From the R.M. Dolin book, “Truth and Trust in Crisis.” 2021
Chapter 7: The Saint Petersburg Paradox
May 7, 2020: On a quite evenings over Cuban contraband and homemade bourbon, I often ponder how radicals like Vladimir Lenin and Leon Trotsky were able to overthrow the Russian monarchy and install one of the most repressive regimes in history that even today vies for control of its once vast empire. I’ve never understood how it was possible for Hitler and Mussolini to mesmerize the masses, and no one’s ever adequately explained to me how Mao Zedong and his communist cohorts got away with murdering over 50 million people? My list of unexplained mysteries now also includes how fifty state governors gained authoritarian control over the greatest nation in world history without firing a single shot. If you’ve spent your life proudly believing such a radical takeover can never happen because Americas are too strong and independent, I invite you to more closely examine the unraveling of your delusion because not only did it happen; it can easily happen again.
My questions don’t end there, something bothering me from the start of COVID is how the list of “essential” businesses was created. In what logical world is it okay for you to go to Walmart to buy shoes, but Bob’s Boot Barn must shut down? Why can I stroll through Home Depot’s Garden section, but my local nursery is banned from business? Why can’t Bob assume the same risk in being open as a Walmart worker? Logically, it’s safer to shop at Bob’s Boot Barn with his twenty customers per day, than funneling into Walmart with thousands of worried workers and infected shoppers. Whoever’s mandating health and safety policies is either compliantly incompetent or a pawn of political manipulation.
As profound as these musings are, they’re secondary to COVID’s quintessential question; what’s left to trust and where do we go for truth? It’s difficult to wrap your mind around the fact that 7,825 Americans are expected to die each day in 2020, with an average 85 deaths per day due to pneumonia and influenza. It’s logical to assume given all the pandemic hysteria that daily death rates are soaring way above average, but in fact, the year-to-date number of American deaths is down 1,457 from expected levels. This seems like one more thing we can add to our list of unresolved questions, only for this one, we have the magic of math at our disposal.
Is there a COVID crisis? Absolutely. Are people dying from this possibly manmade virus? Yes. Was the government’s response appropriate? Yes; at least initially. Are we still in crisis? The media says yes, politicians say yes, academics say yes, the dismissed demographic (i.e., you and I) initially say yes, but are starting to have second thoughts. But it’s all conjecture and what should interest us is what the evidence indicates; that is, after all, the last bastion of truth and trust for our beleaguered nation.
America increasingly finds itself in a polarizing purgatory where politicians have too much personal prestige invested in hysteria to prematurely end the crisis without calling their leadership into question. Governors can’t collectively resolve how to balance the risk their careers can absorb against what their subjects are compliantly willing to endure. Risk aversion is a common consideration in most engineering applications. The expression, “safety factor” is a form of risk aversion addressing the additional features added to a design to mitigate known and potential hazards. Risk aversion can be viewed as a means for making decisions under uncertainty. A famous example of this is the Saint Petersburg Paradox, first posed by Daniel Bernoulli in 1738, which today is a core component in how financial institutions set insurance premiums and interest rates.
Bernoulli’s work led to the mathematical field of “Expected Utility Theory,” which he explains as
“The determination of the value of an item must not be based on the price, but rather on the utility it yields. There is no doubt that a gain of one thousand ducats [dollars] is more significant to the pauper than to a rich man though both gain the same amount.”
Expected Utility Theory is key to how COVID eventually ends. For that, we must first accept that the COVID genie is out of the bottle and whether natural or manmade, is with us forever. Since virus vaccines are never 100% effective, people will continue to die from COVID after a vaccine’s been developed and distributed until the virus is fully attenuated. Society accepts a certain level of risk, for example, we accept 85 people die each day from pneumonia and influenza. How many COVID deaths are acceptable for the economy to turn back on and for us to resume our normal lives? In our political purgatory, some governors assert the answer’s zero, which means we never resume normal lives. The problem with their beguiled belief is that zero deaths are unobtainable. At a minimal, the threshold should be 85 deaths per day.
In resolving the Saint Petersburg Paradox, Bernoulli recognized the psychology behind personal risk. An iron worker may walk along 8” wide beams hundreds of feet in the air but have a fear of water. In poker, one person may go all-in on a pair of Jacks, while another folds. Each of us has different measures for perceiving and averting risk. When it comes to declaring COVID over, each of us has a different threshold reached only after our personal expected utility is realized. An elderly person who’s overweight and on high blood pressure medication likely has a higher threshold than a healthy teenager. This is what governors can’t grasp, insisting instead that their unobtainable thresholds be applied uniformly across all demographics. The purgatory our once proudly independent nation finds itself in is that we’ve compliantly decided that fifty governors, fifty individuals declaring themselves rulers over 328 million subjects, can autocratically dictate a collective expected utility.
As we approach June 7th, Brix/Fauci decide to make another dire prediction. However, given they’ve been 100% wrong 100% of the time, their credibility is suspect. Even with their dismal record, the media reiterates every word unable to distinguish rigorous scientific evidence from inadequately informed opinion. Brix/Fauci assert that the rate of infection is a credible predictor of future deaths, but it’s actually a false flag. There are multiple issues with the CDC infection numbers, for example, the people who get tested tend to have symptoms, which skews the sample population away from a random representation of the general population and in statistics, skewed samples lead to skewed inferences.
People currently being tested are concentrated in urban areas, which means they don’t represent a cross-section of the country. In addition, the more you test the more you find, which means as more tests are performed more cases are found but that has no correlation on whether the rate of infection is increasing or decreasing. Long story short, infection rate data provides no discernable evidence regarding COVID’s behavior.
Further falsifying the Brix/Fauci infection rate fallacy is the CDC admits to botching multiple batches of tests and are unable to quantify the impact, making any inference based on infection data scientifically meaningless. The only value tracking the number of COVID cases provides is as a measure of how close the country is to achieving herd immunity. I keep waiting for a study that samples a random cross-section of the country breaking down regions and demographics so credible inferences can be made regarding risks and mitigation, but no such study seems forthcoming, and it should be a high priority.
Brix believes the CDC overreports COVID deaths by 25% while Fauci asserts they underreport by 25%. New York and Pennsylvania admit to over-counting by as much as 50%. This means it’s impossible to know how many Americans have died from COVID and calls the viability of CDC data into question. Given the ethical ambiguity of the health care industry, once government incentivized doctors and hospitals to inflate COVID deaths, the Pavlovian practice of reporting any death as COVID began further corrupting CDC data.
As of May 13th, CDC reports 81,805 cumulative COVID deaths; with estimated over/under counting, the actual number is likely somewhere in the range of 42k to 102k. Deductive logic dictates we subtract out pneumonia and influenza deaths from the CDC PIC number, which results in a likely range of 6k-66k. When you factor the financial incentive to falsify COVID deaths, the actual number is likely skewed toward the lower end of the range. Let’s assume the actual number of COVID deaths is 26,000; less than half the number of flu deaths in 2017. To refresh your memory, in 2017, schools remained open, baseball was played in packed stadiums, and you could buy shoes at Bob’s Boot Barn.
Note: This chapter is based on a series of 2020 essays submitted to major media outlets, including the NY Times, Washington Post, and Chicago Tribune. The essays can be found at: https://rmdolin.com/commentary/
Read entire Truth and Trust in Crisis book
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