Welcome to Plugging the Gap (my email newsletter about Covid-19 and its economics). In case you don’t know me, I’m an economist and professor at the University of Toronto. I have written lots of books including, most recently, on Covid-19. You can follow me on Twitter (@joshgans) or subscribe to this email newsletter here.
I write these newsletters ahead of time so that they will arrive promptly at your breakfast table every other morning. As today’s newsletter is scheduled for November 4th, I had a problem: what to write that is both relevant but also independent of the outcome of the election. I decided to lean into the problem.
This newsletter has often examined how social distancing and other precautionary actions that people might take are largely driven by individuals themselves with government mandates being ‘icing on the cake’ rather than having a big effect themselves. In so doing, I have cast doubt over whether the ‘policy’ of achieving herd immunity is really a feasible policy at all.
Just to recall what that policy is: herd immunity involves getting approximately two-thirds of the population infected with Covid-19 as quickly as possible so that the virus dies on a natural course with around 87% of the population having had it. To be sure, there are costs of this in terms of fatalities among the vulnerable but as some, such as this group behind the Great Barrington Declaration, argue, that is, apparently, ‘easily’ solved by locking those people out of harm’s way for the duration. The purported benefit is that we get over the crisis quickly and get back to normal, especially in terms of economic, life. And if a vaccine can speed that up, then it is all the better. Now, most countries have opted not to pursue this strategy but, near as I can tell, it is the current policy of the US government and, I am hedging here, possibly the future policy too.
Today, I am going to try and be helpful and say, well, if you want to do all that, what would be the best way to go about it? This is something I hadn’t previously given a lot of thought to but, as a dutiful economic policymaker, I have to ask “if that’s what you want, what does the scientific evidence say about the policies you might pursue?”
The challenge in getting to herd immunity is, of course, behavioural; namely, the evidence, thusfar, is that the vast majority of people do not want to get Covid-19 and risk their lives for the sake of overall economic performance. For instance, this paper by Martin S. Eichenbaum, Miguel Godinho de Matos, Francisco Lima, Sergio Rebelo & Mathias Trabandt found that:
… older consumers reduced their spending by more than younger consumers in a way that mirrors the age dependency in COVID-19 case-fatality rates. This differential expenditure reduction is much more prominent for high-contact goods than for low-contact goods and more pronounced in periods with high COVID-19 cases.
Suffice it to say, this is going to slow the path to herd immunity. Even if governments do the obvious first steps such as having no restrictions on business openings and large gatherings and do not mandate mask-wearing, people are going to take matters into their own hands. This will, as I have argued, cause the viral reproduction rate to hover around 1. Even if the US could manage 150,000 new infections today (50% more than the current level), it would take around 1,500 days or 4 years to reach herd immunity. This would mean that the economic slump would continue into 2025. I mean, that would be an unimaginable long-term economic hit that would make the Great Depression look like a walk in the park. Not to mention all of the old folks locked up for that period of time.
Some people have argued that herd immunity, as a policy, is one that respects freedom. But as I have just argued, if you allow people free choice, then you won’t get the benefits of that policy so that is surely not what they mean. Instead, you need a highly activist approach to getting people infected quickly. If you want to get out of this in a year, then you would need to have 600,000 infections per day in the US. That is quite a challenge.
Let me suggest and evaluate some options:
Mask prohibitions: masks should be outlawed. As is well-known, they have the effect of reducing the viral spread when people have contact with other people. That said, the economist in me has to point a problem. One of the things mask-wearing does, especially if it is widespread, is give people the confidence to go out and do things. If you prohibit them, then people might adjust their behaviour and stop having contact with other people. That not only has an economic hit in the short-term but also slows the rate of infection. That said, you can get some marginal spread by banning them in places where people have no choice such as prisons, hospitals and schools.
The DMV ploy: To really spread the virus you want people to congregate for long periods of time. Clearly, having large gatherings where people shout a lot indoors for many hours will help. But the government is in a position to accelerate this. It should make a requirement that all individuals have to visit the DMV over a period of time (say a week) and fulfil some requirement. It doesn’t matter what that is but the more useless the better. Then people will queue up indoors at DMV offices and engage in lots of sighing, deep frustrated breathing and large grunting exhaling. I think the DMV is uniquely suited for this but the post offices in some places may be an alternative. (That said, National Spin Class Week might be another option if you have the capacity.)
The Ostrich maneuver: don’t test anyone for Covid-19. Testing only means you know who is infected and there will be a temptation to isolate those people. That is the opposite of what you want. You need those people to continue their asymptomatic spread. That said, if you are willing to test people frequently, then you can turn this into an advantage by taking those people when identified and employing them as DMV helpers who can stand at various points in the queue and talk with frustrated others. Maybe even sing a little.
Secret vaccine achievements: don’t tell anyone you are close to a vaccine. I can’t stress how important this is. If people think they can get out of this without getting infected, they will take pre-cautionary behaviour. So keep all of that secret. I’m not saying don’t use the vaccine when you have it (I’m not a lunatic) but, for the sake of the policy, do not give people any hope. Fatalism is your friend.
Hold more political rallies: rallies have proven to be an excellent accelerant for Covid-19. It is almost as if the virus pre-infected people to have them. A new paper by Douglas Bernheim Nina Buchmann Zach Freitas-Groff and Sebastian Oteros showed that 18 Trump rallies alone resulted in 30,000 additional Covid-19 infections. Now, this is a leader doing what was necessary to accelerate the population to herd immunity. But it is limited. Apparently, the people attending these rallies were people likely to already be doing their best to catch Covid-19. You need to engage the cautious segments of the population. Also, sadly, election season is over which makes it hard to find the same reason for gatherings. That said, in history, there are many leaders who have found ways to force the population into large rallies and these studies show that those policies could accelerate infections. Historically, those have tended to be outside and involved a heavy military component. They also occurred before people could just watch the rallies on TV. But they do have lots of chanting. The best approach would be to have them inside maybe in required viewing stations in lots of smaller ventures holding 1,000 people each like schools.
Pay for play: this was a policy innovation of the UK government who paid 50 percent of restaurant checks in the summer (up to ten pounds). A recent study by Thiemo Fetzer who showed that it was responsible for 8 to 17 percent of new Covid-19 infections during the month of August. And this was a policy that only subsidised eating for Monday through Wednesday each week at a time when dining could take place outdoors. Suffice it to say, this would be one of the more effective levers for your activist herd immunity government.
Isolate those who are now immune: as per usual, the above suggestions are ones an economist would come up with and an epidemiologist is likely to point out that this doesn’t get to the core of the issue. So let me put on the hat of an epidemiologist now. The problem is that as you go to herd immunity, the rate of growth of infections starts to slow down. But the herd immunity threshold is the target and to get there quickly you need to understand why it is slowing. The answer is simple: people are interacting with more immune people that mutes all of the good efforts a government would be doing in pursuing options 1 through 6 above. Thus, what you want to do is take immune people and isolate them so that they keep the pool of people who are free to move ‘pure.’ At this point, as an economist, I would raise the objection that if people thought that by getting infected and recovering from Covid-19 would lead to their isolation for many months they might try to avoid infection. But an epidemiologist would point out that is hard to model and tell me to stay in my lane. In any case, so long as we don’t publicise it too much, isolating immune people or locking them in with old people to keep them company will likely help.
I don’t know if those things will be enough but they are an obvious place to start.
Also, if last night has turned out differently and the US no longer wants to achieve herd immunity, then just take everything I have just said and do the reverse.