Cost-benefit analysis vs. model-making

The response to the Wuhan virus by the federal and state governments is unprecedented. Given the magnitude of the effects these actions are having on the American society, one would expect that cost-benefit analyses would be taken into account. But no, not even at a rudimentary level. Instead, decisions are made based on epidemic models, models that have proven wildly inaccurate. And then on top of that, we have wild statements like this from New Jersey Gov. Phil Murphy: "There is no price too high to save a life," or New York Governor Andrew Cuomo: "We will not put a dollar figure on human life."

Are they serious? Of course not. But as Holman Jenkins, Jr. noted in his Wall Street Journal column:  "The problem here is not an inability to think clearly. It's an unwillingness to be seen thinking clearly." Nobody wants to be seen as callous or a meanie. Bringing sober cost-benefit analyses into consideration would be akin to bringing a skunk to a garden party. 

Without cost-benefit analyses, public officials and their fearmongering enablers in the media are allowed to sweep the costs of the shutdown under the rug and posture as caring humanitarians. They are not. Betsy McCaughey writes that any sane response to the Wuhan flu must balance the deaths from the coronavirus against the deaths from the shutdown.

And what might be the number of deaths due to the shutdown? 

Job loses cause extreme suffering -- every 12 percent hike in unemployment rate will likely produce a 3.3 percent increase in drug-overdose deaths and a 0.99 percent increase in suicides, according to data from the National Bureau of Economic Research and the medical journal Lancet.

These are facts based on past experience, not models. If unemployment hits 32 percent, some 77,000 Americans are likely to die from suicide and drug overdoses as the result of layoffs -- deaths of despair.

Then add the predictable deaths from alcohol abuse caused by unemployment. Health economics Michael French from the University of Miami found a "significant association between job loss" and binge drinking and alcoholism.

The virus will eventually finally burn itself out. When it does, the problems of increases in depression, suicides, alcoholism, domestic abuse, and so on will start to surface. Then, the very same experts who willfully ignored any costs of their heavy-handed shutdown edicts will be the same ones stepping forward to tell us how to solve the new problem.

And speaking of "experts," a few words need to be said about the epidemic model makers. It is an understatement to say all the models have been spectacularly wrong. Even when revised to account for new data, they still way overstate the problem. From this, I can only conclude that these people are either grossly incompetent or they have a hidden agenda.

And why are the models not presented so others in the field can scrutinize and critique them? And why are the model makers themselves essentially anonymous? Ideally, they should be front and center and be required to defend their models. Isn't that how democracy is supposed to work? Instead, we are lectured to rely on the experts. They create a black box, put in the data of their choosing, and we're supposed to follow the output as if it came from Mount Sinai. It's all so shallow. Is it any wonder then why the American people's confidence in many of our  institutions is in a downward spiral?

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