A National Health Service

One of the unexpected consequences of the response to the novel corona virus has been the effect of the cancellation of all elective procedures in anticipation of a flood of covid-19 patients. Combined with lock-downs and a fear of going to public places, hospitals are loosing revenue and some may go bankrupt. If a significant sector of the economy (about 20% of GDP) goes broke, that will have long term implications for the recovery, not to mention health care delivery. 

Contrast that to the state run National Health Service. Not only does health care in the UK (like most of the rest of the developed world) only account for about half what it costs Americans, there is no danger that hospitals will "go out of business". 

The NHS may not provide some of the cutting edge procedures that elite, but it does provide at least as good care to every member of society in the UK as the American private healthcare system does for those lucky enough to have health insurance but not wealthy enough to pay for "premium" treatment. And it provides immeasurable better care than can be accessed by those without money and without health insurance.

Suppose, for a moment that many of America's hospitals do go broke. What can be done? First, there is an odd echo of under-capitalization of systemically important financial institutions here. So might government, state of federal, bail them out? It's possible; and perhaps there might be similar provision sin the legislation appropriating the bailout funds requiring hospitals undergo an equivalent stress-testing procedure, and that they maintain adequate reserves to continue operations during a similar event in the future.

Another option, however, would be to acquire those failing hospitals to begin the construction of a state-run health service. This might best be done at the stare rather than the federal level. And they one could make some useful comparisons in the US context of two different approaches to health care delivery.

Masking insecurity

Why does Trump still refuse to wear a mask in public? He says he has done in private and that his refusal to model CDC recommended behavior is just to troll the media. That is certainly part of the explanation, but there are two other factors to consider.

First, since he initially took the pandemic too lightly and ignoring science decided not to wear one, , he now can't admit he was wrong, so he's committed to his failing course of action. And there there is the optic. He doesn't want there to be any images of him wearing a mask anywhere that might be used by his opponents in the in the upcoming election.

If all the images of him are of a man looking totally normal while all those around him are wearing masks, he thinks it will make him look super human. For his supporters of course everything he does is seen as super human. But subconsciously, it might work on independent voters. That's a problem for Joe Biden. 

Globalization

These calipers, which measure to one thousandth of an inch and a hundredth of a millimetre have been one of the most useful tools I have. This kind of accuracy was unheard of when I was beginning to use tools like this 45 years ago. As importantly, a set of vernier calipers, yesteryear's equivalent,  could have cost at least $30 to $50. These I think were $15, and of course, were made in China. So about 10 times more accurate and at least half as expensive; that kind of 20X gain in value is seldom noted when we discuss globalization, where the focus has generally been on the hollowing out of middle class American manufacturing. But it begs the question how is China able to deliver this kind of order-of-magnitude increase in value creation?

That increase in value creation may be attributed to lower Chinese labor costs; if labor costs are a quarter US labor costs^[1], and direct labor is half the costs of the product, the saving would be about 37%; so a $30 item might cost only $19. If labor costs in China were a tenth of those in the US^[2], it might bring the cost down to about $16. The comparison is difficult because many of the products that purport to be made in the USA may only be assembled in the USA with parts sourced from China.

However this doesn't take into consideration innovation. The dominant design today seems to have settled on something pretty similar (if not identical) to the calipers in the picture.  Where that innovation occurred is an interesting question. China could have developed the technology in this product itself or it could have reverse-engineered an existing American tool; the second is more likely. And if elements of that technology were protected by US and international patents, whether Chinese manufacturers respected them is a second question (and the answer is probably not). So one reason these calipers were so cheap might be that China didn't have to invest as much in R&D as the original inventors.

This presents a real problem for US manufacturers. If they invested in R&D and if patent laws were enforced they, could charge a premium price for their product to recoup their R&D costs. But if patents are not enforced, and their product is copied and priced much lower they cannot compete and so they have no incentive to innovate; indeed to do so would put them at a cooperative disadvantage.

Equally problematic is the decision to enter the Chinese market. Often doing so would require the sharing of IP and thus puts them in the same position as if their products had been copied illegally. But the alternative is to cede the market to Chinese firms who would likely reverse engineer their products, flout patent protections and capture the entire Chinese market. So until China enforces patent protections, it's a catch-22 problem for US firms. And the Chinese government has absolutely no incentive to enforce international patents, since to do so would impede both its acquisition of IP and its economic growth.       

[1] https://countryeconomy.com/countries/compare/china/usa?sc=XE0H

[2] https://www.huffpost.com/entry/average-cost-factory-worker_n_1327413

Russian Poker, American Roulette

Would you object if I held a revolver to your head with only one bullet in the cylinder, gave it a spin and pulled the trigger?

After all it's my 2nd amendment right to bear arms, and there is only a 1 in 6 chance that you will die, and with the required six foot separation for social distancing, I could easily miss, so even if the gun did go off there's a good chance you might live (results vary based on make and model).

If you are infected with covid-19 and you are not wearing a mask, those may be fairly similar odds as a person you are talking to has of living.

What non-mask-wearers are playing is a twisted version of Russian Roulette (sometimes called Russian Poker) in which they are taking reckless chances not with their own lives, but with other people's lives; that's American Roulette.

Strategic procrastination

The GOP is in no hurry to work on a fourth stimulus bill.  They complain that existing allocations have not been spent. They worry that provisions for voting by mail will hurt them by preferentially enfranchising Democratic voters. They want liability protection for small businesses (of which more later). These are the overt justifications; but another plausible explanation is that they want to force people back to work, regardless of the disparate impact and risks of a fast re-opening.

States can't run deficits, That means that as income declines with people out of work and taxes plummeting, states must either cut services or raise revenues; and since they can't borrow, the only way to raise revenues is to get the economy re-started.  And with the economy restarting, the message in the run up to the election will be "we beat it, we put money back in your pockets, while the Dem's wanted to keep you poor to protect the illegals".

It's bold, quite clever, but risky; if the second wave does return, something made much more likely by fast re-opening, they may get the blame. But if Trump has shown us one thing it's how effectively he can shift blame onto others. So when the second wave comes, the message will be "that's not on us, that's on the governors". The recovery will be more V than L shaped, the stock market will be near twenty eight thousand. Most people feel life is back to normal.

The GOP has evidently concluded that to remain in power, a few more deaths are worth it to get the economy back on track. When Senator Patrick Toomey re-frames the lock-down as simply an effort to prevent the healthcare system from being overwhelmed he can declare "mission accomplished" despite rising the number of cases and the infection growth rate R, still being being very close to one nationally and much grater than one in many states. That's a clear indication that his priority is the economy, not mitigation of the disease.

When economic activity is the top priority, liability protection becomes important; it allows small business owners to restart with much less rigorous covid-related health precautions than they would implement if they were at risk of being sued. That helps accelerate the reopening.  And Trump's continued refusal to wear a mask is part and parcel of the blasé, "covid is nothing terribly serious" attitude he wants to project to get consumers back to work and back to buying. 

Of course the death toll will be higher that it would otherwise have been, but that's hard to prove; comparisons of an actual outcome with an unrealized path not followed are easy to manipulate: "That's what some scientists predicted but here's another scientist who says something quite different". We've seen that cherry-picking of scientific outliers in the climate change debate. Without the vaccine some (the old and the sick) will have to voluntarily self-quarantine; but in the GOP playbook that's OK since they are not economically vital and if some of them vote for the Dem's, that's a price worth paying.

Inconvenient science

Just as science provided us with, in Al Gore's words, an "inconvenient truth" about the climate crisis, so science seems now to be inconvenient to Trump's political ambitions.

Early on in his handling of the pandemic, science seemed irrelevant to Trump. He said covid-19 was less of a problem than the flu; he said he had a hunch it would magically disappear. Then the death-toll began to rise and he discovered science could be a useful political prop that allowed him hours of free air-time for his non-stop re-election campaigning after he could no longer hold his rallies.

But as unemployment rose to depression-era levels, the economy began to sputter and the prospect of a quick stock market recovery began to fade, science suddenly became inconvenient. He considered disbanding the pandemic task force and then reconsidered when he found out it was really popular.

Ultimately, however, the need to put the country back to work, in order to keep his 'economic miracle' (i.e. tax-cut juiced economy) alive, made a slow reopening a real problem for him. The CDC's reopening guidelines were too restrictive for Trump's political timetable and "would never see the light of day".  A watered down version of the guidelines were hastily produced, the Obama administration's science-based pandemic preparedness plan that a week ago didn't exist was miraculously found and found wanting, the scientists, including Anthony Fauci were lambasted, and the value of their work questioned. 

Trump's untethered bravado was on full display today when he pronounced: "I just want to make something clear. It’s very important. Vaccine or no vaccine, we’re back. And we’re starting a process. In many cases they don’t have vaccines and a virus or a flu comes and you fight through it".     

We were are now set on a course in which in many parts of the country, caution has been thrown to the wind. We can only hope that "science" was overly cautious and that things won't be quite as bad as feared. 

Hope for the future

If Trump has taught us just one thing (although in fact he has taught us many) is it that the absence of good leadership in a crisis is why good leadership matters.

Had he been listening to expert advice, the covid-19 epidemic in the US would have been far less severe. Had he surrounded himself with competent people rather than sycophantic opportunists, implementation of the response to covid-19 would have been better. Had he not lied so consistently while in office, he could have sent a coherent message people might have believed. And had he been concerned with the country rather then his own ego and reelection, we might have had a policy response that saved lives and avoided unnecessary economic hardship.

The "who do you want to pick up the phone at 3am?", Hilary Clinton's 2008 primary campaign slogan is suddenly more than just an abstract idea. If there is one person who should not be answering the phone at 3am (or at any time for that matter), it's Trump.  He has shown us very clearly what leadership isn't and covid-19 has shown us why that matters.

Unexpected consequences

Tushman and Anderson (1996) wrote about technological discontinuities, disruptive technological changes that give rise to an era of ferment in which new technological standards emerge.

Covid-19 is will represent a similarly disruptive discontinuity. Many things will change in the new post-covid-19 normal.  Air travel will fall dramatically and air fares rise sharply. Tourism across continents or very long distances will stop (there no points taking a two week vacation to visit the UK if you have to be quarantined for two weeks when you arrive and then another two when you return. So leisure time will be spent at more local destinations.

Global supply chains will become more local with production being repatriated. With a disentangling of physical trade relationships, may come a similar rationalization of financial flows and interconnections.
 
Public transit will be able to accommodate only a fraction of their usual daily volume; flexible working hours will help but won't be enough. People will have to walk or cycle to work, meaning a preference for more local employment. More people may work from home; but if that is to be effective they will need more space, leading to an exodus from very dense cities where space is at a premium.

As knowledge workers work from home, time saved in not having to commute might allow them to be more involved locally, strengthening local civic engagement. That might lead to further disengagement with federal politics in the US, perhaps similar to the way may Europeans feel about the European Parliament.

There is talk of transforming education with on-line making access possible in the short-term with social distancing. Along with that may come a push for universal high-speed internet access which will further facilitate some of the transformations.

As we reflect on the lessons of covid-19, changes to health care and inequality may come, though that depends on getting past the partisan and cultural divide.     

Many expect these changes to be temporary; but in may cases these will not be reversible and so the impact will be permanent. 

This is in inflection point in history; there will be unexpected consequences, of course, but if one thing is certain it is that the future will be very different from the past.

Questionable motives?

Perhaps I'm being too cynical, but I can't help wondering why UnitedHealth, a large medical insurer, has decide to share some windfall profits with its customers.

It is because it is concerned that the covid-19 pandemic has exposed some of the shortcomings of the US heath care system and wants to paint itself as one of the "good guys", should Congress decide to do a complete remake of healthcare in the US?

Anarchy

Dan Crenshaw (R-Texas), appearing on Fox this morning, lambasted a judge who had sentenced Salon owner Shelly Luther to 7 days incarceration.

Luther had defied a court order to close her shop, and was defiant and unapologetic when she was sentenced.  She made it clear she had no intention of obeying the court and would keep her shop open.

Crenshaw's argument was that it is an individual's right to defy any ordnance they believe to be unreasonable.  There's a term for people who philosophical position; "anarchists". 

Those who believe in the rule of law must also accept the law applies equally to all, and that individuals cannot simply choose which ones they consider "reasonable".

Even if he were to moderate his position from defying any ordnance they believe to be unreasonable, to defying any ordnance they believe to be unconstitutional, there is still a legal process by which laws may be challenged. Encouraging people to ignore due process and take matters into their won hands is still a big step on the road to anarchy. 

What is predictable but also irritating is that, ironically, its usually Republicans who bang on about the rule of law.  Yet here is a Republican loudly encouraging people to only obey laws they like; assuming Crenshaw is indeed a Republican and not an anarchist (aka "libertarian"), his position is absurdly hypocritical.

Loose talk can cost lives

During the Second World War, the public (on both sides of the Atlantic) was encouraged to be careful with what they said in public. Eighty years later, some people appear not to have understood that. Take Ingraham for example. A week ago she chuckled approvingly while Rudi Guliani ridiculed contact tracing, saying that we should have contact tracing for heart disease, cancer and obesity.  And yesterday she suggested that there was no evidence that social distancing worked. Both are not only demonstrably wrong, they also undermine the efforts that sensible people are making to contain the spread of covid-19.

Encouraging people not to trust science, not to trust experts and not to take the precautions that will curb the virus' spread will not only cause more people to die unnecessarily, it will also mean the mitigation efforts will have to remain in place longer causing needless economic hardship as well. And since she can't possibly be stupid enough not to know that what she is saying is arrant nonsense, and says it anyway, that can only mean she is completely indifferent to the consequences - and that makes her a sociopath.

These are not the only bozos who are either clueless (Hannity) or indifferent to this loose talk and the cast of unsavory characters below is far from complete; but they are the public face of an organization that is undermining societal cohesion, partly out of a self-interest-based ideology, partly in pursuit of profit. Were there any justice in the world they would be held to account and live out the remainder of their sorry lives in jail as restitution for the lives their loose talk will have taken and the misery it will have caused; but of course there isn't. Since none of them appear troubled by anything remotely resembling a conscience, perhaps fate will allow that they or people they care about (if there are any) fall victim to the virus they are helping to propagate. That's the kind of Old Testament justice of which they would approve. And it would be poetic indeed.

Perhaps we should call these people what they are: traitors in the war on covid-19.

Rationale

Yesterday, Trump announced he was disbanding the Corona Virus Task Force. One must assume he decided to do so because it was dragging its feet on reopening the economy, contradicting him when he went of on a flight of fancy (about hydroxychloroquine, injecting disinfectant etc.) which made him look bad, and generally sending depressing messages about the likely death toll. None of this was helping him get re-elected.

Today however, he suddenly reversed course, announcing that he was keeping the task force after all. Why? Well, and I quote: "I had no idea it was so popular".

So lets review. He was going to disband the task force because science was getting in the way of his reelection. Then he reinstated it, not out of some new-found respect for science, but because it was "popular" and he figured that keeping it was good for his reelection.

That's the kind of focused, goal-oriented leadership we've come to expect.

Equilibrium

California's Governor Newsome has been talking about reopening based on the numbers. Austria is using a 14 day window to gauge the impact of a step-wise approach. In this model I compare three scenarios: complete and indefinite re-opening after shelter-in-place is lifted; complete re-opening after shelter-in-place is lifted but reimposed if number trend upward for 14 straight days and lifted if they trend down for for 14 straight days;  and finally a partial re-opening after shelter-in-place is lifted but reimposed if number trend upward for 14 straight days and lifted to that 'partial' level if they trend down for for 14 straight days.   

The results suggest that a total return to normal behavior whenever the numbers trend upward leads to an oscillating cycle of relaxation and re imposition of the shelter-in-place restrictions. Moreover the virus appears to circulate for longer than if it simply burnt itself out after a single shelter-in-place event.

However a return not to 'normal' but to a 'new normal', modeled here as a 20% reduction in social interactions, significantly dampens the oscillations and reduces infection rates faster than the second scenario.

Contact tracing app: promoting widespread adoption

On February 28th, I made this suggestion to a friend who works at Google:

"Assuming it doesn't yet exist, how fast could Google develop/adapt an app to track face to face interactions that might be used to back and forward trace covid-19? Developing an accurate social network graph based on recall is hard, and having a real time data collection would allow the CDC to quickly trace those who have been exposed. What do you think?"

I elaborated on the idea about three weeks ago, when I wrote about an exit ramp from the shelter-in-place order.

"Technology could help here; an app if widely adopted that recorded all other apps in Bluetooth range proximity could help in that contact tracing effort, but like all apps with network effects, widespread adoption is needed to make it effective. Once such an app is developed, adoption might be accelerated if localities (towns, counties) required all restaurants to require the app be installed and active for all their patrons.

Another possibility is to require Fit-bit and similar health monitoring app companies to share data; this could be aggregated and annonymized giving a broad picture of small regions that may be heating up, triggering localized lock-downs; or it could be shared with personal data sent to the CDC (and the local authorities) to ensure that infected people are prevented from circulating freely in the community".

About two weeks after that, it was reported that Google and Apple were collaborating on an app to do exactly this - a contact tracing app.

One of the issues influencing its effectiveness is how widespread is its adoption. Google and Apple are solving the problem in a way that is likely to run into enormous backlash once people understand what they are doing; they are going to embed the app into the operating system and distribute it as the next update.

I predict the uproar will be enormous when people realize that tech firms are surreptitiously collecting data on their interactions and their health. Court challenges are inevitable. So we may need to fall back on voluntary adoption.

One way of making the app more attractive to users, and thus to promote its use without a mandate (or its inclusion by "default") is to enhance the value it delivers. As it is, the contact tracing data is useful to society as a whole but less useful to the individual participating in the data collection effort by using the app.  But what if the app could also tell you what the likelihood is that someone you are within 6 feet of has the virus? That would enable people to make their own real-time social distancing choices. Those concerned for their own health might find this a very useful feature.  Individualists would appreciate it, even if they were not concerned for their (or societies) health since it would allow for a relaxation of blanket restrictions on association. That could promote adoption if people saw use of the app as a reasonable trade off between monitoring and an extension of shelter-in-place.