Thursday Throughput: The Economy of Lockdowns

San Francisco in May 2020. Photo by David Goehring from San Francisco, CA, USA, CC BY 2.0 , via Wikimedia Commons

[ThTh1] This LA Times article, headlined “COVID lockdowns saved lives without harming economies” drew a lot of fire this week. The headline is a disaster. Michael Hiltzik’s article admits that lockdowns and related restrictions harmed economies. What it argues is that these things harmed the economies less than “herd immunity” approaches did or would have. Let’s unpack this argument because I think this is an important debate we need to start having.

First of all, I must once again emphasize that lockdowns and stay-at-home orders are not the same thing, and our debate would be much improved if we kept that in mind. Lockdowns are where people are forced to stay in their homes. Almost everything is shut down except for utilities and food distribution. It’s how Wuhan got control of the initial outbreak and how Italy got their outbreak under control.

There is little doubt that such lockdowns work at least in terms of controlling the virus. And if the outbreak can be brought down within a few weeks, you can quickly go back to normal life and the economy can rebound. But the key point is “if the outbreak can be brought down within a few weeks”. Your lockdown has to be fairly airtight so that the virus actually stops circulating. Otherwise, the virus continues to spread, people stop complying and you’ve gone through all that pain for nothing. This is why the WHO and most public health experts have moved away from lockdowns as a control mechanism.

Lockdowns were rarely deployed in COVID and almost never after the first few months. What where deployed were stay-at-home orders and similar restrictions that tried to manage the outbreak rather than end it. They basically split the baby, allowing more economic activity but contemplating more spread of the virus. In the end, you might end up with more economic pain; a restaurant that is shut down for a month and then re-opens might recover better than one that can only do take-out for six months. But they are also more doable.

So that’s the theory. What’s the evidence? The LA Times article is based heavily on this analysis by Noah Smith. I strongly recommend reading it. Noah notes out that countries that did a hard lockdown in the early days got the virus under control faster and had stronger economic 2020s than countries that didn’t. In the end, the virus came back in the fall with variants. But we also had far better treatments and the initial use of the vaccine. This was the whole concept of “flattening the curve” and it worked.

But he also points out this: countries, states and communities that issued stay-at-home orders showed no more of an economic hit than countries, states and communities that didn’t. The reason is that places that didn’t implement stay-at-home orders had higher overall infection rates. So, their economic activity declined because people were being infected and dying:

Let’s do a little thought experiment. Suppose in City A, they lock down. People stay home. The economy gets hurt, but the virus gets suppressed and infections go to a low level. Eventually, they can start to reopen safely, and they don’t immediately get another wave of COVID because there just aren’t that many sick people in town. But in City B, they don’t lock down. 80% of people stay home because of fear, so the economy gets clobbered anyway. But the 20% who go out end up spreading the virus, raising the infection rate to a high level. That causes more fear, and eventually even the 20% who were going out get scared enough to stay home. But now it’s too late — infection has a higher baseline, and takes much longer to go down. So, the fear lasts longer, and so does the economic pain.

The data now supports that thought experiment. If you want to see it taken to the greatest extreme, just look at India right now. Thanks to a massive outbreak of COVID, their economy is crashing and will almost certainly end up worse than it was in 2020. We are seeing what would have happened with a herd immunity approach: even more economic pain combined with even more death.¹ But you don’t even need to go that far. Just look at Sweden. Early in the pandemic, herd immunity advocates pointed at Sweden as an example of how a herd immunity approach was superior. Well, here we are a year later. Sweden did not experience the catastrophe that Indian is, since many Swedes stayed at home anyway and Sweden doesn’t have the same social, economic and cultural issues that India does. But they did did take a bigger economic hit than their neighbors along with three to seven times as many deaths per capita. When you look at the Scandinavian countries, you can see clear evidence that stay-at-home orders saved both lives and jobs. The claim that you must choose between saving the economy and stopping the virus is simply not true.

There is no approach to COVID — none — that is going to result in zero economic pain. An unconstrained outbreak is an economic disaster, as India is showing right now. Even a controlled outbreak is going to cause pain because, stay-at-home orders or no, most people aren’t going to risk death to watch a movie. The only thing that truly saves the economy is beating the virus. Maybe not 100% but certainly down to manageable levels.

One of the things we’re going to have to figure out is where the tradeoff is. At what point do the methods used to control the virus cause more economic and social damage than the virus itself? The evidence after a year of COVID suggests it is well away from “do nothing”.

But…we’re still figuring this out. It’s tricky because government and private behavior do not always align. Take masks for example. States that repealed mask mandates earlier this year have seen no more infections than states that kept them: mask-wearing depends more on personal choice than law. On the other hands, states that mandates masks in schools saw significantly fewer infections among schoolchildren. Do mask mandates work in schools but not in the general public? Perhaps.

It will be a long time before we can say for certain which policies worked best, let alone which minimized the economic damage. And the rules that apply to the initial outbreak of COVID may not apply to future outbreaks, let alone other diseases that might be heading our way. But the early evidence indicates that many of the policies that saved lives also saved jobs.

It’s vital that we have continue to have these discussions. And it’s incredibly vital that we have them without the certainty that the LA Times headline tried to inject into the debate or the certainty that those responding to it did. We know some stuff. We don’t know everything yet. And science is how we will move to a place of not knowing a bit less.

[ThTh2] While we’re on the subject…anti-mask mandate folks are jumping on Biden for describing the repeal of mask mandates as “Neanderthal thinking”. But Neanderthals were actually very intelligent. I sometimes wonder if they were more intelligent than humans.

[ThTh3] You may have heard that a COVID variant broke out among the New York Yankees. The data shows the vaccine worked as advertised. Most of those exposed weren’t infected. Those who were infected were asymptomatic. Only one coach got sick, and it was a mild case. And a new study indicates that the AstraZeneca vaccine is working against the India variant. We continue to get great news on the effectiveness of these vaccines. Let’s hope it continues. And that the news on side effects continues to be good.

[ThTh4] And speaking of things we don’t know; we may be significantly underestimating the number of lives COVID has taken. While I agree with the overall conclusion — especially as most of the uncounted are in developing countries — I do think they overshoot the mark a bit.

[ThTh5] What, still not done with COVID? OK, I swear this is the last one. But there is more evidence trickling in to support the lab leak theory for the origin of the virus. I don’t think we’ll ever know for certain. But China’s opacity on this issue isn’t helping.

[ThTh6] It turns out: mammals might be able to breath through their intestines. So, if you get sick in the future, doctors might literally blows oxygen up your …

[ThTh7] When I started graduate school, one of the embarrassing inconsistencies in the field was that the age we estimated for the universe’s oldest stars was higher than the age we estimated for the universe itself. This is not as dumb as it sounds. Those two ages were obtained through very different approaches. One used models of stellar evolution, the other used the expansion of the universe. And the uncertainties in both numbers was quite high. Within a decade, the problem disappeared. Improvements in our understanding of stellar evolution dropped the age of the oldest clusters to just above 13 billion years. And our discovery of dark energy pushed the age of the universe to just shy of 14 billion years.

So, the current argument over Methuselah’s Star does not phase me. The two estimates are within uncertainties of each other. And we are currently trying to improve our understand of both stars and the universe, which may move those ages to a more sensible alignment. Honestly, the fact that they are so close to each other at all is testament to how well science works. It’s as if you tried to measure the length of a football field with your tongue and with a corvette and got almost the exact same answer.

[ThTh8] I am not at all persuaded by the claim that Bitcoin is not an environmental disaster. The argument hinges heavily on the idea that Bitcoin computing can be supported with carbon-free energy (as it is in Iceland) while ignoring the reality that much of it is supported by coal (specifically, coal in China). It responds to the reality that Bitcoin uses hundreds of thousands of times as much energy per transaction by claiming that since Bitcoin transactions tend to be very large ($16,000 on average), we should judge on a per dollar basis, which seems backward to me, especially if Bitcoin is going to be an actual everyday currency rather than an investment vehicle.

[ThTh9] A ranger just made one of the biggest fossil discoveries in California history.

[ThTh10] A few years back, an XKCD cartoon pointed out that electronic communications travel faster than seismic waves. So, it was possible, if an Earthquake went off in one state, that people in other states would see it show up social media before they felt it. Then it literally happened. The 2011 Virginia earthquake was felt all across the United States and many people literally saw it on social media before the seismic waves hit them.

A new early warning network will now exploit this by sending out instant alerts to people in the Western US when an earthquake is detected. This could potentially give people vital seconds to get to safety.

1. And keep in mind: people dying and contracting life-long complications from COVID is an economic cost too.