Thoughts From a Distance #2

16 March 2020

Thoughts From a Distance is a series of daily ruminations written while self-quarantined during the 2019-2020 COVID-19 pandemic. In order to mitigate “corrections” from hindsight, each day’s thoughts are posted on the following weekday with minimal editing.

By Trauma, Alas

A confession: I still live with my parents. While harmful to my pride and marriage prospects, this arrangement may benefit my survival.

See, my mother has the paranoia of a Soviet-era babushka. Our cupboards and cabinets have always been stuffed with canned goods, excess medical supplies, gift wrappings preserved from past Christmases. I have never recalled seeing the back of our refrigerator. Her first impulse towards leftovers was to squirrel them away in the freezer, only to have them reemerge years later when she did not feel like preparing a meal. There wasn’t cash underneath the mattress, but only because that would be the obvious place to look.

These types of habits are unsettling for those who prefer order, the possibility of finding a particular canned good without needed the sponsorship of an archaeology department, and so forth. All the other members of the family had gotten in minor spats with her over it at some point or another.  But when the economy began shutting down and people flooded the markets to buy supplies, we were glad for her peculiarities. We did not have to brave the crowds in order to stock up, facing shortages and markups, because we had prepared in advance. Not that this stopped my mother from making a few additional shopping runs.

My mother’s strategy of excessive stockpiling is a clear example of what Nassim Taleb calls antifragility, a behavior with a positive response to uncertainty and instability. Under normal circumstances, our household paid a minor “fee” for hoarding: messiness, shouting matches, cans expired in a previous century. But in rare crisis situations, my mother’s behavior could be the difference between survival and starvation. The cost of the behavior is small and frequent, while the payoff is rare, but unbounded (you would trade an infinite number of days with messy cabinets for additional years of life). Compare this to someone I once knew who boasted about only having enough food on hand for the week. In a crisis, this person is at best squeezed by the market, and at worst reduced to eating the neighbor’s cat.

I wonder how many “irrational” traits are only revealed by luck and circumstance to be vitally useful for survival.

How did my mother come by such a trait? By trauma, alas. Hers was a difficult childhood. Post-traumatic growth, the oft neglected cousin of post-traumatic stress, helped mold some of her helpful quirks. As I write, our bathtub is full of water, just in case the plumbing goes out.

So when I wonder whether our society will learn from this pandemic, recognize and confront the existential risks exacerbated by our hyperglobalized society, I think it might. But, alas—

If They Plan in Weeks, You Plan in Months

A heuristic: Prepare an order of magnitude beyond what the average person is preparing for. Right now, most people are buying food for the next few weeks; my mother is planting vegetables in the garden.

Airline Bailouts and the Reverse Broken Window Fallacy

As the economy retracts and international travel comes to a halt, President Trump is signaling that he is willing to bail out the airline industry. “It’s not their fault,” he says; “No one could have predicted this.” This is weak-minded thinking. Businesses are not expected to predict the future, but they are expected to prepare for it. A restaurateur is not expected to know whether they will be undone by a change in customer taste, an unexpected competitor, or embezzlement by the co-owner. But they are expected to be prepared for turbulence; we may shed a tear when the restaurant goes out of business by misfortune, but we do not rush to save them with taxpayer dollars.

Change the scale from an individual business to an industry and somehow people lose this clarity. People suddenly become concerned with the loss of jobs, in a way they were not when our lone restaurateur went under. (If I could have any socio-economic principle named after me a la Murphy’s Law, it would be this: Every slack-jawed economic idea will, under duress, rest its laurels on job preservation or creation.) The public becomes so concerned with saving the status quo, they fail to consider whether their generosity is actually an act of heroism at all.

An industry bailout is a sort of inverse of Bersiat’s Broken Window Fallacy. In its original formulation, the naïve observer concludes a window broken by vandals is a gain for society because it creates work for the glassmaker, while in actuality the benefit is illusory; the funds spent buying the new window would have been spent elsewhere in the economy anyways and society is now short a window. A bailout begins with a visible cost, or rather an extortion. Pay a cost or lose an industry. Political leaders pontificate on job losses, the taxpayer grumbles and ponies up. Just as before, we end the scenario back at the status quo as it was before the crisis (be it window smashing or economy crashing) and we deem it a gain for society. But what would have happened if we let the industry collapse?

Let’s assume the industry in question still services a consumer demand; even economic policymakers are not stupid enough to want to keep something like the floppy disk industry alive. The airlines clearly fit this mold. People may not want (or be able) to fly now, but they will once the pandemic is past. The airline industry goes bust: workers laid off, Chapter 11 filed, upper management escapes on their golden parachutes. What happens next? Some combination of the following:

  • Foreign competitors move in once consumer demand revives. They hire domestic staff to run operations (likely from among the recently laid off staffers of moribund domestic industry) and are able to purchase equipment from the recently bankrupt domestic airlines.
  • A private source of capital fills the niche, either by buying out the failing companies, or by purchasing some of their equipment and starting a new company.

In either scenario (bailout or no bailout), we end up with an airline industry. In both scenarios airline employees are likely to face furlough (either from bailed out companies temporarily reducing operations, or functionally the same as the open market niche is colonized by other companies) followed by staff reductions to match slower demand (these reductions will likely better match reality in the no bailout scenario; it’s easy to be generous with the money of others). The notable difference is that in bailout world the existing upper management get to keep their jobs at public expense, while in case of collapse they get to live off their Swiss bank accounts and work on their memoirs.

The Parable of the Broken Window is about unseen consequences. We see the benefit to the glassmaker, not the loss to society. In the Corollary of the Bailed-Out Industry, we see what we have saved at public expense, failing to see that we could have gotten the same benefit for nothing had we left it to private capital.

Apologist who brandish the “too big to fail” argument trotted out in 2008 should be met with this retort: Why should industries large and vital enough to merit public insurance be allowed to run independently? If they are truly so vital to our country that any major perturbation would be untenable, then the airlines should be nationalized, not given a check from public coffers. From my analysis above, it should be clear I think the airlines do not meet the benchmarks for nationalization, and that airline industry will be fine regardless of the fate of individual firms.

Thoughts From a Distance #1

Thoughts From a Distance is a series of daily ruminations written while self-quarantined during the 2019-2020 COVID-19 pandemic. In order to mitigate “corrections” from hindsight, each day’s thoughts are posted on the following weekday with minimal editing.

13 March 2020

History from the Inside


Yesterday, the 12th of March 2020, will remain in my memory as the day Americans realized their lives were about to change. The contingencies of history always seem to beggar belief from distant generations. It seems improbable that two of the largest religions in the modern world arose from the backwaters of Roman Judea and tribal Arabia—but only in retrospect is it clear these particular movements, out of all of their competition through the ages, would emerge ascendant.

If future historians and epidemiologists look with amused confusion on the American chapter of the coronavirus epidemic, they should rest assured that if it did not begin with these peculiar set of circumstances, it would have begun with another set equally arbitrary. As it is, the major morning news on the day the American public began to wake up were the cancellation of the National Basketball Association (NBA) season and the diagnosis of beloved actor Tom Hanks with the virus. The educated perhaps will scoff that this sea change was not ushered in by reasoning or government decree. But those who are blessed (and perhaps cursed) with analytical minds so often forget they belong to a vocal minority; motivation by abstraction is the exception rather than the rule.

I watched, while working as a substitute teacher in a special education classroom, the aides begin the day with jokes and dismissals about the crisis, regurgitated naïve talking points. By lunch, they were worriedly discussing whether they would be paid in the event of school closures.


The Counter-Virus


A fraction of the people in the United States understood the magnitude of what was going to happen. These people coalesced through social media platforms such as Twitter. Those fortunate enough to be connected to the right nodes—my high-value nodes included Nassim Taleb (@nntaleb), Joe Norman (@normonics), Luca Dellanna (@DellAnnaLuca), and Yaneer Bar-Yam (@yaneerbaryam) —gained awareness of information too nuanced and rapidly evolving to make it through any mainstream journo-tainment vector. We saw the first warnings based on the precautionary principle, followed by further warnings based off the developing spread and containment attempts in China, South Korea, and Italy. When the medical system in Italy began to break under the load, we were connected to accounts confirming the risk of secondary and tertiary effects—and how quickly, with inadequate measures, things could fall apart.

Some of us became vocal agents in a spreading counter-virus; I began to argue with friends, coworkers, and relatives who remained unconvinced of the dangers, perhaps convincing a few. If we were lucky, one of those we’d convinced would start spreading word within their social circles. Case in point: I caught my mother on the phone with her brother, working to debunk the “less dangerous than flu” fallacy. I suspect our counter-virus is less contagious than our adversary, but thanks to social media we had less friction across our transmission vectors. Time will tell whether our spread was rapid enough to make a difference.

In these opening days, when there still appears to be time to flit away on such nonsense, there has been talk about the dangers of the “infodemic”. While the suggestion that misinformation about the pandemic will spread through social media is real, the cure is far worse than the disease. The “infodemic” perspective does not acknowledge the potential positive effects that can come out of a distributed communications system, such as the precautionary counter-virus. I cannot imagine how much further behind our country’s response would be if we had to rely solely on mainstream media outlets and official channels.


Vindication Feels Better with a Black Eye


On the 12th of March I arrived for work at a Southern California high school, determined to assess the staff and administration’s preparedness for the coming crisis. There was also a staff stage performance (for charity purposes) scheduled for the following week I intended to get cancelled or postponed (I guaranteed my resolve by refusing to learn my lines).

The consensus was confusion. Teachers had no directives on distance learning—the first template I saw was from a diligent coworker who developed it independently. District workmen were rapidly installing new hand sanitizer stations, yet I was sure the school would be closed by Monday. Most dishearteningly, a friend who worked there had just returned from a two-week conference in Switzerland (with a sightseeing stopover in France), just making it past the European travel ban. She claimed to have not been screened upon her arrival and walked over to the school’s front office—seemingly as an afterthought—to see if they had any concerns about her returning to the classroom. She seemed a little hurt when I suggested she should be self-quarantining; evidently the virus “panic” had been the butt of frequent ridicule from the conference attendees.

I called out of work today, Friday the 13th, and told my employer I would not be returning next week either. By the end of the day, every district in the county had shuttered its schools.

While the risk of community exposure for an additional day was non-trivial—especially given I live with a high-risk individual—the tangible payoff from my decision was aligning my beliefs and actions. I knew intellectually schools needed to close as quickly as possible, the upside of a few extra days of class was dwarfed by the potential downside of community spread. But my grim confidence gained whatever savor it could from the day’s wages I forfeited. Hunger may be the best sauce, but action is the only sauce for one’s ideas and values.


Stage Nerves

I have felt a tension and sharpness within me these past days. I can feel it clearly in my chest as I have laid in bed each night. It isn’t panic, or fright. It is the nervousness of the actor waiting for the thunder of hands, great gouts of stage light, the trigger of dialogue.