Friday , June 5 2020
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Tomorrow’s news, today

Summary:
Suppose you want a heads up on what the news media will be talking about in a few weeks. Where do you go to find it? In the blogosphere. On March 1, I did a post questioning the conventional wisdom on masks. Now the media is full of these stories. I did numerous posts on the mystery of Germany’s low mortality rate. Now the media’s full of them. I did several posts on the relative success of California and Washington. Now check out this news headline from today: Flattening the curve on coronavirus: What California and Washington can teach the world And it’s not just me.  Other bloggers (and tweeters) like Scott Alexander and Marginal Revolution are consistently ahead of the curve.  The news media can be viewed as a sort of official acknowledgement that the story has seeped

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Suppose you want a heads up on what the news media will be talking about in a few weeks. Where do you go to find it?

In the blogosphere.

On March 1, I did a post questioning the conventional wisdom on masks. Now the media is full of these stories. I did numerous posts on the mystery of Germany’s low mortality rate. Now the media’s full of them. I did several posts on the relative success of California and Washington. Now check out this news headline from today:

Flattening the curve on coronavirus: What California and Washington can teach the world

And it’s not just me.  Other bloggers (and tweeters) like Scott Alexander and Marginal Revolution are consistently ahead of the curve.  The news media can be viewed as a sort of official acknowledgement that the story has seeped out from the internet into the real world.  It’s like a quarterly profit report from a corporation, producing information that the market already largely understood and discounted.

In monetary policy, we have the recent flurry of stories claiming the Fed has almost infinite ammo.  Hmmm, where did we first hear that?  In the not too distant future, look for stories that this crisis is morphing from an aggregate supply problem to a demand problem.

A bit further out in the future (late 2020?), look for stories of companies being unable to find workers at a time of high unemployment.  I fully support the beefed up UI program.  But let’s not kid ourselves; there are massive work disincentives.  For now that’s not a problem.  But later. .

I also predict that in a month or two, when we have a good grasp on the likely death totals from this epidemic, or at least this wave of the epidemic, there will be news stories showing how many of those deaths could have been prevented merely by starting the social distancing at the national level at the same time it was done in Washington (which was about 2 weeks earlier).  And the numbers will give you a sick feeling in the pit of your stomach.  I don’t know the exact numbers, but if there are say 100,000 deaths, it might be the case that on the order of 80% could have been eliminated by starting two weeks earlier.  And no, this is not a dig at Trump (or de Blasio), the country was not mentally prepared for doing something like this two weeks earlier.  But it won’t change the reality of the fact that we as a society made a huge error.  Social distancing may not even be the right answer, as some tough guys claim, but given that we ended up doing it anyway, not doing it two weeks earlier was super costly.  Hiroshima costly.

And let’s not even talk about the tens of thousands of preventable deaths each year from kidney failure.

Time for some soul-searching?

PS.  Check out this twitter thread.


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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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