting paid their full salaries while getting to stay home, assigning some YouTube videos, and calling it teaching.

These hypotheses are of course not mutually exclusive.

Regardless of the explanation, a failure to reopen schools will damage the educations of millions of American children, stunt their social and emotional development, and in some cases inflict serious psychological harm. Moreover, it will inflict substantial stress, distress, and economic harm on adults trying to earn a living now forced to divert time and effort to monitoring their children, and trying to teach them.

It is utterly cynical, and frankly, quite vile. Objectively the case for reopening schools is solid. Certainly far more solid than the cases for various Covid-19 measures, including masks (FFS) or social distancing or lockdowns that have been imposed over the last 4 months. Yet those forcing these latter measures adamantly oppose opening schools.

Like I said. Cynical. And vile.

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June 30, 2020

Hide the Decline! Coronavirus Edition

Filed under: CoronaCrisis,Politics — cpirrong @ 11:03 am

Reported Covid-19 daily deaths (likely exaggerated for reasons I posted on months ago) have been declining inexorably since their peak, and are now about 10 percent of the maximum. Even that is overstated because of backdating in states like Delaware and New Jersey that resulted in large single day death reports that summed deaths that had occurred over periods of weeks or months.

We can’t have that, can we? How are we going to sustain the panic, as politically useful as it is, if we report good news?

No problem–just switch the metric! Whereas for weeks we were told the Grim Death Toll narrative, that has disappeared down the Memory Hole, to be replaced by the Skyrocketing Cases narrative, especially in Red States such as Texas, Florida, and Arizona.

I have been calling bullshit on the case numbers as a meaningful metric since March. It’s even more bullshit now.

A major reason case numbers (i.e., the number of positive tests) are BS is that testing is not a random process, but is endogenous. Moreover–and this is crucial now–the process driving who is tested is changing. Whereas before tests were focused on the symptomatic or the particularly vulnerable, testing is now more widespread. Some companies are requiring employees to be tested in order to return to work, or to remain at work if they have the sniffles.

As a result, more people are testing positive. Moreover, the average age of those testing positive has declined dramatically (because they were censored from the test population before). Most of those people are symptomatic, and those who are experience mild symptoms. Those under 60 exhibit little risk of death, or serious illness (especially if they do not have other serious health conditions). Those who are sick enough to require hospitalization are less likely to require ICU care, and those who do tend to recover at high rates (without ventilation), and have relatively short stays.

As a result, there has been a striking divergence between rising case numbers, and deaths.

But that doesn’t fit certain political needs. So we hear virtually nothing about deaths, but only shrieking about case numbers. This exploits the earlier misconception–misinformation, actually–that the death rate from the virus is high. Indeed, as positive tests accumulate, and serological studies accumulate, it is clear that the infection death rate is in the range of .1-.25 percent, far smaller than the earlier estimates that remain embedded in the memories of most.

The shrieking is particularly intense in–and at–Texas. Yes, Houston has seen a large increase in positive cases. But the deaths in Texas (and Houston) have never been large (up until now 2020 has seen fewer pneumonia-related deaths than in the typical year), and are not trending up . Not that you’d know from reading the media.

So there has been a reprise of the overwhelming the health care system narrative.

The worst sinner at this is my local POS newspaper, the Chronical. This article in particular, which insinuated that Governor Abbott (and no, I’m not a fan) had coerced Houston hospitals into covering up impending doom.

The article starts out with a lie, claiming that Houston ICU utilization had hit 100 percent. Actual data show this did not happen, and that Houston ICU utilization has been fairly constant over since April. Even throwing around scare numbers about 90 plus percent utilization is misleading. Of course hospital facilities are sized so that they do not have persistent unutilized capacity. That is wasteful, and inflates costs. As the data in the link show, moreover, hospitals–rationally–have the ability to expand capacity.

As I said in a very early post, capacity is not a destiny–it is a choice.

Yes, there as an increasing number of Covid patients in ICU. But this is clearly another manifestation of changing testing protocols, and most importantly, of the same problem that makes even the death data meaningless: lumping people in the hospital with Covid together with those who are hospitalized because of Covid. If the increased Covid numbers were there because of Covid, you would see ICU usage go up overall. You don’t. It’s oscillating around normal levels.

It should also be noted that there are reasons to believe that people who should have gone to ICUs, or to hospitals, did not because of Covid. This suppressed numbers and makes it dubious to attribute any increase in utilization to Covid.

As for the supposed coverup, the hospital systems did not stop reporting hospitalization/ICU data, but the projections of future usage.

The outrage! Yeah, because Covid-related predictions have always been spot on, right?

In fact, the only competition between projections is which is the most absurd.

The POS Chronical’s political agenda and utter hypocrisy is on full display:

Then, after reporting numerous charts and graphs almost daily for three months, the organization posted no updates until around 9 p.m. Saturday, sowing confusion about the hospitals’ ability to withstand a massive spike in cases that has followed Gov. Greg Abbott’s May decisions to lift restrictions intended to slow the virus.

Gee. What else happened around the same time. Let me think? Protests ring a bell?

But of course, the protests (and the massive George Floyd funeral) are sacrosanct, and out of respect the virus took a holiday and didn’t exploit the conditions (large crowds) that are supposedly the main source of contagion. (EG., MLB will be restarting–but without fans, because otherwise Minute Maid and other parks would be Covid Central.

The hysteria over case numbers reminds me of a phrase from the Climategate emails: “Hide the decline!” Just as in Climategate, there was a divergence between a number that mattered (actual temperature) and a bogus number (proxy data-based temperatures): actual temps were flat/declining when the proxy number was going up inexorably.

So the battlecry became: Hide the decline!

We are seeing the same thing now. Hide the decline in deaths by hyping irrelevant case numbers, misinterpreting those numbers, and making dire forecasts at odds with the actual data.

If you will recall, the entire justification for lockdowns was to “flatten the curve” to protect the healthcare system. The underlying rationale was that the virus’s spread was inevitable, but we need to control the rate. That is, suppression/elimination was an impossibility until herd immunity was achieved.

Based on that rationale, the surge in cases with low and arguably declining numbers of deaths and no data demonstrating an overwhelmed healthcare system is actually a good thing. It measures progress to herd immunity. Moreover, it’s better to have the spread now, in the summer, rather than when the flu season kicks in, and creates its inevitable increase in demand for healthcare resources–including ICU beds.

But the media and many politicians are completely invested in panic, for malign and dishonest reasons. So it is essential to hide the decline, and hype the spike.

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June 16, 2020

Igor Sechin Is An Idiot. But You Knew That.

Filed under: Commodities,CoronaCrisis,Economics,Energy,Russia — cpirrong @ 1:06 pm

The very informative RBN Energy blog notes “Look What You Made Me Do – Permian Crude Producers Waste No Time In Ramping Up Production“:

Crude oil supply news comes in from all angles these days, bombarding the market daily with fresh information on producers’ efforts to ramp their volumes back up now that the global economic recovery is cautiously under way. Crude demand is rising, storage hasn’t burst at the seams yet, and prices have come a long, long way in just a few weeks. Permian exploration and production companies, having avoided a fleeting, longshot chance that the state of Texas might regulate West Texas oil production, are responding to higher crude oil prices as free-market participants should. The taps are quickly being turned back on, unleashing pent-up crude and associated gas volumes that, you could say, were under a sort of quarantine of their own for a while. Today, we provide an update on the status of curtailments in the Permian Basin.

The story mentions “the taps.” US shale regions, Permian in particular, are as close to something that can be turned on and off like a tap as anything in the history of the oil business.

You will recall that Igor Sechin’s brain flash in responding to the Covid-caused demand crash was to spurn Saudi importuning to extend output cuts, which spurred the steamed Saudis to increase output, thereby turning a hard fall in prices into a bona fide crash. A crash that hurt Russian producers generally, and Rosneft specifically, extremely hard.

The reasoning for Sechin’s strategy was that US shale producers had been the main beneficiary of previous output cuts, and he wanted to drive them out of business. Predatory pricing, in other words.

But as the RBN post indicates, this strategy, like most predatory pricing strategies, doesn’t work if the target can rope-a-dope and recover when you attempt to raise prices. That’s exactly what’s happening.

Yes, some companies have gone bankrupt–but bankruptcy is different than destruction. (Igor might not know this. Seriously.) And yes, the industry is facing more stringent financing conditions–but if prices rise these will ease too, and drilling activity will resume.

In other words, Sechin failed to realize that not only is predatory pricing almost always a futile strategy, it is particularly futile when unconventional US oil production is concerned. The Saudis found this out in 2014-2015, but Igor either wasn’t paying attention, or didn’t learn the lesson.

Predation doesn’t pay. This is hardly a new insight, or one not demonstrated by repeated experiences–including experience involving Igor’s intended prey.

Sechin’s predatory endeavors work when they involve exploiting the Russian legal system. In the marketplace, not so much. But we all knew that Igor is basically a thug, and not all that bright.

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June 3, 2020

Does “Science” Mean Results That Are Too Good to Check?

Filed under: CoronaCrisis,Politics — cpirrong @ 5:45 pm

You’d think that in the face of a feared pandemic that was thought to put the lives of millions at risk, the prospect of a cheap, proven, and widely available treatment would be a godsend. In a sane world, you’d be right. In our twisted, increasingly dystopian one, you are dead wrong.

Hydroxychloroquine is a decades-old anti-malarial drug that has exhibited antiviral properties. It is off-patent, and cheap. It has been used billions of times.

Some anecdotal evidence suggested that hydroxychloroquine could reduce mortality in Covid-19 patients, especially if used in a timely fashion and in conjunction with zinc and/or antibiotics. Some also suggested it might have prophylactic uses.

Great, right? WRONG! The drug has been the subject of unrelenting attack for months now.

Why? The cause is overdetermined.

Probably the biggest reason is that Trump said positive things about it. And if Trump supports something, it must not just be opposed: IT MUST BE DESTROYED.

But that doesn’t explain all the opposition. Being off-patent and cheap, its’ not in the interest of the pharmaceutical industry to promote or even defend it. In fact, it is against the interest of those developing new anti-Covid drugs. Moreover, it is definitely an anathema to the vaccine evangelists (or the vaccine cult, if you prefer), most notably the malign and creepy Bill Gates. The elites have no vested interest in this everyman’s drug, and some have an extremeoy strong interest against it.

Hence the war on hydroxychloroquine.

The anti-hydroxychloroquine forces thought they had scored a decisive victory with a publication in the (don’t ask me why, given some of its past escapades) esteemed medical journal The Lancet which purported to show that not only was the drug inefficacious in treading Covid-19, it was positively dangerous, leading to substantially increased risk of fatal heart conditions.

So hydroxychloroquine quickly became the New Thalidomide. Almost immediately upon the article’s publication, other clinical trials of the drug were stopped. France banned its use in the country.

But the article quickly received scrutiny, and its findings proved unsupported at best, and perhaps utterly fraudulent. The results were certainly not reproducible. The data were assembled by a small firm nobody had ever heard of, which allegedly trawled electronic health records to compile a huge sample. But the results give indications that the data were made up out of the whole cloth:

Other researchers were befuddled by the data themselves. Though 66% of the patients were reportedly treated in North America, the reported doses tended to be higher than the guidelines set by the U.S. Food and Drug Administration, White notes. The authors claim to have included 4402 patients in Africa, 561 of whom died, but it seems unlikely that African hospitals would have detailed electronic health records for so many patients, White says.

The study also reported more deaths in Australian hospitals than the country’s official COVID-19 death statistics, The Guardian reported. On 29 May, The Lancet issued a correction updating a supplemental table and saying that a hospital assigned to the study’s “Australasia” group should have been assigned to Asia. “There have been no changes to the findings of the paper,” the correction notice said.

Similar problems have been identified in other articles on Covid-19 using data produced by the same firm.

There were also serious methodological problems. (See the linked Science article for details.)

The Lancet, for its part, said it had “concerns.” Really? What was your first clue?

The haste with which this article was published, and the greater haste with which our supposed betters acted upon it, is grotesque. It gives all the appearance of rushing out results that advance a certain agenda or agendas, and since they do, being too good to check.

We are constantly lectured and hectored about Science! Don’t question The Science! If you dispute The Science!, you are knuckle-dragging flat earther fundamentalist!

In fact, the first virtue of true science is skepticism: question everything. And it is precisely events like this Lancet study which suggest that the thing we should be most skeptical about is professional science, particularly as related to subjects where strong political or economic interests are involved.

That is indeed a tragedy.

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