Shots or fired: America’s vaccine mandates

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Hello, and welcome to the Intelligence from the Economist. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. One of the pandemic's more unexpected effects has been rocketing prices of used cars in places like America. That's because brand new ones are scarce. They're increasingly dependent on a commodity that the car industry hasn't quite cracked yet. And there's something of a plague of snakes in Mumbai. Our intrepid correspondent discovers why they're being found in such high numbers. And it's only partly to do with the torrential rains lashing the city. But first, In America, there's something spreading almost as fast as the Delta variant of the coronavirus vaccine mandates. Yesterday, the Pentagon issued a memo that spokesman John Kirby called a warning order. Vaccinations will soon be mandatory for America's 1.3 million active duty troops.

This isn't just about you.

It's about your ship. It's about your platoon. It's about your squadron. It's your opportunity to contribute to the.

Health and readiness of your teammates and thereby the nation. A week ago, Mayor Bill de Blasio said New Yorkers will have to provide proof of inoculation for all manner of activities.

The key to NYC Pass will be a first in the nation approach.

It will require vaccination for workers and customers in indoor dining, in indoor fitness.

Facilities, indoor entertainment facilities. Not everyone is happy about the requirements. We will not comply. We will not comply. New Yorkers soon took to the streets.

This is a war and they've been.

Starting war and we're going to defeat them. And in America's courts, challenges are already being raised. It remains unclear what might work best to get more citizens vaccinated. Cash payments, lotteries. And now mandates may not work as well as the plain fear of the delta variant or whatever may come next.

America is facing a surge in vaccine mandates.

Tamara Julz Bohr is our US Policy correspondent.

On the public side, the federal government in several states like California and Virginia are are requiring that their public employees get vaccinated or have to undergo regular testing, social distancing, and mask requirements. On the private side, we're seeing universities, Tyson Foods, Walmart, Uber and others require vaccination.

And America isn't alone in this where we're hearing about similar mandates happening, for example, in Europe as well.

Yes, France is requiring a health pass for their citizens to be able to engage in activities like restaurants and museums. And Italy is doing something similar. In Hong Kong, public servants are required to get the vaccine or pay for regular testing. And England is considering requiring vaccination among club goers.

And in a way, this is sort of catching up with vaccinations against other maladies that we already know, right?

Yes, this may seem new that we're having these vaccine mandates, but for over 200 years, the US military has required their troops to get vaccinated for diseases like smallpox. All 50 states require children to be vaccinated against childhood illnesses like measles and mumps in order to go to school. And there are always medical exemptions so that somebody who physically cannot tolerate a vaccine won't be in harm's way. But there are also sometimes religious and personal exemptions, though California revoked that in 2019, as did New York.

So the trend even before the pandemic was that it was legally okay to require proof of vaccination.

So. So while we have seen vaccine mandates in the past, and we have even seen a tightening of those mandates with the removal of personal and religious exemptions, there are still legal challenges to this current Covid mandate. Students at Indiana University are trying to block a mandate that they get the vaccine before they go to school in the fall. And so far they have failed. The rationale is that they can go elsewhere for their education. Therefore, Indiana University is allowed to require the mandate.

But beyond the legal question, I suppose the wider one is whether these mandates will tend to do what they're intended to do, which is get more people to get vaccinated.

Right. And there's evidence on both sides of this. So, for example, there are quite a few behavioral experiments that suggest that incentives for vaccination, whether they're rewards or punishments and actually do not work. A group of researchers from Stanford University studied Ohio's vaccination lottery, and this lottery offered $1 million checks and college scholarships. And they found that this lottery and other similar state lotteries had no impact on whether or not people got the vaccination. Other surveys have shown that people would not respond well to a mandate. According to a survey by the economist ANN YouGov, only 1 in 10American vaccine holdouts said they would get the jab if they had to for work or travel. But sometimes people aren't so good at knowing how they will actually respond once they have things taken away from them. And in California, for example, when they removed the personal and religious exemption for childhood immunizations, the vaccination rate actually increased. And New York City's Mayor, Bill de Blasio 3 thinks that his $100 incentive, along with his new mandate requiring vaccination or testing to go to restaurants and gyms, that will be coming up in mid August, he thinks that that has already increased vaccination rates. They saw a 41% increase in the first week of August. And he thinks that's because of the incentive system and because of the mandate.

And I suppose a lot of these experiments have been confounded by the fact that meanwhile there have been other variants raging around the delta variant, increasing cases and so on.

Right? Interest in the vaccine has gone up now that the delta variant has created an increase in infections, hospitalizations, and deaths. On August 4, America had its highest number of COVID 19 vaccinations in a month. And we're seeing some of the hardest hit regions with the lowest vaccination rates. Places like Florida and Louisiana see an increase in their vaccinations overall. For example, in Louisiana A about 37% of people are fully vaccinated. But on August 3rd, it had the highest number of vaccine doses since April 30th. Right before this surge, many vaccine clinics were empty. But reality is hitting and many people are now racing to get the vaccine. It's interesting because we're having this debate about vaccine mandates and whether or not we should do them, whether or not they're legal, whether or not they're politically wise. But in some cases, Covid might do the work for us and we might end up seeing vaccination rates increase without having to ever require anyone to do so.

Tamara, thank you very much for joining us.

Thank you.

Degenom. And once again, the British Ford Motor Works make history with the production of the first of their new streamlined 1951 range. First, we've got the lane keeping system. Let's face it, even the safest and most experienced drivers can get distracted and.

Wander too close to the edge of your lane.

You can control several things without taking.

Your hands off the wheel or your eyes off the road. With snazzy entertainment setups always on backup, safety features and systems that can park or even partly drive cars are increasingly becoming essentially computers on wheels. Which means that more than ever, a shortage in an industry far from motoring can really put the brakes on.

North America posted a 40% sequential decline.

In wholesale due to the semiconductor shortage last week.

Ford said its inability to get hold of chips had driven down second quarter profits by half year on year. Jaguar, Land Rover, Volkswagen and others have all said they're expecting to sell fewer cars this year, even as other consumer sectors are upshifting. It's all a bit revealing to see what happens when the chips are down.

There are two things going on here.

Simon Wright is the Economist's industry editor.

1 First of all, carmakers didn't anticipate the recovery in demand for cars that would come as the pandemic started to come under control. So they under ordered chips and cancelled orders back in 2020. Another reason is that people are working from home and also lolling around at home. So the demand for these electronic devices, where chips might go, computers and the like, has also boomed. So for that reason, carmakers are having trouble getting hold of chips. And that goes back to where carmakers stand in the pecking order for chips.

How do you mean? Why are they different from any other industry?

So although cars use an awful lot of chips these days, they really only account for around a tenth of global chip demand. So they're down in the pecking order. But also the way those chips come to carmakers is also proving something of a difficulty. Carmakers over the years have outsourced much of the sort of development of technology to the big suppliers, the tier one suppliers, as they're called, the likes of Bosch, Continental, Denso, those companies make the big pieces of technology that go in the car. They acquire the microcontrollers and PCBs from another tier down the supply chain who acquire the chips themselves. So the chip makers are sort of three or four rungs down the supply chain rather than being right at the top of it. So the carmakers don't have a direct relationship with chip makers, so they're relying on somebody way down the supply chain to ensure that these chips are arriving in time.

And you say it's starting to become clear in the industry what the effects of all those different pressures are.

That's absolutely right. So Stellantis, one of the world's biggest carmakers, they reckon they will be producing 1.4 million fewer cars this year than they would otherwise have liked to have done. Ford's net profits fell by half in the second quarter, mainly due to the chip crunch. Jaguar Land Rover says it expects sales in the three months of September to be 50% low planned. And research bodies come out with some big numbers. They think that 5.2 million fewer cars will be produced this year because of the chip shortage. As a result, car makers have cut shifts, they've closed factories temporarily, they've done other things in the short term, which is, for example, make cars that require fewer chips or put the chips they do have into their most profitable models just to keep them going.

You mentioned carmakers trying to get into models that use fewer chips, but that's not the way the world is going, is it?

No, look, the changing nature of the car, in fact, means that car makers are going to have to concentrate on chips and how they get them much more closely. And that is for a variety of reasons. One, electric cars have twice as many chips by value than fossil fuel cars. And most of the industry is moving towards electricity. But also cars are becoming computers on wheels. And the software is the thing that is going to both differentiate cars, but also bring in much more revenue in the future. Tesla, for example, in 2019 made an average of $1,200 vehicle through over the air software updates. And for that software to pay up, car makers are going to have to ensure that they have the hardware that supports that software, that is the chips. A company like Tesla again has been designing its own chips since 2016, which allows them to launch the new software features much more quickly.

And is that just Tesla that works that way?

Other car makers are thinking about following suit, both by going more directly to chip makers to ensure that they can get supplies, but also to develop their own chips. Volkswagen, for example, has announced plans. And as the boss of Volkswagen, Herbert Diess, says, the software and the hardware have to come out of one hand. The two things are sort of interlinked Fundamentally, there's a big debate in the industry about how much software they develop in the house and how much they're buying. It's the same with designing chips, which in fact leaves the Tier one suppliers who are looking a bit concerned about being cut out of the loop here with the opportunity to do their own thing.

But coming back to what's brought us to talk about this in the first place, the chip shortage itself, is there any end in sight for that?

Yeah.

Look, most car bosses agree that the worst is probably over, but this is going to drag on for the rest of this year and probably into next year as well. But by the sort of middle of next year, I think we'll be back to normal.

Simon, thanks very much for your time.

Thank you, Jason.

The city of Mumbai, like much of the rest of India, has been suffering torrential monsoon rains. The old saying has it that it's been raining cats and dogs, but to read the news, you might be tempted to guess it's been raining snakes.

I opened the papers the other morning and found a story about three pythons that were trapped in a shipping container somewhere near the port. And then a fourth python that was trapped in a fisherman's net.

Leo Moroni is our Asia editor and is currently in Mumbai, or as he's always called it, Bombay.

But then the next day I found a story about a lost python on a city beach with a big picture of a couple of guys holding it up from either end. Two days later I opened the newspaper again and this time there's a story about a 28 year old man in some distant suburban. He finds a snake. He thinks it's going to be great fun to wrap it around his neck and have his friends make videos for social media. Then the snake bites him three times and, you know, he died. As any good journalist knows, three makes a trend. So after three days of this stuff, I decided to find out why there were suddenly so many snakes in Bombay.

And it's not just a matter of it being August and those being easy news stories in August.

Ah, you are laboring under the misconception that Indians all take August off the same way Europeans do. They do not. However, it being August does have something to do with it, because August is in the middle of the monsoon and what happens when it rains quite heavily is that snakes and other reptiles, they get sort of flushed out of their burrows and sort of washed out into the city. Once they're in the city, sometimes they don't know how to get back to their natural Habitats which very often will be in Burivli national park, that is within the city limits of Bombay. So they don't know how to get back there.

But if this is a seasonal thing, a monsoon thing, doesn't this happen every year?

But there's more of it now. A snake rescue outfit told me that this June, which is when the month that the monsoon starts, this June, they rescued 130 reptiles, whereas last June it was 114. So that's a rise of 14% this year. And the numbers have been going up in recent years. Anyway, the reason for that is that the climate's been changing and so the sort of pattern of the monsoon has shifted it. It starts a bit later, it ends a bit later. It's often more extreme. The week that all these stories were in the papers, it was just raining really, really heavily. Torrential rains. I mean, it rains pretty heavily in Bombay in the monsoon anyway. But this was pretty exceptional, even for this city.

So it's not just down to the weather, then. It's ultimately down to the climate.

Not just. There's a couple of other factors. One is that, area wise, it's quite small. It's just a little island, despite the fact that it has several million people living in it. So the encroachment of development onto the natural habitats of various creatures is reason they're coming into conflict with human beings. And then the third reason is there's a lot of rubbish in Bombay. And when you have a lot of rubbish, you have a lot of rats. And if you already have snakes, the snakes tend to follow the rats because they think they make a very tasty dinner.

And if people are dying from snake bites, as you've said, there's a problem here that needs to be addressed. I mean, what can be done?

So the people I spoke to suggest a couple of things. One is to keep your environment fairly clean. And then the other big thing they suggest is education. If humans can tell the difference between venomous snakes and harmless snakes, that would reduce some of the conflict. One good time to think about this could be in the coming days. Every year, Hindus celebrate a festival called Nag Panchmi, which is notionally, you know, given over to the worshipping of snakes. This year that falls on August 13th. And so it's a good excuse to bring up the subject and perhaps impress upon people that a good way to honor these creatures would be to learn a little bit more about them so that humans and snakes and indeed other reptiles might be able to live in, I suppose, relative harmony.

Thanks very much for your time, Leo.

You're very welcome, Jason.

That's all for this episode of the Intelligence. If you like us, leave us a rating and a review and you can subscribe to the economist@examiner.com intelligenceoffer. The link is in the show notes. See you back here tomorrow.