Nudging and banning

Here’s a Guardian piece I wrote about Government policy regarding the Coronavirus as it stood on Thursday. 

Less than 48 hours later, policy seems to have changed.  Initially eschewing enforced social distancing measures in the form of banning large sporting and other events, this is now going to happen.

On Thursday, the position on this was that 1) the science did not support a ban because this would not much to affect the spread [controversial] and 2) that there was nonetheless concern about such events placing unwanted burdens on emergency services at a time when they might later, but are not yet currently, under stress.

The science clearly has not changed in 48 hours.  And the case load has not risen to the point where the emergency services cannot cope with some people being punched at football matches.

What happened was that the Premier and other Leagues decided it was irresponsible to hold such events where the virus could spread, and decided presumably it would be very bad for their brands if they carreid on.  This then left the government looking like it was behind the curve and out of control.  To retake the initiative, it is embracing the bans of these very large events and readying itself to ban some more things, smaller but still large events.

The overall strategy seemed initially to be one of fatalism as regards the overall spread of the disease.  Initial gentle coaxing, followed by later enforced distancing, would be used to try to curtail the case load of those needing hospitalisation and particularly intensive care treatment to the point where current capacity could deal with it.  How it reached that judgement watching the experience of Lombardy in Northern Italy, and bearing in mind the difficulties the NHS has had in coping with winter peak demand in the last several years, and the surplus mortality caused by social care cuts re-routing the elderly into hospital care, I cannot fathom.  But that was the judgement.  Social distancing would be enacted later, when it was most needed, at the peak load of cases.  And later because there was fear of ‘fatigue’, that its effectiveness would diminish when it was most needed, as people tired of the regulations, or through financial necessity, and sought ways around them, or substitute ways of encountering eachother.

A medical strategy, the government are discovering, can’t be executed in a political vacuum.  Politcal factors seem to have pushed it to alter significiantly the timing of social distancing measures which it stressed was so important.

One can’t help wondering how much politics entered the first calculation.  Was it an inclination towards intervention as a last resort because of instinctive laissez-fairism?  Possible, but I doubt it.  Brexit did have its Global Free Trade Liberal Leavers in the coalition, but they seem to have been an impotent part of it and Brexit overall has been about decisive flouting of what free market economics would dictate.  And the budget showed the Government’s tilt towards fiscal interventionism.

Was it about British exceptionalism?  Deliberately doing the opposite of what the continent were doing?  I hope not, and also doubt that too.

Although whatever the imperative, the UK has clearly decided that they don’t care about the difference in policies in the two political halves of the island of Ireland.  South of the border, Ireland have closed schools and had already ratcheted up social distancing.  North of the border follows UK policy.  But the effectiveness of social distancing south of the border will be greatly affected by it not happening North of the border.  If you want a demonstration of the costs that chopping up territories into selfish nation states imposes on its citizens, as one government fails to internalize the externality it has on another, you have a good example right there.

It’s to be expected that politics is gong to continue to have an affect as the strategy and the virus’ progress evolves.  One follower of mine on Twitter mused that just letting the virus do its thing and kill a lot of people might just prove politically untenable, and it would be forced into introducing lock-downs in due course.

 

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New Statesman post on monetary policy and the virus

Posting here a New Statesman piece by me.  For those of you who don’t follow me on Twitter, or read anything else except blogs and therefore do not interact with major media outlets.

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New Statesman Post on that Cummings Job Ad

I didn’t post this here before, so if you didn’t see it at the time, and felt somehow that you had not had enough Cummings journalism, here is a New Statesman post about his infamous job advert.  The one that culminated in him hiring Andrew Sabisky, the ‘Superforecaster’ who subsequently resigned after views that he had expressed on eugenics and women had been unearthed from his past writings.

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Guardian article on Cornonavirus

A fair portion of those who read the blog don’t follow Twitter, so posting this Guardian piece by me here in case you have not seen it.  The headline of the article doesn’t really match the content.  My main point is about the many networks – travelling, supply chain, finance and social media – in the globalized world that are infecting us all with the virus and its economic harm.

Central banks do have a role to play;  maximizing monetary stimulus with rate cuts and QE;  perhaps restarting funding for lending;  contemplating private asset purchases in the restarted QE program.  But because they are still dealing with the legacy of the financial crisis, the main burden will fall on the fiscal authorities.  That is, unless drastic measures like helicopter money are contemplated.

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EU trade talks chart crime

Consternation today on the internet about a chart crime committed by the EU Commission.

The EU is peturbed that the UK appears ready to renege on a commitment to negotiate a ‘level playing field’ [for example to restrict state aid] as part of a Free Trade Agreement.  To explain why it continues to want this [and hasn’t, as No 10 disingenuously suggested in a tweet using almost Russian Embassy style tactics, ‘moved the goalposts’] it dug out a slide showing data on countries with which it has reached trade deals.

Here is an image of the slide and an enumeration of other crimes by Stefan Loesch, who writes under the handle OscarDTorson.

The chart crime people are focusing on is the the fact that the size of the trade contributions to total EU trade is matched to the diameter of the circles, not the area of the circles, which is implied.  So the chart overstates the difference between trading partners.

The message the EU want to convey with the chart is this.

Given how close the UK is to the EU, and how large, we know from trade across the world and history that the likelihood that trade with the UK could supplant domestic EU activity is quite high.

For this reason, a relatively small shift in the terms of trade induced by unfair state subsidies, or a loosening of regulations [say governing health and safety at work] could be enough to change some activity from non-traded to traded.  For this reason, we want level playing field rules to rule out or at least constrain this kind of trade-predation by the UK.

For trade blocs a long way away, or that are small, it would take a much larger shift in state subsidies or regulations to tilt many activities from non traded to traded, and these either won’t be politically feasible in the 3rd country, or they can be constrained by much looser provisions in an FTA.

A slight complication is that the trade patterns are the product of current and past agreements establishing administrative trade frictions between the blocs.  The UK trades so much, currently, with the EU, because of its past membership of the single market.

Once rules of origin checks are required, or if there is regulatory divergence in the UK that forces firms in either bloc to produce to multiple standards, trade would shrink.  The effort required at that point for one jurisdiction to predate on the other using subsidies or regulatory undercutting would be larger.

By how much?  Not enough to make the UK look as unimportant as Canada, which is the most relevant comparison:  the UK have been trying to claim that a ‘Canada’ style deal, which absents from the same stringent level playing field provisions, has been ‘taken off the table’.

The EU threat is, without those level playing field provisions, to offer nothing more than a minimal trading relationship provided for by WTO rules.  Beyond the threat to cut off your own nose to spite your face, there is some logic to it.  With such a minimalist deal it would take much more aggressive, and therefore less likely, state trade-predation to tilt new activities in the EU from non-traded to being traded with the UK, a kind of crude [and expensive] security to prevent it from happening.

 

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The Get Brexit Done lot want cheerful soldiers not Philosopher King technocrats

Much has been made of the appalling spectacle of the cabinet participating in a Q and A chant with Boris Johnson.  The video circulating can be taken to be a homage to those of the Trump cabinet, featuring supplicants offering praise.

Conventionally, UK cabinet members are supposed to be the equals to the PM’s  ‘first among equals’.  Heavyweight minds negotiating policy solutions and probing their costs and benefits ceaselessly.

But the video is not meant to be a mini-documentary shedding light on the workings of government.  This video is a marketing tool.  What is being marketed is the idea of a Prime Minister with cheerful junior soldiers promising to Get Stuff Done.  Those who were seduced by ‘Get Brexit Done’ are calculated to have voted for ‘Boris’ and not be particularly interested in heavyweight Philosopher King technocrats that he might have delegated stuff to.  They might know of very few other politicians, nor feel they need to, and be only dimly aware of the different government departments and what they are charged with doing.

You don’t have to be an actual supplicant to grasp that this is a sound marketing ploy for Johnson and you should agree to it.  (You might even command a price by agreeing to it).   The fact of the video does not actually shed light on the true workings of cabinet or government in general.  The Johnson campaigns and government have frequently involved saying one thing and doing others.  We can presume that they might be fine with the incantation for cameras, but what actually happens away from the cameras will be a function of the same power arithmetic that has always dictated cabinet.

Johnson’s election victory and the size of his majority naturally then raise the possibility that perhaps even away from the cameras, cabinet are really supplicants nowadays.  Johnson’s preparedness to stand by Cummings over the issue of who gets to pick the Chancellor’s advisors adds weight to that.  But other realities have not chnaged:  the impossibility of organising such a large dimension project as ‘Government’ entirely from the centre, and the necessity to delegate and have firewalls between No 10 and reality.  And there are new complications, including the tension between the leftward shift that the levelling up spending prefigures, and the traditional Tory right who won’t want the taxation that goes with it.

 

 

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Power? No thanks, I’m a decently paid and fulfilled megaphone

If you were designing a marketplace for ideas for policies to solve social problems, one thing you might hope is that it would incentivize people actually to take power and do things.  Only by doing things in government do problems get solved and lives altered.

If you are of a particular persuasion, the failure of the Labour Party to orient itself to obtaining power is remarkable.  A demonstration that the marketplace rules are not providing the right incentives.

But perhaps there is no puzzle.  Life as a campaigner and not a doer is not so bad.  At the top of the pile, you can expect a pretty decent salary.  MP’s earn £79k.  More than some Professors [less than others].  About 4/5 of that of a Head of Division in the Bank of England.  Compares well with local government, heads of charity, senior civil service salaries.  But there are other perks.  Fame!  The sofa circuit.  Public speaking at marches, rallies, constituency meetings, favoured campaigns.  Most of those who self-select to be an MP enjoy this.

Why spoil all this  by contaminating the process by actually seeking power?  Doing that involves compromise.  Falling out.  Banging heads together.  Or having your head banged.  Making specific promises and risking not delivering.  Figuring out the boring detail of what you need to do to actually do things.  Reading briefs.  Understanding them.  Forming a view.

For those in constituencies that are safe, you might prefer cultivating your own brand, doubling down on your views, gaining repute and TV time, shaping yourself for the book deal or the paid speaking circuit.

The incentives for the leftist outrider are even less oriented to achieving things and implementing policies.  These people are even more transparently Content Providers for a demographic that consume what they do in the same way that I consume fish and chips and the New Yorker.

Radical imagined futures that fill out newspaper columns and book length manifestos – compiled cheerfully by Owen Jones, Aaron Bastani, Grace Blakeley and others – fulfil the same purpose as literary fiction.  The survival of the value of this content depends on coverage and mentions, and these things are at best tenuously related to whether they describe workable solutions to problems that people face.

I’ve singled out the left tribe because of my relative familiarity with it;  but also because the pathology – not actually attaining power – seems more acute there.  Labour have not won a general election since the person that current tribal affiliations dictate it is necessary to deplore, Tony Blair, last won one in 2005.

But one can equally well apply the same critique to the cesspit of the right.

Dan Hannan’s net worth does not depend on whether he can recommend solutions to problems;  neither Matt Goodwin or Eric Kaufmann or David Goodhart or any of the actual office-holding politicians.  Their earnings also depend on attention.  There are limits, as Katie Hopkins’ career serves to remind everyone.  But provided you can tolerate not inciting legal action against you, the constraints are not that great.  You can and indeed perhaps must say things that are of no use to people:  you can tweet things about tariffs that are not true;  you can retweet material linking race to IQ;  you can selectively and incompetently celebrate things that seem to indicate your populist team are winning and were right all along.

The truth about problem solving does not lend itself to the politician/outrider industry.  It is probabilistic and multivariate.  Things may or may not work, or have worked, in concert with lots of other things.  It frequently will be discordant with the emotional resonance needed to maximise the entertainment value of an outrider piece.  You are not going to get a book deal with the pitch that we need a policy programme put together on an evidential case-by-case basis, updated in the light of data of imperfect and uncertain quality.  [Just to test this:   if anyone wants that book, I can write it.]

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