May 9, 2020

What people in other forums are saying about public policy

The pandemic’s progress

Time to open up?  Proceed with great caution

There are strident voices – mainly of self-interest – calling for a rapid lifting of restrictions, even though lifting restrictions too early could trigger another outbreak and, as has happened in Japan and Singapore, require a costly re-imposition of restrictions. In any event, apart from some groups with understandable concerns such as those suffering mental health consequences from isolation, the public is in no rush (see below under “Polls and surveys”).

On April 16 The Prime Minister announced three conditions for lifting restrictions.

The first is more extensive testing. On this criterion the states with the greatest ongoing struggles, NSW and Victoria, are certainly making progress.

The second is improved capacity to trace contacts. So far the Covidsafe app has been taken up by 5.1 million Australians (perhaps 5.5 million). Some journalists, hungry for a story going against government recommendations and scientific opinion, raise fear about privacy, but expert opinion from non-partisan sources suggest privacy issues are adequately addressed. If anyone needs further convincing it should be noted that among the minority of politicians who have not taken up the app are Barnaby Joyce, Pauline Hanson and Malcolm Roberts. Notably, Shadow Attorney General Mark Dreyfus has taken it up.

The third condition is an ability to respond to local outbreaks. While the northeast Tasmania outbreak seems to be under control, the outbreaks in a Victorian slaughterhouse (45 and counting) and in a NSW nursing home are still being dealt with. In relation to the slaughterhouse outbreak, ACTU Secretary Sally McManus has pointed out that casual workers at the plant, employed by a labour-hire company, are not eligible for sick leave, and may not have been eligible for Commonwealth support. There should not be a financial disincentive for people to absent themselves from work.

Although the western states have made good progress in eradicating the virus, all but 21 of the 143 new cases recorded in the last seven days have been in NSW and Victoria. As in Germany it is wise for Australia to accept that some state governments are in a better position to ease restrictions than others.

It’s hard to see why any privileged release from restrictions should be given to football players whose behaviour in training reveals that they believe social distancing doesn’t apply to them, that influenza immunisation is a matter of belief rather than public risk, and that they are seeking to valorise close-contact fighting and groping. The football governing bodies seem oblivious, or indifferent, to the demonstrated link between football matches and family violence. Every match has a losing side, and some obsessed supporters of the losing side take out their frustration on those around them.

Those country curves

New cases in Italy and Germany are still falling rapidly. Contrary to their government’s claim, the UK does not appear to have the virus under control. The USA curve will probably bump along, or may even rise as the virus moves into the “red” states, where both the populations and their governments are less likely to take strong precautions. Germany is now where New Zealand was just a few weeks ago: can it drive the rate down to the axis?

One Pearls and Irritations reader has pointed out that in those countries with high rates of infection WHO figures, on which this graph is based, probably understate the infection rate.  That’s a valid point – perhaps the gap between the countries at the bottom of the graph and those at the top should be wider – but the main information from graphs such as this is about the trajectory of the virus. Does it peak, does it stabilise, does it break out again as has happened in Singapore and Japan?

Below, as presented last week, is the focus on South Korea, Australia and New Zealand for the last three weeks. The upward bump in our curve is due to two specific outbreaks. It’s a warning about the risk of complacency, and the political risk of making hasty claims in a spirit of trans-Tasman friendly rivalry.

Information sources

These are the same sources as we have been presenting.

The WHO daily situation report;

Our Department of Health Coronavirus (COVID-19) current situation and case numbers;

Our Department of Health Coronavirus (COVID-19) health alert;

A group of volunteers’ daily-updated site Coronavirus (COVID-19) in Australia;

The ABC’s daily-updated site Charting the COVID-19 spread in Australia;

The Johns Hopkins University Coronavirus Resource Center;

Norman Swan’s Coronacast;

The Economist paywall-free Coronavirus hub;

The coronavirus update from the Harvard Gazette;

The ABC’s The one Covid-19 number to watch, tracking the reproduction factor (R)

The ABS program of special statistical releases.

Policy choices clarified

Stephen Duckett of the Grattan Institute has a short article The corona wars: Australia’s three new policy contests. The first policy contest was between allowing the virus to spread at a controlled pace, infecting millions vs a New Zealand-type policy of suppression-elimination. At first Morrison was attracted to the former, but we have moved to the latter and now he is an enthusiast, even to the extent of celebrating Australia’s membership of the First movers group of nations, including Austria, Greece, Denmark, New Zealand, Singapore, South Korea,  Israel and the Czech Republic. The second policy contest relates to the speed of lifting restrictions, essentially involving a pragmatic choice between a fast lift, risking a second wave of infection, and a slow lift. We seem to be opting for the latter. The third is about the shape of the post-pandemic world – back to the world before March 2020 or a world incorporating some of the present “temporary” measures.

Hint for readers of Duckett’s article – you don’t really need to understand the terms “leptokurtic” and “platykurtic” to follow it, but you can add them to your Scrabble dictionary, as well as the word “kurtosis”. They refer to the extent to which a distribution resembles a statistical “normal” distribution, that degree of resemblance being called “kurtosis” – i.e. spiky or flat.

Should controls be targeted or general?

A reader of Pearls and Irritations has brought to our attention a working paper published by the US National Bureau of Economic Research examining the economic effects of different lockdown policies. In a framework applying conventional estimates for the value of life saved, and an assumption that public policy can regulate the rate of infection, it finds a rate of new infection that optimises the cost of lives lost against the economic cost of lockdowns. This optimum would involve a 23 per cent loss to one year’s GDP and a death rate of 1.8 per cent of the population (457 000 if applied to Australia). By contrast, a policy designed to protect the elderly and frail, while imposing lighter restrictions on younger people, could strike an optimal trade-off with a death rate of just 1.0 per cent (254 000 if applied to Australia).

It should be noted that the authors assume the inevitability of a strong flow of infections, rather than considering the suppression-elimination approach as a baseline – an approach that can achieve their economic optimum without any significant loss of life. The alarmist figures in the paper should not detract from the general finding that when lockdowns are necessary, approaches directed at particular groups are more effective than those that apply uniformly to all.

Also note that the idea that economic and health effects are subject to some balance or optimum, as if they are in the same domain of human values, involves contestable assumptions about people’s values and the nature of society.

Evidence that the US planted Coronavirus in China to discredit the Democrats

If Mike Pompeo can assert that “There is a significant amount of evidence that this came from that laboratory in Wuhan” we may as well add to the idiocy.

It shouldn’t be necessary to dismiss such rubbish, but such is the ferocity and consistency of Trump’s attempt to blame China for America’s problems that the highly-respected  academic Jeffrey Sachs of Columba University has found it necessary to set the record straight in an article on the CNN website: Trump’s anti-China theory implodes. Sachs warns:

Such charges by the Trump administration and by Sen. Tom Cotton of Arkansas are reckless and dangerous. They could push the world to conflict just as the Bush Administration’s lies about weapons of mass destruction in Iraq pushed the US into war in 2003.

He concludes with a message to Trump and Pompeo “To this moment, Americans have not fully gauged your recklessness. You have done enough. Have you no shame?”

Polls and surveys

While airlines and cafes have struggled, the opinion polling industry has boomed.

One strong finding is that people are in no rush to see restrictions lifted.

The other is that politicians, even someone as daggy and awkward as Scott Morrison, gain strong support when their measures, although they involve hardship, are seen to be in line with expert and non-partisan opinion rather than the voices of rent-seekers and miscreants in their own parties.

Essential – Morrison soars close to the sun

The Essential poll shows a further strengthening in Morrison’s approval from his low point just three months ago.

Less spectacularly, but of more concern to Labor, Morrison has strengthened his position as preferred prime minister.

Essential also has a swag of questions about coronavirus concerns. Almost eighty per cent of us are still concerned, but that percentage is coming down from its near ninety per cent high. Consistently about a third of us believe we will develop the virus.

We’re still fairly satisfied with the government response – no discernible change. and when it comes to states we give the governments of South Australia and Western Australia (both states with hardly any cases) much higher approval than the governments of Queensland and NSW.

On easing restrictions, we’re a little more relaxed, but in no hurry – certainly not “as soon as possible” to cite one of the poll questions. Nor are we in a rush to see schools re-opened – only 46 per cent of parents of school-age children want to see schools re-open straight away.

On a related topic the ABC has published some figures from a poll about attitudes to restrictions. Even if restrictions were removed immediately only 40 per cent of us would go to a bar or restaurant, 19 per cent would travel by air, and 12 per cent would attend a large event. (Would it still be a “large” event if no one wanted to go?)

There’s a question on how we rate different countries’ response to the pandemic. Top marks to New Zealand, contrasting with a miserable assessment of the USA.

And not even a majority of Coalition supporters want to see Newstart returned to its old level of $285 a week.

Roy Morgan – consistent 54-46 lead for Labor, except at elections.

William Bowe’s Poll Bludger draws attention to a Roy Morgan poll, which shows the Coalition enjoying a 2PP 51.5:48.5 lead over Labor, with primary votes of 43.5 per cent for the Coalition (41.4 per cent at last year’s election) and 33.0 per cent for Labor (33.3 per cent at the election). On its site it shows a graph of a reasonably consistent 2PP 54:46 lead for Labor over almost all of the six years from 2014 to 2018, but with short and sharp dips around elections. A reflection of bad luck or of the campaigning resources the Coalition can muster, unconstrained by considerations such as accuracy or respect for conventions?

Following last year’s election the parties were running 50:50, until the Coalition’s support fell with the bushfires and then swung back to a decisive lead in response to the pandemic.  It is curious to find that Roy Morgan has been polling every month, but not until there is a Coalition lead is the result published.

We’re doing it tough but we have become a bit more trusting

The ANU Centre for Social Research and Methods has produced a report Hardship, distress, and resilience: The initial impacts of COVID-19 in Australia based on two consecutive polls, one in January-February and the other in mid-April. To quote from the abstract:

The findings suggest large declines in employment and income, significant increases in social isolation and psychological distress, changes in household structure, and significant uncertainty about the future. At the same time, we observe greater confidence in government and the public service, large improvements in social trust, and substantial observance of physical distancing measures.

Its findings generally align with those of other surveys. Some points borne out by this study include:

  • young people who lose jobs are likely to feel the effects throughout their working life;
  • trade union membership appears to protect against employment loss;
  • the effects on household income are unequal and significantly progressive, probably reflecting the effects of government transfer payments: for those in the lowest two income deciles incomes have risen, for those in next two deciles they are little changed, and for those in the higher deciles they have fallen;.
  • people’s satisfaction in the direction their country has taken has risen;
  • there has been a rise in trust and social cohesion, but a decline in life satisfaction and a rise in psychological distress.

On the ABC’s Breakfast program Hamish McDonald has an interview with Nick Biddle, one of the report’s co-authors. (8 minutes)

Polls in America

Much publicity was given to Trump’s boost in the polls in late March when he confidently boasted that his administration was on top of the coronavirus, but Nate Silver’s  FiveThirtyEight, a site that tracks and consolidates other polls, shows that since then his net approval (approval minus disapproval) has fallen from minus 3.9 per cent to minus 7.1 per cent since then. FiveThirtyEight also has polling suggesting that Trump is losing support in crucial swing states he won in 2016.

A Pew Poll taken in mid-April finds that most respondents believe that in addressing the threat of coronavirus Trump was too slow (65 per cent) and that the worst is still to come (73 per cent). They are concerned that state governments will lift restrictions too quickly (65 per cent).

One of our readers has brought to our attention a Pew Poll published in mid-March, revealing what Americans think of Trump’s conduct in office. That poll shows that 80 per cent of respondents believe he is “self centered”, 59 per cent believe he is “prejudiced”, 36 per cent believe he “honest”, and even fewer believe he is “morally upstanding”.  And those figures are from Republicans!  But there is little sign of Republicans abandoning their support: older and less-educated Republicans remain loyal to Trump.

Another group of Republicans, including Kellyanne Conway’s husband  George Conway  have come together as the Lincoln Project, making this anti-Trump video advertisement Mourning in America.

With no sign of the country’s infection rate falling, and with 75 000 deaths so far it’s little wonder that Trump is sheeting all the blame to China, and is persuading compliant US allies to legitimise his anti-China distraction.

New Zealand wins top approval

The Australia Institute has a major survey of Global attitudes to COVID19 pandemic and response.  Well, not quite global, but covering Australia, New Zealand, UK, US, Italy and South Korea. In assessing the government’s overall response, US scores worst, with UK and Italy not scoring much better. New Zealand is well ahead, with Australia and Korea in the middle.  In most countries people are wary of those with commercial interests – “trade unions”, “business leaders” and “my employer”.  Dispelling any lingering belief that there is some trade-off between “health” and “economic” interests, New Zealand scores highest on bothcounts.

Eden-Monaro election

If there emerges any analysis that may help voters make an informed choice, we will post links.

In light of the stoush that has erupted in the Coalition, we could consider whether a man who uses a word referring to female genitalia as a term of abuse is suitable to sit in parliament, let alone serve as deputy premier.

What did the church elders know?

On Thursday the previously redacted parts of the Royal Commission into Institutional Responses to Child Sexual Abuse were tabled in Parliament.  Much of the material is about what George Pell knew about priests who were sexually abusing children when he was a priest at Ballarat. The Commission was “satisfied that by 1973 Cardinal Pell was not only conscious of child sexual abuse by clergy but that he also had considered measures of avoiding situations which might provoke gossip about it”.  Also covered is Pell’s conduct as an auxiliary bishop in Melbourne some years later, when he failed to take action against a priest who was allegedly abusing children.

On the ABC website Jessica Longbottom, Sarah Farnsworth and others have prepared a short analysis: Royal commission finds Cardinal George Pell should have done more to remove paedophile priest.

There is a risk that Pell will become a scapegoat for the way the Catholic Church (and some other institutions) have prioritised institutional solidarity over their obligations to those they are supposed to serve. In an interview on the ABC’s PM Francis Sullivan, former CEO of the Catholic Church’s Truth, Justice and Healing Council, says he fears the present hierarchy of the church will remain fixated on Pell – “a person of the past” – rather than facing up to the church’s failure and reforming.

Perhaps by next week people will have had more time to consider these long documents, allowing us to provide links to more thorough analysis. For now it may be of interest to contemplate what is meant by the term “willful ignorance”. Alexander Sarch, of the University of Surrey Law School UK, has a 2018 paper Willful ignorance in law and morality. It’s not a clear-cut matter, and the law tends to take a narrower interpretation of willful ignorance than that taken by moral philosophers.

Australia after the pandemic

How to build a stronger Australia

Travers McLeod, chief executive of the Centre for Policy Development, outlines what we must do to attend to our structural shortcomings when we emerge from the crisis – Here are 10 steps to build a stronger Australia after coronavirus – published in The Guardian.

Covid-19 has exposed faultlines and frontiers for Australia’s future. We should roll up our sleeves and start paving a new path – actions will speak louder than words.

It’s a wide-ranging set of recommendations. On the broad principles of economic principles he writes:

Australians want business to back long-term value creation for a larger set of stakeholders, especially their employees and their suppliers, and to broaden what we mean by capital. Covid-19 has signalled a capacity to do both. We must sustain this spirit to rewire capitalism for good.

The end of banks’ easy run

On the ABC’s Saturday Extra Geraldine Doogue interviews James Eyers of the Financial Review on how Australian banks have adjusted to the pandemic. Traditionally banks have been generous to investors, with strong dividend streams, but in this reporting season the ANZ Bank and Westpac have both “deferred” their dividends, and NAB has cut its dividend from 80 to 30 cents, with implications for superannuants’ incomes. So far these three banks have added $3.4 billion to their provision for bad debts, with more to come suggests Eyers. He points out that banks are helping to buffer the financial effects of the economic shock, for example by allowing borrowers to defer mortgage payments, but the time will come when they have to call in their debts. (13 minutes)

Tough time for universities

For many years universities have been compensating for cuts in government funding by taking in more fee-paying foreign students. By 2019, 26 per cent of university revenue was from foreign students, but restrictions related to our pandemic response have resulted in a sharp cut in foreign students, with consequences into the future because the undergraduate who would have enrolled in 2020 would have been in third-year in 2022. On the ABC’s Saturday Extra Geraldine Doogue discusses the outlook for universities with Margaret Gardner, Vice Chancellor of Monash and with education consultant David Phillips – Higher education catches the virus. Although higher education brings in $40 billion in export revenue, the Commonwealth seems to be indifferent or even contemptuous towards the sector, as illustrated by its lack of support for foreign students affected by the shutdown.

Booming exports

Over most of the last fifty years Australia’s trade with the rest of the world has been in deficit more often than it has been in surplus, but for the last three years we have had a growing surplus.

The ABS has released its figures on International Trade in Goods and Services for the three months to March, and we’re going gangbusters, particularly in March. Mineral exports are holding up, but the big change has been in services: foreigners are spending less here and Australians are spending even less overseas. It illustrates a general economic point that a trade surplus is not always of benefit to the community.

The world after the pandemic

Pandemic economics

The Australia Institute has a series of webinars The Economics of a Pandemic.  You can register to take part in real time or you can listen to these one-hour sessions later at your leisure.

On Tuesday they had a session with Peter Doherty on the public health response.  Doherty clears away a few myths, describes how various governments are coping, and explains what may be involved in developing a vaccine. You can even witness Richard Denniss, Chief Economist of TAI, singing the praises of the Morrison Government – on this issue at least.

The week before they lined up Joseph Stiglitz and Wayne Swan to discuss inequality in a pandemic. The effects are two-way: inequality helps spread the pandemic, and the pandemic is worsening inequality. Stiglitz points out that the US is doing a great service to the world in demonstrating what happens when policy is framed in terms of a health vs economics trade-off, and when restrictions are not given time to work.

Has Coronavirus dealt JIT a fatal blow?

“Just-in-time” or JIT started as a management consultants’ fad in the 1970s, and soon became an established business practice. It’s about running businesses with as little slack as possible. Initially it was seen as a way of managing physical inventory but as a broader idea it extended to cash management, to the idea of employing people on an “as needed” basis, and into the practice of households living pay-to-pay without any buffer of saving. The ABC’s Stephen Long writes that the Coronavirus pandemic exposes fatal flaws of the “just-in-time” economy. The proponents of JIT see it as a means of sustaining flexibility, but in reality it’s about living too close to the edge. It’s why we don’t have face masks when we need them, and why some otherwise well-managed businesses will go to the wall waiting for “Jobkeeper” reimbursements.

If we do go back to a world of more slack in our business and personal lives, we can expect it to have a negative impact on conventional indicators of productivity, but that’s a comment on the limit of those indicators.

Who wins, who loses, from the oil price collapse

Australian media tend to focus on what it costs to fill up a Toyota Hilux. The Lowy Institute has a twenty-minute podcast with Research Fellow Rodger Shanahan and Rachel Ziemba of the Center for New American Security, who discuss the global effects of what will turn out to be an extended period of low prices. It will be tough on high-cost producers who are heavily dependent on oil for foreign revenue – Venezuela, Nigeria, Iraq, Iran for example. For Gulf states the effects will be mixed, but they will have collective arrangements to even out the effects. US shale producers will be hit hard, and what happens to Saudi Arabia will depend in large part on the outcome of the US election.

This is the latest (the ninth) of the Lowy Institute’s weekly COVIDcasts, a series focusing on global political and economic consequences of the pandemic, accessible from the Institute’s News and Media Page.

Can America learn how to get along with China?

Writing in Foreign AffairsThe new China scare: Why America shouldn’t panic about its latest challenger – Fareed Zakaria examines the assumptions that have led America to see China as a vital threat to its interests, both economically and strategically, leading in turn to an almost “instinctive hostility” to China. Drawing on a history of America’s botched engagement with other powers Zakaria argues for a more considered response – a policy of “engagement plus deterrence”.

The United States risks squandering the hard-won gains from four decades of engagement with China, encouraging Beijing to adopt confrontational policies of its own, and leading the world’s two largest economies into a treacherous conflict of unknown scale and scope that will inevitably cause decades of instability and insecurity. A cold war with China is likely to be much longer and more costly than the one with the Soviet Union, with an uncertain outcome.

The globalisation we got vs the globalisation we wanted

Writing in ProspectGlobalisation after Covid-19: my plan for a rewired planet – Dani Rodrik describes how the present model of “hyper globalisation”, with an agenda:

…  set by multinational corporations and big banks, with labour, environmental and civil society groups typically on the defensive. Instead of targeting genuine domestic governance failures, or concentrating on the public goods or beggar-thy-neighbour rivalry that truly affects the whole planet, the global economic rules have been designed for the most part to privilege one set of interests over others in the tussle for resources.

The globalisation we want is one that addresses serious problems requiring world-wide cooperation:

This means we should focus on disciplining beggar-thy-neighbour policies and securing global public goods. Global action against tax havens is an obvious priority, since tax havens are a clear and costly instance of a true beggar-thy-neighbour policy. The climate and (in many respects at least) public health are obvious global public goods.

Reflections on “The American disease”

Trump tries to call Covid-19 the Chinese disease, but Julian Cribb looks at the epidemic not in terms of its origins (epidemics can emerge anywhere) but in terms of how societies and their governments handle them, and on that count the USA stands out for its failures.  It’s not just Trump: it’s the country’s embedded culture of “individualism” that has provided a fertile ground for the virus.

America, or a very large part of it, doesn’t get that. It will pursue aggressive individualism, even if it kills them – which, in the case of coronavirus, it does.

But, asks Cribb, will America learn from this failure?

Somewhere in the confused mythology that makes up the US psyche, Americans must relearn the values of a mutual society in which each pays his or her dues to the greater good.

We have a vaccine but we aren’t using it

Tom Sauer and Ramesh Thakur remind us that we already have a vaccine against a threat far greater than Covid-19. That threat is nuclear war, and the “vaccine” is the Treaty on the  Prohibition of Nuclear Weapons. But:

… unfortunately, despite their legal obligations under Article 6 of the Nuclear Non-Proliferation Treaty (NPT), the five nuclear weapon states and their allies, and also the four nuclear armed states outside the NPT, are refusing to take the prophylactic medication the ban treaty prescribes.

Their provocatively-titled article How many intensive care beds will a nuclear weapon explosion require? is published in the Bulletin of the Atomic Scientists.  They don’t attempt to calculate that number, but they do point out, in passing, that it would be a wise precaution for us to have more ICU places ready to cope with disasters.

A vaccine for footballers

Motivated by a desire to help humanity solve one of the planet’s most pressing problems – some footballers’ aversion to inoculation – researchers have successfully completed human trials on a vaccine.

Saturday’s Good Reading and Listening is compiled by Ian McAuley

Watch out tomorrow, Sunday, for Peter Sainsbury’s Sunday environment round up.

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