Tony Yates Profile picture
17 Oct, 18 tweets, 3 min read
Relative to where the government was at the time of the first lockdown in March, it seems much less enthusiastic about 1) doing what is necessary to stop the virus spreading and 2) providing compensation for those affected and to encourage them to comply with new meaures.
This is perplexing. The opposite should be the case. Relative to March, we are in some ways in a much better position to accomplish this.
To begin with, even at this late stage, things are not as bad as they had been allowed to get by the 23 March. It therefore would not take such draconian measures, or for so long, to get control again.
Second, the prospects for a vaccine and in short order are much much brighter than they were at the point we embarked on the first lockdown. This means that social distancing and fiscal support can proceed with more certainty that there is an end in sight.
Third, much knowledge has been gained by other countries' experience of test trace isolate, and also by our own unfortunate experiments. The upside of the disaster is that it doesn't have to repeat itself, and we have good precedents to copy now.
Fourth, a dramatic success has been the spread of remote working, something we were by no means sure could work when the first lockdown began. This should tilt the calculation a great deal.
News about the seriousness of the disease itself is mixed; therapies and knowledge of how to treat critical patients may have cut mortality a lot; but there is an emerging issue of long-term symptoms for a significant chunk of those who don't die.
The working assumption is still that immunity for those who have been infected would not be long term. This should put improvements in the one-time mortality rate into perspective.
As @toxvaerd1 and @giannitsarou point out in one of their papers, waning immunity acts very like a multiplying up of the one-time mortality rate in the cost benefit analysis of a lockdown.
FIfth, people have got used to and learned about social distancing. A new lockdown does not threaten outright panic and distress in the way that policymakers might have worried in the run up to the first one.
Sixth, we have learned something about what measures are needed and work and what are not and don't. New measures don't need to be the same blunt hammer.
There are some things weighing on the other side:
[to be resumed in a short while...]
OK, coffee made: weighing against are 1) compliance and fatigue. Fatigue was inappropriately invoked last time by SAGE in delaying a lockdown, [which still baffles me] but perhaps it's a more convincing argument this time? Likewise compliance. Post Cummings particularly.
But, though these factors might weaken a renewed effort to suppress the virus, they might not! And a weakened effort might yet be enough.
Also weighing against is 2) we are a bit closer to the fiscal limit. But not much closer! And it's still almost certainly a long way off! And: the consequences for that limit and the tax base, of letting the virus go.
I forgot Brexit. Weighing in favour of really getting to grips with this is that end of transition is now upon us. It should not need explaining why. And vice versa: weighing in favour of an orderly exit is that we will either be straining to damp or suffering the 2nd wave.
So, in the unlikely event that anyone in the policy formulation process is reading this - have strength. The case is much stronger for knuckling down now, the sacrifice required much less.

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More from @t0nyyates

17 Oct
OK, I'll bite. This is an excellent question, not just a genuine one.
There is not a mechanism in place to write off most of each other's debt. There doesn't need to be.
Not all governments are borrowing, for starters. The ones that are are borrowing from their citizens, and foreign citizens, who have stuff to lend.
Read 42 tweets
17 Oct
What would be a short term crisis business plan to get test/trace/isolate working again?
Whatever the behind the scenes qualities or lack of them, I think it would have to involve the letting go of Dido Harding, and the termination of the existing contracts to Serco. To instill confidence that there was a recognition a fresh start was needed.
Never having had a business, or written a plan, this task is not my forte. Also complicated by a lifetime, until now, of lacking curiosity in logistics.
Read 5 tweets
16 Oct
It’s a cruel irony that when policy makers most need high quality data - in the midst of an economic crisis - they are least likely to have it.
New things happen to people [covid] and you have to collect data on them from scratch, developing new systems and standards.
Government measures to react to the crisis affect national accounts and labour market status, close markets for goods, confusing income, employment, unemployment, welfare and price data.
Read 4 tweets
15 Oct
I have mixed feelings about the @ecb moving to introduce Green criteria for eligibility of corporate bonds in its QE asset purchase program.
The urgency of climate change mitigation policy gets ever greater, so, on the one hand: good, a new tax on brown [as in not green] activities.
The ECB is saying this because it thinks greening QE is a reasonable reading of the Treaty requirements of it to support the EU's economic policies.
Read 22 tweets
15 Oct
Brilliant letter. Since the optimal policy response to a pandemic is also an economic policy, and not just a health policy, I hope that there might be a consensus forged across both epidemiology and economics too. I for one concur with the prescription in this text.
Really, the matter also draws in political scientists. Because both the prescribed poilcy and the do-nothing counterfactual entail novel and dramatic political-economic forces.
The do-nothing policy envisages a hefty multiple of the circa 60k deaths we have seen; we talk often about how the financial crisis scarred attitudes towards the status quo - how would 200k deaths leave its imprint on politics and civil society?
Read 8 tweets
30 Aug
1. Covid has shown us that we need a bigger, better, state. 2. Taxes will eventually have to rise to pay for that.
3. Many other economies with high GDP/head function well with higher taxes, larger states, so 'high tax damages business', is, to a point, a canard.
4. Macro stabilisation priorities mean that it is too soon to be thinking of raising taxes yet.
5. Not the case here, but often on the right the 'high tax will damage business' is just cover for 'small state means the rich keep more for themselves'.
Read 5 tweets

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