Missed opportunities

Kate MacNamara keeps digging into New Zealand's botched vaccine procurement last year. 

Things could have been so different.

Labour Minister David Clark was sent a key Pfizer letter on June 30 last year, in which the drug company pressed the head of New Zealand's "vaccine taskforce" to meet and discuss its vaccine candidate.

Taskforce officials, however, were not equipped at the time to begin talks with the drug company, and over six weeks elapsed before a first meeting took place.

The Cabinet finally armed the taskforce with funds both to contract specialist negotiation expertise and to make vaccine purchases on August 10; officials signed a non-disclosure agreement with Pfizer on August 13 and a first meeting with the company took place the following day, on August 14.

Clark, the then Health Minister, refused to answer questions about the letter, including whether he read it at the time and whether he made any effort to hasten the readiness of the taskforce to begin meetings and negotiations with the drug company.

Clark was beset by calls to quit his post at the time the Pfizer letter arrived and he resigned as Health Minister two days later, on July 2. An upcoming election, then scheduled for September 19, added sensitivity to Clark's predicament.

...

Pfizer's June letter noted: "We have the potential to supply millions of vaccine doses by the end of 2020, subject to technical success and regulatory approvals, then rapidly scale up to produce hundreds of millions of doses in 2021.

"I would welcome an opportunity to discuss our candidate vaccine development in more detail, and open discussions on how we might work together to support planning for potential Covid-19 vaccinations in New Zealand and continue to build a strong partnership for the future," the letter said.

...

It's unclear whether earlier engagement with Pfizer could have secured a larger quantity of early vaccine doses for New Zealand.

New Zealand contracted to buy 1.5 million doses of the Pfizer vaccine candidate on October 6, 2020.

Earlier this year an Auditor-General Report noted that "the Taskforce wanted to purchase more doses of the Pfizer vaccine [in its first contract] but, at the time the agreement was signed, Pfizer was in negotiations with other potential purchasers and could not commit to supplying more doses of the vaccine to New Zealand. However, the purchase agreement included an option to purchase further doses of the vaccine if they became available."

By October, New Zealand lagged many of its peers in signing so-called bilateral advance purchase agreements with drug companies for vaccine candidates.

The delay in starting negotiations, because Clark was distracted and because, for incomprehensible reasons, the bureaus hadn't prepped themselves to think about vaccine procurement, meant we were competing against other places for supply. 

If we'd started when Pfizer sent the letter, decent odds we could have started the vax rollout with a lot more doses a lot sooner.  

Think about what that means.

The government made a laudable effort to push vaccines out to elderly Māori in remote communities. But they had hardly any doses at the time and were also trying to vaccinate border and health workers. They could have made that push a vaccination event, vaccinating whanau at the same time. The vax rates by ethnicity by age, at least when I'd last looked at them, had no particular ethnic gap for Māori at older ages - because of that push. But the gap at younger ages is substantial. How much of that gap could have been bridged if they'd had enough doses to vaccinate the whole community while they were out there? 

Here's the most recent data.

The lowest vaccination rates are for younger Maori in more remote places. 

But their grandparents are vaccinated. 

They could have been vaccinated at the same time, or at least everyone 16+ could have been.

But the government didn't have enough doses. 

And it's awful likely that that's because Clark, Bloomfield, and Crabtree sat on a letter from Pfizer for 6 weeks.

When the letter was released, only its main recipient was noted: Dr Peter Crabtree, the chair of the vaccine taskforce.

However, in response to a subsequent written question by Bishop last month, Hipkins revealed that the letter, delivered by email, was copied to Minister Clark and also to Bloomfield.

You'd think they'd have learned by now. But while Canada's vaccinating 5-11 year olds, and the US has been for weeks, New Zealand just isn't. And the odds-on bet on why we aren't is that they screwed up procurement again, because they didn't see any need to hurry.  

Sad

Emily Brookes' piece on the tragic Carla Neems case lets Nathan Wallis wander all over the place, including here:

Wallis stressed that no blame should be placed on Neems' parents for her death - "the last thing they need is a bloody coroner's report saying it was kind of their fault" -   and said they were victims of a society "that doesn't value children very much and is all run by the Business Round Table."

"We've created an economic situation where it's impossible to buy a house in New Zealand without having two parents go to work," he said. "Then how on earth are we expected to have someone there to walk (kids) to school every morning and pick them up every afternoon? It's an impossible situation for people."

I didn't know Roger Kerr well; he was the Business Roundtable. I met him once or twice, and had email correspondence a half-dozen times. He taught me to write my first OIA request, back when I was an academic.

But I do know that one of his last submissions, if not his last submission, before he died in October of 2011 was to the Productivity Commission's inquiry on housing costs, in August 2011. He would have been near the end of his battle with melanoma.

He there stressed the importance of getting the regulatory settings right so that more housing could be built, because housing affordability matters.

The emphasis on fixing housing has continued with the New Zealand Initiative, successor organisation to both the former Institute and the former Roundtable.

A clearer-thinking Wallis might have wished that the Business Roundtable's warnings on zoning and urban planning impediments to housing affordability, way back in 2011, had been paid some heed.

It's a pretty sad article all 'round.

Racist donuts?

I've been looking forward to Krispy Kreme opening in New Zealand since, well, since I moved here. 

But what the fresh hell is this?

Anti-foreigner rules at Krispy Kreme have left a bitter taste in one doughnut enthusiast's mouth - prompting a burning response from the Philippine Embassy.

A Hamilton man has been left hurt and angry after his Filipina girlfriend was not allowed to attend the grand opening of New Zealand's first Krispy Kreme outlet because she was not a Kiwi.

The multinational company admits the woman was likely turned away because of a "tired and over-zealous" security guard.

The company had a promotion for the first hundred customers and wanted to restrict that to Kiwis rather than American tourists - fair enough. And random-draw stupid security contractor - I doubt we should blame Krispy Kreme for that.

But how have we gotten to a spot where a dumb-ass security guard's baseline expectation around foreigners is "when in doubt, boot them out"?

Is this legacy of the Labour/Green/NZ First racist election campaigning around the evils of foreigners, or part of what drove the success of racist campaigning in the first place, or both?

I know politicians respond to incentives and when racism wins votes, they'll pander to it. Might as well blame the sharks for eating people. It's just in their nature. But it isn't right.

Brighton follies

Never a bit of good news for my old neighbourhood. The South Brighton Campground is again scheduled for closure. Council reckons it too expensive to fix up the quake-damaged toilet and kitchen block, estimating over $2m in capital savings should they shut it down.

A council document that forms part of the draft Long Term Plan adopted by city councillors last week says extensive damage has rendered the future of the camp "precarious".

It estimates the council could save between $2.3 million and $3m in capital expenditure if it closed the park.

Lessees Lyn Pilling and Dom Brownin are questioning those figures, and say the council seems hell-bent on closing the camp even though it attracts visitors and money to the area.

Pilling and Brownin have run the holiday park since 2005, but they have been operating on a month-by-month lease for more than three years.

"You can't operate a business like that - it's just killing us," Brownin said.

The couple could not walk away from the business because they had invested significantly.

They had had no formal contact with the council since January 2014 and had been unable to progress their plans.

"Our financials are great and the business is very strong. We could easily stand on our own two feet without the council," Brownin said.

Amazingly, the first comment on the news story, from "Mariel", gets it exactly right:

If the council doesn't want to pay for new kitchen, ablution block then let the lessees do it ,and give them a good long lease to make the expense worth while. If people can park caravans and pitch tents there now, how much land remediation is really required to make it fit for purpose?

If the council closes the Camping Ground, closes Rawhiti Golf Course, has already decided not to replace QEII facilities in the east, including Ascot Golf Course , Hydroslides and all the great leisure pools and other sports facilities that were there, move tennis and hockey facilities to the new sports hub on the other side of town, do little to attract people to New Brighton what the hell are people on the East paying rates for because we already know it's our roads that won't be fully repaired for at least thirty years.

Letting the lessees do this through a long-term lease not only lets a valuable facility continue to operate, it also builds in robustness against future potential earthquakes: functioning campgrounds can make for excellent emergency facilities.

The campground was just down the road from our old place. When we were hosting lots of family from Canada, my sister and brother-in-law stayed at the campground and we'd walk over to visit. It backed onto the reserve's walking trails and was about a five minute walk to the beach.

What a waste.

Reserve prices, marginal utility, and management degrees

Sellers on trade-me set a reserve price: the minimum price at which they're willing to sell whatever they're auctioning off. In the absence of strategic play, a seller should set the reserve price at the lowest amount at which they're willing to sell the product: they should be trivially better off for having sold it than for not having sold it at that price. While they gain income that brings utility when they sell it, they forgo the flow of utility provided by continued ownership of the good.

Some things you might value at zero dollars, or negatively. That clunky thing that's taking up needed space: set a reserve price of $0 and hope somebody takes it away for free.

Let's then parse this TradeMe listing:

Replete with intermediate level Economics knowledge, this degree will help you realise that the reserve price and the marginal utility gained by the seller are worth exactly the same!

The seller is auctioning off his Bachelor of Commerce in Management, earned at the University of Canterbury.

I hope the seller means that he or she values the degree certificate at the $1 reserve price: owning the degree certificate provides its current owner with utility worth $1, and losing the certificate would make its owner $1 worse off. And so the reserve price is equal to the utility the degree certificate provides.

If the seller meant instead that he or she would gain marginal utility worth $1 by achieving the reserve bid, that can only be true if the value of owning the certificate were $0. That's plausible from the rest of the text, but hardly clear.

I've copied the whole ad below. I'm considering bidding. Then at Faculty meetings, we can truly state that at least one member of the Economics department owns a Management degree. If it ever comes up.

Original unused Bachelor of Commerce - $1 reserve! 

Major: Broken Dreams

• Current bid: $37.50
•  Reserve met 
• Closes: Thu 5 Sep, 8:59 pm
• Listing #: 632646059

Min next bid:  $Auto-bid

View full size photo

Limited edition print, this 2007 Bachelor of Commerce is barely used and in "like new" condition! Originally priced at nearly $30,000, this is now available at a fraction of the price, with only $1 dollar reserve!

Avoid the gruelling 3+ year sacrifice necessary to pull good grades and skip the rampant physical and mental diseases by buying your degree direct from Trademe. Replete with intermediate level Economics knowledge, this degree will help you realise that the reserve price and the marginal utility gained by the seller are worth exactly the same!

Revel in the accolades of your family as you become the first among them to attain advanced education, only to later avoid their sincere enquiries as to your job opportunities and general wellbeing. Marvel as employers overlook you time and time again, and let your youthful eagerness get beaten out of you with a sack of potatoes (the only food you could afford this week).

Eke out a living in the illustrious field of data entry or pick up a day job putting PostIts one-by-one on a wall - all without the guilt and shame that would exist if you actually made the mistake of getting the degree yourself. Finally, watch your fragile sense of self-worth crash like the Hindenburg; casting hopes and ambitions to the breeze, leaving you twisted, hollow and bitter.

The winning bid will receive ALL THIS and more in the original issued degree pictured above, with the one lucky individual having their name lovingly embossed in crayon over the previous owners. Don't delay, get your degree today!

Please read the questions and answers for this auction.

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gabocha (46 ) 

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Thought experiments and taking offence

I love Brad DeLong's academic work. He's way smarter than me and, more importantly, clearly works much much harder than I do. And he tackles interesting questions. But every time I check his blog, I get an awful "Everyone in the world is evil or stupid or both except Brad and a few of his friends" vibe.

I'd not been there for a while, but switching to The Old Reader (for now) from Google Reader messed up my RSS habits. And so, there I was, looking at Brad DeLong saying that Steven Landsburg is the stupidest man alive and that "the University of Rochester has a big problem" - presumably Landsburg's continued employment there.

What was the cause? A piece at Gawker taking great offence at a thought experiment Landsburg proposed. I'll link Gawker at the end so you're not tempted to read it before reading the original Landsburg piece.

In grad school, we had a lot of fun with thought experiments of this sort. The classic one is Nozick's experience machine. Step into the machine and you'll experience a simulated life much better than the one you'd otherwise live; moreover, you'll never remember that you're actually in the machine. If you stay out of the machine, there has to be something that matters more to you than experienced utility. 

Tyler Cowen liked to ask a variant on it in our Economics & Philosophy class: World B is identical to World A, as far as you are ever able to observe, but in World B, your wife has been cheating on you for years and you never ever knew it, nor will you ever know it. The worlds are identical except for the unknown-to-you fact of your wife's infidelity. Are you worse off in World B? If so, clearly state exactly how, and make that consistent with other things you believe about utility. 

So, what was Landsburg's offensive thought experiment? Recall that the rules of thought experiment club are that you don't add in auxiliary assumptions but stick to what's stated in the thought experiment. Landsburg asked a series of three questions, then wanted to know why our answers to 1 and 2 might differ from our answer to 3. Here they are.

Farnsworth McCrankypants just hates the idea that someone, somewhere might be looking at pornography. It’s not that he thinks porn causes bad behavior; it’s just the idea of other people’s viewing habits that causes him deep psychic distress. Ought Farnsworth’s preferences be weighed in the balance when we make public policy? In other words, is the psychic harm to Farnsworth an argument for discouraging pornography through, say, taxation or regulation?

That's scenario 1. Most economists just ignore that psychic harm - the world's essentially impossible to evaluate when we add this kind of thing in. Further, Farnsworth could pay other people not to watch pornography if he really cared about it that much. But we could assume that away to stick within the proper confines of the thought experiment: say transactions costs prevent it. Is pyschic harm of this sort admissible in the utilitarian calculus? Here's scenario 2:

Granola McMustardseed just hates the idea that someone, somewhere might be altering the natural state of a wilderness area. It’s not that Granola ever plans to visit that area or to derive any other direct benefits from it; it’s just the idea of wilderness desecration that causes her deep psychic distress. Ought Granola’s preferences be weighed in the balance when we make public policy? In other words, is the psychic harm to Granola an argument for discouraging, say, oil drilling in Alaska, either through taxes or regulation?

Actually, policy does weigh Granola's concerns. It's counted as existence value over and above option value or use value. Sound analyses don't put much weight on it, but it does sometimes count. If I get existence value from thinking heroic Randian thoughts about oil derricks and man's mastery of nature, that gets ignored in the cost-benefit analysis for some reason. But, again, all these kinds of pyschic distress are treated pretty dismissively in economics. And now the third and controversial question:

Let’s suppose that you, or I, or someone we love, or someone we care about from afar, is raped while unconscious in a way that causes no direct physical harm — no injury, no pregnancy, no disease transmission. (Note: The Steubenville rape victim, according to all the accounts I’ve read, was not even aware that she’d been sexually assaulted until she learned about it from the Internet some days later.) Despite the lack of physical damage, we are shocked, appalled and horrified at the thought of being treated in this way, and suffer deep trauma as a result. Ought the law discourage such acts of rape? Should they be illegal?

If we take this as a parallel thought experiment, the only trauma here allowable is the psychic distress, which we otherwise typically ignore.

It is a hard question and so a good one. All our intuitions tell us to condemn the third scenario while dismissing the psychic harms in the first two. But if we stick within the confines of the thought experiment, it's hard to distinguish the cases. We can say the psychic harm is worse in the third case, and it would be in the real world, but it's not hard to have a thought experiment Granola McMustardseed who gets more psychic harm from oil drilling than from being in Scenario 3. Or a Scenario 3 victim who never learns that it happened - a case pretty close to Cowen's World A vs World B.

I don't have any great answer other than that when we step away from the thought experiment and into the real world, a rule allowing Scenario 3 that imposes psychic harm no greater than that imposed in Scenarios 1 & 2 would also necessarily allow much much greater harm because we cannot set rules only allowing Scenario 3. But that's a cop-out, because even if we could do it in the real world, I'd still want it banned - in the same way that I think I'm worse off in Cowen's World B and that I wouldn't want to step into Nozick's machine. My maximand isn't just experienced utility.

Meanwhile, Gawker turns it into a story about how Landsburg thinks rape is OK and DeLong signs onto their interpretation. The contrast between the quality of comments at Landsburg's post and DeLong's is interesting too... Landsburg's commenters wrestle with a difficult thought experiment; DeLong's want Landsburg fired.

The plucking of low-hanging fruit

Tyler Cowen argued that some 20th Century growth was due to educational growth: in the early 20th Century, an awful lot of very smart people didn't get much education. By the 1970s, the gains from getting that pool of highly skilled labour into higher return occupations had largely already been exploited. Here's The Economist's take:

What low-hanging fruit? Educational fruit, for instance. Decades ago, the rich world was moving most of its population from very low levels of education to university educations, and was shifting lots of potential geniuses from the fields to the factories to the research labs. That was relatively easy to do and it fueled a big growth boom. These days, improvements in educational attainment are quite hard. Nearly half of all young people now go to college. Moving marginal students into college will require a lot of effort and won't yield large gains. That doesn't mean it isn't worth doing, he says. It simply means that easy gains from education are gone.

That move hadn't started in the rural Manitoba of the 1930s.

From my uncle Daniel Hacault's eulogy to my grandfather, who died 3 January aged 87:

Years ago I had talked to George Hutlet about what kind of student Dad was. George smiled and said he was always in trouble with the nuns and that he doodled a lot. Not very studious at all. Dad got his Grade 8 and left school to work on the farm, not an auspicious beginning for someones life, maybe not too smart-maybe not too bright. REALLY?

Dad was a self educated man. When we were young there were always books around that he read on algebra, welding and finance that he used to round out his education. Dad took a correspondence course in drafting and I can remember the mechanical drawings of machinery he had built or was about to build rolled up on his desk. His education was built on problem solving and common sense.

Lewis and I found a micrometer he had made when cleaning out the shop on the farm.  He probably made it in the 1950's. We measured it with a digital caliper and it is still accurate to a thousandth of an inch. It is on display in the hall.  Dad's metal lathe abilities are legendary and we still needed him to give us advice on how to center a work piece last year. Dad's self education instilled in his children a desire to learn either a trade or achieve higher education in university.

As you can see from the story, Dad was very mechanically inclined. He could fix or build almost anything. I can remember taking phone calls for the neighbors looking for “TI PAUL” to fix or build some farm machinery. I heard a story that he even built a double burner still for some of his more adventurous customers. His mechanical abilities filtered down to his sons in varying degrees. His boys followed in his inquisitive footsteps and dismantled his accordion – just to see how it worked. I think this put an end to his musical career as a polka band leader.

 I didn't know about the still. But it makes me smile.