A very difficult balancing act

President Trump is getting a lot of criticism for his promise yesterday to reopen the country by Easter. It looks, at first blush, like he is simply ignoring the warnings of the health professions. It looks, at first blush, like he is on a different planet than the rest of us. But clumsy as his approach is, I think fundamentally he has a point. We simply can't keep the country closed down for as long as the epidemiologists would like us to.

Here is the dilemma: epidemiological models predict, if we don't keep the country locked down, that even under the most wildly optimistic assumptions, if only 20% of the 327 million Americans get infected, and if the fatality rate is only 1%, as many as 654,000 Americans might die. It is more likely that 50% or more of Americans will get infected eventually, and if we don't sustain social distancing for many months perhaps 1.5 - 2 million Americans will die.  By contrast, a really bad influenza season, like the 1957 season, kills about 70,000 Americans. The 1918 Spanish influenza killed about 600,000 Americans from a much smaller population of about 103 million (that would be about 1.8 million deaths with today's population).

On the other hand, economic models suggest that keeping the country locked down as tight as it is now for 3-4 months or more may well bring on a depression worse that the Great Depression of 1929, with as much as 30% or more of the nation out of work, more than were out of work at the peak of the Great Depression. In the end that might cause even more deaths, from depression, suicide, alcoholism and disease caused by poverty and inability to afford health care or decent meals.

So here is the dilemma: how to balance what the health services need with what the economy needs to survive. I suspect the Imperial College report is correct: we will need to tighten up until we bend the infection curve down, then loosen up enough to get some economic recovery going, then tighten up again when the infection curve starts to climb again, rinse, wash and repeat. And do this for a year or two until, hopefully, an effective vaccination is widely available. Or perhaps we can do this cycle regionally, or just around current hot spots.

This will be a difficult balancing act, and the President and state governments will get incessant criticism when they loosen restrictions, and then when they tighten them again, which will make it all that much harder. But those who are arguing for reopening the economy have a valid point, and we need to not dismiss them out of hand.

Do they get it, or don't they....

Here we are in the crisis of a generation, and Congress is still playing petty political games. Both parties are trying to stuff partisan goodies into the latest desperately-needed Senate bill to deal with the economic fallout of the CORVID-19 pandemic. There are real and valid disagreements about just what financial moves would help most, and how best to implement them, and I don't blame Senators for arguing about those issues, but they ought to pass a clean bill dealing just with the crisis, and not try to shoehorn in all their unrelated pet projects.  House speaker Pelosi has produced an even more partisan goodie-loaded House bill, but fortunately it will probably go nowhere.

It doesn't help that a few Senators seem to have done some insider trading on their advance knowledge, nor that all the old (mostly men) in Congress seem to be getting worried about their own health more than the health of the nation. No wonder the nation is so cynical about politicians.

On the other hand, as Peter Zeihan pointed out today on his blog, Congress has done more in the past week than it has in the last decade, so I guess that is something.

Sophie’s choice

“Sophie’s choice”, which comes from the 1982 movie of the same name, refers to an extremely difficult choice where both possibilities are terrible. That’s the way I feel about the upcoming 2020 presidential election.

In 2016 we had a miserable choice between (1) a female Democratic egocentric sociopath with a sleazy history, and (2) a male (nominally) Republican egocentric sociopath with a sleazy history. The election was clearly the Democratic sociopath’s to lose, but she managed to lose it, mostly because in assembling her campaign team she prioritized personal loyalty over competence, so she got a blindly loyal but thoroughly incompetent team.  So incompetent and so arrogant, in fact, that they refused to listen even to the wise advice of her politically-brilliant twice-elected ex-president husband.

Being an egocentric sociopath, she of course blamed everyone else, her staff, the media, the FBI, the Russians, etc., and even wrote a book about it. It couldn’t possibly be that anything she did contributed to her loss.

Meanwhile the (nominally) Republican sociopath who won has governed (I use the term loosely) the country (barely) adequately up until the present coronavirus crisis. To his credit, he has tried his best to deliver on ALL his campaign promises, even the misguided ones, which is not behavior normally seen in professional politicians. And to be fair, Congress and the federal bureaucracy have proven to be every bit as inept and dysfunctional as he is. I have to say he has stood up remarkably well to the incessant and unceasing attacks by the liberal media, the entrenched Washington bureaucracy and the unhinged left, who seem incapable of getting over the fact that they lost the election.

And in fact the dissolution of the world order that has prevailed since the end of World War II is not his fault, despite the hysterical charges of his enemies. It has been slowly falling apart all through the last three administrations, Republican and Democratic alike, ever since the collapse of the Soviet Union deprived the West of a common enemy, and he is just continuing the trend toward American self-focus (but perhaps at an accelerated pace)..

In the upcoming 2020 election we will apparently have a choice between this (nominally) Republican egocentric sociopath and whomever the Democrats nominate. The two Democratic contenders remaining are

(1) an aged and angry socialist (nominal) Democrat whose political ideology ossified somewhere in the 1950’s, who wants America to emulate the 1960s Swedish socialist system that the Swedes themselves abandoned in the 1970s because it didn’t work, and who seems oblivious to the miserable economic failures of socialist systems all across the world from the Soviet Union to Venezuela, and

(2) an aged, folksy and rather likable (in the crazy uncle sort of way) party Democrat whose encroaching senility is so painfully obvious that his staff is trying to limit his exposure to live events to the shortest times possible, and somehow put a positive spin on his unpredictable outbursts and occasional weird behavior (like sucking his wife’s finger while she is talking on live TV).  

It looks right now like encroaching senility will win the Democratic nomination. Normally I would predict that this election is the incumbent Republican sociopath’s to lose, especially against encroaching senility, but he has been so wildly erratic and ineffectual in his response to the coronavirus pandemic that he may well lose it.

Meanwhile, this appears to be the choice we will have on November.  Those who vote blindly on party label or party ideology will have no problems. But for independents like myself this is another Sophie’s choice   

The CORVID-19 response

A number of things are now evident about the CORVID-19 pandemic:

The US federal government is proving to be far too slow, too cumbersome, too bureaucratic to be of much use in this crisis. China’s drastic efforts at containment bought the Western world a month or two of warning, but the US (and most of Europe) squandered that time and were thoroughly unprepared when the infection spread out of China.

President Trump is clearly out of his depth, and seems slow to take the advice of his experts. But to be fair, polls show that there is a fair proportion of the nation who are still in denial about how serious this is, not only medically but economically. And a potential President Biden, while certainly a welcome change in personal style, doesn’t portend much practical improvement, given his painfully obvious loss of mental capacity. In any case, the dysfunction is not limited to the president right now – Congress and the whole federal system are proving to be equally dysfunctional, as the debacle with testing kits demonstrated.

Clearly the infection increases will continue for an extended period, perhaps 6 months to a year or more. If we want to keep the new infection rate down to what the health care systems can manage, we will be in lockdown for months and months, and it is not clear the economy can survive that. There are an enormous number of people who are out of a paycheck now with the shutdowns, and this will rapidly become a serious social and political problem. On the other hand, if/when we lift the lockdown the infection rates will no doubt pick up again. This problem will persist until we have an effective vaccine widely available, probably not for 12-24 months yet.

I suspect that the experience of telecommuting and attending online classes for an extended period will hasten the national move to do that more often, hastening the changes in education and the workplace.

Bad as the crisis is in this country, it is far more severe in the rest of the world. It seems to me fairly likely that China as a nation may not survive, at least under the present government. They have conquered the worst of the pandemic, but their economy, already fragile, depends on exports, and the exports worldwide are drying up.

The European Union, already under strain before this, is simply falling apart. Italy, in crisis, is getting no help from France or Germany, who have banned export of medical equipment and supplies - it is the Chinese of all nations who are sending much needed medical equipment and medical teams to help Italy. Increasingly EU members are closing their borders to try to contain the pandemic. The ill will that this is generating among EU members will poison the effort to hold the EU together from now on.

 And the pressures this crisis puts on places with poor health care infrastructure, like Iran, Russia, North Korea and most of Africa, are bound to have substantial political consequences in the long run.

This event will clearly substantially reshape the world.

The power of state and local governments

I suggested in my last post that while the federal government was fumbling their coronavirus response badly, state and local governments, being closer to the people, were likely to respond better.  Evidence thus far seems to back that up.  New York and Washington states have moved aggressively and quickly to stem the tide of infections, and my own state of New Mexico, which got its first case a few days ago, has also moved with commendable speed. Schools are closed, people are told to work from home, meetings and events banned, aggressive testing is going on (within the constraints of the available testing kits and facilities).

The media focuses on the federal response, perhaps because so many of the journalists live in Washington, but this battle will really be fought and won (or lost) at the state and local level.  And if we succeed in containing this pandemic, it will be the state and local leaders who deserve the credit, not the president or Congress (though not doubt they will try to take the credit).

The point of quarantines and lockdowns

It is clear from some of the media comments that many people don’t understand the logic of quarantines and lockdowns of the sort that Italy has just imposed. The media complaints have been that quarantines and lockdowns are useless, that they aren’t working because the coronavirus is still spreading, so we might as well not bother with them.

Epidemics tend to follow a bell-shaped curve, a sharp rise in infections at first as it spreads through a largely susceptible population, reaching a peak and then beginning to decline as the pool of susceptible people decreases. That peak is what causes the biggest problem, because lots of serious cases at once overwhelm the available medical facilities, as indeed is happening right now in Italy. There aren’t enough beds or enough respirators to deal with the number of serious respiratory problems they are seeing.

The point of quarantines and lockdowns is to flatten that peak and spread out the infections over a longer time, so that the health facilities can better cope with the volume. There indeed may be just as many infections in the end, but spreading them out over a longer time makes them more manageable. Not so many beds and respirators are needed at the same time. There is time to resupply medications, and even to buy time for the development of vaccines.

If the U.S. were smart, it would begin such measures now, even before it is apparent that they are needed, because if one waits until it is obvious that we have a serious problem, it is already too late for quarantines or lockdowns to have their desired effect of flattening the peak.  Of course, we won’t do that. Even with Italy as an example. Some companies and colleges are beginning to understand and move classes and work online, but the U.S. political system – in both parties – is still clueless.

What’s now clear about the coronavirus epidemic

There is still a good deal that is unclear about the CORVID-19 epidemic, but a few things have become clear:

1.  It is clearly more dangerous than the seasonal influenza. Seasonal influenza kills about 0.1% (1 in 1000) of those it infects. CORVID-19 looks like it is lethal in about 1-2% of cases (1 in 100 or 1 in 50).  And for the old the percentage of deaths is significantly higher, running about 15% (1 in 7) for those 80+. 

2. We have no idea how widespread the infection is in the US, because we have tested so few people. We know the number who are ill enough to get hospitalized and tested, where test kits were available, but that is so few cases thus far that we are really running blind at the moment.  It is highly likely that we already have hundreds or even thousands of people in the U.S. with mild or no symptoms, spreading the infection.

3. The official response in the US has been, to put it charitably, pathetic. At the point where South Korea had tested 140,000 people, the US had tested about 2000, and the fiasco with the production of testing kits is just the tip of the iceberg. Trump can’t figure out what to do. He is trying to limit panic, but he is so clumsy at it that the result is simply confusion. But the incompetence isn’t just limited to the president; the whole federal bureaucracy and political system can’t get its act together or move fast enough or decisively enough to make any difference.

4. It is clear that this infection will sweep through a majority of the U.S. population within the coming months, no doubt causing - belatedly - school and business closing throughout the economy and disrupting life for all of us. Fortunately, most people will only get the mild version, often no worse than a cold, but there will be a significant number of deaths and a good deal of panic and hoarding.  (Why people are stocking up on toilet paper, of all things, is beyond me. Toilet paper is made in the U.S., from trees grown in the U.S. – we aren’t going to run out of it, unless of course the hoarders get it all.)

5. It is also clear that this epidemic is going to cause a severe economic hit to the entire world. The U.S. will probably be impacted less than most other countries, but even we will feel pain. The problem is that key supply chains throughout the world have been cut off. A new car or a pharmaceutical product may only have 5% of its components sourced from, say, China or Italy or South Korea, but if that 5% disappears, one can’t complete and deliver the car or the medicine. This is true of hundreds of thousands of products we buy or use daily, and we are about to see how dangerously interdependent and vulnerable the world economy has become.

6. The worst of the pain will be probably be delayed until April or May. Companies know that Chinese factories close down for the Lunar New Year, so they build up inventory in anticipation, In addition, it takes about 30 days to ship goods from Asia to the US by sea, so we have a 30-day supply still in transit. Once that excess inventory is used up and the goods at sea arrive and are used up, the pinch will start.

7. Our best hope is that state and local governments are more competent than the federal government, and move decisively to limit the infection and the economic dislocation. State and local governments are closer to the people they govern, and therefore tend to be more responsive than federal officials and politicians – not always true, but true more often than not.

Recommended: Disunited Nations

Peter Zeihan's new book Disunited Nations: The Scramble for Power in an ungoverned world is a graduate-level course on geopolitics crammed into 429 pages. Zeihan examines the major nations of the world in terms of their geography, history, culture, economies, resources, trading patterns, demographics, politics, and the constraints that shape their likely futures. The conclusions he draws from these factors about who will do well and who will do poorly in the coming decades is often at odds with the "conventional wisdom" of the media pundits, but are more convincing because he backs up his predictions with a wealth of facts.

Written with his characteristic humor, this is quite a readable book, but exceedingly important for those trying to understand the underlying forces driving world affairs today.

Recommended: The Storm Before The Calm

George Friedman’s latest book, The Storm Before The Calm, is well worth reading. Friedman has looked at America’s history and identified two cycles. One cycle is America’s periodic rethinking of the government’s role, and that seems to occur about every 80 years (World War II’s massive expansion of government power was the last one). And then there is a 50-year economic cycle, in which we disrupt the economic model. Both are coming to the end of their cycle together in the 2020-2030 era, which he predicts will produce substantial unrest (the Storm), but then, as we always have in the past, we will accommodate to the new reality (the Calm).

This is fundamentally an optimistic book, but Friedman does think we will go through turbulent times in the next decade, for which Trump’s election and Sander’s rise is not the cause but simply a symptom of the growing problems that will drive the cycles.