Why does this government get away with murder?

In the government’s final press conference Chris Whitty, the Government's chief medical officer, said ““I would be surprised and delighted if we weren’t in this current situation through the winter and into next spring.” The significance of that statement cannot be overstated. Deaths in the UK from the virus are currently running 100 every day. (The true total may be higher.) The chief medical officer is saying don’t expect to see deaths running at an order of magnitude lower before the Spring of next year.

I fear we have become desensitized over coronavirus deaths. We keep being told by the government that they are at a much lower level than they used to be, every graph shows deaths are much lower than they were at the peak, resulting in a danger that we regard daily deaths around a hundred as somehow inevitable. But they are not inevitable. They are an order of magnitude higher than deaths in other European countries. Here is a chart of a three day moving average of deaths per day in the UK and some of our nearest neighbours over the past month.

With the possible exception of Sweden, which chose not to lockdown, daily deaths in the UK are an order of magnitude higher compared to our neighbours. If you think this has anything to do with the UK’s population size, there is the same chart per capita.

The only change is that Sweden now leapfrogs over us. From all those who write for The Telegraph and other right wing outlets saying we shouldn’t have locked down I look forward to their profuse apologies.

This comparison shows there is nothing inevitable about a hundred or more people dying from coronavirus every day. Other countries have got numbers much lower, so why can’t we? The answer is that our government has chosen not to cut numbers further. Our numbers are higher because our lockdown was less severe than in other countries, and we started reducing an already weaker lockdown while deaths were still high. The government didn’t protect care homes, and it didn’t protect medical staff. And the government decided to farm out test, trace and isolate (TTI) to their private sector friends rather than expand experienced local authorities. In other words there are a host of government failures that have led to deaths going down more slowly than our neighbours.

What is equally scandalous, but largely unnoticed by the media, is the government intends to do little to rectify the situation. That was the gist of Chris Whitty’s remarks. Let’s put 100 deaths a day in context. On average 5 people die a day from road traffic accidents. Far fewer die on average from deaths as a result of terrorism. But just think of the media publicity each terrorist incident gets in the UK. Coronavirus deaths can be just as accidental, perhaps being in the wrong place at the wrong time and being infected by a complete stranger.

One reason the government gets away with it is by playing off the majority against a minority. People are desperate to get back to normal. Businesses fear for their existence if lockdown continues. It seems churlish to spoil the day by saying we need to wait for numbers to come down further. Another reason is that the media seems obsessed about a ‘second wave’, and fails to notice the first wave is still killing more than a hundred a day. But there is no getting away from the fact that the government by its actions appear rather indifferent to people dying.

Their excuse is that they are saving the economy. This is nonsense. If daily infection numbers remain high, people will be reluctant to resume social consumption. This in turn will threaten the viability of some businesses, and lead to a lot of unemployment as other firms slim down. The government, by ending lockdown too early, is creating an economic crisis that will hit the UK in the second half of this year.

The root causes of this failure are two basic flaws in the government’s thinking. The first is penny-pinching by the Chancellor and the Treasury. I hate the word, but the fiscal space is there to save around 500 lives a week by giving support to individuals and businesses. It was the Chancellor who initiated the first relaxation of lockdown by insisting those who couldn’t work from home went back to work. The second is the Prime Minister’s dislike of lockdown which allowed the UK to flirt with herd immunity at the beginning of the pandemic and is now ending the lockdown with too many people dying.

Yet the government remains ahead in the polls. They have allowed tens of thousands of excess deaths, and continue to allow people to die who needn’t have done so, yet more people would still vote for them than the only alternative, an alternative government that does not suffer from the same flaws as this one. Incredibly 44% approve of the government’s handling of the pandemic. Trump famously boasted that if he shot someone in Times Square his popularity would be undented. This government through their incompetence and ideological blinkers have killed tens of thousands and still voters would put them back into government. If tens of thousands of unnecessary deaths cannot do it, just what will it take to diminish the popularity of this government?

Did the UK really almost go bankrupt?

I normally publish posts in the first half of the week, but two separate attempts were overtaken by events, and they will have to wait for another day. I finally wrote something for the Guardian on the Governor’s interview that led to nonsense headlines about the UK almost going bankrupt. The piece explains why they are nonsense, but I should note here that the headlines are classic mediamacro, appealing to the idea that governments are like households.

Frances Coppola makes the same point a different way. You could describe what happened in March this year as a short term liquidity problem. There is no suggestion the UK is insolvent. And the thing about countries with their own currencies is that they never have a liquidity problem because they create money. She also notes that no headlines talked about the fragility of our commercial banks around the same time. You would think, after the GFC, that would be the big news. Here is a quote from Frances’s blog:

“I found the interviewers' constant focus on government financing a serious distraction from what was an important story about the Bank's vital responsibility for ensuring the smooth operation of financial markets. When financial markets melt down as they did in 2008, the whole world suffers. Central banks saw the same thing happening again in March 2020, and acted to stop it. And their action was extremely effective. It seemed to me that this was the story Bailey really wanted to tell, but the interviewers were intent on pushing him towards the issue of monetary financing and the Bank's independence.”

This episode was not, as some have suggested, an example of fiscal dominance. To make that clear, I give an example of what fiscal dominance would be in the article, where the Bank is forced to monetise borrowing against its better judgement. Dealing with market disorder in a pandemic is not that. But, rather more controversially, I do suggest that fear of fiscal dominance may make central bank governors not that objective when discussing fiscal policy.

So why does the media hype up some short run disorder in markets to be something it isn’t? Perhaps it all goes back to mediamacro’s view that government deficits are bad, whatever the causes. (I stress here that not every journalist thinks like mediamacro.) We have seen huge increases in these deficits as a result of the pandemic, which some in the media have written up with horror rather than as only to be expected. So maybe the media is looking for the markets to validate their view. I would be interested in what media folk think about why his interview was written up the way it was.

What lockdowns do and what they don’t do

Just a short post to advertise my Guardian article ‘Fear of coronavirus, not lockdown, is the biggest threat to the UK's economy’. The key point I make is that the economy would suffer badly even if there was no lockdown. People, once they realised the extent of the threat, would stay at home. The three reasons I give for imposing a lockdown are classic reasons in economics for state intervention.

1. The state has an information advantage
   
   The government, because it talks directly to top scientists, can see the pandemic coming a lot faster than the majority of people. That didn’t work out too well in the UK, where people were leading the government, but if the state functioned well this would be true.
   
   
2. The state deals with externalities
   
   While the majority of people would stay at home in a pandemic, many others might take risks. Whether the state should allow individuals that freedom is an interesting question, but that is not the point here. Because risky individuals can interact with others who are rightly being cautious, they create an externality which a lockdown avoids.
   
   
3. The state supports individuals in a recession
   
   There is a classic Keynesian role here. In this case it goes further, because it allows people to stay at home who might otherwise feel compelled to work and endanger themselves and others.

A benign government would lockdown quickly and hard, and get new infections down to a sufficiently low level such that the vast majority of people feel comfortable resuming their social consumption. It would have a local and well trained track, trace and isolate regime (TTI) in place to deal with any new flare-ups once lockdown was lifted. That would enable lockdown to be lifted once daily new infections were low.

That optimal strategy leads to a short sharp economic downturn, but an equally swift recovery that should be V shaped. The UK has departed from this optimal strategy in almost every respect. It delayed the lockdown, which automatically means that the lockdown is going to have to last longer. It failed to deal with externalities by not properly protecting health and care workers. It farmed TTI out to an inexperienced private contractor, so the TTI infrastructure will not be fully operational until September/October! It is chipping away at the lockdown before new infections are low enough, which raises R and prolongs the lockdown. The result is more deaths, but also a bigger and more prolonged recession, and a slower recovery.

My article came out at the wrong time, with the media full of pictures of lines of people waiting to shop. And I could be wrong. Maybe there is enough pent-up consumption and risk taking out there to keep not just shops but pubs and restaurants and other parts of social consumption going. Maybe the government will be lucky, and infections will continue to gradually fall despite its easing of lockdown. But given the pretty big risk that I am right, no responsible government should follow the current governments path. We don't want a government to gamble with our lives and our economy.

Locking down too late but ending lockdown too early

The major reason we have one of the highest death rates as a result of the coronavirus pandemic is that Johnson/Cummings had an intense aversion to imposing a lockdown, and an unusual disregard for human life. Any decent politician, after being told at the end of February that 500,000 of their citizens might die, would have moved heaven and earth to stop that happening. Anyone watching the recent Despatches documentary would have heard about scientists worrying about how to stop the pandemic, with little pressure from politicians to do so. It may have been an ultimatum from French president Macron that finally forced Johnson/Cummings to enact a full lockdown on March 23rd.

Unfortunately the same factors that delayed a lockdown have led Johnson/Cummings to relax the lockdown too early, when the number of infections was still pretty high. This is partly because in the circles that Johnson/Cummings move, the recession that the pandemic has created is associated with the lockdown rather than the pandemic. Free the economy by ending the lockdown, they cry. Some practice what they preach, in the sense that they ignore the lockdown rules. One of these people was Cummings himself, which is the second reason why the UK lockdown is being relaxed too quickly.

This is a tragic error, not just because it will lead to yet more deaths but also because it will delay any economic recovery. As I explained in a Guardian article, any recovery will be severely limited if new infections per day remain high. While we often focus on the irresponsible minority, the majority of people are cautious, and do not want to risk catching the virus. They are going to stay away from shops as much as possible, and will certainly not go back to pubs and restaurants, or public transport if they are able to avoid it.

The idea that there is a trade-off between protecting the economy and protecting people’s health is not only wrong, it is also dangerous. It encourages politicians to relax the lockdown too early, which risks reducing the speed at which the number of new infections fall, or even stabilising infection rates at too high a level. Below is data for the number of COVID-19 admissions to hospital, that is shown in the government’s daily briefing.

It is probably the best indirect measure we have for the path of new infections over time, with a lag of 2-3 weeks. (The problem with data on the number of people tested is that it depends on how easy it is to get tested, which has varied greatly over time.) This seems reasonably consistent with the Cambridge/PHE Joint Modelling Team’s estimates that currently there are around 17,000 new infections every day.

The worrying aspect of this data is that it seems to be levelling off, which is another way of saying that R is getting close to 1. This also accords with Cambridge/PHE Joint Modelling Team’s estimates of regional R values. They note “There is some evidence that Rt has risen in all regions and we believe that this is probably due to increasing mobility and mixing between households and in public and workplace settings”.

All this is important not because we might see ‘a second peak’. It is important because it means that the number of new infections is declining very slowly, which in turn means that most people will not return to previous patterns of ‘social consumption’. That in turn means that there cannot be a complete recovery. We do not know at what level of daily infections people will be happy to resume social consumption, but it is bound to be well below 17,000. The difference between R=0.8 and R=0.9 in getting to that much lower number of infections is measured in months, as is the difference between R=0.9 and R=0.95. We are relaxing lockdown at much higher levels for daily new infections compared to Italy, France and Germany.

Relaxing the lockdown might (I stress might) be justified if there was a tried and tested alternative mechanism to suppress R. That mechanism does exist: a well functioning and comprehensive track, trace and isolate (TTI) infrastructure. Yet the government still attempts to gaslight journalists with a launch of the new Serco led, “world beating” TTI regime at the beginning of June, that we now learn will not be fully operational until September or October. Quite how Serco sold that to ministers/Cummings we can only guess. Scaling up existing local authority teams would have been both quicker and more effective, but is contrary to this government’s ideology and the interests of those who fund it.

It seems clear that many/most of the scientists advising the government also think lockdown is ending too quickly. The alert level remains at 4, despite Johnson/Cummings’ wishes. As Rafael Behr put it, “Johnson's relationship with science has gone the way of most of his relationships.” Yet this divergence does not seem to worry him and those around him at all, which is a bit odd for a government that kept claiming they were following the science.

I should resist the temptation to suggest that all this is obvious. When I modeled the economic impact of a pandemic I was surprised at how much of aggregate consumption was social. It isn’t just pubs, restaurants and tourism, but large parts of recreation, culture and transport. These sectors make up over a third of consumption. Even the demand for clothing may decline if there are no parties to go to. The pandemic creates a huge demand shock even without any lockdown measures like school closures.

That is why many better-off households have been saving much more during the pandemic. The certain way to get a recovery is to release those savings, by creating the conditions for social consumption to resume. That in turn means getting daily infections down substantially by not relaxing the lockdown too soon. As the Faculty of Public Health writes “Like everyone else we are longing for restrictions on our lives to be lifted. But evidence from around the globe shows that the way to achieve this is not to merely suppress covid-19, but to systematically reduce its incidence.”

In other words there is no trade-off between public health and the economy: better public health (less COVID-19 infections) is the sure way to a substantial recovery. The idea that we have to lift the lockdown for the sake of the economy is the new austerity. With austerity it was about how we had to get the deficit down, in order to have a sound economy. Now it is that we have to end the lockdown, in order to free the economy. In both cases it was the opposite of the truth. In both cases lives were unnecessarily lost. In both cases the recovery was blunted.

Could we get a similar recovery by some other means, such as a large fiscal stimulus? The short answer is no. Because social consumption is such a large proportion of the total, you would need a ridiculously large increase in spending in other sectors even to come close to substituting for that loss. The only reason why you would contemplate not doing the first best option, getting infections down, is because your ideology is screwing your common sense. Which is a pretty good description of how this government has dealt with this pandemic so far.

How Cummings continues to gaslight the nation

There is little sign of anything that can dislodge Dominic Cummings, the Prime Minister’s adviser in chief, from his boss’s protection. Yet there is no doubt the episode has been costly in terms of the popularity of the Prime Minister and his government. It is dangerous for the gang who say they are on the side of the people against the elite to reveal themselves as an unaccountable elite who couldn’t care a damn about the sacrifices others have been making during a crisis whose severity is largely that gang’s fault.

The cost goes beyond popularity. The government is desperate, far too desperate, to end lockdown well before the experts think it is safe and before common sense says it is safe. The Cummings affair will only make that even more dangerous, as those so disposed flout the rules because if Cummings can do it, so can they. And remember how ministers have fallen over themselves to reinterpret the rules so that they become Cummings-safe, and thereby allow those rules to become open to interpretation (or even instinct).

To understand why this has happened, you have to stop thinking about how our democracy used to function. The old rules, like when an adviser becomes the story they go, just do not hold anymore, because this government has no respect for those rules. Suspending parliament in 2019 should have been warning enough of that. As Robert Saunders notes, the online version of parliament put together to cope with COVID-19 has just been curtailed, with no obvious alternative in place that allows every MP to vote.

We now have a populist government, in the specific sense that it has little respect for the trappings of a pluralist democracy (parliament, the civil service and so on), and instead pretends to speak for the people. The people in this case is a number big enough to keep them in power, and certainly does not reflect every voter. In reality their interest in the wishes of 'their people' is slight, and mainly involves ensuring they continue to win power.

Which is why Cummings is so valuable. Winning a referendum where you had to persuade a majority of voters that leaving the EU would not have an impact on their economic wellbeing was quite an achievement. He gaslighted half a nation into making them poorer because of an issue few of them had cared about before the referendum. To then convince enough people that Johnson accepting a deal which the EU originally proposed and the UK rejected was some kind of triumph was also impressive. Winning a large majority in the subsequent election sealed his reputation as a master manipulator of voters, although it has to be said that with all these things he had tremendous help from the collective media.

But Cummings is much more than a manipulator of voters. He has a personal mission as well, and intends to use his position to recast the UK state into something more to his liking. He didn’t ensure all ministerial advisers report to him because he wanted to ‘improve the coordination of government messaging’ (gaslighting of journalists), but because he wants a say in everything any minister does that might influence his mission.

In this he has found the perfect partner. Johnson famously wrote two articles about the EU before he chose to put all his eggs in the Brexit basket. That calculation was about his route to power rather than anything based on principles. Johnson’s skill is in charming voters, provided he is fed the right lines. He is happy to allow his partner in crime to pursue his own agenda, because Johnson does not have an extensive agenda of his own.

The combination of Cummings and Johnson have effectively purged the Conservatives of any vestiges of One Nation Conservatism. That was ruthlessly done when Johnson came to power. It is worth repeating the tweet from ex-Chancellor Phillip Hammond replying to Matt Hancock (HT Mark Thomas): “Sorry Matt, I’m afraid the Conservative Party has been taken over by unelected advisors, entryists and usurpers who are trying to turn it from a broad church into an extreme right-wing faction.”

There can be little doubt the key unelected advisor he had in mind was Cummings. When Johnson won the election and signalled an early reshuffle, many commentators thought that would be the time when Johnson reintroduced some of the remaining (in both senses) talent into the cabinet. Instead, again I suspect with a great deal of help from Cummings, he chose those who would do Cummings bidding. The previous Chancellor could not accept that, and Johnson was prepared to fire him for it, but it was Cummings making the demand.

The ultimate in Cummings gaslighting was his appearance in the Rose Garden of No.10. As Frances Coppola writes, it was a gigantic show, a show of personal power. Look what I can do, he was saying. I can lie about why I went to Barnard Castle, I can lie about how I foresaw how vulnerable the UK was to a pandemic, and there is nothing you can do about it, much like all the previous lies I have made in the past and got others to say. Cummings was saying in no uncertain terms that he is the power behind the throne. And later, when a BBC presenter tells the truth about what he did, his helpers get the BBC to give her a reprimand.

But Donald Trump got rid of Steve Bannon. Why didn’t Johnson do the same, knowing how weak trying to defend Cummings would make him look? I think the key difference is that Trump doesn’t understand his evident weaknesses whereas Johnson is acutely aware of them. He knows he cannot cope with the detail which any Prime Minister in a pluralistic democracy is required to know. It makes him impatient with that democracy, but it also makes him feel vulnerable. His revealing quote after his recent appearance in front of select committee chairs was about how much Sherpa time it took for him to appear as clueless as he did.

Above all else, coronavirus has shown him that his political instincts can lead him seriously astray. His handling of the pandemic has been diabolical, and he cannot use surprise as an excuse. He continues to make mistakes, almost certainly ending the lockdown earlier than he should, and thereby delaying a complete recovery. (Note the current Chancellor, who is winning over a style obsessed commentariat, is as responsible for this as anyone.) The UK’s “world beating” track and trace system, like so many schemes farmed out to private contractors, is turning into a fiasco.

All those decisions were made with Cummings at his side, so it is not as if Cummings necessarily improves Johnson’s decision making capacity. What Johnson desperately needs is someone with a proven record of gaslighting a nation to get voters to forget about it all as quickly as possible. For that reason Cummings survives, for now at least. The consequences of all this for the UK cannot be overstated. When Frances Coppola writes that “Britain will now be run by puppet politicians controlled by a ruthless, manipulative, unaccountable mastermind” she is essentially correct.

How could it be that just one unelected adviser can have so much power? The mechanics of how it happened are clear, but Johnson’s victory in 2019 indicates that too many in the media and the country have failed to understand what was going on. When a government behaves like populists, and talks like populists, and does things populists would do, why does most of the commentariat still think the threat in 2019 came from the left?

Populist governments have a leader who takes absolute power because they tell the people they embody their best interests and hopes, and that pluralist democracy is frustrating these interests and hopes. They can be individuals like Trump who gets rid of any adviser who annoys them, or they can be the frontman for one or more advisors who hold the real power. Either way the idea of any collective government disappears, particularly if the advisors despise the elements of a pluralistic democracy that normally keeps a government on the rails. We have paid the price with one in every thousand dying from COVID-19, most unnecessarily, and with hundreds of NHS staff and carers dying because of lack of physical or financial protection. It would be a big mistake to assume this is the only sacrifice we will have to make on the altar of one man’s vision.