Media funding

The third column in our Insights newsletter is usually a little tongue-in-cheek.

I'm not entirely kidding about this proposal for supporting the media though. But first, a bit of back-story. 

The basic problem, as I see it, is that there is very little real demand for actual news. That by itself wouldn't be a problem, but there are reasonable social benefits from a better informed public. For one thing, a better informed public will do a better job in voting. And when an investigative journalist finds things like, say, a town councillor used a tip-off about a zoning decision to make some land investments - well, that stuff getting found out and published encourages better behaviour.

For a long period, we were in the happy spot where people were very happy to pay for classified advertising, and newspapers and news magazines could provide a profitable bundle. Subscribers would receive a paper for less than the overall production cost; those willing to pay for access to readers covered the rest of the cost. The papers were the most effective way of getting ads in front of people. 

That's all unwound where there are far more effective ways of running classified ads and of getting other advertising in front of people. Newsmedia have spent much of their lobbying effort on taxing the new and better alternatives for ad delivery - mostly focused on Google and Facebook rather than on Ebay and TradeMe. 

But the case for taxing them to cover the costs of media is, bluntly, ludicrous. The snippets that Google will serve up as teaser do not violate copyright and drive traffic to the news outlets' sites, where people could see ads hosted by the newspaper. If that weren't the case, every news outlet has a simple solution: block the search robots from accessing their sites. It is easy to not have your content linked by Google. 

Newspapers just aren't the best way for advertisers to find people any more. The bundling of advertising with news worked for decades and made sense in that period, but that world is gone.  

I worry that bailouts or, worse, taxes on tech companies to directly fund media will prevent entrepreneurial discovery of better models for funding the news. 

If the underlying problem is private demand for news on current events being less than the socially optimal amount, then interventions should be aimed at boosting that demand rather than directly subsidising existing providers. There is no policy interest in that any particular provider continue to exist; there is a policy interest in that there is a well-informed public. 

The Stigler Centre's recent report on digital media suggested a form of voucher funding. Everyone would get a small amount of money as a voucher that they could use toward news subscriptions; unused vouchers would see their funds distributed across outlets proportionately to how used vouchers were allocated. 

That still has a problem in deciding which kinds of outlets are eligible for vouchers (the report suggests a fairly broad range should be eligible). 

It seems less bad than some other options for government funding of media. It at least doesn't have political appointees deciding which news outlets are worthy of support; it isn't hard to imagine how a Trump appointee would handle that. 

Anyway, all that said, I proposed something a little different, somewhat tongue-in-cheek, in our Insights newsletter. 

Here it is:

Some commercial radio stations encouraged people to listen by running regular lotteries. They’d dial up a random phone number and if the person answering could name the last song played by the station, the lucky listener would get a hundred dollars.

Perhaps the government could set up a $36.5 million budget line for prizes. Every day, one lucky Kiwi gets the call. If they answer that day’s question about the key events of the week – with the different news editors supplying the questions – they win that day’s $100,000 prize.

It’s a lot cheaper than other kinds of bailouts. And it could encourage people to start paying attention.

It wouldn't be all that expensive in the grand scheme of things. If you wanted to splurge, you could just keep calling until somebody won that day's prize. Then the budget line would be the full $36.5m rather than 'up to $36.5m in prizes'. Folks would have stronger incentive to become informed, and would figure out what news option was best for them in doing that. 

Sure, it isn't perfect. But it seems less obviously bad than trying to force Google to fund the newspapers. 

Media shakedown

Newsroom's co-editor wants the government to shake down Facebook for a hundred million dollars to give to newsmedia, under threat that the government would impose worse regulations on Facebook if it didn't pony up the dough.

I'm not exaggerating.

Here's what Mark Jennings wrote:

The best thing the Government could do to help New Zealand media right now is to get the Prime Minister on a Zoom call with Facebook boss Mark Zuckerberg and ask him for $100 million.

In return for saving the New Zealand media, she agrees to let Zuckerberg off the hook that the Australian, French and other governments are planning to put him on by making Facebook pay for news content.

I know that things are pretty tough in the newsrooms, but asking the government to run a shakedown operation to fund you is not all that hot.

Public Health Priorities

New Zealand's public health system has pivoted admirably to focus on the current pandemic. But the neglect of communicable disease for rather a long time ahead of this has had costs.

The public health system's focus on noncommunicable disease may make sense if you only look at the current burden of disease, prior to this year. But contagious and noncommunicable disease are very different things. If I decide to live an unhealthy lifestyle and have worse health as consequence, the costs of that to others are not particularly high. There is a fiscal transfer through the public health system, but that is mostly pecuniary - unless you think that people are living substantially less healthy lives because they know that the system will cover the health costs down the track. But any real, Pareto-relevant, technological externality is small. Concerns about noncommunicable disease are largely paternalistic.

Communicable disease is different. There are real and substantial external costs from it, and real public good benefits from its suppression. If I am currently risky, my staying home provides benefits to everyone with whom I'd otherwise come into contact, whether on the bus, in a restaurant, or anywhere else.

And as much as public health people hate seeing anyone enjoying a soda, a soda has never resulted in a month-long nation-wide lockdown and economic collapse.

Every time I've complained about this, the well-thinking people have told me that government can walk and chew gum at the same time. It can both focus on banning people from doing the things they enjoy doing while also keeping on top of communicable disease.

Yeah. About that.

Here's Georgina Campbell over at The Herald.

Thousands more face masks have been found with crumbling elastic and deemed unfit for purpose in the fight against Covid-19.

Earlier this month it was revealed there were 90,000 masks with corrupted elastic at Capital and Coast DHB and a further 10,000 at Hutt Valley DHB.

South Canterbury DHB has since reported there were 58,000 N95 masks in its pandemic stock, but due to their age, guidance has been sought from the Ministry of Health on whether they could be used during the Covid-19 pandemic, DHB chief executive Nigel Trainor said.

The public health system, broadly speaking (which I take to include the Ministry of Health, the DHBs, the HRC granting system, and the universities doing the research, and the cluster of government-funded NGOs), has managed to do a lot of things recently.

It has managed to ban sodas in hospital cafeterias.

It has managed to put cameras on a pile of kids to take pictures every five minutes, and to scour those pictures for evidence of evil brands that are hurting children by their presence.

It has put huge effort into blocking new bottleshops in places like Khandallah, with months-long hearings processes.

It has prioritised working out the regulations around vaping even in the middle of a pandemic, with MoH resources being put to supporting that committee.

But it has not managed to check that the DHBs are doing stock rotation on its PPE supplies for a pandemic. A public health system that protected its workers from soda did not bother to make sure its workers would have reliable access to PPE. 

This isn't a Labour government failure. It's a failure of the administrative state over the past decade in chasing after noncommunicable disease at the expense of preparedness for communicable disease.

Places like Taiwan have been able to avoid lockdowns because they've had a public health system ready for pandemics.

It is interesting to imagine a counterfactual in which public health had maintained a focus on communicable disease. Where grant money went into ensuring best-practices for scale-up of contact-tracing rather than having people watch sports matches to count alcohol brand exposure. Where central government was telling DHBs to check their PPE stocks rather demanding that they ban soda in the hospitals.

Let's hope that the system can maintain a focus on communicable disease coming out of this.

Climate and recovery

Eloise Gibson over in the Dom Post rounds up comment on climate priorities as we come through the Covid-19 mess.

I suggested pushing harder and faster on getting the ETS into proper order; Eloise briefly covers my comments there. I'll expand on them here.

So much in this space seems to get things backwards. Let's work it forwards first, then show the problems we get in thinking backwards.

A properly working ETS will set a binding path to hitting NZ's commitments, but with one fudge that I'll add in here. The fudge is that prices in New Zealand should never lead prices in other countries that are taking climate seriously.

There are two ways of getting that.

One way is making sure the ETS can handle international tradeability in real and credible carbon permits. If you have that, then NZ emissions can exceed the NZ cap so long as they're offset by emissions elsewhere. Where that tradeability is restricted to credible credits, you maintain the same path to global emission reduction at lower overall cost - which means the world can have more ambitious goals than otherwise.

Alternatively, until international tradeability is in place, the government can set a price cap equal to prices on the European market. Basically the government would be willing to sell an infinite number of emission credits for any year's emissions at the European price. Whenever European prices go up, NZ prices would too if we were at that cap. This would commit us to moving in lockstep with the most stringent regimes, but no faster. That kind of move makes a ton of sense where the climate benefits of moving ahead of the pack are trivial while the economic costs can be substantial. Basically, you want mechanisms where countries all agree to do as much as the one doing the most - at least until you get to carbon prices matching the social cost of emissions. I doubt prices ever need to wind up rising to the current social cost of carbon because tech would come in to help, but the market could discover that.

That would then let the Climate Commission put up an expected price path for carbon. An expected price path for carbon would allow modelling of expected changes in demand for all kinds of stuff, from electric car charging stations through to power generation. Those expected changes in demand could inform infrastructure planning.

The other way of doing it is backward. You'll hear calls for a green-investment stimulus package. The optimal investment path will depend on what demand is going to look like as prices change, but you work that out by working out what demand is going to look like under that revised price path, not by just deciding that some investments are green and some are not-green.

If you do it backward, you risk sinking huge amounts of money in places where it will not do the most good. When we're thinking about big infrastructure projects getting into the hundreds of millions or billions of dollars, those should be based on business cases that take expected demand seriously, with some decent thinking about how that demand will be affected by changes in carbon prices.

Looking through the rest of Gibson's article, we see stuff like:

• EDS wanting revised building standards for energy savings
• ...but if everyone knows that carbon prices are going up, then people will invest appropriately as the marginal cost of heating increases with rising power prices. Why pay commercial building owners to retrofit when tenants expecting higher heating costs would be willing to pay higher rent to avoid those heating costs? Get the price path up and folks will adjust.
• A renewed push for the feebate scheme
• This was always stupid. The article frames it as NZ First having blocked it, which it likely did, but Treasury's report on the scheme was absolutely and correctly scathing. Petrol is in the ETS. You don't need to put extra charges on less efficient vehicles. You might as well put an import charge on Jaguars because they have higher maintenance costs, ignoring that the Jag's owner already knows that and is already going to be paying that cost. It's just dumb. Petrol is in the ETS, the ETS price is increasing, and folks will be thinking about that when they buy a car - they make the choice that's right for them. The feebate scheme was one of the stupidest ideas going. You don't need to incentivise buying climate friendly cars. The higher running costs of petrol vehicles is already appropriate and sufficient disincentive. The only plausible rationale for it was around lower emissions in cities and health effects of that, but really just knocking out the smokiest vehicles at WoF time would be rather more effective. 
• EDS and Greenpeace wanting more solar power in homes and offices and replacing existing fossil fuel plants with renewables.
• But power is in the ETS. Any carbon used in power generation is already priced in. Again - you publish the price path and you'll get the efficient decisions around long term energy investments. Sure, ease up the RMA processes to allow new hydroelectric generation. But coming in to direct what kind of generation should take place is colossally stupid and expensive. Just look at the mess Germany got itself into. We had a report on this last year. Forcing power generation to be 100% renewable would be outrageously expensive, with costs per tonne of carbon abated many multiples of the going price in the ETS. Just absolutely nuts. 
• EDS, Forest & Bird, and others wanting electrification of the rail network
• I am absolutely agnostic about whether the trains should be electric or diesel. But transport is in the ETS. Any carbon cost of diesel in the trains is already paid. If there's then a business case showing that investment in electrification pays off, given expected increases in ETS costs, great. But that's the only basis on which it should be done.

Running things backwards will lead to abatement costs far in excess of that which is necessary. Running it forwards, starting from ETS prices and looking at the business cases from there, makes sure that climate efforts are well focused. 

Removing rigidities

Coming out of the mess will be easier where labour markets are less rigid. People will need to be able to shift to the areas seeing increased demand - both geographically and by industry sector. 

At least in the US, occupational licensing regulation makes that hard. If you're certified by one state's board, you may not be recognised by the next state over.

Much of that licensing was never really necessary. But it's even less necessary where there are better feedback mechanisms providing information about service quality.

Sara Brown summarises work from Brynjolfsson and coauthors: (HT: R.S.)

More than 1,100 occupations, from interior designers to contractors, require licenses in at least one U.S. state. But consumers care more about online reviews and prices than license status when it comes to choosing a service provider, according to new research from MIT Sloan professorErik Brynjolfsson and his co-authors.

As consumers increasingly go online to hire service providers, the researchers found that more stringent licensing regulations result in less competition and higher prices but do not boost customer satisfaction, at least when it comes to home improvement services. This suggests well-functioning online measures, like ratings and reviews, could be an effective substitute for professional licenses as a form of quality control.

Brynjolfsson and his fellow researchers — Harvard University professor Chiara Farronato, Stanford University professor Bradley Larsen, PhD ’13, and Boston University professor Andrey Fradkin— studied a large online labor market and conducted a nationwide survey. Their working paper, “Consumer Protection in an Online World: An Analysis of Occupational Licensing,” was published in January.

Read the whole thing of course.

And recall that NZ is hardly immune to occupational certification requirements that could make our own recovery harder. 

Here's Simon Greenwood & Andrea Menclova, from 2018 (ungated):

This study is the first to our knowledge to document the extent and correlates of occupational regulation in New Zealand. Using data from the Census and the Survey of Working Life, we estimate that 28% of workers’ primary jobs are affected by occupational regulation. This is lower than the 35% reported for the US but identical to UK estimates of 28%. Furthermore, we find that holding observable factors constant, occupational regulation is associated with a wage premium of 5%. This is lower than the 18% licensing premium found for the US but within the range of estimates for the UK.

Note that they find that while 22% of females work in regulated professions, 34% of men do.

Where more women than men will lose their jobs in the current mess due to their representation in service industries more heavily affected, it will be harder for them to shift into areas where entry is restricted. 

NZ's excellent trade response to Covid-19

In the Stuff newspapers this week, I laud New Zealand's maintained commitment to free trade in critical goods. 

Back in March, Canada, Australia, Chile, Brunei and Myanmar signed on with NZ and Singapore to a statement endorsing keeping supply chains open and removing restrictive measures on essential goods.

Last week, Singapore and New Zealand fleshed out what that means for them, with a list of a pile of products that will be moving to tariff-free status. It's an open plurilateral agreement: any other country who wants to join is is free to sign up by agreeing to the what's in the agreement as written.

I really hope other countries join in.

A snippet:

As New Zealand increasingly and deservedly draws the international spotlight, Prime Minister Jacinda Ardern could do well in asking other countries to sign on to the agreement her government has come to with Singapore.

Trump's response to the pandemic has looked far too much like the 1930 Republican Congress's response to the Great Depression: an insular knee-jerk protectionism that only makes things worse both for Americans, and for everyone else. It is a model of what not to do.

Ardern's government has been providing a vision of a better way. One that does not beggar its neighbours, and itself in the process.

It is a vision that should prove compelling beyond New Zealand and Singapore. Ardern should appeal for others to join us.

Morning roundup

The worthies on the culling of the browser tabs:

• The Adam Smith Institute reminds the UK government it needs a plan for exiting lockdown.


• The Atlantic, on how the WHO failed, but why defunding it may not be the best response.


• William Nordhaus on the need for a Climate Club: basically, the Club consists of countries willing to commit to carbon prices hitting no less than agreed targets, and carbon-equivalent tariffs on imports from outside of the Club. He suggests it may be too hard to run full carbon-equivalent tariffing and that the Club might instead set a uniform tariff on all imports from non-members. I wonder whether that could really pan out - the US would be unlikely to join, and very likely to impose its own retaliatory tariffs on the Club. 


• I would have thought that the current mess suggested a mild expansion of hospital facilities was warranted rather than a smaller facility than had been planned. The planned Dunedin Hospital shrinking due to budget constraints. 


• Once things re-open, do not sit near the air conditioner vent.


• Dispatch from a New York Coronavirus Morgue Truck Worker. And from a nurse. I really wonder about calls to follow Sweden or other places that have let things get out of hand. Even if that plan somehow passed cost-benefit, it seems impossible that most places would ever stick with it in the face of stories like this. Instead there would be a shift to an even harder lockdown that would have to be worse because the starting point would have had to have been worse. 

Compare and contrast: Covid-19 funding edition

On 24 February, New Zealand's Health Research Council announced that up to $3m would be available for Covid-19 research.

We're pleased to announce up to $3 million in funding will be made available for a range of research projects to address the current COVID-19 threat as well as future infectious diseases. @minhealthnz @SunnyCollings https://t.co/6wSNVyLmsD

— HRC New Zealand (@HRCNewZealand) February 24, 2020

The Spinoff reported on Friday 17 April that they've awarded $3.8 million to 13 studies.

Nearly half the funding (around $1.3m) has been allocated to studies investigating possible treatments for Covid-19.

One, the Australasian Covid-19 Trial (ASCOT) lead by Middlemore Clinical Trials, will assess how effective two antivirals (lopinavir/ritonavir and hydroxychloroquine) are in treating hospitalised patients. The study will investigate whether one or both drugs can reduce the need for ventilator support or reduce the risk of death.

...

Aside from clinical trials, several of the newly-funded studies deal with socioeconomic impacts of the virus. One, led by public health professor Michael Baker of the University of Otago, will provide the Ministry of Health with information about how individuals and their whānau experience the pandemic – not just the disease itself but isolation due to lockdown and economic effects.

“The study does almost everything,” said Baker. “New Zealand has taken a unique approach so we want to document that. New Zealand may have got by because we’ve got a nimbler society and we’ve responded with amazing leadership but those things can’t be guaranteed. We have to learn as much as possible from this so we can prepare our society for future events.”

Two other studies, one from Massey University and the other from the University of Otago, will address how people respond to quarantine and lockdown. Particularly, the researchers want to understand how ethnic and socioeconomic inequality affect people’s ability to follow lockdown rules. The Massey University study will also try to understand the social, cultural, political and racial factors that shape people’s attitudes towards pandemic diseases.

Both are vital, the researchers say, for building solidarity among New Zealanders when combatting infectious diseases.

I'd thought that international studies were now showing hydroxychloroquine to be less promising than first hoped and Remdesivir to be looking more promising, but it's a fast paced thing.

Meanwhile, here's what Tyler Cowen put together over at Emergent Ventures. Read it twice and think about what had to have gone into getting this done this quickly.

As you may recall, the goal of Fast Grants is to support biomedical research to fight back Covid-19, thus restoring prosperity and liberty.

Yesterday 40 awards were made, totaling about $7 million, and money is already going out the door with ongoing transfers today.  Winners are from MIT, Harvard, Stanford, Rockefeller University, UCSF, UC Berkeley, Yale, Oxford, and other locales of note.  The applications are of remarkably high quality.

Nearly 4000 applications have been turned down, and many others are being put in touch with other institutions for possible funding support, with that ancillary number set to top $5 million.

The project was announced April 8, 2020, only eight days ago.  And Fast Grants was conceived of only about a week before that, and with zero dedicated funding at the time.

I wish to thank everyone who has worked so hard to make this a reality, including the very generous donors to the program, those at Stripe who contributed by writing new software, the quality-conscious and conscientious referees and academic panel members (about twenty of them), and my co-workers at Mercatus at George Mason University, which is home to Emergent Ventures.

I hope soon to give you an update on some of the supported projects.

They went from concept, to finding the money, to announcing the project, to getting an evaluation panel to evaluate 4000 applications, and awarding $7 million in grants to 40 projects, in about TWO WEEKS.

One little side-project run by Tyler Cowen.

Just amazing.

Oh, and for a sense of scale on the HRC funding project, and the implied priorities, the entire amount distributed for Covid projects is about 77% of the value of a single grant made to Janet Hoek at Otago Uni for, well, for this:

Year:                      2019
Duration:               60 months
Approved budget: $4,949,736.70
Researchers:          Professor Janet Hoek
Health issue:          Alcohol/drugs of dependence
Proposal type:        Programme

Lay summary
The Whakahā o Te Pā Harakeke programme represents a collaboration that will develop and improve evidence designed to close smoking disparities, particularly for Māori and Pasifika, enhance how tobacco control evidence is used in decision making, and accelerate progress towards a Smokefree Aotearoa. We will achieve this goal by using mixed methods approaches that combine population-level analyses of existing and potential interventions with in-depth enquiries that probe how reducing tobacco’s appeal, affordability and accessibility has impacted communities and whanau. Analysing the complex tobacco control system will evaluate knowledge translation routes, consider barriers and enablers within these, and identify how evidence can more effectively accelerate reductions in smoking prevalence and reduce entrenched disparities. By partnering with Hāpai te Hauora and Kokiri marae, we will draw on community knowledge, build research capacity, and create unique opportunities to engage across the stakeholder spectrum and address the pressing health inequities caused by smoking.

Benefit principles and cost-recovery

Tony Burton makes an interesting point over at The Spinoff.

When we're thinking about paying for all of this mess, should we be running the benefit principle somewhere in the back of our minds?

The benefit principle of taxation says that the burden of paying for something should, where possible, fall on the beneficiaries of it.

These are the kind of extraordinary times when the government might consider extraordinary responses. Will they recognise the main beneficiaries of the lockdown are over-65s and revisit a capital gains tax or consider a surcharge on New Zealand Superannuation? Both would more evenly distribute the financial costs among generations. Given New Zealand First is in the coalition, and will be implacably opposed to anything touching superannuation, the government is more likely to look at higher taxes for middle and upper-income earners ($48,000 to $70,000 per year and more than $70,000 per year respectively).

The latest metastudy on fatalities shows mortality is heavily concentrated among the elderly.

Results: Thirteen European countries were included in the review, for a total of 31,864 COVID-19-related deaths (range: 27-14,381 per country). In the main meta-analysis (including data from Germany, Hungary, Italy, Netherlands, Portugal, Spain, Switzerland; 21,522 COVID-19-related fatalities), the summary proportions of persons < 40, 40-69, and ≥ 70 years of age among all COVID-19-related deaths were 0.1% (0.0-0.2%; I2 24%), 12.8% (10.3-15.6%; I2 94%), and 84.8% (81.3-88.1%; I2 96%), respectively. Conclusions: People under 40 years of age represent a small fraction of the total number of COVID-19-related deaths in Europe. These results may help health authorities respond to public concerns and guide future physical distancing and mitigation strategies.

I'd argue the benefits are broader: mortality is only one cost, morbidity is another. I'd be willing to pay an awful lot to avoid catching Covid; the accounts of younger people whose cases weren't serious enough to warrant hospitalisation still sound simply horrible. But I have absolutely no sense of what proportion of cases that are short of hospitalisation fall into that kind of category.

Can track and trace scale?

New Zealand's new Parliamentary arrangement, with the Leader of the Opposition chairing a committee that holds the Executive to account while bringing in expert advice, has been superb. It's been great in actually getting answers.

But I'm still none the wiser on how and whether New Zealand will be able to scale up contact tracing to the levels needed.

Looking through the course requirements and learning outcomes for the public health papers at Otago, contact tracing seems a bit like cost-benefit assessment in economics: something that people have to wind up learning on the job, because it's only really mentioned at a high level in courses. When I taught at Canterbury, the closest we ever came to teaching what actually goes into the CBA sausage was a single week of my elective Econ 224 paper. Sure, we built up the first-principles stuff you'd need to be able to think about it, but unless you were going into a place where you could learn it on the job, you were going to have to re-invent that wheel or go and find a textbook.

Contact tracing looks a bit similar. And chats with people who know about things suggest that it's learned on the job: that tracers work in small teams and people learn in those teams.

I can see how a newbie in a team with 3 experienced tracers learns how to do it. I can see scaling that up to have two or three newbies in a team of four led by one person who knows what they're doing. But it's something that might take a while to scale up to the kind of levels that are going to be needed, depending how long any of these folks might need to learn under supervision.

When Simon Bridges pressed Bloomfield on track and trace capabilities earlier this week, I didn't hear any straight answer. Bloomfield noted the importance of track and trace, but gave absolutely no indication that he knew what the plans were for scaling it up, or when track-and-trace might be hitting the levels necessary. 

It'll be harder to stay open when we open if that capability isn't in place. We'll have been in lockdown for four weeks, which you'd think would have given time to scale it up. But I've not seen anything official saying what the capacity is going to be hitting and when.

Update: Dave Guerin emails me with a pointer to Ireland's guidance documents for contact tracing. It doesn't look like scaling up should be inherently hard. It doesn't look like there would be any good reason that we wouldn't be able to trace lots of cases, quickly, if the government put resource into it as we went into lockdown. There are piles of people who could be hired to do that work. 

If a tree falls in the forest, can it be exported?

Forestry Minister Shane Jones has been arguing for export controls on logs. That seems a terrible idea, with risks beyond forestry. A snippet from my column in Newsroom this week (ungated):

BusinessDesk last week reported that Jones is considering levies on log exports to fund some kind of “re-setting” of local industry, or a variety of regulations to ensure domestic lumber processors have their needs met before logs are exported.

The story noted how local lumber processors are struggling to compete with processors elsewhere when international prices for logs are high. Jones viewed protections were necessary to ensure a viable domestic log processing sector in New Zealand.

But it’s worth explicitly stating what that means. Jones, as Minister, would effectively be setting a price cap on logs, restricting exports whenever international demand is high. This would be a transfer of money from timber farms, which would otherwise profit from higher prices, to sawmills.

It would also mean a substantial shift in New Zealand trade policy. If another country banned the export of raw materials to New Zealand to subsidise its own processors, New Zealand’s processors might see that as basis for a complaint about unfair trade practices. New Zealand’s trade negotiators can boast about New Zealand’s clean record in following trade rules. If Jones has his way, those negotiators will have New Zealand’s trade restrictions in lumber thrown at them any time they object to trade practices which disadvantage Kiwi companies.

So it is misguided on pragmatic grounds that it will disadvantage New Zealand as the world leans toward greater protectionism – New Zealand has more to lose than most from a weakened rule-based international trading system. Wellington should be working to support that system rather than help tear it down.

Do read the whole thing, including the linked pieces by Trevor Tombe and Andrew Coyne on fallacies around value-added. We heard some of those fallacies again this morning from Marama Davidson in Committee. 

Ways Out

The New York Times covers some of the ways out of the current mess:

• Paul Romer's plan to spend billions to test 7% of the American population every day: each person tested every fortnight.
• Throw enough money at it and you can make enough reagents for all the tests. It would work, even if there are false negatives, so long as each positive is quarantined. You'd want to do contact tracing on the positives. 
• The Center for American Progress's proposal for tech assistance on tracing. Basically, all your movements all the time. 
• It seems impossible to imagine that being feasible in the US. You can start imagining souped-up versions of a FitBit that would log locations while monitoring temperatures and automatically sounding an alarm if you went out while you had a fever; it's also easy to imagine substantial difficulties in compliance. 
• PolicyLab's suggestion of ramped up community surveillance to watch for outbreaks.
• Following Singapore in masks, social distancing requirements, free testing, rigorous tracing.

New Zealand's options will be better than America's. But even as we come out of lock-down, we are still on something of a pause button. For how long can international mobility be restricted without mounting consequence? 

It’s not clear how tolerant the United States would be of another national pause. If Americans failed to comply, the results could be disastrous. Preventing a second lockdown could even be considered a long-term investment.

“Our trajectory right now does not give me hope,” said Gregg Gonsalves, a professor of epidemiology and law at Yale. “Social distancing is happening in only a patchwork across the United States. The next phase needs a massive national mobilization not seen since World War II, with dramatic scale-up of the production of tests for the virus and its antibodies, the commodities we need to do these tests, from long-stemmed swabs to RNA extraction kits and the personal protective equipment to keep those conducting the tests safe. We also need a huge new cadre of people to do these tests, trained and deployed across the country.”

“And that’s the first step,” he added.

All this sounds expensive. But consider that the cost of a shutdown is trillions of dollars. We clearly don’t want to do this again. As Mr. Romer says, if it costs a couple of hundred billion to avoid it, that may still be a relatively low price to pay.

Meanwhile, Vincent Geloso summarises the lessons of past pandemics. One big one is not to introduce rigidities that make the economic recovery harder after the pandemic.

Transport pandemics

Rather a while before lockdown, I stopped using Wellington's public transport. There were just too many people who'd board busses while coughing or sneezing; I think I got off the bus a mile before our house on my last ride while saying "Nope, not 'till this mess is done."

MIT's Jeff Harris has put up some interesting correlations between New York's most-affected neighbourhoods and public transport.

He also offers this caution:

A Bunch of Garbage 

While we’ve got a few more maps up our sleeve, we’re already at a juncture where some readers may react with extreme skepticism. We’ve already admitted we don’t have a cleanly designed natural experiment. None of Dr. Snow’s successors– He died of a stroke at age 45, four years after the handle came off the Broad Street pump. – managed to get the Flushing Local and the rest of the MTA abruptly shut down at the end of February. Without such evidence, the naysayers will assert that any diffuse, multitentacled network that traverses most of the city could be correlated spatially with the spread of coronavirus infection documented above. To be sure, serious critics won’t point to the electromagnetic signals from power lines, but they could argue that the path traced in Figure 6 could just as well represent the stops of sanitation trucks. Put bluntly, the critique goes, the evidence presented thus far would be consistent with contaminated garbage as the vehicle for the massive spread of deadly COVID-19.

Except for one thing – namely, we know that the garbage hypothesis is entirely implausible. We know that close contact in subways is fully consistent with the spread of coronavirus, either by inhalable droplets or residual fomites left on railings, pivoted grab handles, and those smooth, metallic, vertical poles that everyone shares. We know that the flattening of the epidemic curve in Manhattan two weeks after that borough had cut its subway ridership by 65 percent adds tellingly to the circumstantial evidence. We know that we can’t dismiss out of hand our finding of reciprocal seeding from the periphery of the Flushing local line to Manhattan’s only hotspot in Midtown West, and from that central hub back to the periphery.

As lockdown eases here, I won't be considering public transport unless masks are required.

I've really not had time to blog much lately. The past month has been a blur. I've been active on the Twitter feed, and we've put out a pile of reports, notes and columns on the pandemic response. Hopefully I'll be able to get back to blogging those bits as they come out.