Friday , April 3 2020
Home / Tony Yates: Long and Variable / Nudging and banning

Nudging and banning

Summary:
Here’s a Guardian piece I wrote about Government policy regarding the Coronavirus as it stood on Thursday.  Less than 48 hours later, policy seems to have changed.  Initially eschewing enforced social distancing measures in the form of banning large sporting and other events, this is now going to happen. On Thursday, the position on this was that 1) the science did not support a ban because this would not much to affect the spread [controversial] and 2) that there was nonetheless concern about such events placing unwanted burdens on emergency services at a time when they might later, but are not yet currently, under stress. The science clearly has not changed in 48 hours.  And the case load has not risen to the point where the emergency services cannot cope with some people being

Topics:
Tony Yates considers the following as important:

This could be interesting, too:

FRED Blog writes Unexpected changes to the benchmark U.S. interest rate : Discretion is the better part of valor

FRED Blog writes Bank lending standards and loan growth : Monitoring lending activity in troubled times

FRED Blog writes The St. Louis Fed’s Financial Stress Index, Version 2.0

FRED Blog writes Fourth large-scale asset purchases program: A new hope

Here’s a Guardian piece I wrote about Government policy regarding the Coronavirus as it stood on Thursday. 

Less than 48 hours later, policy seems to have changed.  Initially eschewing enforced social distancing measures in the form of banning large sporting and other events, this is now going to happen.

On Thursday, the position on this was that 1) the science did not support a ban because this would not much to affect the spread [controversial] and 2) that there was nonetheless concern about such events placing unwanted burdens on emergency services at a time when they might later, but are not yet currently, under stress.

The science clearly has not changed in 48 hours.  And the case load has not risen to the point where the emergency services cannot cope with some people being punched at football matches.

What happened was that the Premier and other Leagues decided it was irresponsible to hold such events where the virus could spread, and decided presumably it would be very bad for their brands if they carreid on.  This then left the government looking like it was behind the curve and out of control.  To retake the initiative, it is embracing the bans of these very large events and readying itself to ban some more things, smaller but still large events.

The overall strategy seemed initially to be one of fatalism as regards the overall spread of the disease.  Initial gentle coaxing, followed by later enforced distancing, would be used to try to curtail the case load of those needing hospitalisation and particularly intensive care treatment to the point where current capacity could deal with it.  How it reached that judgement watching the experience of Lombardy in Northern Italy, and bearing in mind the difficulties the NHS has had in coping with winter peak demand in the last several years, and the surplus mortality caused by social care cuts re-routing the elderly into hospital care, I cannot fathom.  But that was the judgement.  Social distancing would be enacted later, when it was most needed, at the peak load of cases.  And later because there was fear of ‘fatigue’, that its effectiveness would diminish when it was most needed, as people tired of the regulations, or through financial necessity, and sought ways around them, or substitute ways of encountering eachother.

A medical strategy, the government are discovering, can’t be executed in a political vacuum.  Politcal factors seem to have pushed it to alter significiantly the timing of social distancing measures which it stressed was so important.

One can’t help wondering how much politics entered the first calculation.  Was it an inclination towards intervention as a last resort because of instinctive laissez-fairism?  Possible, but I doubt it.  Brexit did have its Global Free Trade Liberal Leavers in the coalition, but they seem to have been an impotent part of it and Brexit overall has been about decisive flouting of what free market economics would dictate.  And the budget showed the Government’s tilt towards fiscal interventionism.

Was it about British exceptionalism?  Deliberately doing the opposite of what the continent were doing?  I hope not, and also doubt that too.

Although whatever the imperative, the UK has clearly decided that they don’t care about the difference in policies in the two political halves of the island of Ireland.  South of the border, Ireland have closed schools and had already ratcheted up social distancing.  North of the border follows UK policy.  But the effectiveness of social distancing south of the border will be greatly affected by it not happening North of the border.  If you want a demonstration of the costs that chopping up territories into selfish nation states imposes on its citizens, as one government fails to internalize the externality it has on another, you have a good example right there.

It’s to be expected that politics is gong to continue to have an affect as the strategy and the virus’ progress evolves.  One follower of mine on Twitter mused that just letting the virus do its thing and kill a lot of people might just prove politically untenable, and it would be forced into introducing lock-downs in due course.

Tony Yates
Economist. Consulting, lecturing, a book. Ex Prof at Bham, Ex BoE staffer. Macro, policy, monetary econ, occasional nonsense.

Leave a Reply

Your email address will not be published. Required fields are marked *