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How Will We Know When It’s Time to Reopen the Nation?

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The following originally appeared on The Upshot (copyright 2020, The New York Times Company)

 

Everyone wants to know when we are going to be able to leave our homes and reopen the United States. That’s the wrong way to frame it.

The better question is: “How will we know when to reopen the country?”

Any date that is currently being thrown around is just a guess. It’s pulled out of the air.

To this point, Americans have been reacting, often too late, and rarely with data. Most of us are engaging in social distancing because leaders have seen what’s happening in Europe or in New York; they want to avoid getting there; and we don’t have the testing available to know where coronavirus hot spots really are.

Since the virus appears to be everywhere, we have to shut everything down. That’s unlikely to be the way we’ll exit, though.

Some cities or states will recover sooner than others. It’s helpful to have criteria by which cities or states could determine they’re ready. A recent report by Scott Gottlieb, Caitlin Rivers, Mark B. McClellan, Lauren Silvis and Crystal Watson staked out some goal posts.

  • Hospitals in the state must be able to safely treat all patients requiring hospitalization, without resorting to crisis standards of care.

Other cities and states fear that they will approach New York City’s state of crisis. They’re trying to increase the number of available beds and ventilators — as well as doctors, nurses and other health care providers — to make sure they aren’t overwhelmed in their capacity to provide care to all those who need it.

This is the most immediate bar, and the focus of most public health officials’ attention. At the moment, there’s no reason to believe any area is over a surge of cases, and analysts’ models predict many places won’t peak for weeks to come.

  • A state needs to be able to test at least everyone who has symptoms.

Dr. Gottlieb and colleagues estimate that the nation would need to have the capacity to run 750,000 tests a week — this is after things have calmed down greatly. There are times we might need even more.

“The 750,000 number should be viewed as a reasonable expectation for when we haven’t been having any major pockets or regional outbreaks to manage,” said Mark McClellan, an author of the report and a professor of business, medicine and policy at Duke. “If more testing to help contain outbreaks and potential outbreaks is needed, which seems very plausible, especially early on, the number would need to be significantly larger. We’ll also have to do some surveillance of people without symptoms, especially in higher-risk settings.”

A national estimate means less in deciding whether a state can reopen than its local capabilities. A state would need to be sure it could test every single person who might be infected, and have the results in a timely manner. That would be the only way to achieve the next requirement.

  • The state is able to conduct monitoring of confirmed cases and contacts.

A robust system of contact tracing and isolation is the only thing that can prevent an outbreak and a resulting lockdown from recurring. Every time an individual tests positive, the public health infrastructure needs to be able to determine whom that person has been in close contact with, find those people, and have them go into isolation or quarantine until it’s established they aren’t infected, too.

This will be a big challenge for most areas. Other countries have relied on cellphone tracking technology to determine whom people have been near. We don’t have anything like that ready, nor is it even clear we’d allow it. The United States also doesn’t have enough people working in public health in many areas to carry out this task.

Building that capacity will take significant time and money, and the country hasn’t even started.

  • There must be a sustained reduction in cases for at least 14 days.

Because it can take up to two weeks for symptoms to emerge, any infections that have already happened can take that long to appear. If the number of cases in an area is dropping steadily for that much time, however, public health officials can be reasonably comfortable that suppression has been achieved, defined by every infected person infecting fewer than one other.

In suppression, cases will dwindle at an exponential fashion, just as they rose. It’s not possible to set a benchmark number for every state because the number of infections that will be manageable in any area depends on the local population and the public health system’s ability to handle sporadic cases.

“We wanted to suggest criteria that would allow locations to safely and thoughtfully begin to reopen, but what that looks like exactly will vary from state to state,” said Caitlin Rivers, another author of the report and an epidemiologist at the Johns Hopkins Center for Health Security. “We therefore included some flexibility for jurisdictions to tailor these criteria to their local context.”

These four criteria are a baseline. Other experts think we will need to add serological testing, which is different from the viral detection going on now. This type of testing looks for antibodies in the blood that our bodies created to fight the infection, not the infection itself. These tests can be much cheaper and faster than the ones we’re currently using to detect the virus in sick people.

Testing for antibodies will tell us how many people in a community have already been infected, as opposed to currently infected, and may also provide information about future immunity.

Gregg Gonsalves, a professor of epidemiology and law at Yale, said: “I’d feel better if we had serological testing, and could preferentially allow those who are antibody positive and no longer infectious to return to work first. The point is, though, that we are nowhere even near accomplishing any of these criteria. Opening up before then will be met with a resurgence of the virus.”

He added, “That’s the thing that keeps me up every night.”

Until we get a vaccine or effective drug treatments, focusing on these major criteria, and directing efforts toward them, should help us determine how we are progressing locally, and how we might achieve each goal.

It would also prevent us from offering false hope about when America can start reopening. Instead of guesses, people could have clear answers about when they might be able to go back to a closer-to-normal way of life.

@aaronecarroll

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russd
974 days ago
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Exit criteria: a key component of a plan. Perhaps more useful than a target date?
New Orleans, LA
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Let the “free market” sort it out

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BY LAURA CAVANAUGH/FILMMAGIC/GETTY IMAGES

Again, the fact that Republicans can’t set aside their reverence for regulated-as-little-as-possible corporations even when their political survival is at stake is going to get a lot of people killed:

President Trump on Saturday sought to assure an anxious American public that help was on the way to overwhelmed hospitals, and that private companies had agreed to provide desperately needed medical supplies to fight the fast-spreading coronavirus.

But Mr. Trump resisted appeals from state and local officials and hospital administrators for more aggressive action, saying he would not compel companies to make face masks and other gear to protect front-line health workers from the virus.

Speaking at a White House briefing with Mr. Trump, Vice President Mike Pence said the federal government had placed orders for “hundreds of millions” of the N-95 face masks that can shield medical workers from the virus. Mr. Trump said the clothing company Hanes was among those that had been enlisted to start churning out masks, although the company said they would not be the N-95 masks that are most effective in protecting medical workers.

Neither Mr. Trump nor Mr. Pence would say when the masks would be ready. And it is unclear whether enough new masks and other protective gear will be available before health care facilities start getting overwhelmed by a flood of infected patients. More than 21,000 cases of the coronavirus have been confirmed in the United States, and that number is expected to soar in coming weeks.

So, to summarize, the theoretical testing capacity of state and local governments is finally increasing, but it’s being limited by a lack of N-95 masks to protect medical personnel. Trump could simply order companies like Hanes to make them. Instead, Hanes is making masks that do not protect medical personnel, and Trump (who almost certainly thinks a mask is mask and doesn’t grasp the critical importance of producing more N-95s in particular) is just declaring victory anyway. Just great.

Also, don’t elect Republicans at the state level either:

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russd
992 days ago
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early evidence of flattening the curve via competent governance
New Orleans, LA
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The Rust Belt Didn’t Have to Happen

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The long list of decaying Rust Belt communities gives the impression that their decline must have been inevitable. Detroit’s fall is often discussed as merely the most famous example of a regional rule. But the story of a small Midwest manufacturing city that didn’t rust shows that they didn’t all have to go this way.

Vice President Mike Pence’s hometown of Columbus, Indiana, thrived while other cities declined, because J. Irwin Miller, its wealthiest and most prominent industrialist, remained deeply rooted in and committed to his city. He used his clout, money, and a visionary progressive approach to build up Columbus for long-term success. A new biography of him called J. Irwin Miller: The Shaping of an American Town, by Nancy Kriplen, reveals not just the story of a city but one of a lost model of American leadership that the country badly needs to recover if many of its communities are to ever turn around.

Miller was the fourth-generation scion of Columbus’s premier banking family, who became the CEO of Cummins, a major diesel-engine manufacturer originally bankrolled by the family. He was farsighted enough to see even in the 1950s that the ability to attract highly educated talent would determine whether his company survived in a small Indiana city. He felt that talent acquisition and retention required above all else good schools. So he approached Columbus with an offer it couldn’t refuse: The Cummins Foundation would pay the architecture fees for all new schools in the community if the city picked an architect off his list. His program resulted in a world-renowned collection of schools and other buildings by a who’s who of architects, including Eliel and Eero Saarinen, I. M. Pei, César Pelli, and Harry Weese. The American Institute of Architects ranks Columbus as the sixth-best architectural destination in the United States.

[James Fallows: Democrats should talk about place-based policy]

Miller’s approach was superficially similar to many of today’s public-private partnerships. The difference is that his program invested in building up public goods and services, whereas all too many of today’s partnership’s are about enriching private parties at the public’s expense. When dedicating a new Cummins-financed public golf course, Miller said:

Why should an industrial company organized for profit think it a good and right thing to take $1 million and more of that profit and give it to this community in the form of this golf course and clubhouse? Why instead isn’t Cummins—the largest taxpayer in the country—spending the same energy to try to get its taxes reduced, the cost of education cut, the cost of city government cut, less money spent on streets and utilities and schools? The answer is that we should like to see this community come to be not the cheapest community in America, but the best community of its size in the country.

A Rockefeller Republican, Miller was also a social progressive with national impact. He served on the boards of MoMA, the Ford Foundation, and Yale. A lifelong member of the Disciples of Christ, he was a key ally of Lyndon B. Johnson in getting the Civil Rights Act passed while serving as president of the National Council of Churches. Closer to home, he used his clout to get anti-discrimination ordinances passed in Columbus. Miller was globally minded but also deeply rooted in his community, a combination that steered the local conservative culture in a more moderate direction.

That moderation also helped Cummins and Columbus avoid the labor strife of other Midwest cities. When national unions attempted to organize Cummins, the employees instead elected to form their own, independent Diesel Workers Union, over the objections of the United Automobile Workers. The relationship between the Diesel Workers Union and firm was much warmer than usual, with Miller given honorary union membership. As he put it, “Unions are management’s mirror. They tell you things your own people won’t admit.”

The results speak for themselves. Cummins has remained a successful global enterprise. And Columbus has prospered, never experiencing a major period of decline. Today it’s still growing in population and adding jobs faster than the nation as a whole. It’s more educated than the country at large and boasts a GDP per capita higher than Portland, Minneapolis, and Houston.

This model of forward-looking social and economic elites using their influence and money to pull their community into the future, remaining rooted and investing heavily in their hometown, is not unique to Columbus. It’s also been a key factor in the success of western-Michigan communities such as Holland, as documented in these pages by James Fallows. Local industrialists there retained control over their firms, stayed living in and committed to their hometown, and invested their money heavily to build up the public realm of the city, such as when Edgar Prince paid to install an automated snowmelt system under downtown sidewalks.

Too many wealthy elites and corporations today, however, only talk about social responsibility as they pad their bottom lines. Companies such as Amazon and Foxconn, for example, have mastered the art of extracting subsidies from communities. This reality has soured many on the left to the wealthy and corporations; the idea that old-money power brokers would lead communities simply doesn’t sit well with them. On the Tea Party right, meanwhile, fiscal hawks embrace the very cuts to public goods and services that Miller rejected.

[James Fallows: Three big lessons from one small town]

If America’s corporate and other elites want to actually defuse the populist anger being directed their way, they might want to think about emulating Miller. That’s what Pence arguably did: He was originally an advocate of the Tea Party approach, but as governor of Indiana, he implemented a program called the Regional Cities Initiative to use state funds as an incentive for private benefactors to start investing in public goods and services in local communities.

Columbus’s success can’t be solely attributed to Miller’s approach, though. Success in the real world is complex, and involves good fortune as well as good decisions. Nor has Columbus been totally immune to industrial transition over the years; for example, it lost its other Fortune 500 company, Arvin Industries, to a merger. Despite diversifying its economy, it still remains heavily dependent on Cummins, a firm facing global competition and a looming transition away from fossil fuels. And while Cummins remains an unusually civically committed company, Miller himself passed away in 2004, and his children have all left Columbus.

Still, thanks to Miller’s and Cummins’s decades-long commitments, Columbus is in a place most other Midwest manufacturing towns can only envy. America has a lot to relearn from them about what it actually takes to build long-term community prosperity. It’s not just about macroeconomic policy, but also about the behavior of corporations and local elites.

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russd
1075 days ago
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"Why should an industrial company organized for profit think it a good and right thing to take $1 million and more of that profit and give it to this community in the form of this golf course and clubhouse? Why instead isn’t Cummins—the largest taxpayer in the country—spending the same energy to try to get its taxes reduced, the cost of education cut, the cost of city government cut, less money spent on streets and utilities and schools? The answer is that we should like to see this community come to be not the cheapest community in America, but the best community of its size in the country."
New Orleans, LA
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The optimal rate of income taxation

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An established view is that the revenue maximizing top tax rate for the US is approximately 73 percent. The revenue maximizing top tax rate is approximately 49 percent in a quantitative human capital model. The key reason for the lower top tax rate is the presence of two new forces not captured by the model underlying the established view. These new forces are strengthened by the endogenous response of top earners’ human capital to a change in the top tax rate.

That is from a recent paper by Badel, Huggett, and Luo, via Scott Winship.

The post The optimal rate of income taxation appeared first on Marginal REVOLUTION.

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russd
1402 days ago
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I now expect a stream of Tyler posts supporting a 49% top marginal tax rate. Not.
New Orleans, LA
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Why have countries moved away from wealth taxes?

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From the excellent Timothy Taylor:

Back in 1990, 12 high-income countries had wealth taxes. By 2017, that had dropped to four: France, Norway, Spain, and Switzerland (In 2018, France changed its wealth tax so that it applied only to real estate, not to financial assets.)  The OECD describes the reasons why other countries have been dropping wealth taxes, along with providing a balanced pro-and-con of the arguments over wealth taxes, in its report The Role and Design of Net Wealth Taxes in the OECD (April 2018).

For the OECD, the bottom line is that it is reasonable for policy-makers to be concerned about the rising inequality of wealth and large concentrations of wealth But it also points out that if a country has reasonable methods of taxing capital gains, inheritances, intergenerational gifts, and property, a combination of these approaches are typically preferable to a wealth tax.  The report notes: “Overall … from both an efficiency and an equity perspective, there are limited arguments for having a net wealth tax on top of well-designed capital income taxes –including taxes on capital gains – and inheritance taxes, but that there are arguments for having a net wealth tax as an (imperfect) substitute for these taxes.”

Here, I want to use the OECD report to dig a little deeper into what wealth taxes mean, and some of the practical problems they present.

The most prominent proposals for a US wealth tax would apply only to those with extreme wealth, like those with more than $50 million in wealth.  However, European countries typically imposed wealth taxes at much lower levels of wealth…

It’s interesting, then, that in these European countries the wealth tax generally accounted for only a small amount of government revenue. The OECD writes: “In 2016, tax revenues from individual net wealth taxes ranged from 0.2% of GDP in Spain to 1.0% of GDP in Switzerland. As a share of total tax revenues, they ranged from 0.5% in France to 3.7% in Switzerland … Switzerland has always stood out as an exception, with tax revenues from individual net wealth taxes which have been consistently higher than in other countries …” However, Switzerland apparently has no property tax, and instead uses the wealth tax as a substitute.

The fact that wealth taxes collect relative little is part of the reason that a number of countries decided that they weren’t worth the bother. In addition, it suggests that a US wealth tax which doesn’t kick in until $50 million in wealth or more will not raise meaningfully large amounts of revenue.

There are many more excellent points at the link.  Here is another:

A wealth tax will tend to encourage borrowing. Total wealth is equal to the value of assets minus the value of debts. Thus, one way to avoid a wealth tax is to borrow a lot of money, in ways that may or may not be socially beneficial.

Tim concludes:

To me, many of the endorsements of a wealth tax feels more like expressions of righteous exasperation than like serious and considered policy proposals.

Recommended.  If you would like another point of view, Saez and Zucman respond to some criticisms here.

The post Why have countries moved away from wealth taxes? appeared first on Marginal REVOLUTION.

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russd
1402 days ago
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I now expect a stream of Tyler posts supporting higher capital gains and inheritance taxes. Not.
New Orleans, LA
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Growth mindsets

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Scott Young writes:

In logarithmic domains, two mindsets are important. In the beginning, high-growth phase, the emphasis needs to be on maintaining long-term habits. Since growth is fast initially, care needs to be taken so that it won’t slide back down once effort is removed.

In the later, low-growth phase, the emphasis needs to be on habit breaking. Since low-growth is often caused by calcifying routines, deliberate effort needs to be taken to break out of that comfort zone.

In exponential domains, the mindset of resilience and endurance are critical. Since feedback is sparse and generally negative during the initial part of the curve, it takes dedication to persist. Part of the reason, entrepreneurs are often consumed by their own vision is that it helps block out the negative feedback until they can reach the exponential part of their growth.

There is more here, and for the pointer I thank R.

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russd
3101 days ago
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high growth establishes organizational inertia, hard to overcome and learn new skills for next growth opportunity.
New Orleans, LA
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