As Matt Yglesias recently pointed out, the term ‘panic’ has a negative connotation:
I’m not going to quibble with Yglesias’s claim, as he correctly describes how people think of this term. Nonetheless, I do insist that panic is often appropriate, if we define ‘panic’ in the way that the state uses the term. Indeed throughout history, states often justify evil policies by claiming that they are lying to the public in order to prevent “panic”, as if the state is somehow smarter than the public. In most cases, the opposite is true.
Lots of old people living in the New York/New Jersey area died because the Trump administration (and to be fair, local Democratic leaders as well) tried to prevent panic. Here’s Politico:
The emails and transcripts detail how in the early days of 2020 Trump and his allies in the White House blocked media briefings and interviews with CDC officials, attempted to alter public safety guidance normally cleared by the agency and instructed agency officials to destroy evidence that might be construed as political interference.
The documents further underscore how Trump appointees tried to undermine the work of scientists and career staff at the CDC to control the administration’s messaging on the spread of the virus and the dangers of transmission and infection. . . .
Several former high-level Trump officials who worked on the administration’s response have said publicly after the fact that they did not want to panic the American public.
The specific worry of the Trump administration was that panic would cause people to stop going out in public and pull back on consumption, perhaps driving the economy into a deep recession. Eventually the truth came out and the public did exactly what was feared. And not just in the US, but also in most other countries, including Sweden. By this time, however, thousands of older residents of nursing homes in New York and New Jersey had already become infected and needlessly died.
My mother and stepfather are still alive, because their apartment complex in Tucson (which caters to the old) did understand the risk of Covid in time to panic, to take precautions. As a result, only a handful of the hundreds of people in their complex became infected, right up until today.
I’ve read a number of articles where the reporter interviews doctors and nurses who have treated Covid patients. The doctors and nurses often complain that even many people in intensive care claim that Covid is just a hoax. A bit more panic would have been helpful for those patients.
On the other hand, last spring I predicted that just as we underreacted at the onset of Covid, we would overreact toward the end of the pandemic. Sure enough, excessive Covid restrictions remain in place in many areas, despite the widespread availability of vaccines. So not only can we have too little panic, we can also have too much panic.
I always try to adopt just the right amount of panic.
READER COMMENTS
john hare
Nov 14 2021 at 5:58pm
I quibble with using the term panic as you are using it here. you seem to be terming some level of overreaction as panic. I tend to define panic as a mindless reaction in a random, mostly unhelpful manner that more often than not makes the situation worse. I have never seen panic work in a positive direction. It is a drowning person pulling the rescuer under.
Panic is standing on the brakes when they are clearly locked up and skidding you into trouble. Overreaction might putting the car into the ditch to avoid the pile up. Rational thought might have been to use as much brake as is effective while controlling the care out of harms way if possible.
Scott Sumner
Nov 14 2021 at 11:07pm
I’m walking through Central Park and suddenly hear gunshots to my right. I panic and start running in the opposite direction, away from the gunshots. Was my panic sensible? I say yes.
In this post, I argued that what the government calls “panic” is often a rational response to risk.
nobody.really
Nov 15 2021 at 11:53am
To refine the idea: Yes, panic often entails unhelpful public reaction–but often NOT random reactions, but predictably unhelpful reactions. Sumner acknowledges this dynamic when he remarks, “last spring I predicted that just as we underreacted at the onset of Covid, we would overreact toward the end of the pandemic. Sure enough….”
And this raises issues for public policy. If you can predict that a panicked public will create a tragedy-of-the-commons, what should policy makers do?
If you receive a credible threat that someone has planted a bomb in a packed auditorium, should you announce this fact over the loudspeaker? Or should you invent some plausible lie to get people out of the auditorium quickly but calmly (e.g., a CO2 leak)? Sumner seems to think that withholding the truth would be arrogant, acting “as if [you are] somehow smarter than the public.” And, to be sure, the bomb might go off as people orderly leave the auditorium, killing many. But telling the truth might lead to a stampede for the doors that might result in fewer people making it out before the bomb goes off, while also resulting in people getting trampled. In retrospect, no one will be able to say which policy would have achieved the better outcome.
Fauci initially downplayed the merits of wearing masks. Perhaps this reflected his sincere views at the time. Or perhaps it reflected a desire to avoid “panic” buying in order to preserve the then-limited supply of N95 masks for healthcare workers. Assuming the second hypothesis, can we conclude that the strategy resulted in more deaths than it avoided? I can’t.
Scott Sumner
Nov 15 2021 at 3:19pm
“Assuming the second hypothesis, can we conclude that the strategy resulted in more deaths than it avoided? I can’t.”
Yes, we can. Fauci doesn’t understand that it’s not a zero sum game. (Economics is not his strong suit.) More demand for masks will bring forth more supply. There were mask assembly lines that were not even being used during 2020 because of a lack of demand.
nobody.really
Nov 15 2021 at 3:28pm
Cite? I know an exhausted engineer who works in the division of 3M that makes N95 masks, and will be astonished to hear this.
Scott Sumner
Nov 16 2021 at 8:58am
https://www.washingtonpost.com/investigations/in-the-early-days-of-the-pandemic-the-us-government-turned-down-an-offer-to-manufacture-millions-of-n95-masks-in-america/2020/05/09/f76a821e-908a-11ea-a9c0-73b93422d691_story.html
nobody.really
Nov 16 2021 at 1:55pm
The WaPo article is gated; can you summarize?
Otherwise, I’ve seen similar stories elsewhere, including here:
What conclusions could we draw from that?
1: This article says that HHS declined to buy masks–not that the manufacture declined to make masks; it rather suggests the contrary. In any event, are you arguing that the US experienced a shortage of masks because the all-knowing government failed to intervene, leaving issues of supply and demand to the poor little marketplace?
2: Recall, we’re discussing the idea that Fauci wanted to preserve the supply of masks for health-care workers, and thus tried to avoid triggering a surge in demand from the public. What interest would Fauci have in discouraging manufacturers from adding to the supply?
3: Finally, your thesis–“More demand for masks will bring forth more supply”–is obviously true, which explains why the current boom in demand for goods has been met with an equal boom in supply. Oh wait–that’s not true. Surges in demand have outrun the corresponding surges in supply, resulting in short-term (?) shortages (and inflation). Likewise, when people touted Chloroquine and Ivermectin as treatments for Covid, the surge in demand resulted in shortages and hardship for people seeking these drugs to treat malaria, lupus, rheumatoid arthritis, and parasitic infections.
Given that Fauci sent his e-mail two days after China banned mask exports (constricting supply), trying to manage demand seems like a reasonable (if still hypothetical) strategy to me.
nobody.really
Nov 16 2021 at 12:54am
Update:
Was there idle capacity for mask production? Yes: At a minimum, 3M had built “surge” capacity into their production facilities, based on their experience with managing the Ebola outbreak.
And on January 21, 2020, based on the surging demand for masks in China, among other places, 3M announced that they would put their surge capacity into production, and directed their production employees to begin working overtime. But they would find even this capacity inadequate, and build an entirely new production facility in Aberdeen, SD.
On February 3, 2020, China banned the export of face masks and other medical equipment, thereby restricting supply throughout the rest of the world.
On February 5, 2020, Fauci responded to a private e-mail query by downplaying the advantages of wearing a mask while traveling. The e-mail was disclosed through a Freedom of Information Act request, and publicized on Instagram on June 2, 2020.
It’s hard to imagine that a private e-mail from Fauci on February 5, publicized on June 2, had much bearing on production decisions. If Sumner has identified people who lack an understanding of economics, it isn’t Fauci; it’s those people Sumner cites who elected to sit on their idle production capacity for N95 masks throughout all these events.
Scott Sumner
Nov 16 2021 at 6:39pm
There was a company in Texas with unused mask production lines. They tried to get the government interested in ordering enough to get the older (and more expensive) production line running, but had no luck.
And you are completely wrong in assuming that more demand doesn’t bring forth more supply. Recent supply of goods in the US economy is way above trend (despite shortages), precisely because the extra demand has led to rapid growth in quantity supplied.
Unfortunately, the government often slows the supply response with counterproductive rules against “predatory pricing”.
nobody.really
Nov 17 2021 at 3:59am
I had intended this question to be rhetorical. But then Sumner states:
It would be useful to know a time-frame for this account. But in any event, what factors discouraged the private sector from purchasing masks from this producer–and wouldn’t those same factors justify government in making an identical decision? (Maybe only government could achieve the necessary economies of scale?)
And you are completely wrong in assuming that I have made this assumption; this issue is not if, but when–and in assessing the cost of any delay.
Yup. And Honeywell and 3M had chosen to expand production of N95 masks before Fauci ever sent his e-mail on February 5, 2020. So I have little doubt that “the supply of [masks] in the US economy is way above trend,” too, Fauci’s e-mail notwithstanding. But the question was about identifying a strategy for securing a supply of masks for health care workers during the early “bend the curve” phase of the pandemic.
Absolutely true. Absolutely regrettable. And an absolutely powerful argument for Fauci to try to manage demand as well as supply.
Put yourself in Fauci’s shoes: You know that health care workers are going to have an increasing demand for masks. You know that the US has been hit by a supply shock from China. You likely know that 3M and Honeywell have already thrown themselves into full production mode. And you know that policies at both the state and federal level–policies you don’t control–will impede market forces from ramping up production to the same extent as an unregulated market. If Fauci had encouraged the public to go buy up masks on January 5, 20202, would that have caused the growth of production to outstrip the growth of demand during the early “bend the curve” period of the pandemic?
Health care workers are about 14% of the US population. In the short run, would it have been optimal for them to compete with the other 86% of the population (doubtlessly including some speculators) for masks?
Well, that’s the nature of counter-factuals: Anything’s possible.
Someone was chiding me on this blog for comparing libertarianism to religious faith. It’s not a fair comparison; people sometimes acknowledge a modicum of doubt about their faith…. 🙂
(p.s. The NYT had a story about one of the challenges of the mask industry: It’s boom and bust. During pandemics, people invest in production capacity–which is then stranded when the pandemic subsides. This might be economically viable if firms could engage in “price gouging,” but as noted, governments often bar this practice. So maybe there is something atypical about this industry that would justify atypical strategies/public policy.)
AMT
Nov 17 2021 at 1:42am
Well, even accepting that more demand for masks will increase supply, that doesn’t actually show Fauci was wrong, because the timing is critical. I was certain when he said people didn’t need masks that this was clearly to maintain adequate reserves for health care workers. If it takes even just a month too long to ramp up supplies, it could be a disaster. Imagine the chaos if the vast majority of health care workers didn’t have masks and all got sick. We would have been far worse off. I can easily recall how empty grocery shelves got, and finding that it was impossible to find any masks (either n95 or surgical) on the shelves for about a 3 month period when the advice changed.
Honestly, if you read that article carefully, it’s not even possible to buy Bowen’s story. He says it would be “very expensive,” to produce the masks. Then he says, “my phones are ringing now, so I don’t ‘need’ government business.” Then, surprise surprise, six months later his production lines are still dormant? He was clearly lying (buy now before it’s gone!!!!!!), and trying to charge extreme prices because he could smell a disaster/opportunity coming, but he was trying to charge too much. Not just Americans, but nobody was willing to pay his price. “The company was just extremely difficult to work and communicate with.” “But the reality is [HHS] didn’t have the money to do it at that time.” Yes, the article doesn’t state his price, but the fact that his supply lines were still idle in the summer tells you all you need to know.
And still, could this ONE manufacturer even produce nearly enough supply anyway? He claimed we would need a stockpile of 5.3 BILLION. Just how many months would it take him to get there at 7 million a month? Only a little over 757 months…Yeah, THIS single manufacturer sitting idle because he charged too much for anyone in the world to pay had essentially nothing to do with the mask shortages.
So, if there was a far larger, earlier shortage of masks before any other sources could fill the void, it could have been far worse for health care workers, and thus, anyone needing health care as well. Therefore, Fauci would be very likely correct in trying to keep people from buying them up early on, given how extreme the shortage was initially. The article you cite for support actually proves the strength of Fauci’s strategy. Plus, does Fauci even have much, or anything, to do with the supply side here?
And even if it might not have been optimal in the long run if it hurt public trust too much, that would just be a calculated risk that ended up failing. I wouldn’t beat him up because you think ex post that it wasn’t the best option. It would be like saying the manager of an MLB team was an idiot anytime they use a pinch hitter that strikes out, or saying someone who won a lottery made a great cost-benefit analysis deciding to buy the ticket.
AMT
Nov 17 2021 at 1:44am
Sorry, my formatting disappeared faster than Bowen’s alleged “customers.”
Matthias
Nov 14 2021 at 8:41pm
Alas, the vaccines available to the general public don’t seem that effective at stopping the spread of the delta variant.
Singapore has 85% vaccination rate, and 20% of those have even gotten third booster shots, but we still have many cases of covid.
Scott Sumner
Nov 14 2021 at 11:09pm
Yes, but Singapore’s death rate per capita (so far) is less than 5% of the US rate, so it could be much worse.
rsm
Nov 15 2021 at 12:36am
《 A bit more panic would have been helpful for those patients.》
What if some of us respond to your panics by doubling down?
Does your panic at gunshots increase my risk of being stampeded, should I panic too?
Scott Sumner
Nov 15 2021 at 3:21pm
I’m certainly not claiming that panic never leads to counterproductive behavior, just that I don’t trust the government to withhold data to “prevent panic”.
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