Long Vaccine…

Nearly 18 months later, we are beginning to see some  patterns in Covid-19 which should help health and policy planners to manage what is becoming an Endemic disease, in the words of the Economist.

One of the interesting patterns is that the Vaccines work on a FIFO basis, in accounting jargon—ie First in, First out.

The most virtuous countries who vaccinated super early such as for example, Israel and the UK have seen a deterioration of the number of daily cases in the last few months, going back nearly to all time highs. Israel which was the global lab for Pfizer went from 10,000 daily cases in February to below 100 in May and then back to 10,000 in the summer. At that point, the country trailblazed again with the quick adoption of the booster, and numbers are now back down to several hundred per day.

In the UK a similar but not identical phenomenon is taking place. As an early adopter, most UK residents are beginning to count six months from the second dose, and daily case numbers are spiralling. But there is a big difference, whereas in the spring 40,000 daily cases meant nearly 1500 deaths, today the same amount of cases amount to ‘only’ 150 daily deaths.

Perhaps we can learn as follows: firstly, vaccines seem to give a medium to long -term protection from serious illness and death; however, protection from catching the disease only lasts up to six months. Israel is going for eradication of daily cases via the booster, the green passport, and the usual distancing rules, which keep on being prevalent. The UK seems to have decided that the booster is enough to manage the epidemic, without resorting back to any restriction. The one issue it has is that in order to make people take the booster, there has to be some ‘get out of jail’ incentive and the one that has worked better in most countries (eg France) is the vaccine/green passport. For ideological reasons (UK citizens don’t even need to have an ID card…) Boris Johnson is resisting this and therefore he has to cope with slow booster take-up and high daily cases, which it can stomach until the NHS copes and daily deaths are ‘acceptably’ low.

The coming winter months will test both these conclusions.

Why shouldn’t we call a spade a spade? This is Biden’s Saigon Moment

There is one key difference here. Biden is (D) and is supported by a left-wing democratic party. True, the decision to withdraw was initiated by President Trump. It was a bad idea under Trump, and it has become a national disgrace under Biden. The incumbent cannot blame his predecessor here, this is not a policy that takes months or years to reverse, like many in economic policy. In his first day in office Biden reversed with the stroke of a hand many Trump policies and he could easily have ordered a reappraisal of why and how to leave Afghanistan.

Twenty years after 9/11, after investing (squandering?) over 2 Trillion dollars and thousands of lives of its servicemen and contractors, the US is leaving Afghanistan, less than emptyhanded, humiliated and with its reputation in tatters.

As the Taliban conquer the presidential palace, and the US send helicopters to evacuate its embassy, the memories of Vietnam become vivid. If there was a Republican at the white house, the media would have crucified the president presiding over this terrible precedent that the US is showing to allies and foes. One could argue that in recent years the Afghanistan campaign was highly successful in terms of costs vs benefits. The US only had less than 3,000 troops in Afghanistan, and hasn’t suffered a human loss in about a year and a half. In life it is usually not prudent to throw good money after bad, but protecting one’s investment on the cheap seemed the better strategy here…

Toxic Cocktails

The combination of Covid-19 and Brexit have turned back the clock on the traveling smoothly by 70 years.

Until 2019, frequent and not so frequent travellers used to take for granted that they could whisk in and out of their countries without ever speaking again to a border agent. E-gates had become the norm, at least in European countries.

Travelling now in 2021 is more akin to dodging landmines. Every week states come out with new and more complex regulations, including paper based and digital forms, first pioneered by the UK and now imitated by EU states. The PLF (Passenger Locator Form) has become a dPLF in the EU; however, not all European countries demand it, yet, and there doesn’t appear to be a site that informs passengers which countries do or don’t ask for it.

Travelling on the Eurostar between Paris and London and vice versa has the added complication of Brexit. Travellers going from Paris to London will have to have their travel documents checked four or even five times before they get on the train. They will have to come up with a good reason to leave France, and a better one to go back to the UK. Once they reach the UK, they will see a barrage of customs/border police officers looking for….? Given that all passengers are already checked at the Paris UK Border Police booth, what is the need for the extra scrutiny in London?

The same is true for the opposite direction of travel. Travellers landing at la Gare du Nord will see a dozen French customs agents scrutinising their faces and luggage looking for…?

If all of this is not enough, the French authorities have just announced that they will require travellers from the UK to isolate for a week; however, they are also told that nobody will bother to come and check. The UK of course does the same thing (but there they do check with ‘volunteers’ that look like Uber drivers that visit your house at random) as France is of course, an Amber country.

I have a simple question. Why does a traveller from France need to be checked five times when a traveller from Colombia will get away with one or two? What incredible extra danger do these Eurostar travellers present that they should be scrutinised to such an infuriating degree?

It is possible that a lot of these extra doses of attention are actually needed to prevent Claret coming back into the UK or the Indian variant to contaminate Europe…. but this degree of zeal smacks a lot like a political tit for tat. The French and the English have had periods of tolerance and periods of mutual antipathy, you can guess what is today’s direction of travel…

When Too Much Thrift is No Good

What is the most common sin of elected officials? You guessed it. Taking advantage of their position to gain private benefits. The London political scene has been up in arms with two ‘scandals’ in the past months, both of them probably more political than legal. The first was David Cameron’s lobbying for a failed financial group, long after his full exit from public life, but ostensibly using connections he gained while he was prime minister. The latest stems from Boris Johnson’s spending a very modest amount of money to upgrade his living quarters at 10 Downing Street. The allegation is not that he used taxpayer money improperly, but rather that the refurbishment was paid by friends, in contravention of election rules. Where is the honour of the office, for the man responsible for the security and health of 60m Britons? Ah, that is only for the Royals, whose closest life and death decisions are whether to kill or spare the next goose at Balmoral…

This case is similar, if simpler, to Benjamin Netanyahu’s legal travails in several criminal cases opened against him. The cases range from receiving cigars from businessmen, to asking for Champagne, to requesting good (fair?) media treatment in a country where, much like the US, the media is in the hands of the left-wing liberals.

It seems that there is a much cheaper, more efficient, and fair way to deal with these ‘mini-sleaze’ issues: afford prime ministers compensation and benefits that reflect the importance and honour of their office, not because they should gain a luxurious lifestyle at the expense of the taxpayers, but much more pragmatically because if they can afford to pay for furniture and cigars, they won’t have to ask favours, which have a tendency to be called at some point.

Countries like the United States, but even revolutionary France, and of course Putin’s Russia, treat their senior leaders much more lavishly. They don’t need to spend their pocket money in doing up their living quarters, as this is done at the expense of the State. Just like the queen, the President has attendants that take care of his every need, including helping him to dress in the morning! Contrast this to the British prime minister who has to cook his own dinner, or to the Israeli prime minister who has to rent an El Al plane to travel for State trips (a new plane has finally been ordered), and has to sit on a public beach if he wants to go on vacation (unless he has his own funds of course).

And when things go wrong and these leaders face legal action? They have to spend their own money and time to defend them while in office.  Mr. Netanyahu is responsible for the safety of nearly 10m Israelis who live under the shadow of missiles, terrorism, cyber threats, nuclear bombs, and more recently, Covid of course, but he has to spend incredible time, concentration, and resources in defending himself in court. Contrast this with the United States, where the president can only be indicted for high crimes and treason, and even that is a political exercise which takes a couple of months, not many years, as we have recently witnessed. Or consider the French system, where sitting presidents cannot be indicted for crimes until their term is up, as it happened recently with Chirac and Sarkozy.

Our leaders’ time and attention are priceless. One hour flight time of an F-15 can pay for a lifetime of cigars, champagne and sofas. Let’s pay our leaders fairly and generously and then expect full attention and no conflicts of interest.

When More is Less

French President Emmanuel Macron has criticised Austria and Denmark for their declaration of wanting to cooperate with Israel in the production of vaccines. This comes on the heels of Austria’s eastern neighbours’ decision to approve the Chinese and Russian vaccines. According to M. Macron, European states should not attempt to forge alliances outside the EU perimeter but rather concentrate their efforts to centralise solutions within the EU frameworks.

M. Macron is wrong on multiple counts. Firstly, centralisation is very often less effective than states competing to get best results. Older readers will recall the famous/infamous 5 year economic plans of the Warsaw Pact countries. It was a recipe for economic disaster, which took decades to unfold but at the end, in 1990, unfold it did. Federal countries like the United States have honed the centralist/state model for nearly 250 years, and they are still bickering about it, witness the recent decisions of some states, led by Texas, who will drop Covid measures next week.

Furthermore, the EU bureaucracy has proven inept at managing the procurement process. Britain and Israel, free from centralised shackles have understood very early that vaccination was a health and economic must that had to be approached in a non-conventional fashion. Britain was lucky enough to have left Europe at just the right time to be able to make preparations and orders independently, while Israelis, who can’t usually be criticised for over-paying, decided to do just that in their quest for national vaccination.

Picture this. By some counts, one day of lockdown in the UK costs £500m-1bln to its economy. The average double dose of vaccine costs, say, £25. This means that the cost of all the vaccines to cover an entire country can be financed by avoiding a few, extra days of lockdowns. Which means that the cost paid per dose is completely irrelevant, yet the EU allegedly spent weeks if not months bickering on price. These delays will translate into a 3-6 month delay in vaccinating their populations, which will costs EU countries hundreds of billions of Euros. A CEO making such a mistake would be fired by his board. A prime minister would face his angry voters. What are the consequences of the lack of foresight of the EU executives?

The Vaccine Saga

Italy is a country historically rife with conspiracy theories.

In the past, they have ranged from who were the political backers of the Red Brigades (the Americans or the Russians?), to why Juventus wins so many championships (the Agnellis control everything), to how gnomes in New York play with Italian politics by ‘adjusting’ the BTP/Bund spread. There are many more examples.

Today, the mother of all conspiracies is why Italy is not getting enough people vaccinated. The argument goes that other non-European countries are somehow deviating Italy’s supplies of vaccine. The reality is that Italy is suffering the results of the incapacity of the EU to manage the centralised purchase of the vaccines for hundreds of millions of Europeans at the same time. The EU is an institution that is quite good at putting on the brakes, not at swiftly making things happen. The EU’s executive is appointed and not elected. Its appointers are not looking for charismatic leaders that could eclipse them, they are rather looking for dependable administrators who will follow the protocols. The problem is that the EU had no experience in negotiating purchase agreements of this size and in order to ensure it be seen to do the right thing, it wasted precious time in negotiating with a fine tooth comb and arguing for better prices. The problem is that it didn’t recognise that there are times when price is irrelevant and redundancy crucial. Israel and the UK understood much earlier that it doesn’t matter if you pay $30 (apparently what Israel agreed to pay) for a vaccine or around $10, like the EU did. Every extra week of lockdown is worth a lot more than a few dollars of savings, especially in the midst of a pandemic.

Mario Draghi is credited for having saved Italy and the EU in the midst of the financial crisis. He will now have to apply his ‘we will do whatever it takes’ modus operandi to independently acquire vaccines if he wants to prevent League leader Salvini and his Fratelli d’Italia colleague from running on a very popular vaccine-denial, anti Europe platform in the near future.

Learning the lessons?

This week marks the approximate anniversary of the arrival of the Covid pandemic in mainland Europe. It is notable that while certain towns and regions in Italy were already in lockdown mode at this time last year, other countries such as the United States seemed to be immune until March. On this day last year, we were in Florida where everything was open and masks were unheard of. Meanwhile, Italy was already testing the body temperature of arrivals at airports, and beginning to curtail flights from China.

In the UK it was still more or less business as usual. In fact you may argue that it has taken the UK twelve months to get a hold on its borders, as the harshest measures have only been introduced in February….. 2021!

Consider the difference. Granted that we are worried about mutant viruses, but as of today, the UK has administered over 18m doses of vaccine; if you take into consideration the subjects who are somehow immune, or protected, because they had the virus already, and children who don’t seem to get sick, we are now getting close to 50% of the population being vaccinated or immune. In addition, one year ago, the UK had no real testing capacity. Today they are doing many hundreds of thousands of tests per day.

One would have thought that the borders should have been closed (especially to China) when the disease was difficult to diagnose (for lack of testing capacity) and non-curable/preventable (no vaccines and no effective therapy), and that the restrictions should be relaxed now that the combination of cheaply available testing and vaccines are an effective barrier to contagion. True, it is not proven that vaccination means non transmission. It is also true that testing (especially rapid testing) may not be exact; however, public policy in almost every field aims to minimise and not eliminate problems and to balance prevention with the negative effects of limitation of liberties, commerce, travel etc. No government gives its citizens a guarantee that the streets will be 100% safe from crime. Covid prevention should also fall into the minimisation rather than elimination, bucket.

From Mario to Mario… there was none like Mario

When in 2011, the then President Napolitano asked Mario Monti to form a new government of technocrats, Italy wasn’t very far from its own version of a financial crisis. Credibility in Europe and in the financial markets was near record lows, and the new Prime Minister assumed his role by promising an economic version of “blood, sweat and tears.” His job was to cut costs, increase taxes, reduce the budget deficit and therefore resume Italy’s access to financial markets, a very delicate matter for a country with one of the highest Debt/GDP ratios. Professor Monti succeeded to a certain extent, but his government only lasted two year. By that time his political capital was eroded by having to administer such bitter medicine.

Roughly ten years later, President Mattarella gave his approval a few days ago to another professor, another Mario, the Central Banker emeritus Mario Draghi. While certain circumstances are similar, their mandate couldn’t be more different. Whereas Monti had to cut the budget deficit and start reducing the national debt, as a proportion of GDP, Mario Draghi’s mandate is twofold. He will need to ensure that Italy gets its full allocation of the recovery moneys, which have already been generously earmarked for Italy, and even more importantly, he will have to ensure that those funds are spent well, so that from the ashes of the crisis, Italy can find its renaissance. Both Marios’ jobs were and will be challenging, but the big difference is that Draghi will put money in people’s pockets, whereas Monti had to do the opposite. If Italy ever had a chance to emerge from nearly two decades of stagnation, Mr. Draghi is its best chance.

Mr. Monti’s political career ended quickly with a failed election and he soon returned to academia. Mr. Draghi probably has no intentions at all to stay in politics. He has a mission to do, and he has the skills and the credibility to get it done in the two years before Italy’s next general election.

Give the guy a break?

Make no mistake. Trump’s behaviour in the last two weeks in office was highly objectionable, if not much worse. His call to the mob was indeed outreagous.  As CNN loves to repeat, the peaceful transfer of power is the hallmark of every democracy, first among them the United States, where there is a constitutionally long transition period that is required in part also by the complexity of the government.

However, we learned in school that the institution of impeachment applies to sitting presidents,  in order to attempt to remove them for having committed the highest crimes in the book, including treason. While it isn’t clear that it shouldn’t apply to a president in the last days of his term, as Trump was, impeachment wasn’t framed by the founding fathers as a way to continue a political fight once the president has left Pennsylvania Avenue. The Democrats have four years now to prove their case to the American people and if the Republicans were to run again with Trump in 2024, they will have to beat him at the ballot box.

One fails to see how the continuation of this vendetta post his term will help the healing of the nation and especially Biden’s agenda. Paraphrasing  Nikki Hayley, our preferred Republican candidate for 2024: give both guys, Trump and Biden, a break!

Looking for Maitre d’s….

London is well known for being perhaps the most international city in the world. At last count it was the sixth ‘city’ of French citizens, with up to 400,000 French citizens living in London. Similarly, there are over 100,000 Italians living in London. Traditionally many Italians have been working in the hospitality sector, even though in recent decades the share of professionals, such as bankers has grown considerably.

Initial data, published by the FT, seems to suggest that 700,000 foreigners have left London since the outbreak of Covid-19, most of them from the hospitality sector. London is an expensive city to live in, not famous for its weather, and with shops and restaurants closed for most of the last 12 months, its attractions for foreigners have faded big time. Even the ones that still have a job but are WFH, whose kids are LFH are increasingly looking at spending more time back on the continent in the absence of having to report to work or school physically.

The big question is if and when these expats will come back to London once the Covid-19 crisis subdues?

It is safe to believe that once conditions permit, school attendance will return to normal. But what of colleges and universities? And offices? The working from home mode if it persists can change the dynamics of the job markets and of our big cities in ways that are still difficult to fully appreciate.