UK policy wonks following Troppo in saying the lock downs were a mistake (but hiding the message a bit)

Here at Clubtroppo, we have been saying for well over a month now that a quick look at the economic damage and the health damage of the responses to the corona virus tells you they dwarf the possible benefits of suppressing the virus, anywhere in the West. This has lead to the prediction that the narrative will flip very soon such that the lock downs will be openly recognised as extremely unhealthy for the population, far worse than the virus. That shift is indeed occurring right now in Australia.

A team of befriended policy wonks in the UK – Richard Layard, Gus O Donnell, Nancy Hey, and others – have now openly adopted the same methodology we have used here at Troppo and that I have co-developed the last three years in the UK. Their paper is here. If you read it properly you will find it says exactly the same as I have done, but tries to soften the message a bit to make it palatable to the politicians. So they dont quite say that the UK politicians have been total buffoons for having instigated the lock downs and that the damage of the lock downs is far greater than their potential benefits, but they sort of say exactly that. As Yes Minister could have said, a very courageous stance. Well done!

Let’s take the paper apart and see how they apply the WELLBY approach and the tricks they have had to resort to, to soften the message. Walking through their paper and their assumptions is a great way of learning the logic of wellbeing cost-benefit analyses and the real tradeoffs the UK and our world have faced.

The basic idea of using the WELLBY.

Firstly, they buy into the notion that we should pick our policies on the basis of how many WELLBYs are generated at what costs, whereby a WELLBY is one point in life satisfaction on a 0-10 scale for one person for one year. I was the first to coin the WELLBY and it was first seen in a peer-reviewed paper recently (Frijters et al. 2020) though I have been teaching it for two years now at LSE. The first mention on national television was by our very own Gigi Foster on ABC Q&A this week! Much of the methodology followed is in a Handbook I co-wrote with one of these authors (who did the numbers on this paper) for the UK government, which these authors have read and in essence follow. [1]

So the name of their exercise is to try and track for every month in the near future, starting in May 2020, whether or not to lift the lock downs in the UK based on the stream of WELLBY of the two scenarios (continued lock down versus no lock down).

Of course the crucial thing here is the assumptions on what would happen in these two scenarios: continued lock down or no lock down. As is usual in this kind of exercise, they do not fully flesh out either scenario because that is somewhat impossible, but they implicitly assume many things by how they say things would progress in them. Indeed, they give a lot of “flesh on the bone” for their scenarios.

Lock Down versus no Lock Down, what do they mean?

In their “continued lock down scenario”, they envisage sustaining another 100 thousand new unemployed every month. In the “no lock down” scenario they say people will get out of unemployment at the same rate they went in (several hundreds of thousands per month). You might say that is rather generous towards “no lock down” since we know the bounce back in recessions is nowhere near as fast as how quickly the problems mounted, but this in actuality lets the government off the hook because it pretends the economic disaster can be fully remedied in only a few months. They assume something similar for the income losses. If you think it through, this reduces the costs of the implied recession by a factor of about 10 versus what the IMF and other economic forecasters are now saying (which I first anticipated and then simply followed in my later posts). If only! Continue reading

Posted in Coronavirus crisis, Death and taxes, Health, History, Methodology, Social Policy, Society | 15 Comments

COVID-19: The path back (with updates)

Note: Article expanded on 24 April and again on 27 April. The middle now has more meat. So you can read it again!

As Paul Frijters has recently said on this site, many countries will soon ease their restrictions on social isolation.

As Paul has been pointing out, we pay a high economic and hence social cost for restricting various parts of the society. Paul thinks the current price is far too high. I hold him in high regard, but I simply don’t know enough to say, or whether he knows enough to say, or whether anyone else does either. The numbers do seem insanely hard to work out: you must determine not only what it costs to keep someone alive, but the price you would pay in extra infections by keeping restrictions lighter and letting them circulate, infected, in the population.

But there is a limit to how much any country will pay to save a life. (Australia’s published limit is somewhere above $4.9 million, according to a note from the PM’s department.)

So deep in the government, policymakers are building exit strategies (and, hopefully, briefing communications experts about how to express those strategies to people).

Too many people jump to the assumption that governments, especially those on the right,  will happily kill lots of people for the sake of lining shareholders’ pockets. My assumption is different: governments, including those on the right, want to win elections. And so far, Scott Morrison and indeed the whole national cabinet have prospered by making good – indeed, anti-Trumpian – decisions.

So here’s my guess about where the national cabinet will go from here, and why it won’t be easy.

When does the return begin?

Australia will probably move fairly carefully, finding the areas where activity can be opened up with near-zero damage. We may well follow the sort of course mapped out by Harvard’s Edmond J. Safra Center for Ethics in its newly-released Roadmap to Pandemic Resilience. It suggests the key steps in returning the economy to something more like normality are: Continue reading

Posted in Coronavirus crisis, Economics and public policy, Health, Medical, Politics - national, Social Policy | 16 Comments

Unseen victims of the corona panic: IVF babies and their parents

Did you know that Australia has over 13,000 IVF babies born per year, the UK over 20,000, the West as a whole (Europe+US+offshoots) over 200,000 and the world as a whole 500,000? And did you know that due to the corona panic these services have been halted pretty much everywhere, meaning those children don’t get born and the parents will be childless, which causes tremendous pain and grief?

Here I want to calculate just how many lost babies and childless families are being created by the panic and every subsequent month of lock downs. The bottom line is that in Australia, there is an equivalent loss of life years to about 26,000 corona-related deaths per month due to the halt in IVF services. For every person who has died with corona in Australia so far, more than 2,000 years of life of IVF babies has been sacrificed, and a similar number of years of thwarted parenthood have been inflicted. For the West as a whole, the bottom line is that within 6 months of lock downs, more life will have been prevented and blighted via the halt in IVF services than is likely to have been lost if there would have been no panic and no particular prevention policies at all. These are enormous and unconscionable losses.

To know the total loss of halting IVF treatments we need to get an idea as to how easy it is to “start up again” once the process has been disrupted, and whether it is likely or not that delayed treatment will turn into no babies.

One key thing to know about fertility treatments is that women need over a month preparation before they can have the treatment, quite apart from the consultations and paperwork. They need to be on hormone treatments to get their eggs to ovulate, which can then be harvested, and they need to be on a stable hormone level before any fertilised eggs can be placed back. Disruptions to the process mean one needs to start again.

This means that even a single week of corona virus lock downs means more than one month’s worth of preparation is down the drain as all bets are off with the planned IVF treatments. So the first month of corona related lock downs will roughly cost two months worth of IVF treatments, though after the initial month, one loses only one month of treatment for every subsequent month of lock downs. Continue reading

Posted in Coronavirus crisis, Death and taxes, Economics and public policy, Health, Science, Social, Social Policy, Society | 40 Comments

How the Corona narrative will flip: two predictions.

My first prediction is an easy one: many countries are going to ease their restrictions on social isolation in the coming weeks, including many countries with an ongoing corona problem. They simply have to if they want to have any economy left. You can see this happening to different degrees in Denmark, Spain, Austria, Finland, Belgium, and Australia.

My second prediction is that the political and medical elites in Western countries are  gradually going to be forced to take back almost everything they have been saying about the effect of lock downs in the last two months.

Why are the medical and policy elites going to resist changing their message? They essentially have no choice. They need to rescue their own careers, which requires saving face. Also, they managed to convince the population of their message. If they suddenly started taking it all back, the hysteria they have fanned would turn on them. So they are initially going to continue to speak about the corona virus as if it is the End of Days.

Why do they need to gradually stop their current mantra about how lock downs are the “safe things to do”? Because they will actually need the population to believe the opposite of what they were told before.

Take the business of “flattening the curve”, which took a long time to explain to the population, but at heart is about having a reduced infection rate so as to prevent the hospitals from being overwhelmed. The endgame on flattening a curve is herd immunity, which needs a lot of people to get this virus. If you lock them up, they cant get it as quick so locking people up simply means it takes longer before they get it.

The most recent research tells us that in most Western countries (ie those not as warm as Australia where a flu is not a big problem anyway), we’d have to keep imprisoning the population for years before one achieved the herd immunity one needed to prevent the IC units at the hospitals from being overwhelmed.

Years of mass imprisonment is simply not on politically or economically. As the pain of the first set of lock downs really becomes felt, populations are not going to accept a repeat. So the politicians are going to be forced to speak out against the necessity of flattening the curve and ignore those medics who continue to argue for it.

This also means accepting the inevitable increase in corona cases when opening up. That will lead to overflowing IC units in hospitals, or at the very least will need to involve turning people away for whom there is no space.

This in turn means the politicians are going to have to openly ignore the data on the corona virus when cases start going up again. They cannot sell this without in some way disowning the previous “flattening the curve” argument. They will need a new narrative. They will probably try something like “its painful but we cannot keep imprisoning the population” argument.

That is just step 1 in becoming more honest though. Yet more honesty will follow because they will be forced to address the fear itself.

Importantly, it is now becoming clear that the health problems associated with mass imprisonment and keeping the population afraid are much worse than the corona threat. A 2015 NHS report thus already said that social isolation causes health damage, such as a “50% excess risk of coronary heart disease”.

Fear is responsible for the paradox of hospitals that have much fewer patients outside of the IC units because people are too afraid to go to hospital. Fear of the virus is disrupting inoculation programs, partly because parents are too afraid to have their children innoculated. People are not showing up for medical check-ups. Those who particularly need exercise to remain healthy, like the old and the frail, are too afraid now to do it. This damage will increase over time as months of neglect and inactivity have far graver effects on health than merely a week or two of inactivity. Continue reading

Posted in Coronavirus crisis, Democracy, Economics and public policy, Politics - international, Politics - national, Science, Social Policy, Society, Uncategorized | 87 Comments

The journalist as courtier: COVID19 edition


Well, certainly wearing a mask walking down the streets of Melbourne makes no sense at all

Brendan Murphy, Australia’s Chief Medical Officer, March 9. 

The philosopher Mary Midgley styles her own writing as that of a critic. She means something urgent by this – not something academicInTheBadSense. This publicly available essay is a great read on the subject as usual from my mate Mary, but here’s a passage from elsewhere to give you the sense of it:

Plumbing and philosophy are both activities that arise because elaborate cultures like ours have, beneath their surface, a fairly complex system which is usually unnoticed, but which sometimes goes wrong. In both cases, this can have serious consequences. Each system supplies vital needs to those who live above it. Each is hard to repair when it does go wrong, because neither of them was ever consciously planned as a whole.

In that spirit, I present this close reading of a recent news article by David Speers. He’s an excellent case study because he works hard for his reputation of being even-handed, even in the culture of abusive partisanship that prevailed when he was in the Murdoch stable.

Also, journalists keep up an incredible pace of output which puts me in awe of them. So we shouldn’t judge them by the standards of those who have much more time to consider their view. Nevertheless, Speers’ article presents an excellent example of what I call ‘the journalist as courtier’. My critique amounts to these points which shouldn’t really make much higher cognitive demands on the journalist.

  1. While journalists’ job is to report the doings of power, they should do so in an open-minded and, where appropriate, critical way, particularly when reporting governments’ reasoning.
  2. In reporting disagreements between the government and its inevitable critics, the journalist should be fair to those critics whose points are worth reporting. It is journalists’ job to foster this debate as part of their critical role in democratic deliberation in our political system. Thus they should be putting such critics’ views to government and reporting their response to the public.
  3. It is understandable that the journalist wishes to entertain their audience – but they should entertain the reader whilst attending to the debate they’re reporting. Here the debate, which is supposed to be the subject of the report, plays no structural role in the reporting/analysis. It’s just part of the scenery – along with various bromides about ‘tough choices’ – life and death no less.
  4. This effectively neuters the media’s second most important function – after informing the public of facts – its role in subjecting power and authority to scrutiny.

Continue reading

Posted in Cultural Critique, Democracy, Economics and public policy, Health, Humour, Philosophy | 12 Comments

Blogging the Spanish Flu

We’re constantly in team meetings here in the underground bunker at Club Troppo working out how to tweak the linkbait. An edict has already been passed down the line from the AI that runs the place that no posts will be published on anything but Coronavirus for the next six months (when our JobKeeper payments stop and we’ll all be released for the AFL Grand Final between Collingwood and the Joint Commonwealth Government Treasury/Health Department Coronavirus team (which will also be due for a run round the block.)

So how to keep the readers entertained and clicking on the links, <metaphor>sipping on the champers</WhatsAMetaphorYouEh> here at ClubPony? Paul Frijters has already taken one for the team with his notorious “What do we want? COVID Genocide, When do we want it? Now!” posts. Beyond that, our plan is for mindless epidemiological chit chat, but we do have one or two more angles in the can.

Thus an old friend of mine from Melbourne Law School and member of the Melbourne Cricket Club wrote me this email.

You’re an economist. The Age this morning showed a chart comparing economic downturns. It showed that the Spanish flu only caused a contraction of about 1% in 1918/19 but we are projecting double digit contractions from this pandemic. It seems the Spanish flu in medical terms was at least as serious as Covid-19 and provoked severe restrictions on movement so why the difference in economic effects? I’m just curious.

I worked things out on the fly as follows:

Very interesting question. I don’t know the answer.

My guess is that there would have been much less locking down, but who knows. Perhaps they just had fewer people getting SC kinds of fees ;)

(Actually I think that’s quite a good idea for a hypothesis. I’d imagine the proportion of the workforce considered to be in ‘essential services’ was much higher. I mean what jobs were being done in 1919 that things could keep ticking over without?

Not banking, not accounting. Servants, governesses could keep doing their jobs in situ. All automatic systems they ran, required people to run them – in technical areas they were called ‘calculators’ – and they were people, usually women with pencil and paper (you’ve no doubt seen the movie ;)

There wasn’t much tourism – or, judging from my childhood forty years later, even eating out.

I’m struggling to get much past travelling salesmen and pubs. And the VFL GF was held, so who knows if the season was disrupted?

I’ve just checked – the footy went on as normal – so not a lot of lockdown going on – first things first

Collingwood ended up on top of the ladder, Melbourne the bottom.

Those were the days!

Anyway, in replying I did happen upon the net and this article by Frank Bongiorno, whom I then wrote to asking him to elaborate. To which he replied: Continue reading

Posted in Coronavirus crisis, Economics and public policy, Humour | 14 Comments

How many WELLBYs is the corona panic costing?

How much unhappiness is created by the unemployment of millions of people in Western countries (mainly N-Am +Europe) caused by the corona panic? How much unhappiness has been created due to the vast expansion of loneliness and physical inactivity? And in terms of the tradeoff between the quality of life and the length of life, how many “equivalent lives” are the isolation policies costing us via our reduced quality of life?

In an earlier post I calculated the loss of life due to the economic recession caused by the hysteria to be at least 10 million whole lives in the whole world, probably closer to 50 million. This was essentially calculated from taking the discounted economic loss to be at least 50 trillion and combining it with the rule of thumb that the value of a statistical life in the world is around 1-4 million each, a bit higher in the richer countries and much lower in the poorest countries. 10-50 million lives lost was thus the expected loss of life in the decades to come due to less government services, poorer nutrition, and increased social tensions of the type we are seeing in India.

Now I want to consider the importance of the quality of life, focussing just on the billion or so living in the West, using a wellbeing criterion: the likely effect of the social isolation and the economic collapse on the levels of life satisfaction of the population. The basic unit of analysis is the WELLBY, which is one point change in life satisfaction for one person for one year when measured on a 0-10 scale. As a rule of thumb, the average year of life in richer countries is worth about 6 WELLBYs, less in poorer countries where average wellbeing levels are lower. Then a whole life of 80 years, which is the average life expectancy in the West, is worth about 480 WELLBYs.

I will look only at the two items that I think are the most important components of the WELLBY loss involved in the panic and the social isolation policies: unemployment and the mental health costs of isolation.

We cannot accurately know the full WELLBY costs from unemployment and loneliness caused by the corona panic, but we can make an educated guess using the estimates around on the economic collapse, the social collapse, and what we know from the wellbeing literature. Over the fold, I detail why I think another month of mass isolation will cost the West at least the equivalent of a million deaths in terms of reduced quality of life. Continue reading

Posted in Coronavirus crisis, Death and taxes, Democracy, Education, Employment, Health, History, Politics - international, Science, Social, Social Policy, Uncategorized | 40 Comments