Living with Risk Daily Briefing – March 30

Published on March 30, 2020 / Leer en español

Center for a New Economy

Edited by
Sergio M. Marxuach


Four things you should know today

1) Puerto Rico’s Health Department gets its act together?

The consensus among public health experts right now is that jurisdictions in the United States should be implementing strict shelter-in-place policies, increasing testing for the coronavirus, and tracing the contacts of those infected. In Puerto Rico we have done reasonably well with the first recommendation, but lag badly with respect to the other two. This is important because epidemiologists start off their models by estimating the “basic reproduction rate” for the virus, which they refer to as R0.  According to this recent editorial in the New England Journal of Medicine, scientists estimate the R0 for the novel coronavirus to be around 2.2. This means that each infected person transmits the virus to a little more than two other persons, in the absence of any public health intervention.

Now, if public health authorities know what they are doing and the people cooperate, then the effective reproduction rate, let’s call it plain R, should eventually be lower than R0. The lower it gets, the flatter the curve. Eventually, if R gets below 1.0, the curve starts to slope down. This does not mean the virus is completely wiped-out but further infections should be sporadic. That is why it is so important that the Department of Health announced it will ramp up testing efforts and will finally begin to systematically trace the contacts of people already diagnosed positive. It can then use that information to determine whether R is greater, lesser than or equal to R0 in Puerto Rico, and make policy adjustments accordingly. Remember the goal is to get to R<1.

2) Tough decisions lie ahead

In a recent op-ed piece in The New York Times, Dr. Ezequiel Emanuel, vice provost of global initiatives and a professor at the University of Pennsylvania, argues that the U.S. should be able to fully open its economy by June if it implements an all-out effort to:

  1. keep shelter-in-place policies for another eight to ten weeks;
  2. mobilize public health resources to test and trace in a massive scale; and
  3. create a national COVID-19 certification process, to certify those who have had the disease and are immune.

Other experts, however, are not so sure. In this piece for The Atlantic, Ed Yong warns that “such thinking is seductive, but flawed. It overestimates our ability to assess a person’s risk, and to somehow wall off the ‘high-risk’ people from the rest of society. It underestimates how badly the virus can hit ‘low-risk’ groups, and how thoroughly hospitals will be overwhelmed if even just younger demographics are falling sick.” This is a complicated debate, hopelessly unsuited to the era of Twitter and Instagram. Beware then of people peddling easy solutions to what are, in the words of Guido Calabresi, former Dean of Yale Law School, “tragic choices.”

3) Living with Risk: Differential vulnerability and public policy

One of the main principles of living with risk is that while we all may face a given risk or set of risks at the same time, the particular way risk affects different social groups depends on the relative vulnerability of each group. And vulnerability is a function of income, social status, and education—of social privilege, in essence—among other factors. To be clear, the government is doing the right thing by extending the shelter-in-place policy in Puerto Rico. But it cannot ignore how the social and economic costs of those policies are unevenly distributed among different social groups.

The New York Times recently reported about how economic inequality affects the capabilities of different social groups to mitigate the risks associated with the pandemic. Specifically, as reported in El País, lower income families have fewer resources to deal with school closings and to manage stress levels. However, this does not mean we can just ignore white collar workers, as explained here in the Washington Post. But it is a warning to policymakers when designing relief programs during this crisis. One size really doesn’t fit all.

4) Lessons from Italy

As we watch the COVID-19 pandemic move around the world, it behooves us all to analyze the experience in other countries and learn from their successes and failures. The authors of this article published in the Harvard Business Review highlight the following lessons from Italy:

  1. policymakers should be aware of their cognitive biases;
  2. governments should avoid partial solutions;
  3. learning quickly from both successes and failures is critical;
  4. collecting and disseminating precise data is extremely important; and
  5. don’t be afraid to change decision-making processes as needed.

In Puerto Rico we have already seen some of our policymakers make some of these mistakes. For example, blithely assuming Puerto Rico would not be affected because “there are no direct flights from China”, was a failure to check cognitive biases. We still have time, though, to learn some of the lessons from Italy and avoid making the same mistakes here.

Quote of the Day

The truth is rarely pure, and never simple.

—Oscar Wilde

Note from the editor

There has been a lot of talk recently about whether we face a choice between our health or “saving” the economy. In our opinion this is a false choice. The government is doing the right thing by pushing hard for us to shelter in place. We really don’t have any other viable public health option right now.

On the other hand, the social and economic costs of that policy are indeed quite high. But this is where both the federal and state (territorial in Puerto Rico’s case) governments can help. While people are at home, the government can provide assistance to individuals, families, small business and multinationals alike. Some of that relief is already on the way: providing cash assistance to families, lending at low rates to businesses, legislating debt-payment moratoria; increasing unemployment insurance payments, etc. But much more will be required, until the immediate and present danger passes.

So please, don’t fall for the naive discourse that sets the well-being of grandma against her granddaughter’s paycheck. . It is just nonsense, irresponsibly peddled by certain parties with access to the media. We already have enough real problems to worry about.

This is the end of today’s briefing.
Stay safe and well informed!