On COVID, renowned economist Alex Tabarrok takes no pleasure in saying he told us so. By Raul Damas.
Act like you’re in a crisis. That has been economist Alex Tabarrok’s advice since the start of the COVID-19 pandemic. Tabarrok was among the earliest and loudest voices arguing for urgency and risk-taking when it came to increasing rapid testing, investing in vaccine capacity, and employing flexible vaccine dosing. In hindsight, he has been proven regularly right when most health experts were wrong. A professor of economics at George Mason University, Tabarrok co-founded and writes daily for Marginal Revolution, one of the most influential websites in the world. He spoke with Brunswick Partner Raul Damas about how his analytical approach can help policy makers and business leaders make better decisions in a crisis.
What would you say the US initially got right in its response to the pandemic?
Not much. The CDC’s botched test and the FDA’s refusal to allow private and state labs to develop their own COVID tests put us weeks behind and essentially took the South Korea option—suppression—off the table. After that, we were in a continual game of catch-up, and we never really caught up, even when we had another brief opportunity in the summer of 2020.
The best decision the United States made early on was to pursue vaccines with Operation Warp Speed. Peter Marks at the FDA and Rick Bright at BARDA deserve a lot of credit here, as do CEPI and Bill Gates. Michael Kremer and I, working with a team of economists, also pushed big investments in vaccines early in the crisis.
From rapid testing and investments in capacity, to dispensing first doses first, you’ve outlined approaches that the healthcare establishment was slow to employ, but now considers indispensable. What allowed you to see these solutions that others couldn’t?
I may not be the best person to answer this question, because I’m still confused about why what seemed obvious to me apparently wasn’t obvious to other people. I was perhaps able to brush aside irrelevancies that others became fixated on. On “first doses first,” for example, people got fixated on the specific trial design of two-doses, three-to-four weeks apart. Many people argued that doing something different from the initial trial was not “following the science.” To me it was obvious that the trial design was just surface phenomena. The initial trials were designed to get a vaccine approved as quickly as possible, not to figure out the optimal dose and scheduling.
What mattered was not the trial design, but the information revealed by the trial: The first dose was about 80% effective. It then seemed obvious to me that delaying the second dose and getting more first doses out sooner was the correct choice. Policy makers, however, either didn’t see this or didn’t want to accept responsibility for making a choice.
A closely related problem was that the “obviously” correct choice wasn’t without risk. Policy makers and people in general tend to think that sticking with the status quo is less “risky”—but this too is just surface phenomena. Look deeper and it’s clear that the status quo is also risky. Think of the status quo as being given an urn with 10 green balls and 90 red balls where picking the green ball was better. First doses first was an urn with 20 green balls and 80 red balls. Switching was obviously correct even though risky.
Unfortunately, the risk of switching from the status quo loomed large in people’s minds making it difficult to see what was obvious. If the initial trials had studied a one-dose regimen and someone had then argued for a two-dose regimen, the same people who objected to first doses first would have said switching to two doses was too risky. (In fact, the J&J vaccine trial did study the one-dose regimen first, and no one at the time objected that you needed two doses. Even though you do.) Anchoring on the status quo is simply a mistake.
Oddly even my least controversial opinion, go big on vaccines, also met with a lot of pushback early on.
Yet, as I told people at the White House early on, the US economy was losing hundreds of billions a month due to COVID, even before taking into account long-term health and education costs, so anything that accelerated recovery by a few months was worth hundreds of billions if not trillions. Going big on vaccines was the world’s easiest cost benefit test. Yet most governments failed the test.
The United States was by far the best, spending about $15 billion on Operation Warp Speed, but we could have spent two or three times as much, built more vaccine capacity, and ended the pandemic even sooner, and it would still have been a great deal.