Category: COVID

The Eight Things We Know About COVID

1) Masks don’t work. Not a single RCT study has shown positive effects of mask mandates in the community setting.

2) Lockdowns don’t work (very well). When factors like demographics and pop density are taken into account, they maybe shaved 10% off the curve. Maybe.

3) The Infection Fatality Rate is low – 0.03% even without using any effective treatments. Anyone under 70 faces a risk from COVID lower than from the flu. For young adults and children the risk is miniscule. Over 70s face higher and risking risks (but that’s true for lots of things).

4) There isn’t much evidence of asymptomatic transmission. So if you’re not sick, you don’t need to change your behaviour at all. There’s really no evidence you could harm others.

5) Vaccines appear to provide protection against symptomatic infection, but they have some short-term negative side effects. Spike proteins escape into the vascular system and can cause blood clots, or concentrate in the ovaries of women. While these cases are rare, their likelihood is higher among younger vaccine recipients. Women face a higher risk of negative side effects than men.

6) Longer-term effects of the (mRNA) vaccines are unknown. They may include fertility effects, damage to brain tissue or other unknown effects. Fetuses may be negatively impacted in cases where spike protein escapes into ovaries or is passed through the umbilical chord.

7) The best evidence suggests immuno-protection afforded by previous infection is likely to be lifelong. So if you’ve had COVID, there is little reason for you to wear a mask, get vaccinated or behave in any way other than normal.

8) There exists at least one off-patent, readily available, and safe drug for prophalaxis and treatment of COVID, which obtains results close to, if not at par with, those of the experimental mRNA vaccines. It is called Ivermectin. Those familiar with the wealth of extant data are convinced that if it were prescribed en masse tomorrow, the pandemic, such as it is, would be over in a month.

Conspiracy is breathing at the same time: let’s all take a deep breath.

A knave by any other name…

One of the worst things you can be called nowadays is a ‘conspiracy theorist’. It is right up there with ‘anti-vaxxer’, ‘COVID denier’ and ‘Trumper’ as a dysphemism with the weight of mainstream, neo-liberal social condemnation behind it. Very few of those who wield it as a ball-and-chain in the melee of internet comment battles ever stop to consider what the two words in the compound actually mean.

To ‘conspire’ is for two or more parties to agree in secret a course of negative action. ‘Theory’ is a much abused word in common parlance. As Brett Weinstein has been at pains to point out over at the Darkhorse Podcast, in the scientific sense a ‘theory’ is a well-substantiated explanation of a phenomenon, which fits together laws, hypothesis and observational data.

A Wuhan conspiracy? Or just people breathing at the same time?

So when those advancing the Lab Leak Hypothesis concerning the origins of COVID were branded conspiracy theorists, the branders were unwittingly using doublespeak. Because in fact no collective secret agreement was needed to conceal the mistake that is hypothesised to have occured at the Wuhan Institute of Virology in late 2019 – a simple denial on the part of those involved will suffice, combined with an unwillingness to allow any meaningful investigation. Nor does the hypothesis in any way hinge on leading virologists like Peter Daszak from EcoHealth Alliance sitting in a smoky back room with President Xi and Tony Fauci. He might simply pursue naked self-interest in aligning himself with the statements of the Chinese Communist Party. And likewise, the media who skillfully ignored the leads that were publicly available last year needn’t have been party to any conspiracy; their distaste for Donald Trump was enough for them to shy away. Since no one has a positive motive to admit the truth, there is little need to assume they would agree to withhold or suppress it.

Nor is the hypothesis necessarily worthy of earning the title ‘theory’, as it lacks the weight of rigorous testing to which hypotheses should be subjected.

Are so! Am not! Are so! AM NOT! ARE SO!…

But none of that matters, because the term ‘conspiracy theory’ has assumed a meaning distinct from the sum of its parts. It now merely infers, ‘a statement or line of reasoning that is out of step with orthodox views, and which is therefore worthy of public derision, and association with which should cause a loss of credibility for its proponents, advocates or even elucidators.

Like its siblings in the medical and political spheres, the conspiracy theory label does much damage to our ability to understand and find positive solutions to important problems. Those unjustly branded with this label are shoved further away from the centre, making consensus more difficult. And the fact-free, lebel-heavy nature of such accusations is at best lazy, at worst feeds a cycle of ad hominom attacks and ego battles. Reason emerges as the big loser.

Content warning: this section has been fact-checked by Facebook’s independent shareholders and found to pose risks to Facebook’s share value

All this is a preamble to address an example of just such a ‘conspiracy theory’; one which has received surprisingly little air time, even among those whose natural scepticism earns them the collective designation ‘tin foil hat brigade’.

I am referring to the role Big Tech has played in steering the political discourse. Anyone paying attention cannot be ignorant of the considerable power these tech monopolies now have over virtually every aspect of our lives. Many on the neo-liberal centre left didn’t blink when, in the wake of  controversial election results in January, Jack Dorsey used his editorial control of Twitter to silence the democratically elected leader of the Free World. They barely raised an eyebrow when, shortly thereafter, Jeff Bezos used his control of servers to shut down Parler, effectively silencing half the political voices in the US. Because, well, Orange Man Bad.

Yet they ought to have been concerned. You don’t need to be an exceptional scholar of the history of tyranny to appreciate that when that kind of power exists, it will not exclusively be used against your political foes. And so there was somewhat more of a collective gasp when, a little later, Facebook acted to effectively shut down the virtual lives of millions of Australians, when that country dared try and enforce the intellectual property of its free press.

But few have wondered about the role Big Tech is so evidently playing in this ongoing pandemic response. No one seems to ask how it is that, barely 16 months ago, no country in the world would have considered lockdowns as any legitimate pandemic response, yet the media and social media were virtually unanimous in supporting these measures. No one wonders why Alex Berenson’s pamphlets which make this very point and others were banned from Amazon, saved only by a personal intervention on the part of Elon Musk. No one queries how numerous YouTubers, from Iver Cummins to Freddie Sayers to TalkRadio have faced content removel, shadow banning and demonitisation, all for the crime of daring to engage in public debate on the most important and unprecedented policy change of the Century, and at a time when it was literally illegal for us to have such discussions in person.

Q: Qui bono? A: Page, Gates, Zuckerschmuck, Dorsey, Bezos…especially Bezos

This lack of questioning is all the more surprising when you consider the obvious motives these companies have in promoting as much panic and overreaction to COVID as possible. By closing coffee shops, people take to Twitter and Facebook to stay in touch, with Google running everywhere in the background. For this they need computers, sold to them by Gates. And by shuttering physical stores, more people shop on Amazon, and Bezos pulls ahead of Musk in the race to be the world’s billioniest billionaire.

But don’t take my word for it. Just look at what happened to the share value of all these publicly traded companies in the wake of the pandemic. Without exception, they profited massively. And likewise, as things have threatened to return to normal, share values begin settling down again. Then suddenly: second wave, third wave, UK variant, South African variant, Indian variant, limited natural immunity, vaccinate yet wear masks forever…

Of course, this is a crazy ‘conspiracy theory’. But my point is that no conspiracy is actually needed. In fact, given these publicly traded companies have no legal duty to tell ‘truth’, yet do have a fiduciary duty to maximise shareholder value, you could easily argue it would be illegal for them to not downplay content that tends to reduce lockdowns and encourage people back into the physical world. Evil? Perhaps. But that’s business. And with business decisions increasingly being taken by AI, it’s not even clear that an unscrupulous human being is required to achieve that outcome. Skynet could be doing it all on its own.

When all is said and done, very little is being said and nothing is being done

What is most worrying is the relative lack of meaningful post mortem. On any of it. By which I mean: On face masks. On lockdowns. On border closures. On the media’s role. On Big Tech’s role, and how policy decisions are arrived at. On the role of Big Pharma. On the origins of the virus. On the role of the WHO. On the role of Anthony Fauci and other ‘medical and scientific experts’, and how consensus is reached within their hierarchies. On the side effects of mRNA vaccines. On why large-scale clinical trials were not ordered in April 2020, (or October 2020, January 2021…or even today) on ivermectin, given its safety and the clear evidence it might be an effective, if not ‘pandemic ending’ treatment.

At this stage, these questions are becoming increasinly academic in nature. But it is nevertheless important that we answer them, and make a concerted effort to address the weaknesses that have allowed a relatively mild pandemic to do so much damage to our societies, our economies and our well-being.

But there is still time to ask the right questions

As a start, I would suggest we need to consider the harms of informational monopolies in terms that go beyond classical market failure (consumer prices) and take into account societal harm and harm to our democracies. We need to take a hard look at how our institutions – academia and the medical establishment – perform in light of funding, hierarchy and the process of peer review. We need to look at how media voices create and sustain particular narratives, including the role of corporate control and ownership in mainstream media channels.

Oh, and we need to consider how the Chinese Communist Party is using its high degree of centralised power to achieve favourable political and market outcomes outside its own borders.

Facemasks in Brussels: A Textbook Example of Bad Regulation

If you abstract from the very real impact these dystopian restictions have on our lives, there is a certain academic pleasure to be had in analysing just how bad the policymaking around COVID has been.

My favourite example of this is without a doubt the decision by the Brussels region to make facemasks mandatory in outdoor public places, with a hefty fine for non-compliance. I’m sure Brussels isn’t alone in this measure, but as I limit my exposure to the news and as travel is not allowed, I can’t comment on how this might be administered in other places.

But the Brussels face mask law manages to break every one of my principles of good policymaking. Here goes:

A good law should be

  1. Effective in achieving its stated aim (if enforced). We know, from multiple sources, that there is no scientific evidence supporting the use of face masks in the community setting. Randomised control trials on influenza-like illnesses have shown, for decades, that they either do nothing, or do next to nothing, to slow infections. Where they have been proven effective is in hospital settings, when used by trained professionals, in conjuction with other hygiene measures.
  2. Proportionate to the aim. Formally, proportionality means it should be the least burdensome way of achieving a stated goal. But as stated above, there is no evidence that the measure can achieve its stated aim, it cannot be said that the measure is proportionate to this aim. Indeed, much of the ‘wisdom’ behind the face mask rule seems to repose on the fact that, while it has no measurable benefits, it is also not really that onerous a requirement to impose (I question this – see below).
  3.  Transparent and clear in its application. The rule as written makes exceptions for anyone who is a jogger or is in the act of drinking or eating. There are less clear, but de facto just as real, exceptions for smokers. But what is a jogger? If I am kitted out for a jog, but decide to only walk, am I in breach of the law? What if I stop for a short breather? Should I put on my mask? What if I am walking very briskly or even running, but not wearing the requisite sporty outfit? Does the face mask rule come with a description of what is the appropriate sort of attire which permits one to be outside without strapping a piece of cloth to one’s face? What if one has an unlit cigarette dangling from one’s lips, which one leaves there for several kilometres? What if one’s juice bottle is nearly empty and one holds it, nursing the last few drops as one strolls from Berchem-St Agathe to Fort Jaco?
  4. Fair. Good laws do not have a disproportionate impact on the poorest citizens. But this one clearly does: If you have the good fortune to live in a large house with a garden, you can enjoy time outside with the sun on your face. But if you live in a little apartment, you will be denied this pleasure for months at a time.
  5.  Enforceable in a consistent manner. There is no way to enforce such a measure, even if clear criteria for its application could be assured. Simply put, there are too many people in the city and too few police to enforce this rule. Consistent enforceability is really important. Without it enforcement becomes a sort of lottery. This is very toxic for both the community and the enforcers themselves. Having unenforcable rules languishing on the books creates an environment in which the citizenry grows wary of police contact, generally unsure whether or not they might get called out for a breach of some half-forgotten law. On the opposite side, there is the risk that enforcement becomes arbitrary, giving to the enforcer the discretion to punish at will. To be clear, this is not something a well regulated state should tolerate: Police enjoy a monopoly on physical force with very clear strings attached; they must exercise that power with a minimum of personal discretion. Anything else opens the door to discrimination and abuse of power.
  6. Free of unintended consequences. The list of unintended consequences from forcing an entire population to cover its face in public is very long indeed. First is the loss of public discourse and social interaction, leading to psychological distress and isolation. Then there are the costs for hearing impaired people who rely on lip reading to participate in public life. Then there is the risk of criminal activity from criminals being allowed to walk about freely in disguise. Then there are the (albeit evidence-free) claims of adverse health effects from mask usage. Then there is the financial cost, the environmental burden, and the list goes on.
  7. Measureable in its impacts. For any law, it should be possible to perform a review, to assess using objective benchmarks whether or not the above criteria were indeed met. But for the facemask rule, there are no such criteria. How can we know if, in the absence of the measure, things would have been worse? This is why measures should be piloted first, tested to see if they work. It happens that tests were done in the Netherlands, and on the basis of them, the Dutch took the decsion not to implement outdoor facemask rules. Could the Brussels authorities not have learned from the example of their Dutch neighbours, and refrained from muzzling the entire population?

Open Letter to Dr Trish Greenhalgh on her BMJ article concerning face masks

Dear Trish,
I’m writing to you to express my concern about the medical consensus that has slowly formulated around the use of face masks in public settings as a measure to mitigate against the spread of COVID-19. I read your bmj article on the subject and was frankly alarmed at the arguments you used to back this position.
Having looked at the issue in some detail, it seems reasonably clear that there is at best, as you put it, ‘sparse and controversial’ evidence that face masks stop the spread of SARS-Cov-2 in the community setting.The fact that you nevertheless argue in favour of such measures, on the basis that you see them as essentially costless – “we have little to lose” – is deeply worrying.
Mandatory rules around the use of masks in public are far from costless. In the first instance, they have important and detrimental consequences on the hearing impaired, who rely on lip reading to understand and contextualise verbal meaning. More generally, facial expression is an intrinsic part of human interactions; physical barriers impede not only droplets of saliva, but also the visual appreciation of body language which is a large part of the context in which speech is delivered.
Second, there is the economic and environmental cost of mass production, dissemination and disposal of face masks. A single mask is of low cost, but multiplied by millions, it represents a not-insubstantial addition to our impact on the planet, and a related economic burden, particularly on the most vulnerable in our society.
Finally, and perhaps most importantly, the very act of mandating an accoutrement of this kind entails a system of state intervention and imposition on public life. The symbol value is strong; it is a mark of control, just as certain religions mandate the use of clothing to demarcate adherence to doctrine; just as military and law enforcement mandates the wearing of uniforms to instil discipline and diminish any instinct towards individualism which might threaten the goals of the collective.
Indeed, the very requirement to conform is a small – but persistent and deep – incision into our liberties. It lessens our individuality all the more to have the most expressive and personal part of our anatomy covered from view in public, and it allows the state and the medical establishment to dictate our behaviours, not – I repeat – on the basis of any substantiated scientific knowledge, but rather on the whim of a cadre of experts, who merely deem it possible that this measure could have a beneficial effect.
Apropos the beneficial effect: Your article was written in early April, when less was known about the shape and scale of the COVID threat. Though even at that stage the contours of the epidemic were crystallizing as less than apocalyptic, there was still some concern that COVID could carry with it an infection fatality rate of as high as 1-2%, with an infected population of 70 to 80% of the general population.
It is now amply clear to anyone who takes an honest look at the data that this worst case scenario is not only implausible, but in fact nearly impossible. In Belgium, where I live, almost all lockdown measures have been relaxed since early June – schools reopened, shops, bar and restaurants are full – all with no effect on new ICU admissions. Hospitals are almost completely empty.
Indeed, as some experts wisely predicted even at the time, populations would reach full exposure (Belgium, France, Northern Italy, most of the UK, New York) as the disease followed a classic gamma trajectory, with heavy left skewness; whereafter the rate of new infection would cease to be a major public health concern. The infection fatality rate will never exceed 0.01%, and is even lower when measured in quality adjusted life years.
As the evidence gathers, in fact, it becomes increasingly obvious that the lockdowns put in place had only marginal or no effect on the spread of the disease, and that to the extent they did anything, it has been only to slow the virus’ inevitable progression across the population.
In this context, your core argument for insisting on the use of face masks: “covid-19 is a serious illness that currently has no known treatment or vaccine and is spreading in an immune naive population. Deaths are rising steeply, and health systems are under strain.” appears much less compelling than it perhaps did in April.
Given the above, I would ask you to reconsider your position as expressed in the article, and work with your co-authors to publish a corrigium, in which you argue against the mandatory use of face masks in the community setting.
The stakes are, in fact, quite high.
Kind regards,
Graham Stull

Unmasking the ignorance and superstition of the modern age

An age of Twitter-fuelled ‘truthiness’

I have rarely felt so profoundly disappointed with the state of the rational world as I do these past few weeks. Perhaps it was my own cognitive dissonance at play, but if you had asked me a few short months ago, I would have rated our level of collective rationality as – overall – pretty high. Boy, was I wrong.

In fact, we live in a world in which the principles of scientific observation are disregarded, or else regarded selectively, in such a way as to concur with our collective feelings; in this case, collective hysteria. It is, as someone I know once put it, the essence of ‘policy-based evidence-making’. The clearest and most horrible example is the widespread use of the ‘number of cases’ statistic in the context of the COVID flare-up that struck in March/April (and has since gone away from almost all parts of the world). You won’t see a news report these days that doesn’t quote the ‘number of cases’, despite all honest epidimologists knowing the case count is a meaningless number: It tells you a little bit about the level of testing and nothing at all about the infection rate, for the strikingly obvious reason that the denominator is completely unknown.

See no evil, hear no evil, spit no droplets of evil

Another good example is the use of face masks. They are more than just ubiquitous, they are fashionable. While in a shop yesterday, I took the opportunity to engage the mouthless young woman behind the til in conversation. Did her employer insist she wear one? No, came the muffled response from where her mouth should have been, but she chose to, because it made her feel better. “Although I don’t really know if it does anything,” she added, almost apologetically.

That’s of course fine. In a free society, anyone should have the right to adorn their bodies with whatever tin foil armour they believe might protect them from their chosen alien invaders. The problem is when the use of such adornments becomes compulsory thoughout the ‘free’ world, as is now the case on public transport, on flights, in indoor spaces, and even on public streets.

A narrative built on a meta-study built on a not-so-randomised control trail

Let’s be perfectly clear: there is no evidence that face masks protect against the spread of viral infections in the community setting. And I say this after having spent some time reviewing, line by line, the extant literature that has been recently quoted by proponents of the practice. What is shocking is how disingenious the pro-mask campaign can be.

One good example of how bad some of these studies are is to be found in one NYC radomised control trial from 2010, in which 450 households in a predominantly Latino neighbourhood were studied, divided into three control groups: Group one was given ‘education’ only about how to reduce infection. The second group was given ‘education plus hand sanitizer’. The third group was given ‘education plus hand sanitizer plus face masks’, with instructions that the head of household should wear one if anyone displayed symptoms, as well as children over 3 and ‘if possible’ the sick elderly person in the household.

One bad virus multiplied by Twitter rage and lo! we're back to the Middle Ages
One bad virus multiplied by a nasty dose of Twitter rage and lo! we’re back to the Middle Ages

 

 

 

 

 

 

 

 

 

 

 

The study reports the characteristics of the three groups, which despite ‘randomisation’ show clearly that the group which received face masks had different socio-economic characteristics: 50.8% of the face mask adults had high school diplomas or better, as against only 40.2% for the ‘education only’ control group. Then, though admitting that the face mask group never really used the face masks anyway, the authors proceed to conclude that the face masks are effective in reducing transmission of influenza.

This, in turn, is one of a number of studies quoted in the metastudies, such as the  May 22 2020 Annals of Internal Medicine review, which in turn is used by media sources to support the public narrative. Even if these studies are cautious not to lie (the May 22 metastudy includes the rather unambiguous statement that “No direct evidence indicates that public mask wearing protects either the wearer or others.”), the authors know it’s the headlines that grab the public attention. And theirs is unambiguous in its messaging: “Cloth Masks May Prevent Transmission of COVID-19”. Again, not a lie, but it’s also true that pulverised moondust mixed with elephant tusk may cure cancer. No evidence, mind you, but it may.

Unmasking the cover-up

A question is why, if I can discover all this in a few days’ reading as a lay person, the medical, scientific and political establishment is so keen on pushing the face mask narrative? I posit a couple of possible answers.

First, a benign suggestion: The shock which COVID hysteria caused in society is best managed by allowing for a gradual return to normal. Like the masked salesgirl I refer to above, people actually feel better, more secure, with the masks. The argument then goes that we, as a society, should all mask up – at least for a while – to help the shellshocked return to public life without undue fear.

Now a more malignant thought: What if the political forces, including state-associated virologists and medical experts, now know that they massively overreacted to the outbreak of COVID-19? Maybe they have figured out, well ahead of the public, that the lockdowns were mostly ineffective (coming weeks if not months after they could have made any difference), and the infection fatality rate may in fact be as low as 0.05%. They also realise that they have wreaked untold harm on the economies and societies whose management was entrusted to them. Reputations, maybe even careers, are at stake. The game is now one of making ‘unlocking’ seem gradual, complicated, drawn out; because if they went back to normal too quickly, questions might be raised about why exactly we were forced to give up a third of our economy and two thirds of our civil liberties.

Costs and Benefits of Lockdown (2): Translating GDP into human lives

In order to meaningfully compare costs and benefits of lockdown, it is necessary to have some assumptions about the value of human life. There are different approaches that can be taken to this, such as using the (quality-adjusted) life year thresholds used by public heath systems to ‘price’ a year of healthy human life. Of course, it is popular and politically expedient to ignore the price of life issue, indeed some like to argue that human life is of infinite value. This is nonsense. Human life has a finite value, else we would have no basis to determine whether it made sense to approve treatments based on their cost and their medical merit.

Modelling life expectancy in terms of GDP

The approach I will take is slightly different here. I will attempt to model the relationship between GDP and life expectancy using a simple regression model for the EU-28 countries. The intuition is that higher GDP enables a prolongation of human life, through better diet, investment in workplace health and safety and investment in curative and preventative medicine. Over the relevant part of the curve, we should see a clear relationship emerge, which will allow us to understand what the cost in terms of life is, of reducing GDP. This can then be compared with the estimated benefits – also in terms of human life – of implementing a lockdown.

I use the data from Eurostat for 2018 GDP per capita in euros, (GDP), for life expectancy at age 1 (LE) to construct a simple regression model specified as follows

LE = a*GDP+b*GDP^2

The spreadsheet with the data is here. I exclude Luxembourg and Ireland because of well-known problems with the measurement of GDP. While other control variables are not included, in fact the institutional nature of the EU suggests that many other relevant factors (such as the design of the public health system, workplace health and safety rules, and other cultural factors) enjoy a certain degree of harmonisation.

The results of the regression are as below:

LE on GDP and GDP^2

 

 

 

 

 

 

 

And show that both variables are statistically significant (high t Stat values), and that quite alot of the variation (around 60%) in LE can be explained by GDP/capita alone (high ‘Adjusted R Square’).

The coefficients in the last three rows imply:

(a) that in the absence of any GDP, life expectancy would be at 70 (intercept). Although this seems unreasonably high, suggesting more non-linearity in the relationship as income falls to the zero-threshold, it is not a big deal, however, as we are only concerned with the relationship over the relevant space, i.e. in terms of the GDP/capita of developed, Western countries.

(b) there is a positive relationship between GDP and Life Expectancy; namely that a one Euro increase in GDP/capita results in an increase in life expectancy of 0.0007 years. This is what we would expect to see.

(c) there is a negative relationship between GDP squared and Life Expectancy; namely that as the square of GDP rises by one euro, LE falls by 0.000000001 years. This is also what we would expect – the gains to life expectancy are limited, and at very high income levels, there may even be a reverse effect, due to stress from work, pollution or other lifestyle effects.

The graph below shows the scatterplot of actual values and the estimated line of the curve from the regression:

LE against GDP

 

 

 

 

 

 

 

 

 

Using this model, we can estimate what the 5% reduction in GDP caused by a four month lockdown would mean in terms of life expectancy for the EU-28 countries. Here is what we get when we do that:

LE reduction chart for 5% drop in GDP

 

 

 

 

 

 

In summary, on average, a 5% reduction in GDP will result in a loss of an estimated 0.5 years, or 6 months, in the average life expectancy of people in Europe. This will happen because of many reasons, such as reduced spending on curative health, increased crime, more suicides, greater occupational risks and reduced spending in preventative health and safety.

Costs and Benefits of Lockdown (1): The Costs of Lockdown in GDP

Whether lockdowns make sense or not is an important question, and it is hard to answer definitively. Hard, for a number of reasons. First, as is often said, we do not have all the data at our disposal. On the epidemiological side, we are only just beginning to understand how the virus has been spreading and whether or to what extent lockdowns make a difference.

Quantifying the economic costs of lockdown

On the economic side, there is a large degree of uncertainty. While clearly the economic costs are large, there are inherent difficulties in untangling the costs of lockdown per se from the costs of the general COVID hysteria which would ensue, even in the absence of any government measures. And even then, calculating the costs of lockdown itself is tough. As economists are at pains to stress, this episode is without precedent in modern times, and given the extent to which Western economies have developed over the past fifty years, the older precedents such as WWII or the Great Depression, lose relevance due to the differences in how modern economies operate and the level of prosperity we have come to take as a baseline.

So we have to really try to go back to first principles. What have lockdowns done? As I see it, they have done two things to the economy. First, they have stopped production. Quite simply, governments have closed stores, factories, restaurants, bars, schools, etc., meaning there are fewer goods and services being produced by the economy. How much of the economy is now closed depends on the nature of the lockdown (France, Italy, Spain, Belgium, Germany, New York City, Michigan, Ireland…, are extreme examples; many other US states and the Netherlands less extreme, Sweden the least extreme), but easy estimates put the number at close to a third of the economy.

In some cases, production will have shifted from the formal to the informal economy: restaurants are no longer preparing food, but people are cooking more at home; teachers are no longer caring for and minding children, but parents are doing so at home, etc. However, in many cases, the production is simply being lost. Again, how much is the result of the lockdown and how much of the generalised COVID panic which would have occured anyway? It’s difficult to say, but to put the loss at 15% of the economy does not seem unreasonable, especially when we consider that the two are interlinked: people panic in part because governments lockdown.

The second effect is the productive efficiency loss. We can take teleworking to be less efficient that working in offices, as otherwise the economy would have phased to telework years ago. (After all, the technology is not particularly new and companies wouldn’t willingly fork out for prime office space if they could get the job done as efficiently with no rental costs.) Home schooling is also a large efficiency loss, related to scale diseconomies (a class of 24 formally taught by one teacher, is now being taught by 24 parents) and the fact that parents are not trained teachers. Supply chain disruptions mean that work stoppages occur even in otherwise unaffected sectors: E.g. construction companies cannot pop down to the local supply shop to get an extra bucket of 3″ screws). Quantifying these efficiency losses is tricky, especially because they may be partially offset by some efficiency gains (fewer useless meetings for people to sit through).

There is also, I think, a non-linearity here with regard to time. If we think of businesses as having both an operational and a strategic component, then the former can probably cope better with remote working for some time, and in the short term, a company can get by without a new strategy. But in the long term, the lack of face-to-face contact will make strategic decisions like restructuring, brainstorming, hiring and firing…, much more difficult. This means fewer new ideas, less innovation, less efficiency gain.

Finally, there is the economic impact of social costs. The harm to people’s mental health from isolation, the loss of emotional development for, in particular, vulnerable children. The scarring effects of unemployment and disattachment from the labour market for those who have lost their jobs. While these are all first and foremost social costs, they will also impact the economy through reduced output, higher crime and wasted human potential. Again, these are non-linear with regard to time: the longer the lockdowns go on, the more costly each added day of lockdown will be.

Quantifying all these effects is not easy. If we take as a baseline four months of effective stoppage, and assume this halts 15% of output, then countries in full lockdown can expect at least a 5% one-off loss to annual GDP from the first effect. For the other two, the effects are likely to be more drawn out, but less acute. Using the four-month baseline again, the efficiency cost of teleworking could be estimated using the rental value of the office space currently being leased. In the EU, there is an estimated 650 million square meters. At an annual rent of €400 per square metre per year, this makes about 90 billion in lost office for the 4 month period, or about 0.5% of GDP. Of course, this is a lower bound; it’s reasonable to assume, given the transition costs associated with the shift, that this number is closer to a full percentage point in GDP.

Next is lost productivity for parents. Here we can assume that working parents of dependent children suffer, as a result of the caring responsibilities. Data is available from Eurostat on employment rates of parents by number of children, the distribution of population by number of children. Combined with data on industrial annual earnings for the age group 30-39 (a proxy), we can estimate the lost productivity using wage data and assuming single parent households lose 50% of productivity, two parent households with one or two children lose 25% of productivity and households with three children lose 10% of productivity. (Households with more than two adults are assumed not to lose productivity). This amounts to another €90 billion for the 4 month period, another 0.5% of GDP.

Other costs arise from the stoppage of routine medical activity and the mental health toll. Here indeed, disentangling lockdown from baseline costs is tricky. Undoubtably, any alternative to lockdown would carry with it a certain mental toll, as well as an increased (albeit likely short term) demand on health services. Similarly, other social costs such as the damage to disadvantaged children cannot be readily quantified, but are nevertheless important qualitative considerations.

In summary, the upfront costs of a four month lockdown can be roughly estimated to be between 15 to 20% of GDP, with scarring effects causing a permenant reduction of GDP that is far more difficult to quantify – not least because it will depend on the policy response. Given these impacts on human capital, on educational outcomes for children and on mental and physical health, it seems difficult to imagine a swift V-shaped recovery. In present value terms, a permenant drop in the order of 5% does not seem like an unreasonable working assumption.

Lockdown madness goes on, even as science shows COVID isn’t that deadly

There is a growing body of evidence which suggests that the coronavirus related disease COVID-19, is not nearly as deadly as is being widely reported in the media and as is believed by the public.
Here is one of many serologic studies which uses the best scientific evidence available to demonstrate this fact:
“Fear of Covid-19 is based on its high estimated case fatality rate — 2% to 4% of people with confirmed Covid-19 have died, according to the World Health Organization and others,” he wrote in the Wall Street Journal. “So if 100 million Americans ultimately get the disease, two million to four million could die. We believe that estimate is deeply flawed. The true fatality rate is the portion of those infected who die, not the deaths from identified positive cases.”
This study was performed by researchers are Stanford University, and follows a similar study, which found similar results, performed by Bonn University. It also follows the data gathered early on from the cruise ships, which provided near-laboratory like conditions for seeing the spread of the virus on a population crammed together under contagion-inducing conditions. Please understand that this is not right-wing propoganda, these are not fringe institutions. They are among the best scientists in the field, and the message is clear:
Coronavirus SARS-Cov-2, and the COVID-19 disease it causes, kill only about 0.5% of its victims. The clear majority (over 80%) of the deaths are among the very old, and the vast majority among those who are over 65 and have preexisting conditions (93%). While of course their passing is tragic, a disease that kills someone who is very close to their natural life expectancy is very different to one that cuts down healthy people in their prime.
What is more, the Lockdowns that have been put in place have no proven impact on the spread of this disease.
What the lockdowns certainly do cause is a massive contraction in economic activity. On this point, there seems to be some confusion on what such a contraction means. This isn’t a case of ‘the banks losing money’, rather it means there are fewer goods and services in the economy – an estimated reduction in 10% for the current year in most countries. Concretely, this will certainly mean an increase in poverty by at least 10% – fewer resources to fund schools and hospitals. Many, many more people will die from this that could possibly be the case from the virus itself.
In addition, the lockdowns represent an unprecedented curtailment of our civil liberties. Governments everywhere have overstepped their constitutional limits, locking their citizens in their houses and literally surpressing public debate. The only public forums available for discussion are online businesses, who have a direct economic incentive to keep the non-virtual economy closed for as long as possible. Not surprising therefore, that those who oppose lockdowns are being shadow-banned or blocked on Facebook and Twitter (e.g. Brazil’s democratically elected president).
Those of you who know me know that I am a measured, reasonable person. I have been educated in economics at a leading university and have worked number-crunching for public institutions for many, many years. In that context, I write policy documents that by their nature avoid hyperbole and sensationalist conclusions. But before I go, I just want to leave you with the following graph, to help you understand that not everyone is losing out, and that the very companies that are winning in this crisis are the ones who have the most control over how we understand this crisis:
covid amazon stock price