Sunday, March 22, 2020

Claw Backs on Covid Aid

Personally, my wife and I fall into the category Steven Pearlstein described Friday--people whose income is not siigniicantly impacted by Covid-19. See this more recent post on Politico.

I don't know whether we will receive anything under the measures now being put together in  Congress.

It strikes me that in the absence of the right infrastructure to focus payments you could include a clawback provision. For us, the IRS would know on our 2020 taxes that we received Covid money. If our adjusted gross income for 2020 doesn't show a decrease from 2019, i.e., we weren't hurt by the pandemic, then tax the Covid money, 100 percent or something less.

[Updated:  Here's Greg Mankiw proposing the same thing.]

The Lack of Governmental Infrastructure

One of things crisis  fighters run into is the lack of governmental infrastructure. 

In the Great Recession a bit part of the problem in helping people whose houses were under water was the lack of any infrastructure which had direct contact with mortgagees.  Instead people like Geithner had to design programs to work through banks, but because the mortgages often had been been sold on/collateralized from the original loan maker it wasn't an effective program.

We now come to 2020 and Covid-19.  The programs under discussion now want to make direct payments to people.  But the government doesn't have that infrastructure.  The best we can do is write checks to those who filed a tax return with IRS in the past, but that obviously misses a lot of people: those who weren't required to file, those who joined the country more recently, those who never filed a tax return--i.e., tax evaders.


My Predictions?

I don't really have any, but I just saw a Politico post following up on various predictions made about Obamacare.  They mostly were wrong.  So with that in mind I'll venture this: at least 80 percent of the predictions ever offered about Covid-19 will turn out to be wrong.

Nicholas Kristof at the Times sketched the best and worst cases for the outcome. I'll venture the prediction that the outcome will be closer to the best than the worst.

Saturday, March 21, 2020

Will the Cost of Fighting Covid-19 Exceed the DAmage It Causes?

John Hinderaker at Powerline blog ends a post on the Covid-19 virus (he uses "Wuhan virus" which is an indicator of his viewpoint) with this sentence:
" But policymakers need to consider the possibility that the damage done by the extreme measures being taken to slow the spread of the virus will ultimately prove to be greater than the harm done by the virus itself."
My reaction was--we should hope that's the case.   But I've had to struggle with figuring out whether my kneejerk reaction was valid, or just liberal bias.  Let me try now:


  1. Covid-19 is a case of natural disaster.
  2. Natural disasters vary widely in their causes and destruction: think of Hurricane Katrina or Sandy; earthquakes and tsunamis, droughts, floods, forest fires
  3. It seems to me that forest fires are a decent parallel with forest fires.  Why-both fires and epidemics occur over significant time, not the minutes of an earthquake or the days of a hurricane. That extended time period means humans can fight them, can hope to mitigate effects, limit their scope. 
  4. So consider the Paradise CA fire of a couple years ago.  Suppose, instead of a downed transmission line, it had started as campfire which escaped the firepit. But there was a fire station near enough and someone with a cellphone who saw the escape. In short, the Paradise fire was contained within a couple acres by the exertions of a fire crew over a day.  The cost of fighting the fire would maybe have been $1K, more than the burn damage.  Given that scenario,should we not fight the fire because of a cost-benefit ratio.
  5. In summary, when considering natural disasters the correct cost-benefit analysis is not money expended versus damage incurred; it's money expended versus some combination of probability of damage and the cost of the damage.

Friday, March 20, 2020

In Lieu of Mail Elections

There's a move, led in part by my former candidate for President, Amy Klobuchar, to move to mail elections in the fall.

I've reservations about mail elections because I like the feeling of community you get by voting in person.  I've reservations about moving to mail for our national elections, fearing that people are underestimating the difficulty involved, particularly when you consider counties are basically in charge of elections (remember the butterfly ballot). IMO there would likely be a number of snafus in November because the Harshaw rule applies.

I'd suggest an alternative in case Covid-19 is a danger in November--move to multi-day elections.  Instead of "election day" we'd have maybe "election week", or 2-3 days  That way we'd not need to change the technology, just spread out the people as they come to vote, so they can maintain their 6 foot distance.  The big hurdle that comes to mind is the burden on the people manning the polling places--older folks usually and more vulnerable to sickness.  But, if the virus is still an issue unemployment will be higher, providing a pool of potential hirees.

[Update--it seems the Klobuchar/Wyden proposal allows in-person advance voting, which is the same as an "election week"--I knew she deserved my support

Thursday, March 19, 2020

Innovation--Uses of Social Media

I think it's true that whenever things change some humans adapt to it.  It's like invasive species in biology--when a new ecological niche opens some opportunistic species will take advantage of it.

Anyway, what seems to be going on today is, given the challenge of Covid-19, humans are finding ways to use the internet and social media to counter its effects.  Using Amazon to order supplies, using Zoom for online learning, having a community sing over media, joining friends for online meals.

These uses aren't unprecedented, I'm sure, but tweaks on existing uses and expansion to new audiences.  These uses and audiences are likely to persist even after Covid-19 becomes a normal part of the world's health picture.

Kevin Drum has a post today arguing the greater speed of information exchange now as compared to 1918's Spanish flu explains a greater economic impact.  I'd agree, but also point to the advantages this speed offers--we can learn from the esperiences of others much quicker than in 1918.

Wednesday, March 18, 2020

The Logistics of Checks to Everyone

As a bureaucrat when I see proposals to send checks to "everyone" I immediately jump to the logistics.

I know we've done this in the past--I think in the GWBush administration.  Google that and I find this:
In 2009, the Economic Stimulus Act sent out $14.2 billion in stimulus checks.1 2 The one-time payment went to recipients of Social Security, Supplemental Security Income, veterans, and railroad retirees.
Note that's far from "everyone".  Others, the employed, got a tax credit. This was part of Obama's stimulus.  As for GWB:
The year before ARRA, the George W. Bush administration sent out stimulus checks to battle the 2008 recession. It spent $120 billion in fiscal years 2008 and 2009.1 It rebated taxes on the first $6,000 of income for individuals or the first $12,000 of income for couples. Stimulus checks were mailed out as follows:

Individual taxpayers received up to $600.4

Married couples were eligible for up to $1,200.
Households with children received $300 per dependent child.
Rebates were reduced for higher incomes at $75,000 for individuals and $150,000 for couples.\
Around 20 million retirees on Social Security and disabled veterans also received checks for $300 if they earned at least $3,000 in benefits in 2007.4 Couples received $600.
Everything from this site including a discussion of impacts.

The problems with "everyone" is the government doesn't have a database with everyone in it, unlike say Estonia or India.  So to issue checks Congress has to cobble together databases from across the government.

Tuesday, March 17, 2020

Contrails as a Metaphor for Covid-19

I like metaphors, using something concrete to grasp ideas. I was thinking about Covid-19 (surprisingly!) this morning, specifically the process by which the virus spreads. What gets complicated to think about is the elapse of time, particularly since I tend to resist binary choices--a person is infected or not.

So here's my metaphor:  think of an infected person as a jet plane flying in a clear sky, particularly a older one.  The plane leaves a contrail behind it, which over time loses its structure and dissolves into nothing.  The contrail represents the virus particles being

Nowfly another plane through the contrail, representing an uninfected person.  If the contrail is well structured the person is more likely to be infected than if time has passed or winds have dispersed it.

Monday, March 16, 2020

Covid-19 Makes Us All Poor

Don't normally listen to podcasts but I did this one at Slate with an ER doctor..

He points to the lack of control felt by him and the public. That's one of the things about being poor--the lack of control over your life, the need to live from crisis to crisis, without the resources to get ahead of things.  The lack of control means you lose the ability to scan the environment and to plan the future.

For me, these descriptions apply to my current state of mind--my mental horizon has contracted to the issues raised by the virus: buying food, the loss of outside entertainment possibilities, the uncertainty,.  In other words, I'm now pretty much stupid.

[Updated--I forgot the most important thing--obsessing about the possibility Starbucks will close. I can't live without my coffee.]




Saturday, March 14, 2020

If Memory Serves--Cheney and Pence

If I remember correctly after 9/11 Vice President Cheney and President Bush were, for several weeks/months? kept separated, so a terrorist attack on one wouldn't take out the other.

Is it possibly time for President Trump and Vice President Pence to be separated?  Trump is in the population must vulnerable to the effects of Covid-19. The VP is getting there, but isn't nearly as vulnerable.  By separating them we'd help ensure that the virus couldn't take out both men at once, given that serious cases can result in lengthy hospitalizations.