Author: AustralianActuary

Targeted Risk Mitigation

AustralianActuary Economics

I am unaware of any country other than Sweden that has taken a targeted risk mitigation strategy to deal with SARS-COV-2. It appears to me that the citizens of other countries have been treated as amorphous, to be pummelled towards the impossible goal of virus elimination. “We had to destroy the village in order to save it.” That cliched quotation, supposedly from a US army general in Vietnam, may be a myth, but it does describe the apparent attitude of most governments in response to COVID19.

Risk mitigation has costs. Therefore, mitigation techniques should be applied only where they are needed and only if they can be reasonably expected to work.

Using Europe as an example, here is the median age data by country:

Across the continent, the median age is less than 44. (It has created up to around 46 in some countries.) That means more than half the European population is aged less than 44.

With that in mind, consider the mortality experience of the last 5 years up to the end of 2020, plus year to date 2021. This comes from the European Mortality Monitoring study that collects data from 29 participating countries. The following chart shows excess deaths (ie different from normal, where normal is based on continuous mortality investigations) for ages up to 44. Each line represents a calendar year of data, split by weeks 1 to 52. I have deliberately withheld the legend so that the lines are not identifiable as any particular year. Your challenge is to guess which coloured lines represent 2020 and 2021.

This analysis ought to inform policy response and mitigation targets. More than half the population is being hammered financially, psychologically and socially unnecessarily.

Global hegemony

AustralianActuary Economics

When it comes to global hegemony the main event is the US and China. This will remain the case for the foreseeable future. China has been making its objectives increasingly clear in recent years and I anticipate that pattern will continue and probably accelerate.

Demography is destiny, as the French chap Comte once said. The pattern of demography and wealth follows a well established path: as countries get richer, the fertility rate reduces, which results in an ageing shift in the country’s population structure until a new equilibrium is established. Of course, some countries adopt a high immigration policy to keep up the supply of younger to middle aged people. That works only if the country maintains that rate of immigration indefinitely. Australia and the US are immigrant nations. China, on the other hand is not. There are no queues at the immigration counters in China. Border security officers in China assigned to the immigration desk have one of the world’s most boring jobs.

So China’s population shape depends entirely on the fertility rate. And here lies the tricky issue. Take a look at the following chart of the US population structure, both historical and with UN projections to 2100.

The total population is growing. The workforce age cohort (25-64) is growing. The retiree cohort (age 65+ is growing but does not get too close to the workforce cohort numbers. Having a healthy surplus of workers to retirees, students and children is essential for economic vitality, growth and social cohesion.

Now look at the equivalent chart for China.

The workforce cohort (25-64) has already peaked and is now falling. That’s a big deal. Meanwhile, the retirees are growing in number. There is a rapid squeeze that will take a grip of the Chinese population structure over the next 40 years and generate really difficult economic constraints. A lot of China’s growth in the last 30 years has come from a transition of agricultural labour into industrial labour to support new manufacturing of goods that have been exported all over the world. That transition is largely complete. There is no easy source of new cheap labour still making its way to the industrial cities. Productivity gains and new investment will be the only sources of future growth. But a demographic structure as projected by the UN combined with a Communist state do not give me much hope that the Chinese people will be able to match the productivity gains of a liberal democracy.

China could well be the first country to grow old before it grows wealthy.

Now, I don’t expect the Chinese Communist Party to meekly roll over and say “Oh well, we tried.” Communist regimes fail – that much we know. But they don’t go quietly.

The panicked Australian political leaders and public health experts (sic)

AustralianActuary Economics

Most of the population of Australia remains in a COVID19-related lockdown that is unjustifiable by any measure. I wonder if any of those people bring facts into their thinking process? To give an update, here are three charts. I have shown data for Australia, UK and US.

First, the number of new cases:

Next, the proportion of those new cases that are of the Delta variant:

Finally, the numbers of deaths:

The increase in new cases in the UK and US winter of 2020/21 also resulted in an increase in deaths. But the increase in the current northern hemisphere summer has resulted in no increase in US deaths and a marginal increase in UK deaths. What changed? Delta. Virtually 100% of the current new cases is Delta. Last northern winter, virtually none of the new cases were Delta. Delta is more transmissible (apparently) but dramatically less deadly.

Meanwhile, Australia locks everyone up.

She should have known better

AustralianActuary Life

Katie Hopkins describes herself as a columnist, broadcaster and businesswoman. More commonly, she is described as a colourful media personality. The Australian newspaper reports today that she is in trouble with her latest media contract and also potentially with Home Affairs Minister Karen Andrews.

The problem relates to Katie’s behaviour during hotel quarantine on arrival into Australia. As the Oz reports, Katie “admitted to breaking quarantine rules by taunting hotel staff and opening her door naked and without a face mask when her food was being delivered.”

Well, I can see the problem right there. No matter how frustrated you are at being quarantined in a hotel room, the staff are not to blame. It is only civil to treat the staff, doing their jobs, with respect. To be flaunting herself in that state is unkind and possibly distressing to many hotel workers. When opening the door to receive room service you must always be wearing a mask. Katie ought to have known better.

Failing on the job

AustralianActuary Life

The President of the Australian Medical Association, Dr Khorshid, has failed one of the fundamental requirements of his role. At this link, he says that the lockdown in Sydney may have to stay in effect until everyone is vaccinated, ie. indefinitely. He says that since there are insufficient vaccine supplies to vaccinate everyone it is imperative people stop talking to each other, being close, breathing and coughing on each other. He made no mention of the fact that 100% vaccination rates will never happen, regardless of supply.

Now, some people may watch that news interview and think that the good doctor is giving considered medical advice. They could be excused for thinking that doctors are the best people to give medical advice. In some very limited circumstances, doctors are the best people to give medical advice. Those circumstances are limited to the treatment of one individual person to the exclusion of all other concerns. For example, it applies when you visit your GP, when your dentist is fixing your teeth, when you are on the operating table in surgery and that’s about it. When the health of the public in general is the subject, medical people are just like you and me – they have opinions but these opinions are no better or worse than anybody else’s opinion. All these medical experts advocating locking up citizens in the face of SARS-CoV-2 have no more authority than you or I do to stand up at that press conference. Thus, politicians hiding behind those medicos are cowardly in pretending a political decision to lock up citizens is actually a medical decision when it is nothing of the sort.

Dr Khorshid failed in his role not for any medical reason. He failed for political reasons. The AMA is a political organisation. Doctors don’t need the AMA to practise medicine. In fact, I believe that a large proportion of the country’s doctors are not even members of it. The AMA exists to lobby Government to advance its own political objectives. All professional organisations have similar objectives. By airing statements that many in the general public will see as variously ridiculous, extreme, laughable, unrealistic etc, he has just damaged the credibility and authority of the AMA. A key function of the role of President is to enhance the standing of the AMA, not detract from it. Can anybody explain how such an interview could enhance the AMA’s standing? I can’t. So, Dr Kharshid, let’s mark that interview as ‘Fail’.

A back of the envelope guide to the physics of electric vehicles

AustralianActuary Economics

Is Australia on the way to an electric vehicle future? Some people would like to think so, but is it feasible? It is time to scribble on the back of an envelope about watts.

According to the Australian Bureau of Statistics there are currently (as at January 2021) 19.8 million registered vehicles in Australia, including passenger cars, vans, trucks and motorcycles. Cars and light commercial vans make up the vast bulk of the registrations. If we assume that if those vehicles were electric, they would have a 75kwh battery that would require a full charge once per week, then the extra demand for electricity across the country for a full year would be 74,250 Mwh.

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