Thomas Lenard:
Hello, and welcome back to the Technology Policy Institute’s podcast Two Think Minimum. It’s Wednesday, December 20th, 2023. I’m Tom Lenard, president emeritus and senior fellow at TPI, and I’m joined by my colleague, Scott Wallsten, TPI’s president and senior fellow.
Today we’re delighted to have our guest, Joe Nocera, who has just come out with a timely and important new book co-authored with Bethany McLean. The book is called “The Big Fail: What the Pandemic Revealed About Who America Protects and Who It Leaves Behind.” Joe has had a wide-ranging and distinguished journalism career. He’s written for Esquire, GQ, Fortune, the New York Times, and Bloomberg among others. And has written books on sports, the financial crisis and other subjects and now the COVID-19 pandemic. Welcome to the podcast, Joe.
Joe Nocera:
Thanks very much, Tom. Glad to be here.
Thomas Lenard:
So what made you and Bethany decide to write this book?
Joe Nocera:
We’d like to take on challenges that we can’t possibly win. We had written a book about the financial crisis together back in 2008, called All the Devils Are Here. Came out in 2010, actually. And we’d been kind of looking around for something that was big enough and meaty enough for us to dive into. And when COVID arrived, it just seemed obvious that it was something we were going to write about. We were primarily focused in the beginning about what it might do to the economy. But the more we got into it, the more we decided and the more we came to certain conclusions about the way the country was, the way the public health officials and the federal government and state governments were handling COVID, we decided that that was a really important subject for us to tackle in a dispassionate, nonpartisan way.That became probably at least half, if not two-thirds of the book.
Thomas Lenard:
Yeah. Well, this is certainly a big and meaty enough subject. And as you kind of indicated, your book is really kind of scathing across-the-board indictment of how this country handled the pandemic. Virtually every institution involved comes in for some sort of criticism, sometimes very severe, including, as you indicated, the public health establishment, the CDC and the NIH, teachers unions, the Federal Reserve, private equity companies, globalization, and that elusive entity, the elite consensus. There’s one kind of exception to the entities that come in for criticism, which is Operation Warp Speed.
Joe Nocera:
The conservatives who love what I have to say, what Bethany and I have to say about lockdowns, hate what we have to say about vaccines and Operation Warp Speed. So, c’est la vie.
Thomas Lenard:
It’s a good balance. Quite frankly, I mean, I’ve written a few things on this subject, so I agree with most of what you have to say in the book. But given the fact that virtually everyone comes in for some sort of criticism, how has the book been received?
Joe Nocera:
Well, it hasn’t done that well in the marketplace. There’ve been two issues. I mean, the first is that people don’t really want to deal with COVID at this point. Thank God you didn’t say it, but so many interviewers have begun the interview by saying, folks, I know you’re sick of talking about COVID, but there’s this book out. It’s like, thanks, fella.
But the other point is that we’ve gotten caught in the partisan squabbles. I think the liberal folks really don’t like what we have to say about school closings and lockdowns, and we’ve had very few reviews in the big time mainstream press-
Thomas Lenard:
I’ve noticed.
Joe Nocera:
… which is surprising given that Bethany and I have both been part of that world for 30-plus years. I don’t even know what to think about that. If I may pat myself on the back, I think it’s a book that’s going to stand the test of time. And I think that the fact that it’s a short-term financial disappointment is just something I have to get past.
Thomas Lenard:
You say you don’t really know what to think about the fact that it hasn’t been reviewed in some of the major publications, it seems a little obvious what to think about that.
Joe Nocera:
I’m trying not to be conspiracy minded.
Thomas Lenard:
Right, right, right.
Joe Nocera:
I’m doing my best, man. Don’t draw me in. Don’t draw me in.
Thomas Lenard:
Well, kind of along those lines, and it’s really just in the sense it’s a question that answers itself, but why is there virtually no interest in doing an overall assessment? Some sort of commission or something. Would seem to me, this is a subject that is ripe for some national commission.
Joe Nocera:
I remember, I don’t remember personally, but there was Congressional hearings after the crash of 1929 led to the formation of the SEC and the Glass-Steagall Act that separated banks from investment banks. The Challenger Commission helped improve safety at NASA. I’m a big fan of the post Financial Crisis Commission, although I know that not everybody agrees with that, but I think they did a lot of good in terms of explaining what happened and why and how to prevent another one.
So here we are now with what ought to be an incredibly obvious need to look back and take stock. And I think one reason is that there’s so much partisanship around what happened during COVID that if you had a commission that was evenly divided between Democrats and Republicans, you would wind up instead of a sober minded assessment of, for instance, did masks work? You would get instead a big fight between the progressive end and right wing end. One side saying, of course, everybody should have a mask. And the other side saying, oh, you’re an idiot. They don’t work. You can go right down the line on that. I mean, I think the only thing where there’s any consensus is school closings, I think liberals now understand that that was a mistake. Although, you find plenty of people who defend them, starting with the teacher’s union.
Scott Wallsten:
Yeah. And you see plenty of articles now about the costs of the school closings and the kids that have been lost, increased inequality driven by that. But it doesn’t seem like they’ve taken the next step to ask, how could we have balanced that with-
Joe Nocera:
Right. They don’t say, this was a mistake. They say, this is terrible what happened. We need to see how we can get these kids back up on their feet. I’ve been saying this consistently, that anything anybody did in March, April, even May of 2020, is forgivable. Pandemic plans that the government had put together since 2007 were all aimed at influenza. Because influenza was what hit us in 1918, and then in 1958, and then in the late 1960s. We didn’t know that the coronavirus would act so differently. Influenza killed kids, it killed people in their 20s, it killed people in their 50s, it killed people in their 80s. COVID didn’t work that way. COVID killed tons of people over the age of 70 or 75, and it killed very, very, very few kids under the age of 15. And it took a while to figure out that that’s what was going on.
But at a certain point, we did have it figured out. There was study after study after study, countries all over the world where time after time they were showing that for whatever reason, schools were the safest place you could possibly be. Certainly safer than being in a multi-generational household. And yet partly the fault of public health and partly the obstinacy of the teachers union. You get to September, October, November, January 2021, February, and these big city schools are still mostly closed down, even though suburban schools and private schools are mostly open. And let’s just be honest, the teachers unions are by and large democratic. They claim to care about the disadvantaged.
Joe Nocera:
They claim to care about the disadvantaged. They claim that anyone who says kids should go back to school are racist. That was their claim. Yet, the damage that they did to the disadvantaged is incalculable. We have in the book one statistic that you say what you want about how kids are coming back, who are back in school, 3 million kids dropped out of the school system and haven’t been seen since. The absentee rate in New York City went up from like 20% to 45% on a daily basis. My own kid was a public school kid, which I was very happy about up through fourth grade. Then I switched them to private school because I knew that even if the schools were open in September, 2020, which they weren’t, it was going to be a storm. The kids were just going to be relearning what they learned in fourth grade because remote learning was such a disaster.
My own kid’s case, you saw it firsthand, the teacher had a three-year-old and a one-year-old. How was she supposed to do six hours of lessons? It was absurd. She’d be with them for half an hour. She’d give them basically three hours of homework and that would be the school day. I knew that if he went back to the public school, if it was open, which it wasn’t, they would be relearning most of what they did in the fourth grade instead of moving on to fifth grade. I was like, “We’re out of here.” A lot of parents who have my kind of means did the same thing. Along with everything else, school closings just exacerbated inequality in America, which is also already terrible.
Thomas Lenard:
I think you’ve kind of alluded to this already, but one comment I get when I talk about these things with friends and family is, well, they did the best that they could with what they knew at the time, but that’s really not true.
Joe Nocera:
Not even close to being true. Let me give you a simple, silly example. Rachel Walensky as a private epidemiologist in Boston gets an email from the city, the school department of Newton Massachusetts, which is, as you know, the most upscale suburban town in Massachusetts, right outside of Boston. They say to her, “Is six feet really necessary in terms of social distancing or can we live with three feet?” She writes back to them and she basically says, “Three feet’s just fine. Three feet’s enough.” X months later, I don’t know how much later it was, but five or six months later, she becomes the head of the CDC. Does she say three feet is fine? No, she does not. Now it’s six feet, six feet, six feet. She knows better. She absolutely knows better.
Another classic example is that the CDC and the public health officials around the country never really told the citizens about the enormous disparity between elderly death and children’s death. If you are a parent, you’re scared that your kid’s going to get COVID and go to the hospital and maybe die. You don’t realize that the chances of that happening is minuscule. Did some kids die? Yes, some kids died. But there are states in this country where the majority of deaths took place in nursing homes. The majority of deaths. New Hampshire is a classic, but there’s a bunch of them. That’s an important distinction that was never really spelled out. If it had been spelled out, and if public health had been encouraging people to reopen the schools and get back kids back into school, we might’ve had a different outcome in terms of schools.
Scott Wallsten:
What’s your theory as to why it became like this? We’ve just been talking about faults of more liberal leaning institutions, but like you said earlier, conservatives don’t like Operation Warp Speed, which is crazy because it should have been seen as one of the biggest successes ever. Why did things turn out that way? Why did teachers unions behave the way that they did?
Joe Nocera:
Well, one reason was because of Donald Trump. Randi Weingarten, when Trump came out and said, “We need to open the schools.” She basically was on record saying, “Well, if Trump says we need to open the schools, well that means obviously we shouldn’t open the schools because he’s wrong about everything. He’s so terrible.” Think about what happened in Florida early on. Ron DeSantis reopens the beaches, and Twitter all of a sudden has all these photographs of people at the beach and none of them have masks. We know now the beach is safe. You’re outdoors, you’re by the water. You’re not going to get COVID at the beach by and large. In the east and the north, especially in the corridor, the east coast corridor, people are writing DeathSantis and the hashtag Florida morons, and basically saying they’re going to come to Massachusetts and kill us with their COVID. It was ridiculous.
Of course that gets the people in Florida and Texas and Alabama and Idaho get their backs up and they’re like, “Fuck you. We’re not going to wear a mask.” They start to view people in the east as virtue signaling by wearing masks and staying indoors. In terms of the numbers, they’re probably right. They’re probably right.
Thomas Lenard:
But Gina Raimondo, this one kept the schools open in Rhode Island, I guess, against a lot of opposition.
Joe Nocera:
Yeah, that’s why she should be the vice presidential candidate in 2024 but I know it won’t happen. She’s the most competent. She is so competent.
Thomas Lenard:
I agree. Yeah, I agree.
Scott Wallsten:
I agree with that.
Thomas Lenard:
Maybe she should be the presidential candidate.
Joe Nocera:
I knew her when she was back in Rhode Island as early in her time as governor, and I marveled at the way. She was one of the very few governors, or she wasn’t even governor then. She was treasury secretary, I think. Anyway, she is one of the very few public officials who got the unions and the cities together and solve their pension problems, which were almost as bad as Illinois’s at the time. Now they’re not. She’s just super competent. But she’s the rare Democrat who decided that she would learn the studies herself and she would pay attention. She knew how to manage risk and think about what is more harmful for children, COVID or staying out of school. I wish everybody had been like that, but they weren’t. All this stuff about we’re following the science, it’s bullshit. There wasn’t any science.
Thomas Lenard:
No, no, no. That’s okay.
Joe Nocera:
By the way, it’s fun to swear on podcasts.
Scott Wallsten:
It’s just like mad libs. It always turns out better when you do.
Joe Nocera:
Exactly.
Thomas Lenard:
Let’s change the subject a little bit. You spent a lot of time early on talking about the supply chain problems for things, you know, PPE, all the equipment. Do you think we need some sort of a CHIPS Act for medical supplies?
Joe Nocera:
I think we need sort of a CHIPS Act for everything, although we can’t afford it. If you’re like me and you spent your life in the world of capitalism, mostly applauding it, not entirely applauding it, basically accepting it. I came to the view that our willingness to outsource everything, and I mean everything left us flat-footed when it came to the pandemic, because except for 3M’s N95s, we had nothing. We had no masks, we had no gowns, the slippers they put on their feet, we had nothing. We had no nitrile gloves, which are hugely important. Everything had been outsourced. My argument, we all know Americans love low cost, and we all know American CEO’s are perfectly happy to have China make things for one-tenth of the price that it costs if there’s US labor. I understand all of that. But if you look at a country like Germany, they do a much better job of balancing their national needs with trade, with the need for efficient supply chains, and we don’t do that. We go so all in on efficient supply chains that we have no resilience. Now, I don’t really know entirely how to get that resilience, I will totally admit that, but I do feel like we should have the capability to gin up if we have to, or to have some companies that we’re paying to keep a certain number of people doing this stuff.
I’ll tell you a really good example that hit me hard. There’s a company in Miami called DemeTECH, and they primarily make surgical supplies, and it’s a family-run company, it’s not publicly created. And when the pandemic arrived, they decided that they wanted to do something for the country. They went out and they bought machines to make masks, and they rented out a factory, a big factory, and they hired like 200-250 people. They taught them how to use the machines, and they started churning out masks, mostly surgical masks. And there was a great need for them, they were selling them like crazy. They’re selling them mostly to the VA, but other people as well. When the mask shortage started to abate and China decided that they wanted to get their market share back, China dropped everything and started charging a penny for masks, they really dropped the price, all of DemeTECH’s customers raced back to China.
And the guy at DemeTECH, I mean, obviously he feels betrayed and pissed and all of that. The most interesting thing he said to me was, “We had this expertise here in this factory. We had expertise, we had people who knew how to do this, and now they’re gone. And if we have another pandemic, we’re all going to have to start all over again. And does that really make any sense?”
Scott Wallsten:
It’s kind of a complicated story though, because they were able to ramp up and start making masks without having done it in the past, right? So, that’s a little weird.
Joe Nocera:
… Yes, surgical masks aren’t that hard, but nitrile gloves are very difficult to make, and N95s obviously are extremely difficult to make, which is why 3M is the only game in town.
Joe Nocera:
And that’s probably not the best example. And then you had the shortage of semiconductor chips, not talking about Intel-type chips, we’re talking about just the basic semiconductor chips that you put in cars, that you put in all sorts of small digital devices. Then there’s a shortage of that, and then you have all these supply chain issues. And it’s almost as if the PPE was the canary in the coal mine. We need to be more resilient. We just can’t afford to be at the mercy of the Chinese or primarily the Chinese who can see now what happens when there’s a shortage, that they’re in control.
Thomas Lenard:
Right, right. Well, it’s a cost-benefit question, which I don’t know if anybody’s kind of studied that type of thing. A commission, if it was a good commission, could study.
Joe Nocera:
One of the points we try to make in the book is that we’ve had this 40, 50 year transition of capitalism, where maximizing shareholder value becomes the primary value, if not the only value at many companies. Globalization and the rise of private equity are all sort of a subset of that. Is it really healthy for our system to be built so resolutely around shareholder value?
Thomas Lenard:
Well, we think if you wanted to have this capacity at the ready, the government would have to pay for it. It might be a good thing to do, but I don’t think you could expect the companies to keep this capacity or keep a stockpile with the possibility it might be needed in 25 years.
Joe Nocera:
Yeah, I’ll go with that. That’s fine. Sure. But I would like for the companies to at least go along with it and not fight it and care about our national security.
Scott Wallsten:
Yeah, I was thinking about that a little bit as you’re talking about it. And I know it’s beyond the scope of your book on how we would actually go about doing this. I mean, we’ve started to, by trying to decouple, is the word of the year. But if we compare to a country like Germany, they have not, for the most part, not had to worry about any defense spending to their detriment. And we focus more on resiliency there, maybe not enough, but to the expense of other things too. So, we’re all kind of out of whack.
Joe Nocera:
That’s a great, great point, which I hadn’t thought of until this very second. Yeah, I absolutely agree with you.
Thomas Lenard:
Another point you make, and actually I’d like you to explain it a little better because I’m not sure I quite understand it is, I mean, is you’re critical of private equity?
Joe Nocera:
Yeah, I sure am. I hate private equity.
Thomas Lenard:
… Okay. Well, explain.
Joe Nocera:
Well, I think their main role in our society is to rape and pillage companies.
Thomas Lenard:
Well, why should the incentives of private equity be, and maybe they are, maybe I just don’t understand it, are they any different than the incentives of any other company?
Joe Nocera:
The main reason is that their duty is not to the companies they acquire, but to the investors who have given them money. Now you can say, “Well, what’s different than that than a public company?” But the answer is, there’s a lot of difference because a public company’s investors are amorphous, and Yale University isn’t going to call up Apple and…
Here’s how private equity works. What we focused on was nursing homes. And you can’t think of an industry that is less amenable to being taken over by private equity. Private equity buys a nursing home chain. So in order to buy the chain, they take on debt. Who carries the debt? Not the private equity firm, the nursing home chain. So suddenly the nursing home chain has expenses that it never had before. So then the private equity firm sells the building and the land to real estate investment trust. So now the nursing home chain has rent to pay, millions and millions of dollars in rent to pay that it never had before. So, how is it going to stay solvent? Well, they cut back staff, they cut back resources. They do these… Basically, the private equity firm is trying to suck money out of there that they can divert to their investors, that they can send to their investors, and they don’t give a hoot what happens, frankly, to the people who are supposed to be their customers. That’s my view.
Scott Wallsten:
I agree 100% with everything you’ve just said, having had to recently deal with nursing homes and everything that’s happening there, it’s just a disaster. But does it make a difference to you whether they’re acquiring a distressed company or institution where the alternative might be that it disappears?
Joe Nocera:
Yes, it does. First of all, my basic view is that I don’t think healthcare, you may disagree with this, but I don’t think healthcare is a particularly appropriate industry to be part of the capitalist system. So, I think hospitals and private equity, hospitals and nursing homes are sort of a thing apart.
Scott Wallsten:
It’s true. If there’s a wrong way to do something in healthcare, we’ll do it that way.
Joe Nocera:
If private equity buys a distressed company and puts in expertise and puts people on the board and helps build it so that they can then go public in three or four years and they’re healthier and happier, and yada, yada, yada, I don’t have any problem with that. The problem is that doesn’t happen that often anymore. In the beginning of private equity, it happened all the time. But now, the targets are smaller and smaller. And do you really want private equity buying autism practices? That’s what they’re doing.
Thomas Lenard:
This obviously, maybe because I don’t quite understand how the whole system works, but if it was a competitive system and for example, and somebody and private equity firm bought… I mean, not everybody in the nursing home is… Some people probably have other people, family, et cetera, looking out for their welfare. They’re in a nursing home, it’s taken over by private equity and the service goes down. Their family members should be able to move them someplace else, to another home where that’s not happening. Why doesn’t that happen? Why is that wrong? Why is what I’m saying wrong?
Joe Nocera:
I think once you get a 75, 76, 77-year-old person into a nursing home, it’s pretty hard to move them. And there are really good ones, but they’re also very expensive. And so, your insurance company or Medicare or whatever might have limits on how much they’re going to pay. What you just said sounds plausible, but it doesn’t really happen that way.
Scott Wallsten:
It’s also hard to find spaces and so on.
Joe Nocera:
Yeah. As anybody who has had a person in an assisted living facility knows. Yeah, for sure.
Thomas Lenard:
Okay. Let me talk a little bit before we end… And this is really getting… It’s a little bit more on the theme of what we were talking about earlier, but for example, we had Jay Bhattacharya on this podcast, I think twice, over the last couple of years. There was a group of people who had a different idea and they really were marginalized by the public health establishment in a kind of a not-good way and there are court cases about it now, but…
Joe Nocera:
It was bad. Martin Kulldorff, who’s Jay’s partner in crime, he was a big shot epidemiologist at Harvard University who did work that the CDC found enormously valuable in terms of testing vaccines. And yet, once he became a dissident, Fauci and Francis Collins, his boss, started describing him as a fringe epidemiologist, which is ridiculous. And the thing that Jay says, and Martin says also, is you disagree with us, fine, let’s sit down and talk. Let’s look at the studies. Let’s not have this cancel culture in science. It’s ridiculous. And he’s totally right. And, by the way, in the end, they were a lot more correct about what was happening and what to do about it than the establishment, which I think wound up with a lot of egg on their face.
Thomas Lenard:
I think, in general, the public health establishment in this country has taken a big hit.
Joe Nocera:
Huge.
Thomas Lenard:
Big hit, reputationally, as a result of what they did during the pandemic. And do you see a way-
Joe Nocera:
Yeah, I do.
Thomas Lenard:
…for them to regain some credibility?
Joe Nocera:
I think the way to regain credibility is to show some humility and to say, forthrightly, we didn’t have all the answers. We made mistakes and we’re sorry. And I think that, during the pandemic itself, if they had been more willing to say, look, we’re not 100% sure if masks are going to help us, but we’ve used them in other pandemics and we’re going to try it and then we’re going to measure it and then we’re going to tell you what the results of those measurements are. We’re going to be honest with you and we’re going to be transparent with you. It would’ve made such a difference. One of Jay’s big points, as you guys probably know, is about how, when the vaccine became available in Sweden, practically the entire country got vaccinated. And he says, why is that? The answer, and to him, is that people trusted their government because their government had been honest with them.
And that makes a lot of sense to me. And we don’t have time to get into this, in terms of the vaccine itself, the big mistake public health made with the vaccine was overselling it. It wasn’t that it didn’t work, it’s that it wasn’t the silver bullet that it was initially described to be and then, when it turned out that it didn’t stop transmission and that some people did die who’d been vaccinated, and young men did get myocarditis sometimes, if they had acknowledged all of that upfront and said, no vaccine is perfect. The polio vaccine wasn’t perfect, there’s no such thing as a perfect vaccine. Sometimes there are side effects, it affects different people different ways. And, by and large, it will help you and it will help you stay alive. If they had simply said that, it would’ve made such a difference. I think maybe not to Bobby Kennedy Jr, but to most people.
Thomas Lenard:
Let me actually… Scott has other things. Let me talk about-
Scott Wallsten:
Actually, just before you move on from the humility point, you talked with a lot of people writing this book. Did you find any evidence that even when people would talk to you privately they were willing to think that way? Or was it always defensive?
Joe Nocera:
It was always defensive. It was absolutely… We talked to Fauci and others and, no, we never… Everybody was really mired in their position and they weren’t going to budge. And I don’t know if they ever will, but they certainly haven’t.
Thomas Lenard:
But this is related to the question that’s basically about your industry. The media.
Joe Nocera:
Nolo contendere. I don’t really like-
Joe Nocera:
…pissing on my industry. But I think that the problem for the press… It’s tricky. It’s tricky if you’re the press, because, on the one hand, you’re trying to encourage people to do things that the scientists are telling them to do. You’re uncritically trying to pass that information along. And so, what they didn’t do was they didn’t bring to the table the skepticism that’s supposed to be part and parcel of a journalist’s makeup.
And if the journalists had been more willing to say, hey, what does the science really say about school closings? Hey, are lockdowns really working? If they’d been willing to say that, look into that, it would’ve been, I think, a very important, helpful thing. But they just didn’t. And then, you wound up having this, again, turning into a divide between the Fox type press, the conservative press, the mainstream media, which is mostly liberal, we all know that.
Thomas Lenard:
Okay. This has been great. We appreciate you taking the time to do this and wish you the best of luck with the book. I hope-
Joe Nocera:
Thank you.
Scott Wallsten:
It’s a great book.
Thomas Lenard:
…more people read it and…
Joe Nocera:
Give us 20 years. We’ll do fine.
Thomas Lenard:
I look forward to seeing a review of it in the New York Times or the Washington Post.
Joe Nocera:
So do I. Thank you very much, guys. I really appreciate your time and your good questions.
Scott Wallsten:
Thank you.
Thomas Lenard:
Thanks a lot.
Joe Nocera:
Take care.
Thomas Lenard:
Bye-bye.
