Herds and the policy response to COVID-19
Governments implemented strict policies to stem the spread of the novel coronavirus. The widespread response suggests that governors and presidents saw COVID-19 as an unprecedented public health threat. Or did it? The economics of herding suggests possibly not.
The “Wisdom of Crowds,” also the title of James Suroweicki’s excellent book on this subject, implies this interpretation. Experts in each state reviewed knowledge on the virus, its potential lethality, and vulnerabilities of their state. Each lockdown decision provides evidence of a perceived threat.
Independent, informed evaluations represent our best way to approach the truth. The argument is not that voting establishes truth; experts can be wrong even if they all agree. The consensus of experts is more likely to be correct.
The policy response could reflect other factors. We should remember that safety is a luxury good; as people and nations become wealthier, we spend more on safety. The potential for say 100,000 deaths from a pandemic will be far less acceptable today than 50 years ago. Yet crowds are not always wise; the “Madness of Crowds” is another possibility. The independence of expert judgments affects whether we gain wisdom or create a herd.
Training in public health affects experts’ independence. Experts in any field receive years of specialized, intensive training, in law school, graduate school, or medical school. Academic disciplines have a dominant paradigm or way of making sense of the world. Different public health experts may share the same way of thinking and make the same mistake on COVID-19.
“Information cascades” pose another problem, often seen in business. A group of managers assembles to discuss opening a new retail store. After independently assessing the merits and demerits, most of the managers see the new store as a mistake. Yet the first manager argues that the new store will be wildly successful, and the others agree. After the store fails, the managers all recall their initial misgivings.
What happened? Each manager knows her personal assessment of the venture could be wrong and revises her assessment based on others’ opinions. Managers do not want to appear incompetent – the only one unable to see the new store’s great value.
The visibility of errors also matters. There’s (allegedly) a saying among investment advisors that “no one ever got fired for recommending IBM.” Suppose an advisor recommends a stock no one else likes. If correct, the advisor’s clients make lots of money. If wrong, the advisor will need to find a new job. By making the same common recommendation, no advisor signals below average investment acumen.
An economy or business needs to encourage occasional deviations from the herd. We need contrarian investors and thinkers. In markets, profit rewards correct contrarians. And some people are naturally contrarian. As Henry David Thoreau wrote, “If a man does not keep pace with his companions, perhaps it is because he hears the beat of a different drummer.”
Does the policy response to COVID-19 reveal herding? The policies involved – business and school closings, stay-at-home orders – are called nonpharmaceutical interventions (NPI). NPI have their critics; a 2019 World Health Organization review found the evidence for the effectiveness most “limited.”
A divergence of opinion suggests herding was unlikely. If proponents of NPI won out in debate, this suggests that governors and presidents found them more promising. Vigorous debate usually improves decisions.
Our elected executives, I think, face a bias to action, worsened by the 24-hour news cycle and running tallies of COVID-19 cases and deaths. Yet the nearly 50 million jobs lost since March are also highly visible. Our inability to observe deaths without a lockdown ironically makes the benefits appear larger; perhaps millions have been saved.
Eight states never issued stay-at-home orders and nations like Sweden eschewed lockdown policies, so we have not witnessed complete herding. More likely the bias to take action resulted in excessive policies, and lockdowns imposed too early in some states.
Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.
Regions Bank and Regions Foundation build on investments supporting racial equity and economic empowerment
BIRMINGHAM, Ala. – Regions Bank and the nonprofit Regions Foundation on Tuesday announced a $12 million commitment to advance programs and initiatives that promote racial equity and economic empowerment for communities of color while creating more inclusive opportunities for success.
“At Regions, we are committed to serving others to make life better, and we stand together with our communities in addressing the systemic racism and bias that impact so many people in our society,” said John Turner, Regions President and CEO. “As a financial organization, it is our responsibility to use our resources and expertise in ways that address disparities and create positive change. In 2018, we updated our approach to community investments by prioritizing initiatives that create more inclusive prosperity. While we have made significant progress, much more work remains to be done. The financial commitment we are announcing today represents another important step in our path toward advancing racial equity and economic empowerment.”
The $12 million commitment will be allocated by Regions Bank, the Regions Foundation and the Regions Community Development Corporation over the next two years. Initial allocations will include:
- $1,000,000 from the Regions Foundation for the National Urban League: The National Urban League and its local affiliates work to empower African Americans and underserved residents in urban areas by securing economic advancements, parity, power and civil rights. Regions is a longtime supporter of the Urban League and works closely with affiliates to address community needs.
- $2,000,000 allocated through deposits in Minority-Owned Banks and investments in Community Development Financial Institutions (CDFIs): The Regions Community Development Corporation, a wholly owned subsidiary of Regions Bank, will set aside $2,000,000 to support the services of minority-owned banks as they help clients achieve financial goals, including homeownership, and CDFIs that work with minority-owned businesses to support their growth and success.
- Additional portions of the $12 million will be allocated based on needs identified in conjunction with community partners. Regions will focus on three key areas to address underlying factors associated with racial disparities and economic empowerment. Specifically, these investments will seek to:
- Advance minority business development
- Increase minority homeownership rates
- Reduce the digital divide by increasing web accessibility in underserved communities
- Investments will also be based on input from Regions associates gathered through listening tours conducted by company leadership during the month of June. These tours provided an opportunity for associates to share ideas, observations and feedback on ways Regions can address social needs.
- Regions will continue its financial support and collaboration with organizations including Operation HOPE, the Inner City Capital Connections program,Historically Black Colleges and Universities (HBCUs), and other organizations that work daily to foster and promote economic empowerment.
“By making significant investments through our financial resources, as well as through volunteerism and community involvement, Regions is working to advance racial equity, help create greater social justice, and deliver meaningful benefits across the communities we serve,” said Leroy Abrahams, head of Community Affairs for Regions Bank. “Our teams have deep relationships with organizations on the front lines of moving our communities forward. We are working hand-in-hand with these organizations and will develop additional community partnerships to achieve our shared goals of racial equity, expanded opportunities, and a more just society where everyone can prosper.”
Regions maintains an extensive, year-round program encouraging associate volunteerism and community support. For additional details on programs and initiatives championed by Regions and its associates, visit the Community Engagement section of Regions.com.
(Courtesy of Regions)
Salvation Army facilities in Dothan, Gadsden, Mobile have new leaders
The Salvation Army on June 29 announced that three Alabama locations have new leadership as part of the routine appointment changes made every few years throughout the international philanthropic organization.
The new appointees will lead the Salvation Army Coastal Alabama Area Command, the Salvation Army of Dothan and the Salvation Army of Gadsden, said Media Relations Specialist Karyn Lewis of the Alabama, Louisiana, Mississippi Division.
Former Lynchburg, Virginia, officers Captains Trey and Sheri Jones will head the Coastal Area with facilities in Mobile and Foley. Former commanders Majors Thomas and Jennifer Richmond have begun new roles in the Kentucky and Tennessee Division as secretary for Personnel and Social Services and as secretary for Women’s Ministries.
The Joneses grew up in the Salvation Army as fifth- and sixth-generation Salvationists. They have been commissioned as officers for nine years through appointments in Alexandria, Fredericksburg and Lynchburg, Virginia. He has served in many disaster relief efforts in the aftermath of tornadoes, wildfires and hurricanes, including Lily, Ivan, Dennis, Katrina and Harvey.
“We are excited about the new ministry opportunities and challenges that God has for us,” he said. “We are eager to join the work that the Army is doing in coastal Alabama.”
The Salvation Army of Dothan is now led by Captains Nathan and Deanne Jones, who are former officers of the Chattanooga Area Command. They have served with the Army for 12 years in Owensboro, Kentucky, and Knoxville and Chattanooga, Tennessee. He assisted in every recent major disaster recovery in the Southern Territory, and both captains served during Hurricane Katrina.
“We are excited to become a part of Dothan and make it our home,” he said. “We look forward to getting to know the community and continuing the mission of the Salvation Army.”
The Salvation Army of Gadsden is now under the leadership of Majors Jim and Amy Edmonds, who came from the Louisville Sanders Mission Corps in Kentucky. Former Gadsden Captains Dennis and Armandina Hayes have entered early retirement and remain in Gadsden.
The Edmonds have served throughout Texas, Virginia, Maryland, Oklahoma, Arkansas, Tennessee and Kentucky. Both have worked in disaster relief efforts, including after hurricanes Fredrick, Harvey and Katrina and following floods in West Virginia. He was part of the disaster relief team deployed in New York after 9/11.
“It is such an honor to have the opportunity to serve in Gadsden, Alabama,” he said. “We know the Lord will lead us as we share God’s love and strive to impact the men, women and children that we are fortunate to meet here in Gadsden.”
The Salvation Army annually helps more than 23 million Americans overcome poverty, addiction and economic hardships through a range of social services, Lewis said. It provides food for the hungry, emergency relief for disaster survivors, rehabilitation for those suffering from drug and alcohol abuse, and clothing and shelter for people in need at 7,600 centers of operation around the country.
For more information or to give to the Salvation Army, go to https://salvationarmyalm.org/.
(Courtesy of Alabama NewsCenter)
Alabama needs to limit uncertainty for healthcare providers in the pandemic
Uncertainty can be crippling. In many, it turns an energetic “can-do” spirit into a cautious “wait and see” mentality.
In 2011, more than half of small businesses surveyed by the US Chamber of Commerce said they were holding off on hiring new employees largely because of uncertainty about the economy.
That was in 2011. What about in 2020, with the coronavirus and the government’s response to it, at least for a time, laying waste to the stock market and much of the economy? How much does certainty matter now?
Take Tuscaloosa, for example. Just last week Mayor Walt Maddox said that a lack of a football season, or even a mitigated season with less fans, would be “catastrophic” for the city. How catastrophic? A $131.5 million-in-lost-revenue kind of catastrophic.
So what do the restaurants, bars, and other businesses that rely on football-related revenue do while they wonder if this economic doom is heading their way? Do they hire and train employees? Do they stock up on inventory? How exactly do they plan for two extremely different potential realities?
Those answers are not clear. What is known, however, is that Tuscaloosa is not used to this uncertainty. And neither is our state.
Much of the unpredictability that the coronavirus has brought with it is not easily controlled or minimized. We can’t exactly make college football come back. And even the government cannot regulate the virus away.
We are not, however, entirely powerless in the COVID-19 era. Some uncertainty can be reigned in with action by the state legislature.
On April 2nd, Governor Ivey suspended the licensure and certificate of need requirements for medical practitioners and first responders, which enabled them to more readily come to Alabama’s assistance during the pandemic.
This action made it significantly easier for healthcare professionals from other states to come to Alabama and treat our sick. It’s also made quick and necessary expansions of healthcare facilities possible, since providers no longer have to jump through regulatory hoops governing whether or not the government thinks a new healthcare facility, or even an expansion of an existing facility, is needed.
The certificate of need process does just this. It forces healthcare providers to seek government approval before they can build a new facility or even increase the amount of beds in an existing facility. For many, this is a lengthy and costly process.
For this reason, the suspension of these regulations is good and necessary. It encourages healthcare providers to increase the availability of medical care in our state by offering a break from weighty government restrictions.
The problem, however, is that the April 2nd suspension is not permanent. In fact, Governor Ivey can only suspend these regulations for sixty days at a time.
Is it worth it for a nurse to pack up and move to Alabama to work with coronavirus patients if the order allowing her easy transfer ends in September (when the state of emergency is set to expire as of this writing)?
Is it worth it for healthcare facilities, likewise, to plan for new capacity if they don’t know for sure whether they’ll find themselves ensnared in government regulations once again in a couple months?
Again, it is a good thing that Governor Ivey suspended these regulations. In fact, the very absence of these regulations provides more certainty for our medical practitioners as they are less dependent on the decisions of bureaucrats in Montgomery. The uncertainty which comes with the temporary nature of the suspension, however, can inhibit the very healthcare providers we need most from proactively planning for the state’s health in the near future.
In short, healthcare providers need to know that if they come to Alabama or begin plans to expand medical facilities within our borders, the state won’t spring costly and time-prohibitive regulations on them. They need the certainty that only legislative action, in the form of a 12-month suspension of these requirements as suggested by API in the RESTORE Alabama Plan, can provide.
This, of course, depends on the Governor calling a special session of the state legislature to address the coronavirus and its effects. And if she does, this issue will not likely be a controversial one. In fact, over 70% of Alabamians support this idea, according to a recent Cygnal poll.
Even so, it is an important move. The state government has the ability to inject some stability into a healthcare field riddled with questions. Doing so is in the best interest, not only of our healthcare system, but of our state as a whole.
Parker Snider is the Director of Policy Analysis for the Alabama Policy Institute (API).
API is an independent, nonpartisan, nonprofit research and educational organization dedicated to free markets, limited government, and strong families, learn more at alabamapolicy.org.
National leader in water resources to head Alabama Water Institute
TUSCALOOSA, Ala. – Scott Rayder, an expert on building opportunities and funding for scientific organizations, was selected as the executive director of the Alabama Water Institute for The University of Alabama.
Water is a signature research and academic focus at UA, and AWI was formed to conduct integrated research and education on complex issues of water quantity, quality and security globally and locally.
“The University of Alabama strategically focused on water as a signature research thrust not only because of the profound importance of water in all facets of life, but also because we believe the University is ideally positioned to become a national and influential leader in the discipline. I believe Scott has both the vision and ability to work with faculty and students to make this happen,” said President Stuart Bell.
The executive director position and AWI are vital to UA’s plan to increase research productivity and innovation in research, scholarship and creative activities that impact economic and societal development. Rayder will play a key role in continuing collaboration with the National Water Center, a National Oceanic and Atmospheric Administration center located on the UA campus.
Currently senior advisor to the University Corporation for Atmospheric Research and to the president and vice president of the UCAR Foundation, Rayder will join UA Aug. 1.
He has extensive experience in building relationships and opportunities with both the private and public sector, including longstanding relationships with federal funding agencies such as the U.S. Department of Energy, National Science Foundation, NOAA, U.S. Geological Survey and National Institute of Standards and Technology.
“The University of Alabama has the unique opportunity, working with federal, state and industry partners, to propel the state of Alabama to become the epicenter for water research, water resource management and the new water economy in the United States. Scott is well-known both nationally and internationally and is the ideal leader to take full advantage of this opportunity,” said Dr. Russell J. Mumper, vice president for research and economic development.
Rayder’s involvement with higher education and research extends to the beginning of his career at NOAA, and includes nearly two decades of experience in senior leadership positions in large government, not-for-profit and private sector companies.
“I am honored to be joining the dedicated AWI team. UA science, policy and engineering expertise is uniquely positioned to help improve our understanding and application of the latest science and technology in support of critical water issues that affect everyone across the globe to citizens right here in Alabama,” Rayder said. “I look forward to engaging with the faculty, public and private stakeholders, philanthropists and future Alabama graduates in growing this capability here at the University.”
His work at the University Corporation for Atmospheric Research in support of the National Center for Atmospheric Research as well as at the Center for Ocean Leadership included working with research universities and private sector partners in the pursuit of funding to better understand and utilize the world’s resources.
He was also part of the presidential transition team in 2016 for the U. S. Department of Commerce, which oversees NOAA.
Rayder holds a bachelor’s degree in government and geology from Hamilton College, New York, and a master’s in public administration with a concentration in science and technology policy from the Maxwell School of Citizenship and Public Affairs at Syracuse University.
The committee for this national search was co-led by Dr. Mark Elliott, associate professor of civil, construction and environmental engineering, and Dr. Behzad Mortazavi, professor and chair of biological sciences. Dr. Patricia Sobecky, UA’s associate provost for academic affairs, professor of biological sciences and founding executive director of AWI, was also integral to the search process.
“We are grateful to Dr. Sobecky for her dedication in standing up the Alabama Water Institute as founding executive director,” Mumper said. “Her leadership created an excellent foundation for transformative research and economic development relating to water.”
(Courtesy of the University of Alabama)