Feb 4, 2022
Richard Epstein is our returning guest. Richard is an American legal scholar known for his writings on torts, contracts, property rights, law and economics, classical liberalism, and libertarianism. He is the Laurence A. Tisch Professor of Law and director of the Classical Liberal Institute at New York University, the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution
In this episode we talked about:
Check here the previous show with Richard: https://workingcapitalpodcast.com/the-impact-of-rent-control-and-eviction-moratoriums-with-richard-epsteinep52/
Transcriptions:
Speaker 1 (0s): Low everybody.
Okay. So this week, and next we're going to do something a little
bit different and we're having on returning guests, Richard a
Epstein. If you saw his old episode, we talked quite a bit of boat,
eviction, moratoriums, and a bit of a history of rent control. And
I thought this week, and next we would talk a little bit more about
the actual pandemic and COVID-19 in general, talk a little bit
about its impact vaccine mandates and kind of the political
landscape in Canada and the U S so I thought Richard would be a
perfect guest for that.
He's practiced law for over 40 years. He's a legal scholar, and I
believe still working with the Hoover Institute and New York
university. So without further ado, check this episode out. And I
should just note, if you liked this episode, feel free to go to
working capital podcast.com. You can also download our
financial model at that address. Okay. Check it out. All right,
ladies and gentlemen, my name's Jess for galleon, you're listening
to working capital. We have a returning guest on the show.
Richard Epstein. Richard is an American legal scholar known for his
works on contracts, property rights, law, and economics towards
classical liberalism and more. He is the Lawrence eight-ish
professor of law and director of the classical liberal Institute at
NYU and Peter and Kirsten Bedford senior fellow at the Hoover
Institute. Richard. Good to have you back. How are you doing,
Speaker 2 (1m 27s): Thank you. I'm in given the set of the
circumstances in the larger world.
Speaker 1 (1m 31s): Yeah, it is a, a lot has happened since we last
spoke. We currently in, in the city of Toronto are back in a
modified lockdown, which fingers crossed is going to be something
that opens up on the 26th. I think today we had teachers going back
to school, but then it was a snow day. So can't get more Canadian
than that.
Speaker 2 (1m 50s): Well, snow is no surprise. Look, the, the good
news is, and this is a result largely and natural forces is one of
the rules about viruses is what goes up, must come down. And it
turns out the Alma chronic virus now seems to be on its downward
slope a little bit earlier than some people expected. My view about
this, is that the way in which we have handled the entire COVID
situation? It means we're not talking about pandemics that in
cleanly, we're talking about cyclical arrangements or endemics, and
it's just going to be very difficult to predict aid the length of
the cycle, be this intensity of the cycle and three, the severity
of the disease that comes with the intensity of the cycle.
And so, I mean, if we are going to continue to have a kind of a
lockdown mode mentality as the first alternative, it's likely we
will be continuing to face this with COVID for the indefinite
future. I mean, the notion that people had when they postponed
their admissions to college or to law school in 2020, we'll be out
of this by 2021, nobody postpones today because they think they're
going to be out of it next year, or what's also happened. And I
think quite justifiably is nobody has any competence whatsoever in
today's experts who believe in only the science and all the science
that nobody seems to think that that's true, or if it is true, then
science is very, very bad.
So there's going to be an increasing level of popular discontent
that's likely to spill over. And I know in the United States, one
of the things that will lead the Democrats into serious
difficulties was that Joe Biden overclaim when he says, I know the
cure to cancer at the cancer at the COVID and made the silliest
recommendation imaginable where a mask outside, where they don't do
any good for a hundred days, and this thing will stop. Nobody's
going to believe that. And when you overclaim and under produce,
your credibility is shot not only in the field that you bungle, but
everywhere throughout.
So the COVID performance ratios will influence not only the COVID
issues, but the general coloration of the political economy.
Speaker 1 (3m 51s): So on that point, I think when we last spoke,
we talked a little bit about the history of rent stabilization. We
talked a bit about how the COVID policies affected the real estate
development community as a result of the moratoriums on, on
evictions. How do you see from the, you know, the time we last
spoke to the cases that have now come forward in, in your Supreme
court with, with mandates, how have you seen this thing evolve from
when we last spoke to now with this latest variant kind of coming
through both the states and Canada?
Well,
Speaker 2 (4m 25s): It turns out there's a twofold issues are that
you have to contend with one, there are the various sort of legal
arguments associated chiefly with administrative and
constitutional, or that people bring to bear in the discussions
about the COVID mandates talking largely in terms that are
independent of the substantive merits of the program. And then
there's the other way where it says, let me just look at this
vaccine, let me look at the underlying disease. Let me look at the
available treatments and so forth, which take a much more
medicalized view or the way in which it's commonly dealt with.
And it was the way it was dealt with in the Supreme court is they
did it in the first way. They were straight administrative lawyers.
And with respect to the grand mandate, what they discovered was
that the key issue was what sort of presumptions do you set in
favor of or against government action, or there was an interesting
conflict of authority with respect to this mandate. The general
rule with respect to ocean mandates is there's a lot of
administrative deference for, but the general rule with respect to
these emergency situations that apply only in grave times is that
the presumption is set against them in the two decisions down below
in the fifth and the sixth circuit, one of them is centered in
Texas, the other and Ohio, the fifth circuit basically said, oh,
this is the narrow COVID emergency problem.
The presumptions are against you. You lose, you get up to the sixth
circuit and they say, oh, this is a general administrative law
problem. The presumptions of seven, your favor, you win. When it
got to the Supreme court, what they essentially did, they decided
to stay with the skeptics on this issue. So they required very
strong proof on this particular issue. And what they then found is
that for something which was of this importance, it could not be
done by an administrative fee that it required something that
looked more like congressional authorization.
Now notice when I said that, I did not tell you whether the COVID
thing was a good or a bad or in different ideally a mile
understanding about most academic lawyers is that they are
extremely skiddish in dealing with the underlying science. And so
what they do is they tend to move their cases sharply in the other
direction. I'm not a constitutional lawyer by initial training. I
was changed in the English system. I started off as an Oxford
lawyer and my torts casebook was actually prepared by a Canadian
law professor named sessile, right?
So I mean, it wasn't as though I was a stranger to all of this. And
so we tend to not to start with administrative law. We started with
Commonwealth when I came back to the United States. What I
discovered quickly is that while the paradigmatic towards case of
1964 was one that involved an automobile collision at an
intersection, you had to figure out who had the right of way. You
can see what the rise of product liability law. We are now painting
on a much wider canvas. We had starting to talk about medical
injuries associated with Des and similar quantities.
And I was told by some very smart lawyers, they said, young man.
And I was young at the time. They said, if you want to understand
how to defend or deal with any one of these cases, you must master
the science. Now they didn't say you had to do the signs because
you can't do that. But they said, it's like punching in the air. If
you don't know what's going on. If you're talking about Des you're
talking about asbestos and so forth, and I basically drank the
Kool-Aid, I had a reasonably good, not spectacular science
background. And so I've always made it a point to start in the
opposite direction.
And so I keep up regularly on that literature. I do it with respect
to global warming. I do it with respect to the various kinds of
health conditions of which COVID is only one. And at that
particular point, you start thinking about this case, Jesse, in a
very different way, you say, well, the first thing you want to know
is what's the upside and the downside with respect to the various
kinds of programs and the insight that I started with a long time
ago in which I made a spectacularly wrong prediction under a
thoroughly, right analysis, was that you look at this stuff and you
start with 1918 and the Spanish flu, it killed 675,000 people,
usually in a one day spurt.
And then you always ask people, how long did this last? And do you
know how long it lasts? I bet you, it was nine weeks, nine weeks,
nine weeks. And virtually everybody who died was in the prime of
life. And they died ultimately of pneumonia because of what they
call a cytokine rush, which is healthy. B people, seeing the virus
try to set out the killer fluids, do it. And what they did is they
drowned. You might literally, and we know much more about it today.
We could a control for these things, but virtually the entire new
movement is completely different from the old one.
This is something that affects people who are relatively old with
serious comorbidities and anybody under 60 has only a meniscal
chance of dying, unless they also have some very serious kind of
comorbidity. So it's a completely different kind of profile. And so
what you kind of guessed it, looking at this sort of thing is if
you sort of let it run, its course, it would go up and it would
come down Shaw. But since it didn't have the potency associated
with the Spanish flu or the death rates would be very much slow,
then that's the way I thought about it.
I looked in the New York times and I looked also with respect to
the Imperial college situation. And they have the following
projections that they set up by the media, by July 15th, 2020, we
will have 10 million active COVID cases in the United States and a
similar proportion in Canada and in great Britain. And if you talk
that the chart, it said as of July 1st, it would be relatively
modest. And I said to myself, this has to be crazy because of
everybody knows that this isn't just going to come at that
particular level and they're going to take precautions much earlier
on and they will be holy without regard to government action.
A lot of the adaptive behavior. There's no point in engaging in
strategic games. The bluff of your own life is at stake. And what
you saw on March 9th, the day before this thing, and you know,
everyone, transportation was down by 78%. Now people are taking all
sorts of strange. I had that patients when they went to
restaurants, this bumps and all the rest of that stuff. And you
realize that these adaptions were going to take place. The
government comes in and makes it more dramatic. But the projections
that you actually had was the first peak that not come on, July
15th, 2020, it came on April 9th or 10th in 2020.
And it was follower than anything that anybody had predicted what
the predictions were extremely dangerous at that high level,
because people tried to gear up for something that was going to be
just absolutely enormous. And so one of the things they did in New
York city and several other major metropolitan areas, they said,
we're going to have such an onslaught of people in the hospitals.
We have to take people who are COVID positive and move them out. So
they moved them back into nursing homes where they probably cause
an extra 30,000 best simply because you took a very potent person
and put them into an environment where there were a lot of variable
honorable people.
And what they then did is they opened up in New York city. The jab
had sent the, you know, thousands of beds. The Trump administration
sent a bunch of hospitals, ships, and none of it was ever used.
Right? And all the people who made those projections 16 months
later, essentially apologized for the fact that they were very,
very wrong, but the interim damage had been done. And once you
start to intervene, the natural cycle that you had in 1918 is not
likely to continue. What you're going to do is when you create an
artificial foreign team, you slow down herb immune.
So I did some calculations. If you're curious, tell me if you're
not well, it's 675,000 deaths. And that was essentially a two and a
half percent death rate out of people who got the disease, which
was putting it around 20 odd million people coming out of this
stuff that doesn't get you to herb immune gossip, because you need
to get the 60%. Well, we got there because it was a pretty rapid
prop and some of my guests, and I'm not assigned this, but I am a
structuralist is that there were a lot of asymptomatic transitions,
which created an immunity, even though it didn't create a
disease.
And this is consistent with something you have to understand in
dealing with COVID, which is you just don't talk about medians. You
have to talk about the bearings. And that means in effect that
disease like the deadly Spanish flu is relatively innocuous for say
95% of the population that gets it. There may be some people don't
die, but get very sick and so forth. And the herd immunity took
effect and it slows things down. We don't have her. So I remember
waking up one day in about may or June. And I said, oh my God.
So long as we protect a large portion of the population, it means
that we're not going to get the herb immunity. And the next time a
new variant comes along, it's going to have a highly vulnerable
population because it turns out, and this is, I think a point
that's been well-established, but systematically ignored is that
natural immunities are extremely effective in terms of dealing with
the condition of my friend, Jay bought the Charia who's collected
and read all of these studies. I have not, you know, it says
there's not a single identification of a breakthrough case in
either direction.
And nobody who has natural immunity has ever been seen to give the
virus to anybody else. And nobody who has natural immunities has
been seen to get the virus from anybody else. So you get a perfect
wall. Well, at that point, what you want to do is when you start
seeing natural immunities is you'll let them ride. But when I made
my terrible predictions very low and then try to correct them, what
everybody said is you have to understand that people who are
asymptomatic and give you COVID. But again, the key thing to
understand is the distribution.
And so you have to do it in, let's just do it in discrete terms
because the continuity's don't matter for the well, so now you have
either very high resistant people or very low resistant people.
Okay? And you have you the very powerful, very weak viruses. And so
you start looking at the parents and if you have essentially a very
high resistance rate, you can carry in you a very high dosage of
stuff and not get sick. And then when you transfer that some to
somebody who has a low resistance state, you can actually give them
the disease, the question your then have to ask what's the
probability of that happening, as opposed to the other
distribution, which has people have ordinary levels, they get the
week COVID stuff.
And then they transfer the week COVID stuff, all of the people who
condemn asymptomatic transplant at the high high to the low load
person, that was probably 2% of the case. That means that 98% of
the cases are doing what they did in 1918. I used spreading the
immunity asymptomatic so that you come to a conclusion much more
quickly. If you would ignore the second tab and only worry about
the 2% you are going to ban the transfers. If you take the whole
hundred percent of the distribution into account, you're not going
to do that.
What you'll try to do is isolate two kinds of specialized cases. If
by some miracle you could figure out who is a very high resistant
high transmitter type. You try to keep them out of circulation. And
if you could certainly identify vulnerable populations, which you
can, you try to keep them out of circulation. So they appointed a
COVID test would not be the test that driver coming from Canada to
the United States will reverse something. You mentioned happened to
me before the show. It would be that you will not let the grandkids
visit the grandmother.
If it turns out that she was in the COVID vulnerable portion. And
so you'd get private administration of the cases in an effort to
enforce this policy. And I'm all in favor of that. But when we do
it, the other way, what we say is we forget the probabilities. We
forget the benefits side. So we systematically overregulate as far
as I'm concerned. And I think that the folks who did the great
Barrington declaration, Jay and one called door, what probably not,
probably pretty surely write about all that stuff.
Although interestingly enough, they didn't do the probabilistic
analysis either. Right? What they did is they just said, this stuff
generally works. And what I try to do, knowing a little bit about
games, theory and so forth was to figure out why they were right.
Not to figure out why they were wrong. And I think they are right
with respect to their general conclusion, but then you get
everybody up. So that's the first mistake they made. Second mistake
is X. And they post, you can try to attack these things in two
ways.
One is you can try to stop it from happening until you can try and
cure it after it happened. Right? And it turns out there's no
dominant solution that is you're not going to do only one or only
the other. You want to get the optimal mix. So what's the advantage
of doing it. Soon. You can spare people. The illness what's the
danger is you have wild over breath, because if you're talking
about protecting 0.1% of the general population and so forth, you
stop Miami.
But the ex post situation says this. If you get sick, we're going
to treat you. And the advantage of that is if you get it in time
and know how to do the treatments, what you do is you have to now
tackle 1% of the population instead of a hundred percent of the
population you don't need to quarantine. You certainly don't want
to give any medication to people whom you think is going to be
asymptomatic. What slide, which means that virtually everybody
under 40, probably 50 or even 60 doesn't get any kind of treatment
except maybe some HCQ ivermectin and kind of stops it.
The question you have to ask is safety. You have to ask
effectiveness, okay, Jessie, on the safety stuff, it doesn't matter
what you use a drug for both of these drugs have been out there for
a very long time with billions of usages. There's a kind of an
epic, epidemiological and FDA and drug type situation, which says
the acid test for any drug is, do you give it to a pregnant woman?
And the reason is during the first trimester of pregnancy, the
rapid levels of cell differentiation can be easily interfered with,
by some foreign substance resulting in something like the food over
the mind flips, right?
And it, both of these drugs have been recommended and found safe
for women who are pregnant, chances are there's going to be no
subgroup of the population for whom they're going to be especially
vulnerable. And we don't have clinical studies of a hundred or 200
people. There have been hundreds of millions in the case of
ivermectin billions upon applications, but which the safety has
never been questioned. So what's the downside. Well, it turns out
Mr. Fallacy, who I think is a terrible master on this particular
study. He says, well, you may get some kind of hard complications,
but he's talking about extremely low numbers, one in 10,000 or so
for the relatively minor conditions.
But the overall profile on the safety is long use establishes
general say, well, what about effectiveness? And I'm here. I like
the Pope Rhett Butler, frankly. My idea, I don't know, but I don't
give a damn. And what do I mean by that? Well, let's suppose the
thing is effective. What will happen is people will quickly use it.
And when you measure effectiveness, it's a completely different
inquiry from measuring safety, with safety. You're worried about,
you know, that kind of, oh my God, this is going to take you from
0.1 to 1.4, 1.0 adverse effects.
You make, take a drug off the market when you get things like that.
But if you can sell a drug, that's going to have a 1% effectiveness
and nobody's going to buy, I possibly going to buy a drug, which
can take you from a 2% cure rate to a 3% cure rate. So the
effectiveness stuff has to be much larger to make it worthwhile.
And then when it's much larger, it's much more easily detectable,
right? Because we have 40% rate you can do. So the key thing is to
let this stuff out there and then to get essentially a quantitative
assessment.
Well, what did we do? Well, first we have the phony subjects that
were done in Lancet, right? Edited. It should have been filed five
because of the recklessness moves. You'd put his vote, but since he
was anti-Trump, he was perfectly okay. And they had to retract that
and they did. And then there was a Ford study in the news, and then
the journal of medicine, they had to retract that because it turns
out clinical studies are extremely difficult to do with viruses
because essentially the theory of both ivermectin and HCQ is you
have to catch it at a very early stage that prevent the things from
breaking through.
Once they broken through, it's useless to give the drug and it may
have a slight negative effect. So if you don't get the right
controls on this, you can't do it most critical studies. You know,
people in a third degree, third stage cancers or something, you can
begin everybody on April 15th and this drug, you have to do it on
very different dates. And you have to have a physician who can
record the accuracy. Well, this is extremely difficult to do
through an organized clinical trial. And so what happens is people
start to put together these various kinds of indices recording, all
the cases that have come through my all sorts of people, this, by
the way, in the United States and it's worldwide is the common
way.
Nobody trusts formal government warnings. They're too rigid, too
stiff, too out of date. So they do is they form voluntary
associations and they collect the information and then they
organize it and update it and give you recommendations as to which
drugs and what combinations at what sequence at what those images
at what time. And self-worth in an effort to do that. And so what
you need to do is to encourage that ex-post collection rather than
to rely on clinical trials. And then it's also, if this is a game
of trying to get advantages, you have to have a theory.
And what happens is it turns out there is a general theory that
says, zinc is a very powerful agent for doing this, but if you give
it alone, it's not going to work. And so I have to do is you have
to give them some other drug as this role might as soon as
something which prevents in probation, and then you have to give
them something else. The HCQ in order to make sure that you can
find a way to protect those zinc from being wiped out. So they're
kind of tripartite situation. You're not going to ask me to tell
you everything about it. I don't know enough about, but what you do
know is the way in which this stuff ex-post works is it does not
depend simply on trial and error because trial and error, cherish
Jeffries, Jesse is too slow.
What it does is you got a theory that zinc in this combination has
worked in other cases, and then you carry it over. Now, is this
something which is just done for this, you know, or there is a wide
class understanding of what we call off-label drug uses. I don't
know if you're familiar with the term, but essentially it gets
approved by a government agency. And then once it's on the market,
a doctor could use it for any other condition that he or she wants
to do it. And in the United States where the numbers are pretty
good, for many cancers, off-label uses are dominate.
On-label uses by five to one 10 to one ratio or whatever it is. And
all of this is outside the formal system. It becomes the standard
of care for malpractice, the standard of care for insureability and
forth. So you get this back culture what's happened here is they're
killing this off with respect to this drug. And they're saying, if
you go through the clinical trials or we're going to go after you.
And so, you know, the last blog that I read said, you can only get
ivermectin in the United States. If you get a court order, they're
killing the off-label mark, right?
So now you kill off the ex post market. It puts greater pressure on
the ex-ante market and you start getting these quarantines. But if
you understood what was going on, it turns out that some people
might be good targets for HQ, some not, but by having this thing on
the wraps for the last 18 or 19 months, it means that you don't get
the aggregate data, which will start to tell you whether or not
there are subpopulations that are especially prone to damages with
this or 72 real advantages for trying to use it. What we do now is
the same point I said before, everything is a matter of Marion's
right?
Same block won't have the same effect on more people and the
larger, the samples that you get, you can do it, and you're
reasonably happy to do this because you know that for all of these
subsets, the negative side has been ruled out by the extensive use
that has happened before. So this is the perfect case for running
that situation. Then what we do is everybody wants to do basically
become German autocrats. You know, the famous Maxim in German, I
will say it in English because my German is terrible. At least
today, all of that is not required as forbid or all that is not
forbid and as required required, there's nothing left the
choice.
What this means is once we decide, this is a very good vaccine,
everybody's got a tick. Yep. But again, what have they done?
They've ignored the variants, which is the key.
Speaker 1 (25m 31s): I want to ask you about that. So we've been
kind of going through this process back to the extreme again, I
think we talked before about us in Ontario, Canada being in
lockdown again. Now what we have seen from businesses, chamber of
comments, commerce, I think announced today that the biggest thing
that's killing us right now from a business standpoint that can be
in real estate or business in general is the uncertainty of what
the government is doing when we're supposed to come back in any
clarity. Originally, the vaccines, my understanding was that, you
know, it was the target was to actually stop, you know, flatten the
curve and then it had shifted.
And now the conventional wisdom we're told is that it is you're,
you're far, far more likely to end up into the, in the ICU or the
hospital, if you are not vaccinated. Now in Canada, I believe
double vaccination is at 82% as of right now. So I think Mo
majority of Canadians do want to get vaccines. However, just to
your point, natural immunity was, was almost a word you couldn't
use words you can say a year ago. And it's interesting to me that I
had COVID over the Christmas break and mail, like, God,
Speaker 2 (26m 44s): Yeah, there you go. Giving it
Speaker 1 (26m 46s): To each other. We might have. And what I find
funny is that you have the congressional hearings in your country
that just happened in the Supreme court cases. You have
policymakers saying one thing, but I called the U S embassy about
cause I'm flying to Florida next week. And basically they they've
said just like Canada has, as long as I give them a positive test.
I think the us needs a physician to show that you have recovered.
Now you can cross without a molecular test. So to me that says that
it's admitting natural immunity from a policy standpoint.
So it, maybe you could talk a little bit about the, the kind of
moving target and just as a footnote, one thing we do know in
Canada, the last lockdown, what they said was no, no. The
difference now is cases don't matter anymore. It's about
hospitalizations. And I do think Canada is probably, I think it is
the worst in the , if not one of the worst four per capita ICU
beds. And one of the issues just to aggravate this even more is the
fact that because of our policies, when it comes to testing, we
have a bunch of nurses that have tested positive for this new
variant.
So we're even understaffed to a greater degree. So maybe talk a
little bit about how this target has shifted and you know, where do
you, where do you see this going? Because it is certainly impacting
not just individuals but businesses, the at large, in, in both of
our countries.
Speaker 2 (28m 7s): Okay, look, I mean, let's just state this,
first of all, it is true as a statistic that there are relatively
few vaccinated people who end up in ICU, a similar place as
relative, do they own vaccinate, which is an argument in favor of
vaccination. So it doesn't want to be, but you have to break the
unvaccinated populations down into two plots unvaccinated with
natural immunities and unvaccinated without natural moon. And if it
turns out that the, all of the situations, all with unvaccinated
people with no natural amenities, then the number is actually
higher than it might otherwise appear.
And if you were somebody like that, you should think very seriously
about the vaccine or getting yourself a natural immunity. So there
are a couple of papers that have been written recently, which says,
now that everybody gets this thing, if they're under a certain age,
because they're going to survive that, and it's better than the
vaccine. And there's a lot to be said for that position, but it's
certainly wrong to treat that statement as though it carries with
it, an implication that natural immunities are no good or
uncertain. And one of the lasting disgraces of the CDC is just kind
of throws up his hands and says, we don't really know very much
about the door ability of the natural amenities or the
backseat.
Now, one of the things we do know about is that some of the
immunities that we're talking about in these cases that come from
natural sources and date from previous epidemics 10 years ago, even
50 years ago, if you were old enough for it. So we used to have
something on durability with the vaccines. We have no information
whatsoever. And so, so then the question is, well, what do you look
at? You look at the past numbers and I'm just going to make a two
comparison, and then I'm going to extrapolate from it. It turns out
that the more potent vaccine is the maternal, but less potent is
the Pfizer.
The more journal last longer, it gives a greater penetration than
does the fine. But if you start looking to adverse side effects,
the other side of that, it turns out that the Moderna vaccine is
associated with more adverse events than is the Feisal, which is
exactly what you would expect, right? The good and the bad are both
simulated bias all above. So the question that you then have to ask
as well, what is this situation? And the numbers in my view, keep
changing that is what's really happened in this case, is that
people have to understand MRN.
A vaccine is not a vaccine. It's a drug because if you look, but
the CDC did was to change its definitions in the United States. So
it's no longer kind of a diluted version of the original stuff. It
can be totally fabricated the way in which the MRR and a vaccine.
Well, the natural immunities are like a bore spectrum antibiotic,
but the MRI is a specific situation. And the way to understand that
is you have a large number of links in this particular chain, and
they take advantage of a principle known in a railroad, which is
you take out 10 feet of a railroad.
You can't go from one end of the country to the other, right. What
they forgot to say is you take out 10 feet of a railroad. It turns
out you can build a bypass around it at 40 feet and fix it back up
again. And so what's happening is that my guests and I would want,
you know, I'm not a biologist, but I am a strategic game player.
And I think is that you see the part of the track is broken and
you're a virus. You don't do this by deep connotation, right? But
you have so many mutations that are thrown up at a very rapid
rate.
All of a sudden, one of the managers, the go around the particular
break and all of a sudden, the vaccine turns out to be worthless
because it's been circumvented or compromised in some way. And that
you have to really know what the composition is of subclasses Alma
viruses. But the point I'm making is the prediction you would make
from this theory is that it will turn out that the vaccines will be
progressively more on ineffective because there'll be more
workarounds that the virus is able to do in order to defeat it.
So the prediction that you're going to get is that it's going to be
less effective and it's going to be less effective with each future
innovation. That's why Robert Malone, the guy who invented this
stuff. I mean, he's out there freaking out in public, right?
Essentially an answer. I, you know, I may have created a deaf
machine in some sense. Now he was right. I mean, early on the first
round, possibly the cost benefits were very enormous, but the law
marginal rates of return applied to everything, including vaccine
usage.
And so if this thing is evolving in the way in which I suspect it
is, then what would you would suggest is that the immunities that
you get from the backseat will be a flow with durations. And in
fact, the breakthroughs in both directions giving and getting will
become watcher. And so the ratio of success between the natural
immunities and the artificial immunities very heavily in favor of
doing the natural immunities rather than this. And so this constant
re vaccination program that'd be terrible. So that's the first
part. Second part is what are the adverse events?
When they did the swine flu thing, it turned out they were a real
rush. They got the numbers completely wrong, and they gave all
sorts of people. The vaccine, they didn't give sufficient warnings,
particularly for pregnant women. And the government had assumed all
liability for bad warning. They ended up paying $4 billion in 1970s
and 1980s for the bad vaccines that they put out on the market.
Well, there is no government liability today, as far as I can tell.
And under the emergency use authorization, I don't think there's
one either for the companies or I'd have to check that, but I'm
going to check it very soon because it's something worth writing
about.
And so what you're going to see is diminished the effectiveness of
this and the rising adverse side effect. So right now, I mean, I've
seen at least one publication, which just simply collected a
hundred articles, all of which pointed to some adverse events
associated with Mr and a vaccine. Now you look at the studies and I
did with a couple of handfuls, and they're exactly what you'd
expect in conclusive that somebody reports six cases of this three
cases of that one case of that, somebody that clinical studies very
hard to get broad spectrum stuff.
But if you then start to aggregate them and try to figure out,
well, we've got 50 of these studies, which have three cases of
death after taking a certain kind of vaccine. Now you've got 150.
You have to make sure that you don't have double counting a lot of
other stuff, but you then become more cautious. And the same thing
with respect to administration, just in the last several days,
people said, Hey, this seems to lengthen the menstrual cycle. You
do this to a woman who's 35 years old, right. Who's trying to get
pregnant and this could be just devastating kind of stuff.
And do we know how long it lasts? Of course now, do we know how
serious it is? Of course not. Right. Well, what's the rule you take
with respect to major conditions in essentially the population
that's right in the core of the distribution 20 to 40. Well, my
view is you say the cost of COVID is very well. You say in effect
the effectiveness of the various kinds of remedies, like ivermectin
and ACQ is doubted, but certainly possible.
Oh, last thing you want to do is to give people other conditions
for which there is no known cure. And so you do is you back off in
the middle generation. So what are universities doing? They have
undergraduates in their late teens. They have graduate students,
postdocs in the twenties and thirties, and they impose the vaccine
mandate and all of that. But me, I took it as it were under
protest. Not that anybody care, but when you understand is when
you're 78, as I am, you're not worried about reproductive
success.
You're not worried about, you know, going out and playing
competitive sports in the Olympics and things like that. You all
worried about something that might happen. And so the cost benefit
analysis tends to shift by age a little bit more in favor of doing
it. But rather than that, what you do is you look at these things
and what are they counting? They shameful. What they say is,
everybody knows it. This is not a question of individual Liberty.
This is a question of collective responsibility, and everybody's
doing this to serve the common. Good. Have you ever heard that
expression?
The promise. They don't know how prisoner dilemma game place. And
so I'm going to be just a little bit technical for a second, but
the traditional prisoner's dilemma game was that you get two people
going into jail. And if each of them keep silent, then neither one
gets convicted. But if one of them starts to Blab and the other one
does and Blab, the guy who blabs gets the lightest sentence, and
then a guy who doesn't want to get so much heavier sentence. So
some say, I don't know what that other guy's going to do.
I can't talk to him. So they both Blab and they're both worth or
worse off than they would have been. If not the report. Now, the
way this works is you now have a need for a public facility. It's
perfectly homogenous. It turns out, let's say it's a road on which
there are houses on both sides and you impose the special
assessment by majority vote. And every unit has to paint Penn
dollars into it. And every unit gets $15 worth of benefit. If you
did it by voluntary agreement, instead of all one, everybody would
sit, let the other people build the road and it never gets built at
all.
Right. So why is that not work? You don't have how much in aid,
right? And it also turns out that not only do you get differential
effectiveness, but you get differential worse off. So you don't
have a prisoner's dilemma game. If you turn out Jessie to be better
off not taking the vaccine, no matter what anybody else does.
Right. And if the same tools or somebody out, or what happens is
under these circumstances, you now have the ability for self
protection by isolation or by taking a vaccine or by teaching
HCQ.
So you can get several solutions, which you can't do when you're
building a road down the middle of the situation. So what happens
is all of the collective action systems, all wildly optimistic
because you can't get the initial homogeneity on either the cost
side or on the benefit side to make this thing work. So you have to
just chill that particular language. This is not the kind of case
where to apply. That doesn't mean it doesn't work like that with
all diseases. And so it turns out smallpox is a very rigid virus.
It doesn't change virtually at all.
It also turns out that Cal parks is relatively innocent and we give
everybody count pops. It's an actual immunity against smallpox, and
you do it individually and you do it collectible. But what happens
to people look at this and they come to the following conclusion. I
don't care whether anybody else wants to take the stand backseat.
I'm going to take it anyhow, because I'm better off. So it's not a
prisoner's dilemma, gamma. And when you know the polio vaccine,
you're not old enough to remember this, but the polo polio vaccine
came at the Joan speech and a mother place.
It got shut down every summer because of polio. And then the Salk
vaccine comes out. And I mean, I was 11 at that time. And my father
was adopted. You see people lining up around the block to take the
shot, because essentially they were reasonably confident that it
would prevent this forge. And they were reasonably confident that
they didn't seem to be any kind of potent side effects because it
was done in the attenuation method, right? Like the small, like the
other thing. And then there was a huge fight between him and save
it whether you use the live virus or the dead virus, right?
Because the dead virus turns out to be as effective, but less, she
was side effects, whatever. And they fought over this for 15 years,
but this is just not what we are today. And if you would see people
lined up around the block in order to get it, and the fact that you
don't see them lined up, suggest that maybe they know something
that the other guys don't, but the people who run me, Mr. Bouncy
may have been a great firewall, just in some sense. But you know,
now all of a sudden it becomes a social commentator talking about
epidemiology, public health and game theory about what she knows
less than nothing.
And ironically, he doesn't learn those things. Right. When I said
is, I'm sitting down there and I read the scientific reports. I
don't try to perform them. I don't check the calculations on the
this on, but I look at the abstracts and the major discussions on
this stuff and try to figure out something from the methodology.
And as I said, at the beginning of the show, that was the way I was
told you had to do law at the beginning with the sire. And I think
it's, it's the correct approach. So this has become an
international travesty and the quarantines prolong the situation
and expose you to something else.
And as far as I can see, I have not seen a single serious public
official in out. I didn't say commentator, who's actually got this
right. And I've seen many commentators who seem to get it right, or
at least on some of it. And there's some people who are really
smart and they get much of it. Right? Some of it won't, your job is
in my case, it is not to essentially reproduce the date. I can't do
that, but I've been trained in, you know, I'm just old lawyer,
right. But no, I mean, I've been trained in the science.
I, you know, I had to learn some games. I'm not a game theorist,
but I had to learn it. It turns out from a very long time, I did
sociobiology and evolutionary theory and inclusive fitness and all
that stuff, which is absolutely critical for understanding how
these things start to go in one way or another. And so having done
the sociobiology and the games theory, and then all this other
stuff, what happens is lawyers have the following set of tax
advantages over specialists. I worked in five or six different
areas that are relevant to this thing.
And, you know, I spent my entire life learning everything
one-on-one, but the point is knowing one-on-one about a lot of
stuff is extremely important. And many other people come in and
they know 5 0 5 about one thing and 0.0 on other things, right.
They had it, it turns out the person who has my kind of
intellectual profile is probably better suited for figuring out
what the systematic response would be on one condition. They don't
run ahead of the evidence in substance and barriers.
Why always talking to people who know more than they do about any
one of these particular things. So your job is to synthesize the
best rather than to make it up yourself. So, I mean, I do a lot of
work on science cases have been for many, many years, starting in
the early eighties with Des and the specialists and agent orange
and the whole thing. And you don't go near one of these cases
unless there's a specialist who's worked in the area for years, it
yourself.
Speaker 1 (42m 55s): So that was part one of two with Richard
Epstein. And we're going to cap off the second half of that
conversation next week. So I hope you enjoyed it. And I hope you
tune in next week. And if you want to download our financial model
or check out other episodes, go to working capital
podcast.com, hope to see you there.