Productivity Pessimist Robert Gordon Becomes More Optimistic

(p. A2) After a decadelong drought, worker productivity might be about to accelerate thanks to pandemic-induced technological adoption, which could lift economic growth and wages in coming years while staving off inflation pressure.

. . .

Robert Gordon, a professor at Northwestern University who has studied productivity and living standards during the past century, said productivity growth slowed after 2005 because the payoff from computers faded and new inventions such as smartphones and tablets didn’t revolutionize business operations. In 2015 he had predicted productivity growth of only 1.5% a year over the next 25 years. Recent developments have made him more optimistic, and he expects annual productivity growth of about 1.8% this decade.

A shift toward e-commerce should push up productivity by eliminating workers needed in bricks-and-mortar stores, Mr. Gordon said. Videoconferencing should also help, though the public-transit sector could offset some of the gains because buses and rail transit will carry fewer riders, he said.

. . .

Remote work could deliver a one-time 4.7% lift to productivity after the pandemic, though a large share of the growth will stem from shortened commutes that government productivity data won’t fully capture, according to a working paper from Stanford University’s Nicholas Bloom and co-authors.

For the full commentary, see:

Sarah Chaney Cambon. “Productivity Looks Ready to Pick Up.” The Wall Street Journal (Saturday, April 5, 2021): A2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 4, 2021, and has the title “U.S.’s Long Drought in Worker Productivity Could Be Ending.”)

Gordon’s pessimistic old views were most fully expressed in his much-discussed:

Gordon, Robert J. The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War. Princeton, NJ: Princeton University Press, 2016.

The working paper co-authored by Bloom is:

Barrero, Jose Maria, Nicholas Bloom, and Steven J. Davis. “Why Working from Home Will Stick.” Working Paper, April 1, 2021.

Differences in Study Results Are Seldom Due to Whether Study Design Is Observational or a Randomized Clinical Trial

(p. A17) The health system would be less burdened if more patients were treated before they require hospitalization, and there are promising therapeutic options that patients can administer themselves at home. This was the subject of a Nov. 19 [2020] hearing before the Senate Homeland Security and Governmental Affairs Committee.

Testimony from the hearing underscored an important issue: Too many doctors have interpreted the term “evidence-based medicine” to mean that the evidence for a treatment must be certain and definitive before it can be given to patients. Because accusing a physician of not being “evidence based” can be a career-damaging allegation, fear of straying from the pack has prevailed, favoring inertia and inaction amid uncertainty about Covid-19 treatments.

For diseases with established treatment options, holding out for certainty may be prudent. But when options are limited and there are safe treatments with evidence for effectiveness, holding out for certainty can be catastrophic. Requiring a high degree of certainty during a crisis may elevate the augustness of medical organizations and appease the sensibilities of medical professionals, but it does nothing for patients who need help.

The penchant for certainty is visible in the frequently updated treatment guidelines for Covid-19 from the National Institutes of Health. These guidelines were developed by scientists around the country, but because of a mentality that is biased toward virtually irrefutable evidence, no distinction is made for treatments with evidence for effectiveness that falls below the mark of certainty. This framework almost certainly has contributed to many avoidable deaths during this pandemic.

. . .

While some health officials dismiss nonrandomized studies, the Cochrane organization, an international leader in evidence-based medicine, published a review of several hundred studies showing that randomized clinical trials and nonrandomized studies of treatments generally yield similar findings. Modern epidemiologic and statistical methods can usually overcome biases inherent in nonrandomized study designs.

For the full commentary, see:

Joseph A. Ladapo. “Too Much Caution Is Killing Covid Patients.” The Wall Street Journal (Wednesday, Nov. 25, 2020): A17.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the commentary has the date November 24, 2020, and has the same title as the print version.)

The Cochrane organization review mentioned above is:

Anglemyer, Andrew, Hacsi T. Horvath, and Lisa Bero. “Healthcare Outcomes Assessed with Observational Study Designs Compared with Those Assessed in Randomized Trials.” In Cochrane Database of Systematic Reviews, 2014.

“A Public Choice Analysis of Mandated Randomized Double-Blind Clinical Trials”

My “A Public Choice Analysis of Mandated Randomized Double-Blind Clinical Trials” was presented on April 13, 2021 in the Law & Economics session of the Association of Private Enterprise Education meetings. I am grateful to Ray DeGennaro and Matthew McClanahan for including me in McClanahan’s session and to Lauren Nicole Hughes for recording the session on her smartphone.

To some extent, the presentation was an outgrowth of my book:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

Etsy and Shopify Platforms Enabled Many Small Businesses to Survive the Pandemic

(p. B4) While the year has been a struggle for small businesses, some companies that host their transactions have been soaring.

Shares in Etsy Inc. and Shopify Inc., whose e-commerce platforms primarily cater to small businesses, have surged during the pandemic. Etsy has more than quadrupled this year, while Shopify has tripled.

. . .

For many small-business owners, the technology platforms have served as a lifeline as their companies shift to a focus on online sales.

Matthew Cummings owns a glass-blowing company that makes custom beer glasses in Knoxville, Tenn. He has been on Etsy since 2012, but didn’t move fully online until the pandemic hit and he had to close the doors of his bricks-and-mortar store. He said his Etsy sales are about 10 times higher this year.

Mr. Cummings said that his sales on Etsy have helped him cover his business expenses and that he was able to come out of 2020 with a profit because of his online store. He plans on selling through the platform after the pandemic, with his business now reaching as far as Australia. He has seen a new wave of repeat customers seeking to complete sets of his custom beer glasses.

. . .

One type of sale that might not last beyond the pandemic is masks.

Etsy reported that masks accounted for 11% of overall gross-merchandise sales in the third quarter.

For the full story, see:

Amber Burton. “Sales Platforms Etsy, Shopify Thrive From Small Businesses.” The Wall Street Journal (Thursday, Dec 24, 2020): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date December 23, 2020, and has the title “Etsy and Shopify Buoyed as Covid-19 Boosts Online Sales.”)

22% of U.S. Small Businesses Closed from February to April 2020

(p. B4) In early February [2020], things were looking good for Practice San Francisco, a center offering individual psychotherapy and classes for children and adults that promote physical and mental well-being. Business was so good that owner Nina Kaiser, a psychologist, had just renovated and moved into a bigger space with the goal of doubling revenue.

Then the coronavirus pandemic hit. In early March [2020], Ms. Kaiser moved all her classes and counseling services online. Fairly quickly, however, video fatigue set in. “After a few weeks, we saw a big downturn in attendance across all our programs, even psychotherapy,” she said. Thus began a period of “endless pivoting and troubleshooting.”

Like many other small businesses, Practice San Francisco, which has been around for three years, has essentially become a start-up again, employing a strategy similar to the “fail fast” approach well known in start-up culture: A change is made to some aspect of the business and if it works, it sticks, but if it fails, data is collected and something else is tried.

“There has been a lot of flying by the seat of your pants,” Ms. Kaiser said. “We see what doesn’t work, where we run into trouble, and we course-correct. It’s this constant, iterative process.”

That process is crucial right now for small businesses, whose numbers dropped by 22 percent — 3.3 million — between February and April [2020], according to the National Bureau of Economic Research.

For the full story, see:

Eilene Zimmerman. “Small-Business Owners Pivot and Troubleshoot In Battle to Stay Afloat.” The New York Times (Tuesday, December 1, 2020): B4.

(Note: bracketed years added.)

(Note: the online version of the story was updated Dec. 17 [sic], 2020, and has the title “Can a Start-Up Mentality Save Small Businesses?”)

The published-online-ahead-of-print version of the National Bureau of Economic Research (NBER) working paper mentioned above is:

Fairlie, Robert. “The Impact of Covid-19 on Small Business Owners: Evidence from the First 3 Months after Widespread Social-Distancing Restrictions.” Journal of Economics & Management Strategy (2020): 10.1111/jems.12400.

Pfizer Refused Federal Subsidy so They Could “Liberate” Their “Scientists From Any Bureaucracy”

In September [2020], the CEO of Pfizer, Albert Bourla, appeared on CBS News’s “Face the Nation,” where he was asked about not accepting government funding for development.

“The reason why I did it was because I wanted to liberate our scientists from any bureaucracy,” Bourla explained. “When you get money from someone that always comes with strings. They want to see how we are going to progress, what type of moves you are going to do. They want reports. I didn’t want to have any of that. I wanted them — basically I gave them an open checkbook so that they can worry only about scientific challenges, not anything else.”

“And also,” he added, “I wanted to keep Pfizer out of politics, by the way.”

For the full story, see:

Philip Bump. “No, Pfizer’s Apparent Vaccine Success Is Not a Function of Trump’s ‘Operation Warp Speed.” The Washington Post (online posted Monday, November 9, 2020).

(Note: bracketed year added.)

Unintended Consequences of Centralized Lockdown in India Spread Covid-19

(p. A1) SURAT, India — The crowds surged through the gates, fought their way up the stairs of the 160-year-old station, poured across the platforms and engulfed the trains.

It was May 5 [2020], around 10 a.m. Surat was beastly hot, 106 degrees. Thousands of migrant laborers were frantic to leave — loom operators, diamond polishers, mechanics, truck drivers, cooks, cleaners, the backbone of Surat’s economy. Two of them were Rabindra and Prafulla Behera, brothers and textile workers, who had arrived in Surat a decade ago in search of opportunity and were now fleeing disease and death.

. . .

They were among tens of millions of migrant workers stranded without work or food after Prime Minister Narendra Modi imposed a national coronavirus lockdown in March. By spring and summer, these workers were so desperate that the government provided emergency trains to carry them back to their home villages. The trains were called Shramik Specials, because shramik means “laborer” in Hindi.

But they became the virus trains.

India has now reported more coronavirus cases than any country besides the United States. And it has become clear that the special trains operated by the government to ease suffering — and to counteract a disastrous lack of lockdown planning — instead played a significant role in spreading the coronavirus into almost every corner of the country.

The trains became contagion zones: Every passenger was supposed to be screened for Covid-19 before boarding but few if any were tested. Social distancing, if promised, was nonexistent, as men pressed into passenger cars for journeys that could last days. Then the trains disgorged passengers into distant villages, in regions that before had few if any coronavirus cases.

. . .

(p. A12) On March 24 [2020], at 8 p.m., Mr. Modi hit the lockdown switch. In a televised address, he ordered the entire nation to stay inside their homes for three weeks — starting in four hours.

The decision was pure Modi: sudden, dramatic and firm, like when he abruptly wiped out nearly 90 percent of India’s currency bills in 2016, a bolt-from-the-blue measure that he said was necessary to fight corruption but proved economically devastating.

Prafulla and Rabindra Behera had just finished a dinner of rice, lentils and potatoes, their usual fare. They lived in squalid, bare rooms in Surat’s industrial zone, sleeping wall to wall on the floor with a half dozen other laborers. Within minutes of Mr. Modi’s address, they started getting calls.

“Everyone was thinking the same: This will be over soon and somehow we’ll pass the days,” Rabindra said.

At the time, India had fewer than 600 known virus cases.

Many experts have criticized Mr. Modi’s government for overlooking the plight of migrant laborers, who suddenly had no work, no income and no support network in the cities. The government’s Covid-19 task force lacked migrant specialists and was hardly representative of India. Of its 21 members, only two were women and the rest were largely upper-caste men. Many of the migrant laborers came from lower castes and economically underprivileged backgrounds.

. . .

In Surat, the Behera brothers were down to their last bag of rice. They could not work — the factories were closed. But they weren’t allowed to leave the city, where virus cases were beginning to surge.

“We were trapped,” Rabindra said.

On May 1, India’s Labor Day, the railways ministry made a grand announcement: Shramik Specials. Routes were drawn up from Surat, Mumbai, Chennai, New Delhi, Ahmedabad and other cities deep into rural areas.

. . .

The Beheras were told they would quarantine for 21 days at a center and each was given a toothbrush, a slice of soap, a bucket to wash with and a thin sheet to sleep on.

But the next morning, Prafulla awoke with a splitting headache. A doctor didn’t think he had coronavirus but suggested, as a precaution, that he be moved into the courtyard, away from the other men.

The following morning, Prafulla could barely breathe and called his wife on his cellphone.

“Come and bring the girls,” he whispered. “I need to see you.”

An hour later, he was dead. A subsequent test revealed that Prafulla Behera was Ganjam’s first coronavirus death.

For the full story, see:

Jeffrey Gettleman, Suhasini Raj, Sameer Yasir, Karan Deep Singh and Atul Loke. “Rails Spread Virus as Workers Fled India’s Cities.” The New York Times (Wednesday, December 16, 2020): A1 & A12-A13.

(Note: ellipses added.)

(Note: the online version of the story was updated Feb. [sic] 2, 2021, and has the title “The Virus Trains: How Lockdown Chaos Spread Covid-19 Across India.”)

On Vaccines and Economics, Europe Suffers “the Same Bureaucratic and Intellectual Rigidity”

(p. A25) Europe’s vaccination debacle will almost surely end up causing thousands of unnecessary deaths. And the thing is, the continent’s policy bungles don’t look like isolated instances, a few bad decisions made by a few bad leaders. Instead, the failures seem to reflect fundamental flaws in the continent’s institutions and attitudes — including the same bureaucratic and intellectual rigidity that made the euro crisis a decade ago far worse than it should have been.

The details of the European failure are complex. But the common thread seems to be that European officials were not just risk averse, but averse to the wrong risks. They seemed deeply worried about the possibility that they might end up paying drug companies too much, or discover that they had laid out money for vaccines that either proved ineffective or turned out to have dangerous side effects.

So they minimized these risks by delaying the procurement process, haggling over prices and refusing to grant liability waivers. They seemed far less worried about the risk that many Europeans might get sick or die because the vaccine rollout was too slow.

For the full commentary, see:

Paul Krugman. “A Fiasco That’s Very European: Vaccines.” The New York Times (Friday, March 19, 2021): A25.

(Note: the online version of the commentary has the date March 18, 2021, and has the title “Vaccines: A Very European Disaster.”)

Hacked Trove of Documents Show China’s “Weaponized System of Censorship”

(p. 1) In the early hours of Feb. 7 [2021], China’s powerful internet censors experienced an unfamiliar and deeply unsettling sensation. They felt they were losing control.

The news was spreading quickly that Li Wenliang, a doctor who had warned about a strange new viral outbreak only to be threatened by the police and accused of peddling rumors, had died of Covid-19. Grief and fury coursed through social media. To people at home and abroad, Dr. Li’s death showed the terrible cost of the Chinese government’s instinct to suppress inconvenient information.

Yet China’s censors decided to double down. Warning of the “unprecedented challenge” Dr. Li’s passing had posed and the “butterfly effect” it may have set off, officials got to work suppressing the inconvenient news and reclaiming the narrative, according to confidential directives sent to local propaganda workers and news outlets.

They ordered news websites not to issue push notifications alerting readers to his death. They told social platforms to gradually remove his name from trending topics pages. And they activated legions of fake online commenters to flood social sites with distracting chatter, stressing the need for discretion: “As commenters fight to guide public opinion, they must conceal their identity, avoid crude patriotism and sarcastic praise, and be sleek and silent in achieving results.”

The orders were among thousands of secret government directives and other documents that were reviewed by The New York(p. 14)Times and ProPublica. They lay bare in extraordinary detail the systems that helped the Chinese authorities shape online opinion during the pandemic.

At a time when digital media is deepening social divides in Western democracies, China is manipulating online discourse to enforce the Communist Party’s consensus. To stage-manage what appeared on the Chinese internet early this year, the authorities issued strict commands on the content and tone of news coverage, directed paid trolls to inundate social media with party-line blather and deployed security forces to muzzle unsanctioned voices.

. . .

The documents include more than 3,200 directives and 1,800 memos and other files from the offices of the country’s internet regulator, the Cyberspace Administration of China, in the eastern city of Hangzhou. They also include internal files and computer code from a Chinese company, Urun Big Data Services, that makes software used by local governments to monitor internet discussion and manage armies of online commenters.

The documents were shared with The Times and ProPublica by a hacker group that calls itself C.C.P. Unmasked, referring to the Chinese Communist Party. The Times and ProPublica independently verified the authenticity of many of the documents, some of which had been obtained separately by China Digital Times, a website that tracks Chinese internet controls.

. . .

“China has a politically weaponized system of censorship; it is refined, organized, coordinated and supported by the state’s resources,” said Xiao Qiang, a research scientist at the School of Information at the University of California, Berkeley, and the founder of China Digital Times. “It’s not just for deleting something. They also have a powerful apparatus to construct a narrative and aim it at any target with huge scale.”

“This is a huge thing,” he added. “No other country has that.”

For the full story, see:

Raymond Zhong, Paul Mozur, Jeff Kao and Aaron Krolik. “‘Be Sleek and Silent’: How China Censored Bad News About Covid.” The New York Times, First Section (Sunday, December 20, 2020): 1 & 14.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story was updated Jan. [sic] 13, 2021, and has the title “No ‘Negative’ News: How China Censored the Coronavirus.”)

WHO Team Unable to Conduct a Thorough and Impartial Study of Wuhan Origin of Covid-19

(p. A1) . . . , as the WHO-led team finalizes its full report on the Wuhan mission, a Wall Street Journal investigation has uncovered fresh details about the team’s formation and constraints that reveal how little power it had to conduct a thorough, impartial examination—and call into question the clarity its findings appeared to provide.

. . .

(p. A10) The WHO asked the U.S. to recommend government experts for the team, but it didn’t contact the three that Washington put forward, according to current and former U.S. officials.

. . .

On Jan. 23, 2020, a WHO emergency committee recommended that a WHO-led group of scientists should “review and support efforts to investigate the animal source of the outbreak.”

. . .

Tedros Adhanom Ghebreyesus, the WHO’s director-general, discussed the matter with President Xi Jinping in a January 28 meeting. The next month, a WHO-led team, including two U.S. government experts, visited China.

Local officials appeared committed to a search and described work they had under way, according to people on that trip. But no studies emerged over the following weeks.

. . .

The team included leading specialists in animal health, epidemiology and virology, and government experts from Germany, Russia and Japan.

It included one scientist from the U.S.: Peter Daszak, a zoologist and president of EcoHealth Alliance, a New York-based nonprofit.

Dr. Daszak had experience hunting for the origins of emerging human viruses in animals, including 16 years working with researchers in China. He was on a team that pinpointed bats as the source of the coronavirus behind SARS.

Some U.S. officials and scientists were concerned some of his nonprofit’s work in China posed a conflict of interest. EcoHealth had in past years provided funding to the Wuhan Institute of Virology as part of a grant from the U.S. National Institutes of Health. The WIV is at the center of assertions by the Trump administration that the pandemic virus could have come from a lab, and Dr. Daszak had publicly dismissed the possibility.

In applying for a spot on the team, Dr. Daszak said, he described his expertise and provided a conflict-of-interest statement to the WHO including his work with the WIV.

. . .

On Jan. 28 [2021], a year to the day from the WHO director-general’s meeting with President Xi, they were cleared to begin field visits and face-to-face meetings with Chinese counterparts. For the remainder of the trip, they were restricted mainly to one part of a hotel due to more quarantine rules and forced to eat separately from Chinese counterparts—preventing the kind of informal conversations team members said were often the most fruitful in such efforts. Their contact with anyone outside the team was limited.

It soon became evident to foreign officials and scientists tracking the mission that the team’s itinerary was partly designed to bolster China’s official narrative that the government moved swiftly to control the virus. The team’s first visit was to a hospital where they met a doctor Beijing feted as the first to raise alarms through official channels about an outbreak of unknown pneumonia. The next day, after another hospital visit, the team went to an exhibition commemorating Chinese authorities’ early “decisive victory in the battle” against the virus, paying tribute to President Xi’s leadership.

. . .

Team members said it became clear to them that Chinese authorities would mostly present only their data analysis, not the raw numbers. And they hadn’t completed some short-term tasks the team had hoped for, including detailed studies of blood samples from before December 2019 and compiling a definitive list of animals sold at the Huanan market.

Among the 30 to 60 Chinese participants were nonscientists, including foreign-ministry officials, team members said. China’s team leader has said his team included 17 experts. The Chinese foreign ministry said none of its officials were in the expert group.

A heated exchange during one meeting touched on the pivotal question of how widely the virus spread around Wuhan before the first confirmed case, who Chinese officials say got sick on Dec. 8, 2019.

. . .

After leaving Wuhan, some international team members qualified their verdict on the laboratory. They lacked the authority, expertise or access to conduct a full examination of the WIV or any other research facility, several said publicly or to the Journal.

Several said that they hadn’t been able to see the raw data or original safety, personnel, experiment and animal-breeding logs—which many other scientists say are necessary elements of a full investigation.

“It’s just a great coup by China,” said Daniel Lucey, a clinical professor of medicine at the Geisel School of Medicine at Dartmouth who also teaches at Georgetown University.

A thorough investigation of a potential lab leak would require experts with forensic skills similar to those who do weapons or biowarfare inspections, scientists including Dr. Dwyer said.

“We didn’t see the actual data there,” Dr. Dwyer said. “It would be nice to have seen that, particularly around the testing of their staff and so on. But that didn’t come through. They could still provide that.”

For the full story, see:

Jeremy Page, Betsy McKay, and Drew Hinshaw. “WHO’s Hunt for Covid’s Origins Stumbled in China.” The Wall Street Journal (Thursday, March 18, 2021): A1 & A10.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date March 17, 2021, and has the title “How the WHO’s Hunt for Covid’s Origins Stumbled in China.” Where there were differences in wording between the online and the print versions, the passages quoted above follow the online version.)

Vaccine Immunity, Plus Natural Immunity from Getting Covid-19, Equals Herd Immunity Soon

The author of the passages I quote below is a surgeon and professor at the Johns Hopkins School of Medicine and has authored The Price We Pay, which I recently read. It is a disturbing, eye-opening, excellent account of why the costs of drugs are high and rising.

(p. A17) Anthony Fauci has been saying that the country needs to vaccinate 70% to 85% of the population to reach herd immunity from Covid-19. But he inexplicably ignores natural immunity. If you account for previous infections, herd immunity is likely close at hand.

. . .

Dr. Fauci’s vaccination-only path to herd immunity has significantly influenced the national conversation. KNBC-TV in Los Angeles has a county-by-county vaccine tracker showing a bar graph of the percentage of Californians vaccinated, with the zone 70% to 85% labeled “herd immunity.” Currently, it’s at 26%. The false construct does create a greater urgency for everyone to get vaccinated. But it also creates false justification for continued excessive restrictions on freedom. And it raises the possibility that authorities are misallocating the limited vaccine supply by failing to direct it toward people without natural antibodies.

. . .

Some experts claim they don’t talk about natural immunity because we shouldn’t trust it. But a recent Public Health England study found that less than 1% of 6,614 healthcare workers who had Covid-19 developed a reinfection within five months—even though many of them work with Covid patients. Other experts believe natural immunity is powerful. “Natural immunity after Covid-19 infection is likely lifelong, extrapolating from data on other coronaviruses that cause severe illness, SARS and MERS,” says Monica Gandhi, an infectious-disease physician and professor at the University of California.

For the full commentary, see:

Marty Makary. “Herd Immunity Is Near, Despite Fauci’s Denial.” The Wall Street Journal (Thursday, March 25, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date March 24, 2021, and has the same title as the print version.)

The Makary book praised above is:

Makary, Marty. The Price We Pay: What Broke American Health Care–and How to Fix It. New York: Bloomsbury Publishing, 2019.