Some optimism about America's Covid response
A social cohesion disaster but an innovation success story
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Before the main item, a quick bit of followup on raising policy ambition in Blue America:
The Metropolitan Transit Authority, which serves New York, says that absent federal bailout, it may need to lay off 9,000 workers and drastically cut subway service. The federal government should definitely be providing state and local governments with more aid. But did you know that the MTA employs over 3,000 subway conductors when almost every other subway system in the world (London, Paris, DC, Chicago, etc.) operates trains with only a single driver and no conductor? Wouldn’t reform be better than drastic service cuts, especially if you’re doing layoffs anyway?
New York can do better than this.
America and Covid — some good things are happening
Now for the real stuff: to make a non-original point, America’s response to the Covid-19 pandemic has been dismal. The United States is not a world leader in social cohesion, and Donald Trump was a very poor choice to serve as president.
Specifically, we failed at non-pharmaceutical interventions (NPI) like social distancing, mask wearing, risk communication, and prioritizing socially valuable things (school for younger kids) over economically profitable things (bars). But we are home to one of the vaccine leaders (Moderna) and half of the other (Pfizer) and to the leaders in the monoclonal antibody world. So while 2020 is going to go down as a black mark on America’s global reputation, I do also think that in 2021 the world will be a much better place thanks to the efforts of American companies, American researchers, and to a US government that put a lot of funding in place to help make this stuff happen.
And more broadly, while this has been an awful year that’s highlighted incredible systemic failings in our politics and society, I do think it should make us more optimistic over the medium term about American life across a number of dimensions.
Tech finally proves its worth
The great economist Robert Solow quipped in 1987 that “you can see the computer age everywhere but in the productivity statistics.”
There were these tremendous advances in microprocessors happening, and by the late 1980s more computers were popping up in offices. Technological progress seemed to be accelerating. But there was no evidence of that in economic growth.
Then in the late 1990s, productivity suddenly did surge as big box stores found ways to apply information technology to manage their inventory more efficiently. Since computers kept getting better and better, there was a surge of optimism that finally the Solow Paradox was over. But instead it came back and in the early 21st century, productivity growth slowed back down again.
Smartphones feel like a technological miracle, but the period since the iPhone’s introduction in 2007 has been one of across the board slow productivity growth. And on an intuitive level, a lot of people were tempted to dismiss big tech as creating fortunes for founders without really doing much of anything useful.
I think that critique might hold up for Facebook, but during the pandemic the digital technology world has really proven its worth.
Zoom school is excruciating, but for many families it’s clearly better than nothing and would have been totally impossible in the recent past (Zearn Math is kind of great imo). White collar work has shifted to remote, and it’s been at least adequate and some people like it better. Vulnerable households have relied on Amazon’s logistical capacities and new grocery delivery startups. Restaurants have tapped into platforms like Toast and Uber Eats to swiftly create delivery and takeout services they’d never planned on offering. My kid hasn’t been able to see his grandparents or his aunts and uncles in months, but they’re present on FaceTime. Even something genuinely trivial like streaming Netflix, Amazon Prime, Hulu, and Apple TV has been a godsend during a period of reduced socializing.
All this digital tech is not going to show up in a clear way in the productivity statistics because the pandemic itself messes all the data up. But I think it’s clear that if we had to weather this pandemic with the tech of 20 years ago, we’d have had worse public health outcomes and worse economic outcomes. Two decades’ worth of internet and mobile tech has proven its value, and more good things are to come if this period of experimentation ends up helping to accelerate the development of widely used remote work, telemedicine, and online education models.
Innovation is underrated
“Innovation” is such a ubiquitous buzzword that people of good taste are annoyed by it and likely to deem it overrated. But the reality is that while “innovation” may be an annoying buzzword, innovation is really good.
Even if you take a place like New Zealand that really crushed Covid from an NPI point of view, they’re still really going to benefit from a vaccine that will let them open their country up to travel and give them a stronger world market to sell their exports into.
And of course it’s not just the United States that has failed at NPI-based Covid suppression. Lots of places, including Canada and most of Europe, seem to me to have done better. But they are still stuck in a paradigm where plenty of people are getting sick and dying, and where containing the virus and preventing deaths from getting out of control requires costly restrictions on people’s activity. Indeed, absent a vaccine, the strong NPIs of places like New Zealand actually wouldn’t make sense since the country presumably doesn’t want to stay cut off from the world forever. The “herd immunity” cranks from the Hoover Institution and the Trump White House are wrong, but the reason they are wrong is that we are developing vaccines rapidly. If we weren’t, then a rapid drive to herd immunity really would be better than suppression and tons of deaths would be inevitable.
And what’s particularly great about these new vaccines is they’re the fastest we’ve ever seen developed (the previous record was four to five years), and they’re based on a whole new kind of vaccine technology. So we’re not only getting new vaccines but new ways to make vaccines, which is really cool.
In American politics we argue a lot about how much we pay for health care treatments and how those payments should be allocated. Those are important questions — something I can certainly attest to as a new customer on the Affordable Care Act exchange. But what everyone really wants is not to “get health care” but to get cured or some kind of prevention. When you actually see that progress, it’s inspiring.
More broadly, the extent to which the panoply of both big tech companies (Microsoft, Apple, Google, Amazon) and smaller startups (Zoom, Slack, DoorDash) are in fact making our lives better in tangible ways probably deserves to take some of the edge off of the kind of anti-billionaire sentiment that holds that even billionaire charity is bad. There are lot of perfectly reasonable tax and regulatory debates to be had about all of these companies, but on net it is good that people are inventing new things and that their founders are rich on some level because their products and services are useful.
But there’s more to the story than just rah-rah capitalism.
Immigrants and research are underrated
One of Moderna’s cofounders is an ethnic Armenian born in Lebanon whose family moved to Canada when he was a teenager. After college, he came to MIT to get a PhD. Moderna’s CEO is French and also moved to the United States for graduate school. The Pfizer vaccine was developed in partnership with a German company called BioNTech, whose co-founders are a husband and wife team of ethnic Turks, both born in Germany to immigrant parents.
These kind of gains are badly overlooked by “populists” who think you can promote economic equality by starving the labor market of immigrant workers in some kind of desperate plot to trick central banks into sustaining full employment. Full employment is really good. But the external gains to innovation are gigantic. And while you can boost innovation in certain predictable ways by letting foreign students come here to get STEM degrees, the second-order effects of things like a family relocating from Lebanon to Canada or a factory worker from Turkey having a son who goes on to found a major research company are big.
By the same token, one of the big takeaways from the vaccine sweepstakes is that government sponsorship of research can be a really big deal.
The Pfizer people made a big deal out of the fact that their program wasn’t technically part of the Operation Warp Speed effort that the Trump administration put together. But they are very much part of the program where both the US government and the European Union made large advance agreements to purchase vaccine doses. That guarantee makes a big difference to any private sector undertaking.
And to me it’s a proof of concept for the kind of thing we could be doing in the clean energy space. Say an electric car that meets such-and-such specifications would get guaranteed orders to serve as government fleet vehicles. Or pre-commit to buying electric buses for schools and transit agencies. Nuclear micro-reactors for use on military bases or as backup systems for hospitals. The assurance that a market exists is a big stimulus to private investment, and when strong social consensus exists that innovation would be beneficial, we can get it done.
One difference, of course, is that we don’t have a pro-virus lobby.
Even the companies like Zoom who objectively would benefit from slower vaccine development are not run by executives sufficiently sociopathic to act on that reality. The climate situation is different. Lots of normal people fear empowering environmentalists who’d happily sacrifice economic growth and living standards to combat climate change. But there are also lots of people involved in the coal, oil, and gas industry who oppose clean energy for selfish reasons that have nothing to do with the broader economic outlook. So while we both could and should mount a vaccine-esque push for clean energy research and deployment, we so far have not. Hopefully, that will change as more people look at the success of the pharmacological aspects of America’s Covid response and see that directed research programs really do work.
On your tech thing:
Your antipathy towards Facebook has been very well documented, but at this point it's getting a bit silly how you go out of your way to deny credit. I work on Messenger, and I am proud that we've maintained and grown reliability as a means of communicating despite a huge spike in usage. We and Whatsapp make up a huge percentage of the global messaging market, the two most used messaging platforms in the world, We are also a pretty sizable portion of the global Real Time Communication (calls and video chat) market. The usage of both of those shot straight up when covid started, and despite having to stop data center production and roll out whole new covid themed products for better RTC it has all gone very smoothly in messenger. The WhatsApp people are similarly quite proud of their work, and rightfully so.
You can do the "Facebook newsfeed is bad" takes and frankly I don't disagree. But we are a large company that does a lot of things, and a lot of very smart people worked their asses off to ensure some very useful, market leading products worked even better with hugely increased usage.
Speaking to the IT bit, I live in a remote, isolated rural county in the northeast corner of Minnesota, between Lake Superior, Canada and Boundary Waters. We have 5,200 people total spread over a huge area. More than 10 years ago, we secured a grant-loan package under Obama's stimulus program to develop a fiber-optic system that would bring high-speed broadband to everyone on the electrical grid. Until then, we all depended upon undependable dial-up or satellite with its latency defects. Fortunately, we did not have a commercial provider to protest, so we were given the go-ahead. It was actually a bad "stimulus" because it took way too long for that. But it provided us a level of broadband service that is the envy of much of Minnesota. We enjoyed it in a prosaic way until the pandemic hit. All of a sudden, folks in the Twin Cities discovered they could work from the beauty and relative safety of Cook County. Plus, distance learning, while not terrific, was at least not a technological challenge. It is too early to tell what the lasting impact of covid+broadband will have on our community, but I suspect it will change us in some important economic and societal ways.