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Why The Incentives Are Stacked to Overreact to COVID

September 27, 2020, 12:51 pm

Long-time readers will know that I am interested, to the point of obsession, in incentives.   One should always be suspicious of bad outcomes described as irrational or the nefarious actions of bad people.  In both cases, if one looks carefully, the outcomes usually turn out to be the perfectly rational outcomes of perfectly normal people responding to bad incentives, assumptions, and/or information.

I personally believe the COVID response in this country (and others) is exaggerated and counter-productive.  But for this post I am not going to ask you to agree or disagree with my skepticism.  Instead, I am going to focus on incentives, and show how media, academia, and government all have incentives, assumptions, and information asymmetries that push them towards exaggerated COVID responses.

The following list is not necessarily complete and the items here are not independent of each other.  Having completed this post, they now look a little random but this is sometimes the way I clarify my thinking on things — to write and publish and get feedback and maybe be more structured the next time.

Incentives

  • Political incentives to “do something” about the issue of the moment.  We see this after every high-profile “bad thing” that happens.  There is immense pressure on politicians to do something — pass some law (often with a person’s name in it) or, if the legislative process is perceived as to slow, fire off some executive order.  In the heat of battle these actions are often taken without regard to efficacy, cost, or unintended consequences.  In the heat of these frenzies, a multi-dimensional decision is magically redefined as having only one dimension that matters.  Anyone who focuses on costs or unintended consequences or even efficacy problems of the proposed solution are cast as heartless and uncaring, potentially even evil and nefarious.
  • Politicians always legislate to first-order metrics, never second-order metrics.  Politicians know that the public and the media is looking at their country or state every day and publishing the number of COVID cases and deaths.  No one is publishing the number of additional suicides, or cancer deaths from people too scared to go to the hospital, or increased starvation and disease deaths in poorer countries as food prices rise and aid from rich countries dries up. These second order effects are real but hard to prove or measure.  They are what we call “unintended consequences” but should instead call “ignored but entirely predictable consequences.”
  • Political incentives to expand power.  Every politician in every branch of government is always working to expand their own power (this is not unique to government, you can say the same thing of executives and functional departments in many large corporations).  When the public is scared and panicky, politicians are able to break through past limits and norms and establish new precedents.  The best example of this is that governments in Western democracies all expanded their power during the 20th century wars, expansions that largely stuck and were not reversed in peace time (except for a few fortunate examples like locking up whole ethnic groups in internment camps).  When the public is scared, power is to be had and it is the unusual politician that will say in such a situation that the right solution is to do nothing.
  • Political incentives not to admit error.  Politicians simply cannot admit error.  To some extent this is due to the personality and ego traits that the political process sorts for, and to some extent this is based on day to day political incentives.  But think about any President in your lifetime and try to think of even the smallest issue on which they said something like “I tried X, over time X has not worked and now I realize we should do something other than X.”  We would actually hope this is the kind of person we have leading the country, but simultaneously our own behaviors don’t allow it.  Presidents frequently admit past errors of others (eg, a current President saying the war in Afghanistan was a mistake) but they can never turn against any policy of their own.  So if, say, lockdowns were the response to wave 1 of the virus, lockdowns are damn well going to be the response in successive waves.  Because not doing so is essentially an admission that it was a mistake the first time.
  • If it bleeds, it leads.  This one takes little explanation, because I think most of us understand the strong incentives of news organizations to create and amplify emergencies to increase the attention and viewership they get.  Cable news had a huge spike in viewership after 9/11 and again in the early days of the Gulf War, and they are constantly jonesing for the same sort of hit.  Remember that the media has accurately called 11 of the last 2 pandemics, earlier predicting disaster from swine flu (dating myself here), bird flu, ebola, zika, mad cow, and probably several I can’t remember.
  • Reference to personal circumstances when making national trade-offs.  I would say that the number 1 thing that drives me crazy about statists on the Left and Right and which makes me a libertarian is the tendency to impose solutions to tradeoffs on everyone in the country based on how you would personally make decisions for yourself.   If one-size-fits-all public policy decisions are going to be made, I want them to be made in a way that suits me.  For example, a politician in Chicago might say they would never feel comfortable letting thier kids walk to school on their own, so no parent should be allowed to let their kids walk to school alone.  Applying this to COVID, we know there is a large contingent in media, academia, and politics who will say that is is wrong to consider economic damage when evaluating COVID lockdowns.  What do all these folks have in common who tend to be advocating strongest for lockdowns?  They still have their jobs, are still getting paid, can still be productive over the Internet, and are comfortable getting their social interaction over zoom.  Note that these are the same folks that constantly tell us to check our privilege, but then tell us to ignore the economic hardships of lockdowns that they are too privileged to experience.  Only by the most extreme action do the voices of the less privileged who are suffering the most under lock-downs get heard (and even then, like the hair dresser in TX and later in SF, they get mocked by the elite).

Assumptions

  • Trump is so bad that no price is too high to get rid of him.  I have told folks for years that every generation thinks their current era is uniquely politically toxic.  I don’t think we have yet risen even to 1968 levels of discord, but one exception is the hatred for Trump that exists in some quarters.  I personally have never seen anything like it.  The nadir was when Trump mentioned that HCQ looked like a promising COVID treatment and the governors of MI and NV immediately banned HCQ without evidence to make Trump look bad (a desire I assume stems from a perception that Tump is so dangerous and represents such an existential threat that any action to undermine him or make his re-election less likely should be pursued).  A prominent study was essentially made up out of whole cloth to prove HCQ was dangerous and thus Trump bad, a conclusion that should have made zero sense to everyone as HCQ is used by millions every day as a malaria prophylactic.   I find Trump distasteful but trust the American system to limit the damage of tyrants, but many are working from a very different assumption.
  • Humans have conquered nature.  I will confess to having an almost Victorian confidence in progress, but even I accept that sometimes nature throws things at us that are a) not our fault and b) we can’t yet stop.  But throughout our COVID responses there seems to be, particularly in Western nations, an assumption that we should be able to prevent death from this thing — ie that any death should be judged as a failure of our response.  But diseases still kill people.  Last year communicable diseases killed at least 15 million people in the world.  And many of our Western deaths have been among the very old in care facilities where the average life expectancy pre-COVID was numbered in months.

Information

  • Good cause skewing of data, or “fake but accurate.”  Decades ago, there was a stat that there were a million homeless people in the US.  Everyone repeated it as gospel.  Someone tracked it down, and eventually discovered that it was just made up by a homeless advocate who just picked a round large number.  When this was presented to a well-respected reporter on NPR, that the “fact” she was quoting was no such thing, she just shrugged.  She said homelessness was clearly a problem and if the number she was quoting (as a reporter!) was exaggerated, then it was in the good cause of increasing attention to homelessness.  This was the first example I can remember of something that was considered fake but accurate, but there have been many more since.   During COVID, this has caused outlets like Goggle and Facebook to actually censor opinions the tend to be skeptical of the severity of the disease or efficacy of mitigation steps like lockdowns.  They claim to be doing so for a good cause, believing it is better to err on the side of having the public too cautious rather than insufficiently cautious.
  • Asymmetric public exposure to experts.  Throughout COVID we have been told that the experts all say X, that there is a consensus for X.  And sure enough, we mostly only hear X on the news.  But anyone in academia can tell you that this sort of homogeneity of opinion can’t possibly be true.  As in other science, on issues such as mask or lockdown effectiveness or herd immunity thresholds, academics hold a wide range of opinions and there are a wide range of findings in the literature.  But this heterodoxy in opinions never really gets full public view due to media incentives, political incentives, and good cause skewing.  The most extreme voices on the end of the academic scale that support the media’s and politicians’ desire to create fear are selected for public exposure.  Then, these selected academics are retroactively crafted into leading experts.  Any of you folks every heard of Anthony Fauci before this started?  How about whatever expert your governor is using?  No, you had not — these are prominent people in their field but just one of ten or twenty equally qualified persons who could have been selected and presented as experts.  They are then retroactively reinvented not as one of ten folks with a wide variety of opinions but as the one leading true unassailable expert.
  • Social media amplification of tail-of-the-distribution events.  One of the features of social media independent of these incentives is that it tends to spread and amplify tail of the distribution events/risks.  The problem is that there seems to be two personality types in people — one, and I would include myself in this — who are knee-jerk skeptical of such stories.  Did it really happen?  Did A really cause B?  Is this really anything more than one bizarre outlier?  But there is a second type of person, and I would say that they are WAY more prevalent than I would have believed a year ago, who sees a story that someone’s gynecologist’s hairdresser’s uncle claimed to have had heart issues after getting COVID and suddenly “everyone who gets COVID has permanent heart damage!”  Even before the Internet, Americans were very bad at parsing relative risks and now they just seem terrible at it.

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