Attention Economy


Tuesday, March 31, 2020

European Approaches to Limiting Labor Market Damage

Preparing for Pandemics

Preparing for Pandemics by Ramanan Laxminarayan (a piece published in 2017 is especially worth reading at the present moment)

Monday, March 30, 2020

Zoom, the Defining App of the Coronavirus Era

How Zoom became the defining app of the coronavirus era
“The firm was founded nine years ago by Chinese-American businessman Eric Yuan, 50, formerly vice-president of engineering at US technology giant Cisco Systems. ...
But this growth has now been far exceeded: Covid-19 meant Zoom’s daily active user base grew by 67 per cent in the first three months of this year, and the company now has a market value of $42bn. In recent weeks, its app has been downloaded more than 50 million times from the Google store alone.
Yuan, who was born in Tai’an, eastern China, in 1950, moved to the US in the mid-1990s. His net worth is now rising faster than that of any other person in North America. By the close of trading in New York on 28 March, Yuan’s personal fortune was valued at $7.86bn, a rise of $4.29bn (121 per cent) since the same time last year, according to The Bloomberg Billionaire Index”. 


As the videoconferencing platform’s popularity has surged, Zoom has scrambled to address a series of data privacy and security problems.

Economic Impact from the Coronavirus

Francis Fukuyama on Political Systems and Crisis Response

The Thing That Determines a Country’s Resistance to the Coronavirus
Noted political scientist Francis Fukuyama observes:
“It is a popular misconception that liberal democracies necessarily have weak governments because they have to respect popular choice and legal procedure. All modern governments have developed a powerful executive branch, because no society can survive without one. They need a strong, effective, modern state that can concentrate and deploy power when necessary to protect the community, keep public order, and provide essential public services.
What distinguishes a liberal democracy from an authoritarian regime is that it balances state power with institutions of constraint—that is, the rule of law, and democratic accountability. The exact point of balance between the principal institution of power, the executive branch, and the primary constraining institutions (the courts and legislature) differs from one democracy to another, and also differs over time”. 

Sunday, March 29, 2020

Morality During a Crisis

Class of 2020 - Bad Luck and Poor Timing

The Class of 2020 Was Headed into a Hot Job Market. Then Coronavirus Hit.

State Capacity and the Size of Government Debate

Causes of Decline in US State Capacity
Bloomberg’s Noah Smith (who has a Ph.D. in Economics from U of Michigan) notes:
“But the U.S. made big moves toward centralization to deal with the Civil War, the Great Depression, World War II and the Cold War. Those successful responses show that the U.S. has been capable of adapting to the challenges of upheaval in the past. Recently, though, the U.S. has allowed its civil service to shrink and its salaries to become less competitive with the private sector, outsourcing many of the bureaucracy’s functions. …
It’s tempting to blame this on small-government ideology, but the coronavirus failures also involved over-regulation by the FDA. In general, fans of more government and less government seem unable to prioritize high-quality, effective government — what my Bloomberg Opinion colleague Tyler Cowen and his fellow economist Mark Koyama call state capacity”.

It’s easy to blame Trump for this fiasco. But there’s a much larger story.
“It’s easy to blame Trump, and the president has been inept from the start. But there is a much larger story behind this fiasco. The United States is paying the price today for decades of defunding government, politicizing independent agencies, fetishizing local control, and demeaning and disparaging government workers and bureaucrats.
This was not always how it was. America has historically prized limited but effective government. In Federalist 70, Alexander Hamilton wrote, “A government ill executed, whatever it may be in theory, must be, in practice, a bad government.” President Franklin D. Roosevelt created the modern federal bureaucracy, which was strikingly lean and efficient. In recent decades, as the scope of government has increased, the bureaucracy has been starved and made increasingly dysfunctional.”

Ongoing Consequences of the Decline in State Capacity
How a Failure to Test Blinded the U.S. to Covid-19
https://www.nytimes.com/2020/03/28/us/testing-coronavirus-pandemic.html

Desperate for medical equipment, states find a beleaguered national stockpile
https://www.washingtonpost.com/national/health-science/desperate-for-medical-equipment-states-encounter-a-beleaguered-national-stockpile/2020/03/28/1f4f9a0a-6f82-11ea-aa80-c2470c6b2034_story.html
The U.S. Tried to Build a New Fleet of Ventilators. The Mission Failed.
“Thirteen years ago, a group of U.S. public health officials came up with a plan to address what they regarded as one of the medical system’s crucial vulnerabilities: a shortage of ventilators….
Money was budgeted. A federal contract was signed. Work got underway.
And then things suddenly veered off course. A multibillion-dollar maker of medical devices bought the small California company that had been hired to design the new machines. The project ultimately produced zero ventilators….
The stalled efforts to create a new class of cheap, easy-to-use ventilators highlight the perils of outsourcing projects with critical public-health implications to private companies; their focus on maximizing profits is not always consistent with the government’s goal of preparing for a future crisis”.
To address coronavirus-related shortages, companies want the federal government to provide strategic guidance

SIZE versus QUALITY of GOVERNMENT
Quality of Government, Not Size, Is the Key to Freedom and Prosperity

Rafael La Porta; Florencio Lopez-de-Silanes; Andrei Shleifer and Robert Vishny, (1999), The Quality of GovernmentJournal of Law, Economics, and Organization15, (1), 222-79

If You Want Bigger Government, Vote Republican
“… for decades, we've been told that a vote for the GOP  is a vote for "smaller government." This is repeated both by Republicans, who say it like it's a good thing, and by Democrats who still seem to think that the GOP is committed to cutting grandma's safety net. If we look at federal spending, though, it's easy to see that the myth of the budget-cutting Republican president is just that: a myth.”
The political colour of fiscal responsibility
“The recent debt growth under the Trump administration is remarkable, especially since it occurred during years of economic expansion. The rhetoric of political debate might give the impression that this is an unusual behaviour for a conservative government. For instance, in March 2011, 23 Republican Senators publicly urged President Obama to reduce the deficit to protect future generations. The reality is quite different. Since the end of WWII, Republican administrations have systematically been more prone to expand debt, except during times of crisis. The Trump administration is continuing in this tradition”.

BIG PICTURE VIEW
David Runciman on political timing and the pandemic
“Partisanship and the tribalism of our politics have entrenched this division, particularly online. Rumour and suspicion abound”. 

Saturday, March 28, 2020

Panopticons and Surveillance States

The rise of the bio-surveillance state
Jeremy Cliffe notes:
https://www.newstatesman.com/science-tech/2020/03/rise-bio-surveillance-state
“I have argued before for a “data social democracy” in which digital information accrues not to all-powerful governments, nor to overmighty private firms, but to ordinary people under a pluralist system of redistribution. Legislatures must impose sunset clauses on emergency powers. Independent institutions need to monitor concentrations of data power. The default has to be that citizens own their data and decide who else does. Applying these principles over the turbulent coming period and the century beyond will not be easy. But it is the only way”.

What does the panopticon mean in the age of digital surveillance?
“[Jeremy] Bentham was regarded as the founder of utilitarianism and a leading advocate of the separation of church and state, freedom of expression and individual legal rights…
As a work of architecture, the panopticon allows a watchman to observe occupants without the occupants knowing whether or not they are being watched. As a metaphor, the panopticon was commandeered in the latter half of the 20th century as a way to trace the surveillance tendencies of disciplinarian societies”. 

A Balanced Discussion of Post-Crisis Recovery Prospects

The coronavirus crash was fast and hard. The recovery will be slow and uneven.

Bill Gates on Pandemics

How we must respond to the coronavirus pandemic | Bill Gates

Gates from 2015 – Highly Prescient

Partisan and Polarized Politics Hurts US Democracy

70 former U.S. senators: The Senate is failing to perform its constitutional duties
The letter from a bipartisan group of ex-senators notes:
“Examples of Congress ceding its powers to the executive through the years include the power to regulate international trade, the power to authorize the use of military force in foreign conflicts and, when the president declares national emergencies, the power of the purse. In addition, the partisan gridlock that is all too routine in recent decades has led the executive branch to effectively “legislate” on its own terms through executive order and administrative regulation. The Senate’s abdication of its legislative and oversight responsibilities erodes the checks and balances of the separate powers that are designed to protect the liberties on which our democracy depends”.


The Future of the World Order

The Great Coming Apart – and the chance to build something better

Human Behavior in Times of Crises – History Lessons

The Need for a Discussion about End-of-Life Care

The coronavirus pandemic highlights how much we need to have conversations about end-of-life care.

The Federal Reserve to the Rescue

The Fed Brings the Global Financial System Back from the Abyss

How the Fed’s Magic Money Machine Will Turn $454 Billion Into $4 Trillion

Approaches to the Tackling the Pandemic – Scandinavia versus USA

Friday, March 27, 2020

Further Tales of Incompetence

Irrational Exuberance and Tail Risks

Lessons in Stock Market Investing

I Became a Disciplined Investor Over 40 Years. The Virus Broke Me in 40 Days.
https://www.nytimes.com/2020/03/27/business/stock-market-pandemic-coronavirus.html 

Stock Buybacks and Bailouts

These Companies Enriched Themselves. Now They’re Getting a Bailout.

The Hunt for a Coronavirus Drug

The global hunt for a coronavirus drug

‘Arrogant’ and ‘ashamed’: The coronavirus mea culpas from people who once thought it was no big deal

Role of the State in the Time of a Pandemic

Opinion: On coronavirus, Singapore shows the way
“Singapore's success in managing the coronavirus outbreak comes down to three basic ingredients and one big one: closing borders early, rigorous contact tracing, a lot of testing — and SARS acting as a macabre dress rehearsal. These measures allowed public life to go on as normal. All restaurants, malls, schools and offices remain open to date. Hong Kong and Taiwan have similar success stories despite their proximity to China.”

Seattle Is Living Your Coronavirus Future: This city is well ahead of the rest of the nation in the cycle of denial, panic, action.

The case is strong for spending a large amount of money in the short term to fend off worse economic woes down the road.

Rich countries try radical economic policies to counter covid-19

Countries are using apps and data networks to keep tabs on the pandemic

Trade Protectionism Can Actually Put Lives at Risk

Maker of Purell Hand Sanitizer Denied in Request for Trump Tariff Relief
“Gojo Industries, the inventor and manufacturer of Purell-branded products, builds its hand-sanitizer and soap dispensers in the U.S., but a key input that ensures the dispensers work is made in China and subject to a 25% duty.”

A memo to trade ministers on how trade policy can help fight COVID-19

Tariffs disrupted medical supplies critical to US coronavirus fight


The Coronavirus Is Demonstrating the Value of Globalization

Thursday, March 26, 2020

Economics and the Fight Against the Coronavirus Outbreak

Europe’s Leaders Ditch Austerity and Fight Pandemic with Cash

Assessing the Cost of Combating the Coronavirus

J-value assessment of how best to combat Covid-19 by Phillip Thomas
Abstract
The new coronavirus infection will continue to pose a very severe challenge to the UK and to all countries around the world for the next 12 to 18 months. An epidemic model has been developed to explore the range of possible actions open to the UK and other nations to combat the virus. A "business as usual" policy would lead to the epidemic being over by September 2020, but such an approach would lead to a loss of life in the UK little less than that it suffered in the Second World War. Using the J-value without constraint suggests that exceptionally high spending would be justified for the three strategies that could reduce significantly the numbers of cases and deaths compared with the unmitigated epidemic. However such high spending is likely to come up against the J-value GDP constraint, whereby the measure should not so decrease GDP per head that the national population loses more life as a result of the countermeasure than it gains. The challenge for the UK Government (and other governments around the world) will be to manage its interventions so that the recession that is now inevitable is not significantly worse than that following the 2007 – 2009 financial crash.

Tuesday, March 24, 2020

Tracking the Impact of the Coronavirus Outbreak

Coronavirus Deaths by U.S. State and Country Over Time: Daily Tracking

Forecasting - Magnitude of the Economic Contraction

Monday, March 23, 2020

Currency Volatility Poses a Risk

India, Indonesia and Thai currencies flash red in virus stress tests

A Writer's Perspective on Lockdowns

Why International Trade Still Matters

The U.S. Needs China’s Masks, as Acrimony Grows
Critical Medical Supplies Are Stuck in China with No Planes to Ship Them

Crisis Winner - Big Tech


Big Tech Could Emerge from Coronavirus Crisis Stronger Than Ever
https://www.nytimes.com/2020/03/23/technology/coronavirus-facebook-amazon-youtube.html

Benefit of Fiscal Prudence During Good Times – Ability to Splurge During Bad Times

Federal Reserve’s Big Gamble

The Fed’s Message: The Money-Printing Presses Are Fired Up and Ready to Go
https://www.nytimes.com/2020/03/23/upshot/coronavirus-fed-extraordinary-response.html


Fed’s ‘Infinite Cash’ Put to the Test in a World of Leverage

Fed Unveils Unlimited QE and Aid for Businesses, States
Federal Reserve announces extensive new measures to support the economy
Federal Reserve Board announces technical change to support the U.S. economy and allow banks to continue lending to creditworthy households and businesses

Sunday, March 22, 2020

For Stock Investors – Industries in Trouble

The Coronavirus Crisis Could Wipe Out Entire Industries. These Are the Ones at Risk.

Singapore – An Example of Effective State Capacity

India Tries a Nationwide Curfew



Magnitude of the Coronavirus Recession and Policy Responses [Updated]

How to Prevent a Coronavirus Depression by Paul Romer and Alan M. Garber
Romer and Garber note:
“In a market economy, firms are good at meeting stable demand, but they do not stockpile in anticipation of a crisis. Now that we face a shortage, we would like firms to double or quadruple their daily output of protective equipment. But they would be reluctant to buy machinery that will be idle when the shortage is eliminated and demand returns to normal. Philanthropy like that provided by the Gates Foundation can help, but only the federal government can orchestrate and finance the dramatic industrial mobilization that we need in the face of this crisis.
In the long run, we are likely to have better options — a vaccine perhaps, or effective drug treatments.
But we cannot afford to wait and hope. John Maynard Keynes famously quipped that in the long run, we are all dead. If we keep up our current strategy of suppression based on indiscriminate social distance for 12 to 18 months, most of us will still be alive. It is our economy that will be dead”.

Beating COVID-19 and the Economic Pandemic

This Time Truly Is Different
https://www.project-syndicate.org/commentary/covid19-crisis-has-no-economic-precedent-by-carmen-reinhart-2020-03

Top Economists See Some Echoes of Depression in U.S. Sudden Stop. Key is length of contagion and the economic policy response
https://www.bloomberg.com/news/articles/2020-03-22/top-economists-see-some-echoes-of-depression-in-u-s-sudden-stop

Recession Math for People Who Don’t Like Math

Coronavirus Layoffs Will Hit These Entertainment Towns Hard

Saturday, March 21, 2020

Why Has this New Coronavirus been so Successful?

Why the Coronavirus Has Been So Successful
A Different Way to Chart the Spread of Coronavirus
How the Coronavirus Became an American Catastrophe

Related:
https://vivekjayakumar.blogspot.com/2020/03/covid-19-interesting-items.html



Tech and Working from Home

The Tech Headaches of Working from Home and How to Remedy Them

MMT and the Coronavirus Recession

Coronavirus Recession Looms, Its Course ‘Unrecognizable’

MMT Proponent Stephanie Kelton: Congress Can Do for People What the Fed Did for Banks

Friday, March 20, 2020

Covid-19 - Interesting Items

Coronavirus is killing far more men than women. The question is: Why?

In the U.S., 705 of first 2,500 cases range in age from 20 to 44.

Newton formulated his theory of gravity in a time of plague. We need a miracle, too.

Oil Price War Hits US Shale Producers Hard

Dollar Shortages and Fed’s Dollar Swap Arrangements

This Is the One Thing That Might Save the World from Financial Collapse

Intriguing Macro Policy Questions

Thursday, March 19, 2020

When Will the Stock Market Hit Bottom?

Book Recommendation: THE DREAM UNIVERSE

Coronavirus Outbreak: A Scientific Study Influences Public Policy

This Is How We Can Beat the Coronavirus
https://www.theatlantic.com/ideas/archive/2020/03/how-we-beat-coronavirus/608389/
Which Country Has Flattened the Curve for the Coronavirus?
https://www.nytimes.com/interactive/2020/03/19/world/coronavirus-flatten-the-curve-countries.htm
Behind the Virus Report That Jarred the U.S. and the U.K. to Action
Related FT article -

Imperial College Study:
Summary Report 9
The global impact of COVID-19 has been profound, and the public health threat it represents is the most serious seen in a respiratory virus since the 1918 H1N1 influenza pandemic. Here we present the results of epidemiological modelling which has informed policymaking in the UK and other countries in recent weeks. In the absence of a COVID-19 vaccine, we assess the potential role of a number of public health measures – so-called non-pharmaceutical interventions (NPIs) – aimed at reducing contact rates in the population and thereby reducing transmission of the virus. In the results presented here, we apply a previously published microsimulation model to two countries: the UK (Great Britain specifically) and the US. We conclude that the effectiveness of any one intervention in isolation is likely to be limited, requiring multiple interventions to be combined to have a substantial impact on transmission.
Two fundamental strategies are possible: (a) mitigation, which focuses on slowing but not necessarily stopping epidemic spread – reducing peak healthcare demand while protecting those most at risk of severe disease from infection, and (b) suppression, which aims to reverse epidemic growth, reducing case numbers to low levels and maintaining that situation indefinitely. Each policy has major challenges. We find that that optimal mitigation policies (combining home isolation of suspect cases, home quarantine of those living in the same household as suspect cases, and social distancing of the elderly and others at most risk of severe disease) might reduce peak healthcare demand by 2/3 and deaths by half. However, the resulting mitigated epidemic would still likely result in hundreds of thousands of deaths and health systems (most notably intensive care units) being overwhelmed many times over. For countries able to achieve it, this leaves suppression as the preferred policy option.
We show that in the UK and US context, suppression will minimally require a combination of social distancing of the entire population, home isolation of cases and household quarantine of their family members. This may need to be supplemented by school and university closures, though it should be recognised that such closures may have negative impacts on health systems due to increased absenteeism. The major challenge of suppression is that this type of intensive intervention package – or something equivalently effective at reducing transmission – will need to be maintained until a vaccine becomes available (potentially 18 months or more) – given that we predict that transmission will quickly rebound if interventions are relaxed. We show that intermittent social distancing – triggered by trends in disease surveillance – may allow interventions to be relaxed temporarily in relative short time windows, but measures will need to be reintroduced if or when case numbers rebound. Last, while experience in China and now South Korea show that suppression is possible in the short term, it remains to be seen whether it is possible long-term, and whether the social and economic costs of the interventions adopted thus far can be reduced.