Forever lockdowns

Open for takeoutCoronavirus appears to be forcing some US troops out of Iraq, a sign that America’s “forever war” in that country may be winding down after just 17 years of destructive and pointless conflict. Ironically, though, SARS 2.0 has inspired the launch of a new type of forever war: the indefinite suspension of society and commerce in the name of defeating a microbe. Call it the forever lockdown.

As with America’s misadventures in Afghanistan and Iraq, there is no clear end date for this gargantuan effort because the victory conditions are vague. On the one hand, we are told that the goal is to “flatten the curve.” But then Dr. Fauci, the immunologist who apparently believes he has been placed in charge of the United States, informs us that “social distancing” must continue until the virus is no more – which presumably means well into 2021 at the earliest:

Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said that the novel coronavirus “might keep coming back” year after year. Speaking to the White House press corps on Wednesday, he said that the ultimate hope is a vaccine. That, Fauci added, may not be ready for a year to a year and a half, although other experts say even that timeline is optimistic.

“I was on the weekly conference call with the WHO-sponsored group of all the health leaders in the world who are dealing with this, and we all came to the agreement that we may have cycling with another season,” Fauci told the press conference. “We’ll be much better prepared. We’ll likely have interventions, but the ultimate game changer in this will be a vaccine.”

“If we get to the part of the curve where it goes down to essentially no new cases, no deaths for a period of time, I think it makes sense that you have to relax social distancing,” he added. “The one thing we hope to have in place, and I believe we will have in place, is a much more robust system to be able to identify someone who is infected, isolate them, and then do contact tracing.”

Fauci called for a national lockdown in a CNN interview:

Dr Anthony Fauci, the chief infectious disease expert leading the US response, echoed Mr Gates’s claims and said he doesn’t understand why states aren’t working together to tackle the virus.

Dr Fauci told CNN: “You know, the tension between federally mandated versus states’ rights to do what they want is something I don’t want to get into … But if you look at what’s going on in this country, I just don’t understand why we’re not doing that.”

Did someone mention Bill Gates? America’s wealthiest man, like Fauci, is calling for a complete national lockdown in almost comical language:

First, we need a consistent nationwide approach to shutting down. Despite urging from public health experts, some states and counties haven’t shut down completely. In some states, beaches are still open; in others, restaurants still serve sit-down meals.

This is a recipe for disaster. Because people can travel freely across state lines, so can the virus. The country’s leaders need to be clear: Shutdown anywhere means shutdown everywhere. Until the case numbers start to go down across America — which could take 10 weeks or more — no one can continue business as usual or relax the shutdown. Any confusion about this point will only extend the economic pain, raise the odds that the virus will return, and cause more deaths.

Gates is more generous with the expected timeline in an interview with the Khan Academy guy:

Even then, there will have to be limits. “It’s not normal. They don’t do sports events or big gatherings. That will wait until [we have] the vaccine, but we’d like — if things go well, and the numbers will drive it — we’d like to see that ability to open up somewhat by ideally early summer,” Gates said.

Large gatherings might have to be put on hold for as much as a year longer, to give time for adequate testing of a vaccine that can be administered worldwide. “It’ll take a while to get back into the ‘let’s go take a vacation, let’s go buy a new house’ type of mode,” Gates said.

Presumably, “large gatherings” include religious services, which have been banned in a number of states. Gates takes it for granted that the US will simply do what he is urging. We’ll see about that. In any case, he is smart enough to recognize and acknowledge what this would mean for American prosperity:

That more cautious mindset seems likely to lead to “the biggest shrinkage of GDP in any of our lifetimes,” Gates said. “We are in uncharted territory. … Eventually the economy will be bigger than it was before we got into this, but the shrinkage we’re seeing in these few months is completely unprecedented, and there are human lives behind that,” he said.

The federal government plans to maintain social distancing guidelines until the end of April. But some states are going beyond that: Virginia’s stay-at-home order extends until June 10, while similar edicts in California and Maryland are indefinite.

Abroad, Australia’s PM is talking about extending the country’s lockdown for at least six months:

Mr Morrison has previously said such measures could be in place for six months, but he admitted that the restrictions could last much longer.

‘I said at least six months, it could be longer,’ he said.

‘What I am trying to do is make it very clear to those who think this can all be done in a couple of weeks, with the lockdown, as they call it, that that is not true.

‘I am the only leader in the world at the moment talking about a much longer time frame.

‘I am trying to get Australians to understand there is no quick fix.

“There is no quick fix” is the message that is increasingly coming from our elites. They are preparing us for a long, miserable and ruinous battle against the microbe, one which our economy, society, and political order are not likely to survive. The forever wars weakened and demoralized America. The forever lockdown, if actualized, will finish us off. Buckle up!

Flatten the economy

Mad MaxNearly three months after the WuFlu outbreak was first reported to the World Health Organization, the total official global death toll of this once-in-a-century pandemic remains modest – even trivial, on the scale of the human population – notwithstanding relentless wall-to-wall media coverage, social media hysterics, and deliberately scary-looking “trackers” like that sinister map from Johns Hopkins. Although the death toll will certainly rise a great deal in the coming months as the virus spreads, it is currently a tiny fraction of the ~1 million global deaths from each of the influenza pandemics of 1957-58 and 1968; neither of which brought society and commerce to a screeching halt.

We don’t know if the repressive measures that are being taken to “flatten the curve” in the West, such as turning Britain into an Orwellian dystopia where you are only permitted to walk your dog once a day, will be beneficial overall, given the speculative nature of the epidemiological models used to justify them and the (unaccounted-for) public health costs of putting hundreds of millions of people under de facto house arrest. But it seems obvious that if these mega-interventions continue for the duration that is apparently required for them to be effective, then they will trigger a violent collapse of the global economy, and with it, widespread immiseration, political chaos and a truly Biblical scale of human suffering and death.

Yet that crazy, nation-wrecking strategy is precisely what is being rolled out around the world. The US is extending its “social distancing” guidelines to April 30, while the UK government is signaling that social distancing measures will be in place for three to six months; while similar measures are being taken in Europe, Australia, New Zealand, India (which has imposed a total ban on leaving the home for 21 days)…

It would appear that the epidemiologists have staged a global coup d’état. The Anglo-American policies are heavily influenced by Neil Ferguson’s team at Imperial College London, whose March 16 study recommended the adoption of Chinese-style “suppression” measures:

We therefore conclude that epidemic suppression is the only viable strategy at the current time. The social and economic effects of the measures which are needed to achieve this policy goal will be profound. Many countries have adopted such measures already, but even those countries at an earlier stage of their epidemic (such as the UK) will need to do so imminently.

Our analysis informs the evaluation of both the nature of the measures required to suppress COVID-19 and the likely duration that these measures will need to be in place. Results in this paper have informed policymaking in the UK and other countries in the last weeks. However, we emphasise that is not at all certain that suppression will succeed long term; no public health intervention with such disruptive effects on society has been previously attempted for such a long duration of time. How populations and societies will respond remains unclear.

But for how long? Earlier, the study notes:

The main challenge of this approach is that NPIs [non-pharmaceutical interventions] (and drugs, if available) need to be maintained – at least intermittently – for as long as the virus is circulating in the human population, or until a vaccine becomes available. In the case of COVID-19, it will be at least a 12-18 months before a vaccine is available. Furthermore, there is no guarantee that initial vaccines will have high efficacy.

Elsewhere in the Discussion section, the authors write (emphasis mine):

However, there are very large uncertainties around the transmission of this virus, the likely effectiveness of different policies and the extent to which the population spontaneously adopts risk reducing behaviours. This means it is difficult to be definitive about the likely initial duration of measures which will be required, except that it will be several months. Future decisions on when and for how long to relax policies will need to be informed by ongoing surveillance.

The measures used to achieve suppression might also evolve over time. As case numbers fall, it becomes more feasible to adopt intensive testing, contact tracing and quarantine measures akin to the strategies being employed in South Korea today. Technology – such as mobile phone apps that track an individual’s interactions with other people in society – might allow such a policy to be more effective and scalable if the associated privacy concerns can be overcome. However, if intensive NPI packages aimed at suppression are not maintained, our analysis suggests that transmission will rapidly rebound, potentially producing an epidemic comparable in scale to what would have been seen had no interventions been adopted.

In his testimony last Wednesday, Ferguson seemed to offer another possibility:

Ferguson said the current strategy was intended to keep transmission of the virus at low levels until a vaccine was available. Experts say that could take 12 to 18 months and Ferguson acknowledged it was impractical to keep the UK in lockdown for so long, especially because of the impact on the economy. “We’ll be paying for this year for decades to come,” he said.

The UK government is aiming to relax restrictions on people’s movements only when the country has the ability to test more people for the virus, said Ferguson. Some have criticised the UK for not following the advice of the World Health Organization to “test, test, test”. But Ferguson said community testing and contact tracing wasn’t included as a possible strategy in the original modelling because not enough tests were available.

He said the UK should have the testing capacity “within a few weeks” to copy what South Korea has done and aggressively test and trace the general population.

But if the country’s deputy chief medical officer is to be believed, Britain is going to be on some form of lockdown for months. What most people don’t seem to understand is that the massively complex, interdependent nature of the world economy means that switching off large parts of it for an extended period of time is likely to bring the whole system crashing down. I don’t expect infectious disease experts to consider this, but then again, who put them in charge of the world?

Magic money machine

Money MakerThe US is plowing $6 trillion of imaginary money into a faltering economy to blunt the effects of the great WuFlu Panic. For context, that sum is larger than the annual GDP of Japan and way larger than US federal revenue in FY 2019 of $3.5 trillion:

An emergency stimulus package to bail out the US economy amid the coronavirus pandemic will total $6 trillion — a quarter of the entire country’s GDP, the White House said Tuesday.

Trump administration economist Larry Kudlow said the package would include $4 trillion in lending power for the Federal Reserve as well as a $2 trillion aid package currently being hammered out by Congress.

“This package will be the single largest Main Street assistance program in the history of the United States,” Kudlow said at the White House coronavirus task force briefing Tuesday evening.

Included in the package is Congress’ almost $2 trillion emergency bill, which, when passed, will issue direct checks for American families, bailouts for the airline industry and a $350 billion loan program for struggling small businesses.

The other $4 trillion will allow the Federal Reserve to make huge emergency bailouts of whatever entity it chooses — a measure that was used to prop up Wall Street firms from collapse during the 2008 financial crisis.

This raises interesting questions about the nature of money. What does it even mean at this point? What is a dollar actually worth, if the US can just conjure a quarter of its GDP out of thin air? Why even collect taxes? This mega-bailout may stabilize things for a while, but our fake economy seems to be on its last legs.

The great heist

Written on March 21, but still relevant. Certain, shall we say, powerful lobbies are determined not to let a manufactured panic go to waste…

1. Here’s a list of what’s been floated, either publicly or privately, for the #CoronavirusCoup. I am told that Pelosi will take whatever McConnell negotiates in the Senate on the corporate side. $50 billion for airlines. $150 billion for anyone Mnuchin wants, likely Boeing.
2. Speeding up of payments to defense contractors. Lifting of Other Transaction Authority caps for the Pentagon to shovel money to defense contractors without restrictions. Transdigm likes to use this one. washingtonpost.com/business/2019/…
3. Elon Musk and Jeff Bezo want “$5 billion in grants or loans to keep commercial space company employees on the job and launch facilities open.” They also want the IRS to give them cash for R&D tax credits.
4. “The hotel industry wants $150 billion. The restaurant industry wants $145 billion. The National Association of Manufacturers wants $1.4 trillion. The International Council of Shopping Centers wants a guarantee of up to $1 trillion.”
Congress is working on a massive coronavirus relief package — it might not be enough for businesses
“The bailout requests are mind-boggling,” said Dennis Kelleher, chief executive of advocacy group Better Markets. “And it’s going to be a matter of whose going to win and who’s going to lose.”
https://www.cnbc.com/2020/03/21/coronavirus-1-trillion-rescue-package-might-not-be-enough-for-businesses.html
5. “Adidas is seeking support for a long-sought provision allowing people to use pretax money to pay for gym memberships and fitness equipment.”
Coronavirus Stimulus Package Spurs a Lobbying Gold Rush
Some industries are in dire need of a bailout. Others see a rare chance to win special breaks at a moment when the fiscal spigots are open.

6. Big meatpackers want expedited visas for seasonal workers. nppc.org/wp-content/upl…
7. Here’s one GOP lobbyist. “Any time there is a crisis and Washington is in the middle of it is an opportunity for guys like me.”
K Street Gets Ready to Feast on Coronavirus Stimulus
More than a trillion dollars is on the table, and terrified lobbyists—and the buckling industries they represent—are gonna want theirs.
https://www.thedailybeast.com/k-street-lobbyists-get-ready-to-feast-on-coronavirus-stimulus
8. Importers are rushing to get rid of duties paid by those found guilty of dumping. app.emarketeer.com/a/plink/row/v1…
9. Beer industry wants $5B. Candy industry wants $500M. And on. And on. And on. There will be more.
Beer industry calls for $5 billion in federal assistance
The Beer Institute and other alcohol beverage producers’ groups wrote to congressional leadership to ask for a stabilization fund of $5 billion to provide cash advances to their businesses in order t…
https://thehill.com/business-a-lobbying/business-a-lobbying/488541-beer-industry-calls-for-5-billion-in-federal
10. McConnell wants big business to rule. So he is refusing aid to normal people, and the Dems are negotiating with him to try to get unemployment assistance and social welfare. He knows Dems won’t pay attention to corporate bailouts if he takes the public hostage.
11. Pelosi will cave on all of this, because the moderate Democrats want her to govern this way. “We have to do something!” they will say. The only hope is a bipartisan coalition of skeptics, people like @AOC and @MikeforWI coming together to say NO #corporatecoup.
12. We have to support industry in a moment of crisis. But the key here is the conditions, and what is likely to happen by allowing Mnuchin to set the terms of all aid is a consolidation of power in the hands of a few. No more small business. America will be unrecognizable.
13. I put this thread into a blog post.
Stop the Coronavirus Corporate Coup
Hi, Welcome to BIG, a newsletter about the politics of monopoly. This is a special edition. I need you to take this newsletter and repost it, forward it, and contact anyone you know in politics. Here…
https://mattstoller.substack.com/p/stop-the-coronavirus-corporate-coup
14. Take this blog post, repost it, forward it, whatever. We need to stop the opportunistic power grab. Bailouts can wait, we need aid to the people. Rent is coming due at the end of the month, but I can assure you Boeing will be fine for awhile.

Econopocalypse

Who could have predicted that stopping a $21 trillion economy in its tracks for months on end would bring about a crisis comparable to the Great Depression?

Federal Reserve Bank of St. Louis President James Bullard predicted the U.S. unemployment rate may hit 30% in the second quarter because of shutdowns to combat the coronavirus, with an unprecedented 50% drop in gross domestic product.

Bullard called for a powerful fiscal response to replace the $2.5 trillion in lost income that quarter to ensure a strong eventual U.S. recovery, adding the Fed would be poised to do more to ensure markets function during a period of high volatility.

Note that this unemployment rate would exceed the peak of 24.9% reached in 1933.

At least giant retailers like Amazon and Walmart are still hiring – indeed, they are planning to add hundreds of thousands of workers to keep up with soaring demand, while small businesses get brutalized.

Some 80 million Americans are living under a near-lockdown that Mnuchin says could last for 10 to 12 weeks. Cuomo is suggesting that the New York lockdown could continue for up to nine months.

Common-sense measures to slow the spread of the virus, like a mandatory 14-day quarantine for all inbound travelers to the US and the wearing of facemasks in public, are apparently not even being discussed, while crazy, anti-social, panic-inducing, economy-killing actions are instead being taken that have transformed daily life more than any single event since World War II. These draconian measures are being imposed in the name of health and safety, but nobody seems to have run an analysis on the public health costs of tanking the economy and effectively confining a quarter of the population to their homes.

Peter Hitchens isn’t falling for this destructive insanity in his home country of Britain.

Economic suicide: the cure for coronavirus

Florida is closedI admit, I’m having trouble wrapping my mind around the speed and scale of the changes that are being imposed on our society right now. A decision has apparently been made to power down huge swaths of the US economy, perhaps indefinitely, to fight the Wuhan Flu, the invisible enemy that has so far killed 155 people in the U.S. and a grand total of less than 10,000 people worldwide.

Disney World is closed. The Las Vegas Strip is closed. Atlantic City is closed. Macy’s is closed. Nordstrom is closed. Apple stores are closed. Half of all school children have been sent home. Nationwide.

For people living in New York, New Jersey, and Connecticut, it is no longer legally possible to eat at a restaurant, drink at a bar, work out at a gym, or assemble a crowd of more than 50 people. Andrew Cuomo, Phil Murphy and Ned Lamont have effected a radical (if “temporary”) transformation of social life that would be the envy of any totalitarian social engineer – and the alacrity with which the people of the tri-state region have accepted, even embraced, these changes is truly shocking.

Maybe I have it backwards – maybe it is the people in authority, the governors, mayors, health bureaucrats and CEOs, that have buckled to pressure from the social media hive-mind, which grows ever more powerful as the US state gets hollowed out. Perhaps it is blue check Twitter, and its sudden demands for ever-intensifying, draconian action, that truly occupies the driver’s seat of our national clown-car.

In any case, a vast chain reaction has now been set in motion that will be difficult or impossible to stop. Where it will lead, nobody knows. We are in uncharted territory and few people have even begun to think this through. A nationwide shutdown that lasts 15 days is perhaps survivable. One that continues for, say, five months probably is not. Having the entire country hunker down at home for a prolonged period of time will slaughter the economy and hurt millions of Americans, perhaps killing a large number of them through knock-on effects: stress, drink, drugs, suicide, vitamin D deficiency… At a certain point you begin to wonder whether the cure won’t be orders of magnitude worse than the disease.

The economic impact

It looks increasingly plausible, even likely, that coronavirus will tank the global economy. Let’s take a gander at some recent headlines:

From the Fortune article:

Now, as coronavirus continues to spread, the region of China most heavily affected by the outbreak is a hub of global supply chains. A new Dun & Bradstreet study estimates that 163 of the Fortune 1000 have tier 1 suppliers—those they do direct business with—in the area. And 938 have tier 2 suppliers, which feed the first tier.

“That’s where it becomes troubling,” Nelson said. “It’s going to be that [item] where only one plant is qualified to make that and it’s going to interrupt a whole production line.”

Allow me to reference a blog post I wrote on the long-ago date of Feb 4. How many other people were writing about this at the time?

[Your humble author:] Mark Kern’s thinking about the global economic shocks being set in motion by the coronavirus outbreak is likely to prove prophetic, even if the virus itself doesn’t morph into a devastating pandemic:

On a related note, Asia’s gigantic work-from-home experiment continues in Japan:

From Sony to Takeda Pharmaceutical, top Japanese companies across industry lines are telling employees to work from home as the country continues to see a rise in coronavirus cases.

The outbreak has spread to nations across Asia in the weeks since it started in the Chinese city of Wuhan. With 66 cases [Ed: 132 now], Japan is among the countries with the most cases outside China, and the growing number of infections with no traceable links to the original epicenter have alarmed experts and government officials alike.

To keep employees out of large crowds, Sony urged staffers Tuesday to telework and avoid commuting during rush hour. It is suspending its usual 10-day monthly cap for working from home.

John Robb asks a pertinent question:

This thing is going to hit the US like a freight train and we won’t be ready for it.

Preparations have begun but they will almost certainly be inadequate.

CNBC: FBI has ordered $40,000 in hand sanitizer and face masks ‘in case the coronavirus becomes a pandemic in the United States’

Economic damage

Mark Kern’s thinking about the global economic shocks being set in motion by the coronavirus outbreak is likely to prove prophetic, even if the virus itself doesn’t morph into a devastating pandemic:

CNN 3 days ago: It’s just the flu bro.

CNN today: It’s a full blown global emergency.

I think the risk in US is still low. If the graph starts to climb next week (which would be after the 14 day incubation period following Chinese New Year Travel), then we’ll see.

People think in linear terms. We aren’t wired for exponential curves…they are non intuitive in everyday thinking.

The grains of rice on a chessboard example is mind blowing to most.

Not many considered the economic problem as well. I started talking about it many days ago..the shutdown of cities and factories in China affecting global supply for raw materials, processed materials and electronic component supply.

You’re only starting to hear the press now.

There is also the terrible problem of all those shut down cities with people who can’t go to work, open their shops. And food. Things can get very ugly fast when the supply chains for food get disrupted to these large cities.

We really need to all work together on this one, and we should have acted much faster.

Instead the WHO sat on their hands, and no China rep was ever on hand during press conferences. Travel needed to be shut down during Lunar New Year, when millions flew, not 10 days later.

China is huge and wealthy, but that just means the logistical problems are beyond the scope of any single nation, even China. They need to be more open and we need to figure out ways to help everyone trapped in these quarantined cities as a single world problem.

He also points to this article in the Straits Times:

Thanks to the coronavirus outbreak, working from home is no longer a privilege, it’s a necessity.

While factories, shops, hotels and restaurants are warning about plunging foot traffic that is transforming city centres into ghost towns, behind the closed doors of apartments and suburban homes, thousands of businesses are trying to figure out how to stay operational in a virtual world.

“It’s a good opportunity for us to test working from home at scale,” said Alvin Foo, managing director of Reprise Digital, a Shanghai ad agency with 400 people that’s part of Interpublic Group.

Telecommuting? What a novel idea! Why not make it worldwide and permanent? But wait:

You can’t manufacture components at scale from home.

The coronavirus will be very damaging to the world economy.

ASUS is already having supply chain issues caused by “the prevailing situation in Asia”:

More:

The economic damage the the US economy is currently more of a risk than infection and is already underway thanks to supply chain dangers of coronavirus.

Selling rice to China

This is how it’s done. Story that I missed from July:

A private importer in China last week bought U.S. rice for the first time ever, in the midst of a trade war between the two nations, a rice industry group said on Wednesday.

The Chinese importer bought two containers, about 40 tonnes, of medium-grain rice from California-based Sun Valley Rice, said Michael Klein, a spokesman for USA Rice, a trade group that promotes the sale of the U.S. grain. […]

China is the world’s largest rice grower and consumer, producing 148.5 million tonnes of the grain in the 2018/19 marketing year and importing 3.5 million tonnes.