The joe stiglitz endorsement of new zealand’s handling of covid-19

I have been reading a lot about how the Economics Nobel Laureate Joseph Stiglitz has “praised New Zealand’s handling of the Coronavirus.” .

I am big fan of his and so I decided to read what Stiglitz actually has to say. I found that the article is not about the handling of coronavirus by either USA or New Zealand but rather about how covid-19 will lead to growing economic inequality around the world.

What did Stiglitz say actually?

“Still, two countries illustrate likely lessons that will emerge. If the United States represents one extreme, perhaps New Zealand represents the other. It’s a country in which competent government relied on science and expertise to make decisions, a country where there is a high level of social solidarity—citizens recognize that their behavior affects others—and trust, including trust in government. New Zealand has managed to bring the disease under control and is working to redeploy some underused resources to build the kind of economy that should mark the post-pandemic world: one that is greener and more knowledge-based, with even greater equality, trust, and solidarity.”

In my mind, “perhaps New Zealand represents the other” does not sound like full-throated praise.

But fine, let us accept the compliment gracefully and then go on to parse some of the other things he says.

New Zealand indeed is a high-trust country. Here is how I would expect a high-trust country to operate. Involve a wide range of experts and expertise in tackling a national challenge; provide a realistic assessment of the risks along with the costs and benefits of locking down a whole country. Establish clear guidelines and make decision making criteria transparent. Be honest with your citizens when you are asking them to make such big sacrifices.

How did we actually respond?

The government chose to listen to only one side advocating lock downs instead of calling upon a wide range of expertise. Others, including leading international scholars were dismissed in the media as contrarians or “lock down sceptics”.

The first nine days of our April lock down have been found to be unlawful by a court of law.  

A recent report from the Productivity Commission suggests that the cost of extending our earlier lock down by five days outweighed the benefits by more than 90:1.  Kate MacNamara points out in the Herald that the government has ignored this report and not commissioned any further cost-benefit analysis, which is an integral part of good policy making.

We have passed a new law under urgency, which among other things allow the police to enter homes without warrants, if they believe quarantine laws are being violated.

The family of a 11-year old girl who died suddenly was denied permission to travel through Auckland to Northland for a  tangi.

We jailed a woman for breaking quarantine to attend her father’s funeral but a man who also broke quarantine to buy alcohol escaped with only a sentence of community service.

Even if the first lock down was justifiable, that is hardly true for the second, particularly the one imposed on Auckland. A high trust government would have trusted its citizens to listen to requests for physical distancing and mask wearing. If it is safe to go out now with masks, surely the same was true prior to the second lock down in Auckland. And if it is was not safe then, how is it safe now, with the same level of community transmission?

Are these the actions of a high-trust government?

Those who are so happy about the Stiglitz endorsement seem curiously silent about the fact that others like the 2013 Chemistry Nobel Laureate Michael Levitt suggests that New Zealand’s elimination strategy will impose significant social and economic costs.

How have we managed to bring the disease under control, when life remains interrupted and the border is shut tight? Businesses, universities and even sports bodies are asking what the future holds for them.  

Are we working to redeploy underused resources to build the kind of economy that should mark the post-pandemic world: one that is greener and more knowledge-based, with even greater equality, trust, and solidarity?

What kind of solidarity is it when there are experts asking the government to make sure that Aucklanders not be allowed to travel outside the city? Did they miss the memo that in the absence of international tourists, it was Aucklanders that made up much of the shortfall in the wake of our first lock down?

How did we get from the team of 5 million to Jafas versus the rest of the country?

Much of the shovel ready projects seem to be going to roads and the big “win” for the Green Party is the nearly $12 million given to the Taranaki Green School.

In the United States, for all its faults, we have people like Alexandria Ocasio Cortez, pushing for a  Green New Deal. Where is our version of it?

After borrowing $50 billion, the government has raised taxes for the top 2% amounting to just over $500 million (assuming no leakage). This is a small fraction of the total borrowing. The former Reserve Bank Governor Alan Bollard recently pointed out that in order to improve the fiscal outlook, capital gains tax must be back on the table.

But, clearly not all experts carry the same weight or are worth listening to.

How does one create a knowledge-based economy by hobbling one’s universities, international connections and by shutting itself from the expertise of a large section of its own knowledge workers?

Around the world new results are being published and serological testing is shedding additional light on the virus and how to control this and future pandemics. But, sitting in New Zealand, one would never get to hear about any of this. All one would know is that there is no other recourse than to implement periodic lock downs till a vaccine arrives.

Recently, The BMJ (formerly the British Medical Journal), a highly prestigious outlet, featured two scholarly and well-reasoned articles arguing for and against locks downs. The opposing view has been written by the academics dismissed and ridiculed as “contrarian” in New Zealand. Why are we so averse to debating the merits of the alternative viewpoints?

The fact is that the citizens of New Zealand are indeed highly trusting, of themselves and of their government. But our government has hardly reciprocated that trust. I say this with an enormous amount of regret as an admirer of our Prime Minister and a long-time supporter of our governing party. By shutting itself off from different sets of expertise our governments has done itself and the population a singular disservice.

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