Tyler Cowen: belief

Transcript context

…Yeah. I’ve actually been working — oddly, mind you, I’m the theorist criticizing the use of models, so, go figure — but what have I been doing recently? I’ve been using a model to try and figure out, what is actually the value of an additional test relative to its cost? Models definitely have their role, but you’ve got to stick to the idea that a fact beats a theory every time. Now, the thing is, just very clear, that a test is worth a lot more than it would cost us to provide. Why aren’t we delivering more? I think there’s a genuine confusion and puzzlement about how to increase the supply of tests. And because people don’t know how to go about increasing it, they say it’s not possible. They treat it as if it’s just something beyond our control. I think we have to look carefully at what changes should we make in policy to increase the supply of tests. One part of that, as I’ve been saying, is we just have to pay for them. If we put up enough money, we can get tests. It’s like I’ve been saying: if we spent about twice as much on tests as we spend on soda, we could have all the tests we need, like 23 million tests a day. So first, you’ve got to provide money. Because tests are a public good, this has got to be money that comes from the government. It’s hard to get there with having consumers pay. But the Congress has allocated $25 billion. There’s a proposal now for another $75 billion from the Democratic plan. So, we’re getting there on the money. The other side, which frankly, I’m in this position — think about what I was saying before — I’m generally in the position of defending regulation. The more I’ve looked at the role of the FDA in holding back progress in testing, the more I’ve concluded this is a case where we have to say, as economists often say, “This regulation is just getting the cost-benefit tradeoff wrong.” It’s way too restrictive. There’s little harm from tests. Tests don’t hurt people. It’s not like a vaccine or a pharmaceutical agent, so that the FDA is just needlessly slowing down innovation that could otherwise flourish. So, pay some money, and then get the FDA out of the way. And then all of these very clever researchers and university labs all across this country — they could give us all the tests we need. Germany has done a great deal with testing, as you know. But at least now, as we’re speaking, as of, I think, May 12th, their R is still over one. Does that worry you? Does testing really get you into the promised land if you’re not a small island? It does worry me. And I don’t think that, as well as they’ve done . . . Let’s just pause for a second because this is a little tricky. If R is equal to one, that means that the number of deaths, the number of infections will stay constant over time. So you can have R0 equal to one at a low level of infection and low rate of deaths, which is where Germany is. We have R0 about equal to one at a higher rate of death. But in any case, it is worrisome because what we want for suppression is R0 significantly less than one. And Germany is not testing at the scale that I would propose, and I’m afraid that the way to get there is that even Germany is going to have to do more testing, including more testing where you’re just kind of fishing for people who were infected. You just test people who are asymptomatic. You’ve got no indication that they were in contact, but you test them anyway because that’s the only way to find some of the people who are currently infected.…

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