1. Neither Hoax nor Apocalypse

I’ve seen some extreme differences of opinion regarding the Covid-19 outbreak. Some people think it’s a big hoax, maybe created to make Trump look bad (okay, maybe Trump is the only person who thought that), or to justify a government power-grab (https://thewashingtonstandard.com/the-coronavirus-hoax-overhyped-to-bring-about-more-tyranny/). (Yep, that last one is from none other than Ron Paul.)

Other people seem to think it’s some kind of apocalypse. For some reason, I guess the apocalypse is expected to particularly impact toilet paper production, which explains why the supermarkets are out of toilet paper. Many frozen foods and junk food (the stuff in the potato chip aisle) are also out. Fortunately, in my local stores, there are still plenty of fruits and vegetables in the produce section, so I’m fine. People are desperate, but not desperate enough to eat broccoli. (When the stores start running out of kale, then you’ll know we’re in trouble.)

I’d like to suggest the obvious — that both of these reactions are irrational. They’re the product of two different biases: (i) the bias toward alarmism, and (ii) the bias toward conspiracy thinking. Both biases result from the drive to overdramatize the world. When we form our beliefs, we don’t really try to figure out what is plausible or realistic, so much as what is an entertaining story. Stories with world-ending catastrophes are interesting, as are stories with backroom conspiracies among the powerful.

Neither of these things is happening. Covid-19 is not a hoax, nor is it the apocalypse.

Why I’m Not a Conspiratist

I have written about conspiracy theories before (https://fakenous.net/?p=699), and much of that applies here. To be fair, Ron Paul didn’t mean that the entire thing is invented — he knows that Covid-19 is a real disease that is really killing people. He just thinks that the government and media are greatly exaggerating the threat, because it helps to justify an expansion of government power. I would find that more plausible if it were only politicians and media people, but many medical professionals also seem to be seriously worried. It’s not as if the CDC, WHO, or NIH are known for going crazy with exaggerated pandemic predictions. If they’d done stuff like this before (and they’ve had plenty of opportunities), and then it didn’t pan out, then I’d be suspicious now. But they haven’t.

I have no medical expertise. I also know that at least some people are disputing the more alarming predictions from WHO, etc. But it appears that most medical experts think the situation is very serious. This, it seems to me, is a good time for deferring to experts. (See my earlier discussion of trusting experts: https://fakenous.net/?p=550.)

By the way, I’d probably disagree with those experts about a lot of political questions, and I certainly wouldn’t defer to them on such questions. I also know that a lot of those experts are government employees, so they might have a pro-government bias. Nevertheless, they are obviously better positioned than me to judge a medical, public health question.

Why I’m Not an Apocalyptist

A friend strenuously advised me to start stockpiling food while I still can. I didn’t do it. Why not?

I accept that Covid-19 might kill a million Americans. I don’t know if it will or not — I’m just saying I can’t rule that out based on my current knowledge. But even if that happens, that is not going to bring our society crashing down — our society is not that fragile. The death of a million people, the great majority of whom would be retirees, would not, for example, collapse our food production or distribution capacity. It would not stop us from growing kale or making toilet paper.

(And before someone freaks out, I’m not saying this isn’t a horrible outcome. I’m saying it won’t break down society. At some future date, though, we may well encounter a much worse disease that really would collapse our society.)

I assume there is also going to be a serious recession. Many people will lose their jobs. People in entertainment and travel-related industries should be especially worried. However, again, this is just a big recession worry, not a collapse-of-society worry. In particular, it really doesn’t call for buying up a 12-month supply of toilet paper. (To be fair, I haven’t really seen people predicting collapse of society. I’m just reacting to the people rushing out to buy up multi-month supplies, as if production of cheetos and paper goods is going to shut down.)

2. But Don’t Be Stupid

I’ve noticed that quite a lot of people (especially young people and men) are overly risk-tolerant. We just assume that really bad stuff won’t happen to us. E.g., we assume the coronavirus isn’t going to kill us.

I don’t assume that. I think there is a non-negligible chance that, if I keep going outside like normal, Covid-19 will kill me in the next several weeks. I’m not alarmist — I mean, I think maybe there’s a 1% chance that that would happen (due to asthma, I am at higher risk than normal, but even ordinary people have a non-trivial risk). Maybe it’s only 0.1%. Or maybe it’s 5%. I don’t know, since there seems to be a wide range of opinion about the risk. But if I don’t go out, there’s almost 0 chance that I’ll die in that time period.

People have a hard time properly taking account of “small” risks like 1% — normally, if P(A) < 0.01, we just form the outright belief “~A”, and thenceforth ignore the possibility of A. But a 1% chance of death is clearly worth spending several weeks indoors to avert.

I recommend to you all (readers) to do a similar expected utility estimate, if you’re doing stuff that has a “small” chance of giving you the virus. Because I wouldn’t want to lose any FakeNous readers due to the virus.

3. The Economic Cost

There’s a pretty good chance that the biggest harm of the coronavirus is going to turn out to be the economic cost created by our response to it. We don’t know whether that’s true or not, since we don’t know how bad the epidemic will be and we don’t know how much the economic cost will be. But I’m saying that it wouldn’t be terribly surprising if the economic cost turned out to be greater.

I say this despite — again — the fact that I take the virus seriously as a public health threat. It’s just that I also take very seriously the harm to society of shutting down large portions of the economy for weeks at a time. So I think we just need to think seriously about that in designing our response. Public health officials may be experts on things like the spread of infectious disease, but they are not experts on these economic costs, so we can’t just take their word on what is the best overall response to the virus.

The Public Health Threat of Recessions

Now, you might be tempted to react, “Public health is more important than money!” But this is not a rational position. First, of course, whether public health is more important than money depends upon how much public health impact and how much money we are talking about.

Second, some research suggests that economic costs come with public health costs. A lot of people are going to lose their jobs because of the Covid-19 response. When the unemployment rate goes up, we also see an increase in suicides, depression, and deaths from prescription drug overdoses (https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-015-2313-1).

Wait, Maybe Recession Is Good for You

I was going to leave it there, but then I did a little more reading, and I learned that some scholars think that unemployment lowers the death rate. As crazy as it sounds, the case for that effect seems more compelling. (See https://www.nature.com/articles/d41586-019-00210-0.) That is, even though it’s true that increases in unemployment lead to higher suicide and mental health problems, the overall death rate seems to go down.

One reason is fewer traffic fatalities, because people are driving less. It may also be that people consume less alcohol and cigarettes, because they’re trying to save money. There will also be fewer on-the-job accidents. All of these are mentioned in that article in Nature. It seems that most of the effect is due to cardiovascular disease deaths, which for some reason decline when unemployment rises (https://www.ncbi.nlm.nih.gov/pubmed/28772108).

However, I still find this intrinsically hard to believe. Anyway, presumably recession is still bad overall; I don’t think anyone is suggesting that we should have more recessions. It just might not be as bad as we thought.

Side point: we should probably try to figure out why employment would increase the death rate, and try to address that. (Are people’s jobs causing them to have heart attacks??)

“Stimulus” Won’t Work

The government has one idea about reacting to recessions: “stimulus”. “Let’s spend a trillion dollars, cut interest rates to zero, cut taxes, and send checks to people.”

None of that will work. It’s a complete misunderstanding of the problem. The coming recession is not going to be caused by a liquidity crisis or a shortage of demand (for which gov’t stimulus is a conventional remedy). Even if you think some recessions are caused by those things, obviously this one isn’t. We know that, because we know why we are anticipating a recession to begin with: we expect a recession because lots of people are not going to work, and people working is where goods and services come from.

There is nothing we can do about that, unless we make people go back to work. The government “stimulus” can’t possibly address the recession, unless it somehow makes people go back to work. Which, in normal circumstances, is in fact what the government hopes for. But in this case, we don’t want people to go back to work, because the whole reason they’re staying home is to avoid transmitting the virus. So this whole stimulus idea is just a confusion — a complete failure to even understand the theory behind stimulus (if you think that theory makes sense to begin with).

Caveat: one thing the government could in fact do is to spread the costs. The economic cost of the coronavirus is inevitable (unless we want to send everyone back to work and spread the virus). That cost is going to fall very hard on people in specific industries (airlines, hotels, restaurants, &c.), and much less on other industries. So the government could spread that around — e.g., take money from the rest of the country and give it to the hotel workers. That would probably reduce the utilitarian cost of the virus. I doubt that they’ll do that, though, because the majority of people won’t care to give their own money, during a recession, to help those in the most heavily-affected industries.

4. Effect on Academia

This isn’t so important to most people, but I’m thinking about the effect of the coronavirus on academia, since that’s my industry. We’re doing comparatively quite well, due to the possibility of online teaching — so we don’t have to just shut down.

After the current panic is over, I think there will be a modest uptick in online courses, because some people will have discovered that they like them. I suspect, though, that most people are discovering that they don’t like online courses. So most will go back to “real” courses after this.

Now, you might think that in-person instruction is so inefficient that it has to go by the wayside, even if it is moderately more satisfying. Is it really worth it to have all these people traveling to meet in the same place, just so they can learn in a slightly more enjoyable way? Besides all the costs of travel, you also have the costs of maintaining the physical buildings and grounds.

If you think that, though, you probably haven’t paid enough attention to the incredible inefficiency that has been endemic to academia for decades. We’ve never cared much about wasting resources. I don’t see why we would start now.

The whole academic industry is founded on signaling (see Caplan, The Case Against Education, https://www.amazon.com/dp/0691174652). Degrees have value because they signal that the holder is smart, hard-working, conscientious, able to follow directions, etc.

So, whether online instruction replaces in-person instruction will ultimately depend upon whether getting an online degree improves, worsens, or has no effect on your ability to signal desirable traits. My guess is that going to the in-person classes helps with the signaling. It’s too easy to take online courses while sleeping in and wearing your pajamas all day.

On the positive side, maybe businesses, including academia, are starting to realize how wasteful and pointless in-person department/business meetings are. Just send out a damn email.

Also, by the way, I suspect that some academics are discovering that we don’t like going to conferences. For instance, some of us have noticed that we were relieved that the APA meeting was cancelled.