Category: News and politics

Facebook and Immigration

December 3rs’s WSJ started an article on immigration as follows:

“The Trump administration has sued Facebook Inc., accusing the social-media company of illegally reserving high-paying jobs for immigrant workers it was sponsoring for permanent residence, rather than searching adequately for available U.S. workers who could fill the positions.

The lawsuit reflects a continuing Trump administration push to crack down on alleged displacement of American workers.”  “Trump administration claims Facebook improperly reserved jobs for H1-b workers”

Immigration policy is a complex issue with many aspects. The economic aspects, however, should be straight forward and simple. https://wcoats.blog/2018/03/03/econ-101-trade-in-very-simple-terms/  https://wcoats.blog/2018/03/24/econ-101-trade-deficits-another-bite/  https://wcoats.blog/2018/09/28/trade-protection-and-corruption/ A free market in goods and labor increases productivity and output making the world wealthier. The cost for this extraordinary benefit is that some firms may go out of business and some workers may lose their existing jobs when someone else does better what the firm or worker were doing. They will need to move on to other activities or jobs.  It is wise and appropriate social policy to help those displaced by competition find alternative uses of their resources and skills.

It might seem rather harmless to protect existing firms and jobs from competition (aside from its afront to our individual freedom) but overtime the cost in reduced income growth will become greater and greater. What if such policies had been imposed a hundred years ago? Where would we be now?

If there are American workers who can perform the same job for the same wage Facebook needs, it has every financial incentive to hire them over sponsoring foreign workers. They don’t need laws to push them to do so. The good old profit incentive works just fine. It is fortunate that the exercise of our individual freedom to invent, invest, and work where we please also produces the most efficient (i.e. productive, thus profitable) use of our talents and resources. Talk about win-win. Those displaced when I come up with a better idea (i.e., something the rest of you like better) should be discouraged from stopping such progress with an effective economic safety net. “Replacing Social Security with a Universal Basic Income”

The Thanksgiving Revolt

Sadly, Thanksgiving and healthcare more generally has been politicized (or “weaponized” as I said in a report to the UNDP with regard to the monetary system in Yemen–my advice was that nothing as important as the monetary system should be weaponized). Why are normally sensible (I am being generous on this day of giving thanks) people behaving like rebellious teenagers? Among other reasons, I think, it is in part because they are being treated like children. We can demand that our children do this or that (at least when we don’t have the time or patience to explain why they should do this or that as part of preparing them to become adults).

Mature, independent minded adults (i.e., typical Americans) bristle when told that they must stay home, or cancel Thanksgiving dinner and other social activities, even when they suspect that it is the prudent thing to do. Our government should not be dictating our behavior in a free society. There are exceptions, of course, for the protection of the rest of us. We are (or should be) free to do what we like as long as we do not infringe on the right and ability of others to do the same. For example, we don’t permit people infected with communicable diseases to wander around in public endangering the rest of us–quarantining those with active cases of Covid-19 is properly required.

We each have our own assessment of the risks of infection and our own willingness to take risks.  We should be free to make our own decisions about what to do (as long as we are not endangering others–yes you should wear a face mask if you go out).

What should the government’s role be? The government should provide the best information available on what those risks are and how best to mitigate them. Not everyone agrees on what the data says.  Where that is the case, the government (CDC basically) should be honest about the disagreement and the basis of the government’s consensus judgement. This is a constructive, helpful role and a proper way of dealing with adults. Somehow too many political types have acquired the tone of voice with which one might speak to children. And if that weren’t bad enough the government provides conflicting information. Fortunately, our stable genius is no longer listened to and his quack remedies will fade from our memories.

We need an honest and less intrusive government that advises rather than dictates. We need fellow citizens who civilly share their views with us while respecting, even if not necessarily agreeing with, ours. We have a long way to go but let’s rally and raise above the muck we are in.  Oh yes, and happy Thanksgiving.

Thanksgiving Proclamation, 3 October 1789

Thanksgiving Proclamation

[New York, 3 October 1789]

By the President of the United States of America. a Proclamation.

Whereas it is the duty of all Nations to acknowledge the providence of Almighty God, to obey his will, to be grateful for his benefits, and humbly to implore his protection and favor—and whereas both Houses of Congress have by their joint Committee requested me “to recommend to the People of the United States a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many signal favors of Almighty God especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness.”

Now therefore I do recommend and assign Thursday the 26th day of November next to be devoted by the People of these States to the service of that great and glorious Being, who is the beneficent Author of all the good that was, that is, or that will be—That we may then all unite in rendering unto him our sincere and humble thanks—for his kind care and protection of the People of this Country previous to their becoming a Nation—for the signal and manifold mercies, and the favorable interpositions of his Providence which we experienced in the course and conclusion of the late war—for the great degree of tranquillity, union, and plenty, which we have since enjoyed—for the peaceable and rational manner, in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One now lately instituted—for the civil and religious liberty with which we are blessed; and the means we have of acquiring and diffusing useful knowledge; and in general for all the great and various favors which he hath been pleased to confer upon us.

and also that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech him to pardon our national and other transgressions—to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually—to render our national government a blessing to all the people, by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed—to protect and guide all Sovereigns and Nations (especially such as have shewn kindness unto us) and to bless them with good government, peace, and concord—To promote the knowledge and practice of true religion and virtue, and the encrease of science among them and us—and generally to grant unto all Mankind such a degree of temporal prosperity as he alone knows to be best.

Given under my hand at the City of New-York the third day of October in the year of our Lord 1789.

Go: Washington

Saving the American Dream

The American Dream is under attack.

“The American Dream is the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone. The American Dream is achieved through sacrifice, risk-taking, and hard work….” “The American Dream is to succeed by work, rather than by birth”. The Dream has attracted the world’s best and brightest to our shores making America the world’s leading economic powerhouse and enabling us to live freely as we each determine what we are willing to work for, for ourselves and our families.

Historically, individuals have been limited in what they could achieve by where they were born in society, by their parent’s position in life, and by who they knew. Companies of individuals were limited by the restrictions placed on them by their governments, often by the protections from competition government granted their friends (crony capitalism). Such traditional societies limited the freedom and ambitions of its citizens and limited the productivity of its human and physical resources. In short, traditional societies were keep poorer than they would have been if their citizens had been freer to innovate and compete.

The American Dream is now under attack by Donald Trump’s trade protectionism, crony capitalist government favoritism, immigration walls, and weakening of the international rule of law that has extended the benefits of specialization and trade globally. It is also being attacked by Alexandria Ocasio-Cortez’s (LOC’s) vision of state leadership and control of production and a new generation of idealistic, but uninformed, voters who mean well but have missed the lessons of socialism’s failures. If we are to save the conditions in the United States in which the American Dream still lives, we must better understand what has led so many Americans to vote against it.

I am sure that the answers to that question are many and complex, but broadly speaking two stand out in my mind, both of which point to the measures needed to restore support for the dream.

The first is to better educate the public, especially its younger members, about the conditions that allow and encourage a productive, innovative economy. This includes understanding the proper role of government in protecting private property, enforcing contracts, maintaining public safety (the rule of law) and in providing the public infrastructure that facilitates private activities and commerce (the commons of public goods). It includes the lessons of why all socialist economies have failed as a result of the corrupting incentives of state direction of economic activity rather than the competitive search by profit seeking private enterprises for better ways to serve the public.

The second answer concerns the adequacy and efficiency of our social safety net. The American Dream concerns individuals who take responsibility for their own well-being. While on average this has opened the way for most to prosper to the extent of their talents and energy, some will, often through no fault of their own, fail and fall off the tightrope. Society has an interest (even beyond the obvious humanitarian one) in softening the fall. It has an interest in an effective social safety net. 

Some–those who have not understood the lessons of socialism’s failures–have looked to trade and immigration restriction to prevent them from losing their jobs. They object to the economic benefits of free trade when it means that they must look for a new job (however, most manufacturing job losses in the U.S. have resulted from technical progress and the resulting increase in productivity rather than from cross border trade). “Econ-101-trade-in-very-simple-terms”  “Trade-protection-and-corruption” Those with such views have supported Trump’s anti free market policies. They have been attracted by Trump’s “I win you lose, us vs them” rhetoric.

AOC and her friends point to the widening income inequality–the dramatic increase in the incomes of the wealthiest and the stagnation of the incomes of the middle class in recent years–and demand income redistribution. But she fails to understand that it has been the growth of government’s role in the economy and the incentives in big government toward corruption and crony capitalism (protectionism for the wealthy) that have reduced competition and protected the position and markets of the biggest companies with friends in government. Socialism would make those incentives even stronger.

America’s dynamism and success reflects the creative destruction of risk-taking entrepreneurs and their hard-working employees.  https://economics.mit.edu/files/1785  However, the workers whose jobs are displaced by new products and new technologies may need help in finding and retraining for new jobs. They may need financial assistance in between (unemployment insurance). If nothing else, this may be the cost of their support for such a dynamic system.  Our social safety net sometimes provides poor incentives and sometimes has holes. It is time to seriously consider replacing it with a less intrusive and more comprehensive Universal Basic Income.  “Our-social-safety-net”  “Replacing-Social-Security-with-a-Universal-Basic-Income”

The American Dream–the foundation of our freedom and affluence–is under attack from the left and the right. We should fight to preserve (or restore) it.

My Travels to Baghdad

Iraq: An American Tragedy, My Travels to Baghdad

Warren Coats (2020)

Kindle and paperback versions available at: Iraq-American-Tragedy-My-Travels-Baghdad

From the corkscrew landing at Saddam International Airport (now the Baghdad International Airport) to adventures in the Green Zone and beyond, this recounting of my experiences helping the Central Bank of Iraq develop modern market tools of monetary policy exposes the disfunction of the U.S. lead Coalition Provisional Authority (CPA) in its attempt to govern and rebuild post Saddam Iraq, following one of America’s more foolish and damaging military adventures. The existence of weapons of mass destruction was a lie. American skill at imperial rule–from disbanding the Iraqi Army to De-Ba’athification of the Iraqi bureaucracy– was a myth. 

Regime changes usually don’t involve changes in the monetary system. However, the toppling of Saddam Hussein’s government and the occupation of Iraq and the takeover of its government by the United States and a few allies in the name of the Coalition Provisional Authority (CPA) was accompanied by the replacement of the so-called Saddam dinar and modernization of Iraq’s monetary and financial system. The Iraq war was launched with “shock and awe” on March 20, 2003 and President George W Bush declared “mission accomplished” on May 1 a month and a half later. But when I retired from the International Monetary Fund and took up residence in Baghdad to advise the Central Bank of Iraq on developing Iraq’s financial markets and managing its new currency, the fighting was not over on many fronts. I lived in Baghdad the last two months of the CPA (May-June 2004) and made four two-week visits between then and December 2005

In this book, much of it written in diary form at the time, I share the challenges of advising the staff and management of the Central Bank of Iraq from my office in the central bank and of navigating the U.S. interagency rivalry from my office in Saddam’s Republican Palace in Baghdad’s Green Zone.  Security was always a challenge, producing many adventures. But the wisest advice I received was from a colleague in the CPA, who told me to “be careful who you talk to here (CPA headquarters in the Republican Palace), your worst enemies are in this building.” Over my 26 years in the International Monetary Fund and the technical assistance missions I lead to some 20 countries, many of them post conflict countries, I have never encountered the disfunction and resulting ineptitude of the U.S. led Coalition Provisional Authority in Iraq.

Previous Books

One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina

by Warren Coats (2007)    Hard cover: One Currency for Bosnia

FSU: Building Market Economy Monetary Systems–My Travels in the Former Soviet Union

By Warren L Coats (2020)  Kindle and paperback versions available at: FSU-Building-Economy-Monetary-Systems

Afghanistan: Rebuilding the Central Bank after 9/11 — My Travels to Kabul

By Warren Coats (2020)  Kindle Edition:  “Afghanistan-Rebuilding the Central Bank after 9/11”

Zimbabwe: Challenges and Policy Options after Hyperinflation

by Warren L. Coats (Author), Geneviève Verdier (Author)  Format: Kindle Edition

Zimbabwe-Challenges and Policy Options after Hyperinflation-ebook

Money and Monetary Policy in Less Developed Countries: A Survey of Issues and Evidence

by Warren L. Coats (Author, Editor), Deena R. Khatkhate (Author, Editor)  Format: Kindle Edition

Money and Monetary Policy in LDCs-ebook

Are Venture Capitalists racists?

Shifting sovereignty from Kings to the people, was the beginning of human flourishing. In the United States, in its constitution the people returned only those powers to their government necessary to protect their wellbeing. The right to and protection of ones honestly acquired property is an essential aspect of this arrangement. This includes, of course, the right to invest our property anyway we choose.

Venture capitalists are those wealthy people who choose to take great risks in the prospect of large gains by investing in “startups” that have not yet established their profitability.  Put differently venture capitalists are prepared to finance an unproven idea/product/service that might gain public approval, i.e. might become profitable, though most of them fail.  As consumers we have benefited enormously from goods and services my parents never would have even imagined that a few wealthy investors took a chance on.

So the idea that the government might need to enact laws to insure that a venture capitalist’s investments do not reflect racial bias is shocking at several levels. “In the clubby world of venture capitalists, who spent $130 billion in the United States last year and helped anoint the world’s four most valuable companies and countless other successful start-ups, there is effectively no legal backstop that ensures people of color have an equal opportunity to share in its wealth creation.”   “Black-entrepreneurs-venture-capital”

First of all is the right of these investors to their property. They can give it all to their daughters if they want to.  Marxists and other egalitarians reject such a right but that would throw away the whole basis of the wealth our capitalist system has created that Marxists would like to redistribute.  But I want to focus on why capitalism minimizes the role of bias in our economic decisions.  This was explored long ago by Nobel Lauriat Gary Becker in his famous 1976 book on the Economics of Discrimination.

Becker’s basic point is that if your economic decision is influenced by racial or sexual or any other non-economic bias it will cost you money, i.e. you will make less than you otherwise would have.  If you hire a man when a woman was better qualified, he will contribute less to your company’s income than would have the woman, thus you pay a financial price for your bias. The same is true if you hire a white person when a black one was better qualified, etc.

The purpose of venture capitalist investments is to make a bundle by funding the next great idea. Most will fail but one or two turn into Facebook, or Amazon.  It may well be that a venture capitalist systematically under rates the potential of black entrepreneurs, i.e. that he suffers racial bias.  But in that case he will be less successful in his investments.  Capitalism will punish him for his prejudices and diminish his importance as a venture capitalist because it will diminish his wealth. None the less, an Irish venture capitalist may well bias her investments toward fellow Irishmen and a black venture capitalist may risk an extra break for a fellow black. But the profit motive of capitalism will discourage departures from objective evaluations of investment prospects.

The idea that a law should forbid or discourage racial or sexual bias when venture capitalists decide in what to invest is without merit.  Moreover, it is hard to imagine what such a law would look like and/or on what basis a government bureaucrat would overrule and direct the placement of a private investor’s chose of investments.

To peak briefly at the other–entrepreneurial–side of the equation, the unbiased opportunity provided by capitalism has attracted many foreigner entrepreneurs to our shores.  Steve Jobs (Apple, NeXT, Pixar), who was adopted at birth, was the son of Joanne Schieble who was Swiss-American and Abdulfattah “John” Jandali who was Syrian.  Steve Wozniak, Apple cofounder, was the son of Polish and Swiss-German parents.  Sergey Brin cofounder of Google/Alphabet escaped from the Soviet Union.  The famous architect, I.M. Pei, immigrated from China.  “How-12-immigrant-entrepreneurs-have-made-america-great”

Independence Day Celebration

As we listen carefully to the current criticisms of America, we should see them in the context of the wonderful features of our nation that continue to attract tens of thousands of the world’s best and brightest to become Americans and thus add to the material and cultural richness of our lives. We should not lose sight of, nor stop defending, the features of our society that have made us the Land of Opportunity even as we confront and strive to deal with our shortcomings. Those motivated by making more money and those motivated by serving and doing good to others enjoy the incentives for both in our free enterprise system. We make money by serving others, by creating better things and services for the benefit of our fellow man.

Our rights to make our own decisions and speak our minds are protected by our Constitution and its Bill of Rights. Our property and commitments (contracts) are protected by the Rule of Law. Indeed, our history is not without sin, far from it.  Slavery was practiced almost from the beginning of time, and our new nation shamefully participated in the practice for almost the first hundred years of its existence. Discriminatory laws and practices replaced slavery for many decades beyond the end of slavery.  Though all Americans now enjoy the equal protection of the law, the uninformed prejudices of some persevere. Our culture of mutual caring that is nurtured by our capitalist economic system and the values taught by all major religions, continue to make progress towards shrinking and isolating bigots. But we have a ways to go.  We have engaged in wars that are not justified by our defense and that are inconsistent with our values. In this area our economic incentives are perverse.

Our freedom to speak out when we see wrong and to praise what is good are critical to preserving what is good and fixing what is not.  The “cancel culture” crowd seem more intent on tearing America down than building it up by fixing its weaknesses.  The current cancerous attacks on our freedom to speak out and debate the important issues of our day in the name of political correctness risks undermining our progress:  “America’s Jacobin moment”.  This is not to say that we should not strive to address our fellow Americans politely “What is wrong with PC?”.  But if we become afraid to express our views and concerns honestly, we lose the ability to understand one another and build mutually satisfactory compromises. “Do we really need free speech?”.

So on this celebration of our Declaration of Independence and the birth of our nation let’s commit ourselves to preserving what has made us great, which includes the ability to freely criticize what is not so great, and to admit and learn from our mistakes and to work at becoming better still: freer, responsible for our own lives, and more compassionate toward others.

George Floyd, RIP

How should we respond to the horrifying murder of George Floyd by Derek Chauvin, a bad cop with “18 complaints on his official record?” “A Minneapolis-police-chief-promised-change-george-floyd’s-death-shows-hurdles”  Finding a constructive answer is not easy.  While it is difficult to watch the horrible death of George Floyd at the hands of a bad cop as three fellow policemen looked on without becoming enraged, those setting fires, smashing windows, and looting are not looking for constructive answers (or if we are to be extremely generous are not being thoughtful about what measures would actually be constructive) and should be locked up.

For starters, in looking for answers we should acknowledge that the problem (racism–unequal treatment of black Americans as well as other ethnic minorities in the law, then by law enforcement and by many people) has existed in America since its founding. But we should also acknowledge that enormous progress has been made over time, especially in recent years. Slavery has been abolished. Racial minorities are no longer discriminated against in the law (as opposed to law enforcement).  Even policing has improved considerably, though being arrested for “driving while black or DWB” remains too prevalent. And then there remain too many Michael Brown, Jrs, an 18-year-old black man, who was killed by Darren Wilson, a 28-year-old white police officer in Ferguson, Missouri in 2014 and too many George Floyds. Any would be too many.

A great deal has been done since Michael Brown’s murder to improve police training. The details are impressive. Medaria Arrandondo, Minneapolis’s police Chief, is black and is committed to furthering the work of his predecessor, Janeé Harteau, to expunge racism from the force and to rebuild trust between the police and the communities they exist to keep safe. While considerable progress has been made, why does it remain so difficult to provide black Americans with the equal treatment under the law to which every American is constitutionally entitled?

Evolution has genetically predisposed us to trust family and distrust if not fear others. Civilization, in part, has required that we overcome or at least tame this primitive impulse with moral teachings and laws (“do unto others and you would have them do unto you”) that facilitate our ability to live together and build trading economies to our enormous benefit. We learn what is “right” from our families, schools, churches, and the varied people we hang out with. We learn from the words and behavior of community leaders that we respect (some have made more positive contributions than others!). Institutional structures are also very important. They should provide incentives for behavior to conform to our moral and legal principles. Police Chief Arrandondo, for example, has increased the transparency of the police force (complaint records, webcams, etc.) in efforts to hold officers more accountable for their behavior.

In the area of policing there are two interrelated institutional impediments to good policing that we should address. Policing can be difficult and can be dangerous. “In a series of decisions beginning in 1967, the Supreme Court gutted [the Civil Rights Act of 1871] by permitting police and other government agents to claim they acted in “good faith” when violating citizens’ rights…. The Supreme Court decided government officials deserved ‘qualified immunity.’”  “Cops-kill-because-we-gave-them-the-legal-framework-to-do-it”  This must end.

“‘Sen. Amy Klobuchar, a top contender for Vice President candidacy for Joe Biden, was the chief prosecutor for Hennepin County (including Minneapolis) from 1998 to 2006. Klobuchar, who was nicknamed “KloboCop” by detractors,  “declined to bring charges in more than two dozen cases in which people were killed in encounters with police” while she “aggressively prosecuted smaller offenses” by private citizens, the Washington Post noted. Her record was aptly summarized by a headline early this year from the Twin Cities Pioneer Press: “Klobuchar ramped up prosecutions, except in cases against police.” [see previous link] This must end.

“Since 2012 there have been more than 2,600 complaints filed against Minneapolis police officers by civilians, according to data provided by Dave Bicking, who was part of the city’s Office of Police Conduct Review. Of those, the data showed just 12 resulted in an officer being disciplined. Among those, eight received written warnings. The most severe penalty was a 40-hour suspension.” [see previous link and “My-fellow-brothers-sisters-blue-what-earth-are-you-doing/?”] This must end.

The other institutional impediment to good policing is the understandable but pernicious self interest of police unions in defending their members from charges of misconduct. “Lt. Robert Kroll, [has been] president of the Police Officers Federation of Minneapolis since 2015. Like his union counterparts across the country, Lt. Kroll has been a fierce advocate for greater autonomy for officers…  Lt. Kroll has criticized the Black Lives Matter movement as a terrorist organization.” “Minneapolis-police-chief-promised-change-george-floyds-death-shows-hurdles”

I am reminded of my mother’s complaint (she was a grammar school teacher) that the teachers’ union was the biggest impediment to improving the quality of education in California. Any monopoly (government, unions, monopoly firms) ultimately sacrifices the public interest for their own if allowed to. This must end.

Social Distancing

Research lead by Neil Ferguson and his colleagues at Imperial College London suggests that a staggering 2.2 million would die in the United States and 510,000 in Britain if nothing is done by governments and individuals to stop the pandemic (no social distancing or hand washing, etc.).  Imperial College London study  The U.S. was late and bumbling in addressing the Novel Coronavirus coming from China in December. The Food and Drug Administration (FDA) refused to authorize the use of tests approved by the EU and the test developed by Centers for Disease Control and Prevention (CDC) was flawed and had to be withdrawn. The United States remains embarrassing and dangerously behind other countries in testing and other preparations for dealing with the disease.  “Coronavirus-testing-delays-caused-red-tape-bureaucracy-scorn-private-companies”

Unable now to contain the virus in a targeted way, the U.S. has largely shut down its schools, theaters, restaurants and other places of public gatherings as well as flights from abroad. The Ferguson “report concludes that the British government might be able to keep the number of dead below 20,000 by enforcing social distancing for the entire population, isolating all cases, demanding quarantines of entire households where anyone is sick and closing all schools and universities — for 12 to 18 months, until a vaccine is available”. A comparable figure for the U.S. implies a reduction in the death rate to 86,000.

For perspective, traffic accidents in the U.S. in 2017 killed 40,100.  More than forty-seven thousand committed suicide that year and 55,672 died from influenza and pneumonia. When compared with ordinary flu, covid-19 spreads more rapidly and is ten times as deadly, but we still do not know very much else about its properties.  But, we can expect a relatively large number of deaths from this new virus no matter what we do.  But doing nothing will increase deaths considerably.

What steps should the U.S. take?  We don’t ban cars because people die in them. We choose to take calculated risks if they are not “excessive”.  https://wcoats.blog/2016/12/27/our-risks-from-terrorists/

The extreme measures being taken in the U.S. proceeded without serious estimates of the economic costs to the economy and the spill over health risks of children kept home with vulnerable grandparents, etc.  “The CDC guidelines advised that short- and medium-term school closures do not affect the spread of the virus and that evidence from other countries shows places that closed schools, such as Hong Kong, ‘have not had more success in reducing spread than those that did not,’ such as Singapore.  But this guidance was not released until Friday [March 13], after the cascade of school closings had begun.”  “States-are-rushing-to-close-schools-but-what-does-the-science-on-closures-say”

Our extreme reaction will generate huge costs that cannot be fully known reverberating for years to come. We can be pretty certain that there will be unintended, undesirable consequences quite beyond the disruption of our pleasurable, cultural activities (bankruptcies of otherwise viable firms and the resulting loss of jobs, etc.). The government (congress and the administration working together for a change) is attempting to anticipate and ameliorate as many of those consequences as possible. One example of the search for cost effective balance of cost and mitigation involves the stopping of flights from Europe.  The cost of monitoring arriving airline passengers before boarding abroad is very likely cheaper than the economic disruption and damage of forbidding foreign visitors at all.  Following Trump’s announcement of the travel ban (once his team sorted out and clarified what he was actually imposing) the American Civil Liberties Union announced, “These measures are extraordinary incursions on liberty and fly in the face of considerable evidence that travel bans and quarantines can do more harm than good.”

Unlike the U.S., Britain has not closed its schools and restaurants. But as I am writing this, the UK just announced that its schools will close Friday March 20.  The Patriot Act passed quickly after the 9/11 terrorist attacks in the U.S. on September 11, 2001 (for those of you too young to remember) reminds us how quickly and easily we surrender our revered liberties when we are scared.  Almost 19 years after 9/11 we still have the dangerously intrusive provisions of the Patriot Act.  Once freedoms are surrendered and the government steps in it seems to be hard to regain them.  The extreme measures being taken in the U.S. and elsewhere to slow the spread of covid-19 provide us with the latest example.

On March 16, Deborah Birx, White House coronavirus response coordinator, reported that models based on data available so far indicated that the biggest reduction in deaths came from “social distancing, small groups, not going in public in large groups. But the most important thing was if one person in the household became infected, the whole household self-quarantined for 14 days. Because that stops 100 percent of the transmission outside of the household,”

The biggest bang for the buck comes from individuals protecting themselves by social distancing, hand washing, and normal (and perhaps enhanced) care to avoid the sick and avoid exposing others when we are sick as we generally do now. Clear public health guidance from the government could go (would have gone) a long way to encourage the enhancement of such diligence.  The Kennedy Center for the Performing Arts never closed down during the flu season.

Covid-19 calls for vigorous government action, even now when it is too late to stop it any time soon. We will need extra hospital beds, medicine, respirators, protective gear, replacements for infected health workers, vaccine research, development, manufacture and administration and more.  Soon we will require replacements for the many brave health care workers such as nurses and doctors as they also become infected with the virus. But as with all decisions, private and public, a careful assessment of costs and benefits of different courses of action will produce the best result.  Knowledgeable public information to guide the natural protective self-interests of each of us and our usual concern and respect for the well-being of our families, friends and neighbors can carry us a long way toward minimizing the further spread of this disease at minimal cost to lives and property.

P.S.  In my previous blog of March 15 (Covid-19, why aren’t we prepared) I reported Beth Cameron’s claim that the National Security Council Directorate for Global Health Security and Biodefense was disbanded in May 2018.  Ms. Cameron was its director at the time.  Yesterday Tim Morrison, director of the successor unit for a year in 2018-19, “No-white-house-didn’t-dissolve-its-pandemic-response-office”, explained that its staff and function were merged with two other units performing overlapping functions in order to improve efficiency without a loss of its capacity “to do everything possible within the vast powers and resources of the U.S. government to prepare for the next disease outbreak and prevent it from becoming an epidemic or pandemic.”  I apologize for misrepresenting what happened and expect Mr. Morrison to apologize for the disastrous failure of his unit to fulfill its mandate.

Protecting yourself from Coronavirus

How can you best protect yourself from coronavirus? Unfortunately, the “government” is providing inconsistent and sometimes misleading advice, as are airlines and other businesses that want to keep you coming.  Disinfecting surfaces and extra cleaning of airplanes and other public transports may not be helpful and can communicate a false sense of safety. You would be safer to sit on an uncleaned toilet and then wash your hands, than to clean the toilet seat yourself with some disinfectant.

Two key facts are critical to understanding the transmission of viruses, such as Coronavirus. The first is that not all disinfectants are created equal.  Most are effective in killing bacteria but not viruses.  By and large only products with bleach (Clorox or sodium hypochlorite) will destroy viruses, but they can potentially also destroy the surfaces they are applied to, including your skin and thus it is not desirable to use them routinely. The second fact is that the coronavirus does not enter your body through your skin. It enters through your eyes, nose or mouth (or an open sore). This is why you should avoid touching your face.  Your best protection is to keep the virus off your hands, and then keep your hands off your face. The best way to keep the virus off your hands is to be more careful where you put them and to wash them with ordinary hand soap whenever you think your hands might have contacted the virus.

Wash your hands:  “If we sanitize, it will be fine.” No it won’t. Saying so can give a false sense of safety. Products to disinfect your hands without rinsing might kill bacteria but they will only rearrange viruses on your hands. Even ordinary soap will not “kill” viruses, but it is great at removing them from your skin so they can be rinsed away. Wash for 30 seconds (humming the “happy birthday to you” song twice) and rinse well. The following article provides an excellent and detailed discussion of the power of soap: “Deadly-viruses-are-no-match-for-plain-old-soap-heres-the-science-behind-it”

Don’t touch your face:  The most reliable measure of protection from acquiring covid-19 is to avoid touching your eyes, mouth or the inside of your nose. These are the access points for viruses into your body. This is easier said than done. See Ito’s suggestions below.

If you are young, don’t worry and have fun. That’s what the young do anyway. If you are my age, keep a distance from others and try not to touch anything (especially someone else’s hands). Stay home more. It will also allow time to develop better treatment protocols, increase isolation ward capacity, and a vaccine (which, however, will take another year or more to test for safety and effectiveness).

In the following, Dr. Victorino (Ito) Briones, MD, Ph.D., provides the most relevant tips on how to prevent getting infected with the Coronavirus

  1. The most significant source of infection will be your hands.

We always use our hands in order to go about our daily routine. We touch the doorknob to open the door, hold the grocery handle from a cart or a basket, shake hands, etc. Do not be afraid to get the virus on your hands. Our skin is one of the best defense barriers from this virus. It will not infect you even if you have touched an object or another person’s hand that has the coronavirus. The way the virus can get into your body is by entering through your mucous membranes, which in this case includes your eyes and your mouth as well as the inside of your nose.

Suggestions:

  • Do not touch your face. Again, don’t worry that you might have the virus in your hands. But don’t transfer the virus from your hands to your face where it can enter and infect you through your eyes, mouth and nose.
  • Wash your hands with soap and water. Do this most especially before eating.

NOTES: Most often public toilets will have a liquid soap dispenser. Be mindful that the top of the bottle may be contaminated with the virus by the previous person who used it. Be careful when you use bar soaps as the virus may survive in the soap bar as well. Also be mindful that the faucet knob or handle may be contaminated with the virus so do not close the faucet with the hand you just washed.

The CDC suggests about 30 seconds of washing. I personally like to wash once with soap first, then rinse and then wash again a second time. Please understand that soap and water do not kill the virus. Washing simply removes the virus from your hands.

  • Wrap a masking tape around the tips of both your forefingers.

It is extremely difficult to consciously prevent ourselves from touching our face.    Research says that we touch our face about 20 times an hour and we may not be aware we’re doing it. Wrap a masking tape (blue or orange) around the tips of your forefingers. The hope is that the masking tape at the tip of the forefinger will remind you not to scratch our face with your hands. Also, the sensation of the tape on the face should immediately tell you to stop.

  • What about Masks?

Masks are most helpful to those who already have cough and colds symptoms and this prevents them from spreading the virus in the air. Wearing masks, however, can be helpful in reminding you not to touch your face especially your mouth. But personally, I don’t find it essential.

  • Hand sanitizers?

A friend showed me a hand sanitizer he was using and the label said “antibacterial”. Antibacterial sanitizers do not kill viruses. Bacteria and viruses are very different organisms. CDC recommendations here: https://www.cdc.gov/handwashing/show-me-the-science-hand-sanitizer.html

Personally, I don’t like to recommend hand sanitizers because it may give the person a false belief that his hands are virus free. My recommendation is to think that your hands are always contaminated with the virus.

  • How to scratch your face/eyes?

It may be time to carry a pack of tissues with you. If you feel the urge to scratch your eyes, use a clean tissue from the pack. Make sure that your fingers don’t touch your eyes or face. Then discard the tissue into a trash can after using. Do not re-use the tissue. Be mindful that if your hand is contaminated, then the tissue is also now contaminated with the virus.

    2.  It might be time to change some personal habits.

  • No more shaking hands and embracing when greeting other people. At this time, people already understand and, I think, appreciate that this form of greeting is no longer appropriate.
  • Perhaps start the standard of using virtual fist bumps or elbow bumps to acknowledge personal greetings.

In general, always consider the possibility that everything you touch is potentially contaminated with the virus. But also understand that the virus cannot enter your body through the skin on your hand.  So don’t be afraid to go about your daily lives. However, be always mindful that the virus can enter your body through your face. Your hands are the most probable source of infection.

 

Coronavirus and You

If you are infected by the coronavirus, i.e. if you contract covid-19, what is the probability of your dying from it?  What is the death rate of this particular virus?  On Tuesday March 3 the World Health Organization (WHO) stated that the global fatality rate was 3.4 percent. The figure changes daily, but if we take this to be a correct measure (it isn’t as I explain below), your own probability of dying from the disease will be higher than that if you are older and/or suffer from other health immune compromising conditions and lower if you are young and healthy, etc.  Oh to be young and healthy again.

Yesterday, Friday March 6, the WHO reported 3,400 deaths worldwide and 100,000 confirmed cases worldwide. This is the basis of the 3.4% death rate. 3,400/100,000=0.034=3.4%. The true figure is probably lower, but it could also be higher. The numerator of this fraction–deaths–should be pretty certain. However, mistakes can be made in stating the cause of death.  A covid-19 death could be missed and attributed to something else.

The biggest probable source of error is with the denominator: the number of cases. There is a high likelihood that many who have contracted the disease have not yet and may never be diagnosed to have it.  It is likely that these missed cases are milder than those that are identified and thus have lower death rates. The U.S. has been particularly slow in testing for the coronavirus. The number of test kits needed to perform such tests are still very limited in the U.S.  As of yesterday (Friday March 6), the U.S. had only tested 1,890 people of which about 10% were positive. By comparison South Korea has been testing about 10,000 people per day for weeks. To the extent that the actual number infected with the virus is larger, and probably much larger, than those identified, the denominator will be larger and the death rate lower.  By comparison in the 2017-18 flu season in the U.S. 45,000,000 had the flu and 61,000 died.

But that is not the end of the challenges to an accurate figure for the death rate. The 17 deaths so far in the U.S. may, and probably does undercount the number who will die from those currently infected. If some of those already infected will subsequently die, the true death rate will be higher. The true figure will only be known sometime after the event. The following article provides a very good discussion of this issue. https://www.washingtonpost.com/health/coronavirus-mortality-rate/2020/03/06/b0c4cdfc-5efc-11ea-b014-4fafa866bb81_story.html

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Dr. Briones adds the following description of a more scientific approach to estimating the death rate.

There is the “TRUE” death rate and there is the “EXPECTED” death rate. The True death rate answers the question of how many people died from a particular disease event. The expected death rate represents the more computable number when people ask for the probability of dying from coronavirus infection.

TRUE death rates can only be computed after the “event” has finished and all people involved have been counted including those that survived the event and those that died from the event. For example, a pile up car accident involving, say 100 people, with 20 deaths would have a TRUE death rate of 20%. The TRUE death rate in this situation can be calculated accurately because the event has finished and is no longer evolving. No more people will be involved in this particular situation in the future.

In the present coronavirus epidemic, the TRUE death rate CANNOT be computed because the infection and disease continue to evolve and increase. It remains impossible to determine how many people actually have been infected with the Coronavirus as compared to those who have been tested and found to be positive for the virus. Also, most importantly, the TRUE death rate cannot be established because all those that have been tested positive have not finished the disease process. The TRUE death rate requires knowing the number of people that recovered/survived after coronavirus infection as opposed to those that died from the infection. Since the present situation of the Coronavirus epidemic continues to spread and infect more people, the result cannot be computed. This may be possible after the Coronavirus epidemic has been contained and new infections have been significantly minimized.

The better computation to answer the question of probable mortality rate from Coronavirus infection would be the EXPECTED death rate. In this computation, a randomly selected group of individuals from the pool of people who have tested positive from the Coronavirus are followed to the end of the disease process. (This approach assumes that this group is representative of the whole population infected by the Coronavirus.) So far, people infected with coronavirus either recover after two weeks or so or they die from the disease due to respiratory distress.

For example, 100 people are randomly selected from those positive for the Coronavirus. After a month or so, these 100 people would either have recovered or died from the infection. If 2 people died from this selected group, then the expected or probable death rate would be 2%. One important key point in this experiment is to follow the disease process to its conclusion of either recovery or death.

To increase the “Power” of the result of this experiment, researchers can further increase the randomly selected population from 100 to 1000 or even 100,000. But it is important that those selected to be part of the final computation (number of deaths divided by the total population) should have finished the disease process.

To increase the accuracy and power of the EXPECTED/PROBABLE death rate is to further categorize the selection by age group. For example: 20 to 40 years of age versus 50 to 70 years. Another refinement of the group selected can address older people with underlying conditions selected for the study. Further refinements of this population group can be made in order to accurately answer the question of: What is my (male vs. female, young versus old, no underlying disease versus one with underlying disease, etc) probability of dying from Coronavirus infection.

With already over 100,000 Coronavirus infections around the world, these numbers and computations can be done on a retrospective analysis of the various population groups.

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WC: The above approach should produce a more accurate estimate of the death rate if the death rate of those testing positive is representative of the death rate of those not tested.  It is reasonable to assume that those who were not tested but had the infection and where thus not part of the population from which the test sample was drawn, had a milder reaction to the infection and thus probably a lower death rate (possibly even zero).  Thus the “expected” death rate computed in the way explained by Ito above would be a maximum expected rate and the actual rate is likely to be lower.