…The country, as a whole, is, and has been, opening up. Sunday's New York Times reports that, for weeks now, more than two-thirds of the states have been relaxing restrictions as Trump had urged.
The reasons: weariness with the lockdown and sheltering in place, a growing belief that the worst of the pandemic is behind us and undeniably positive news from several fronts in the coronavirus war.
"New Cases in U.S. Slow," ran The New York Times top headline Sunday, adding the cautionary warning, "Posing Risks of Complacency."
The facts suggest a positive trend…
Still, the thrust of the Times article was about the new crisis we will be courting, should we try to resume normal activities too soon. Do that, says the Times, and we could easily forfeit all the progress we have made.
Message: Social distancing, sheltering in place, wearing masks, working at home — the practices that broke the back of the pandemic — should be sustained for those able to do so.
Clearly, the opening in many states has been driven by popular protest and public demand…
The protesters seem to be saying: We deplore the losses and know the risks, but we cannot live our lives behind closed doors in our homes until the elites tell us, as though we were children, when we may go out in the yard.
Hence, the next question we are all likely to confront:
If there is a sudden resurgence of the coronavirus, a second wave, and the media elite and blue state governors demand a new shutdown, a new closure of beaches, parks, shops, restaurants and churches, will the people of this republic comply with those demands or defy them?
Will the nation answer back to the elites: We did that. We sheltered in place. We wore the masks. We socially distanced. We stayed in our homes. We stayed home from work. We have done all we were told to do to contain the virus. But, now, with the shutdown having put 36 million Americans on unemployment and sunk our GDP to Depression-era levels, we're going back to work.
The political divide has already begun to appear.
Among those making the case for ending the shutdown and reopening the country and economy will be Trump, red state governors like Ron DeSantis in Florida and Brian Kemp in Georgia, conservatives in Congress and populists.
The proponents of a second shutdown will be liberal governors and mayors, the mainstream media and the Nancy Pelosi wing of Congress.
It should not go unmentioned that the latter's political interests are best served the longer the shutdown endures and the worse the economic situation on Nov. 3. If the economy has failed to begin a robust recovery by fall, the greater the odds that Joe Biden wins the White House.
Yet, even if the pandemic returns in the fall, the establishment cannot keep the country closed indefinitely.
Prediction: If the people conclude they have done all they can do to mitigate the suffering from a virus they cannot eradicate, they will resist the imposition of another shutdown, and the establishment will have neither the will nor ability to push them back into their homes.
Ultimately, the people will decide when this shutdown ends, and when a plurality so concludes, the elites will be swept aside.
Of course, the causal arrow runs both ways here: It is also true that as infections increase, more people will demand tests, which will increase the number of tests given. This story makes sense in a place like New York, where Gov. Andrew Cuomo has stated that the state has more tests than it knows what to do with, and has asked people to get tested. It is less sensible in Texas, which has given only about 600,000 tests in a state of 29 million.
One way to help sort this out is to look at the percentage of tests that are positive. A declining rate of positive tests suggests that this really is a story of a wider net being cast, rather than increased infections driving testing. Indeed, that’s what we see in Texas, where the percentage of tests being returned positive is at a two-month low.
Researchers in Korea found evidence that patients who test positive for COVID-19 a second time aren't capable of infecting others, and may have neutralizing antibodies that protect them from getting sick again.
The findings from the Korean Centers for Disease Control and Prevention (KCDC) could have major ramifications for areas looking to reopen their economies, and have led health authorities in the nation to change their protocols for people who have been discharged from isolation.
Researchers studied 285 patients who had survived COVID-19, but subsequently tested positive after multiple negative tests showed they had supposedly recovered. The scientists found a total of 790 contacts, none of whom tested positive as a result of being exposed to the "reinfected" patients.
In addition, virus samples collected from the reinfected patients couldn’t be grown in culture, meaning the patients were "shedding" dead virus particles.
As Europe and the United States start to return to work after lockdowns imposed to slow the spread of COVID-19, the respiratory disease caused by the new virus, world leaders are trying to work out when it is safe for children and students to get back to their studies.
Dr Rosalind Eggo, an infectious disease modeller at the London School of Hygiene and Tropical Medicine, said she had seen some indications from research that children may not spread the novel coronavirus as much as adults.
“There are hints that children are less infectious but it is not certain,” Eggo, who sits on a panel that advises the British government about transmission of COVID-19 among children and within schools, told the science committee of the House of Lords, the second chamber of Britain’s parliament.
First, stop the multi-trillion dollar bailouts. Quit shutting down large swaths of the economy and paying people not to work. Instead, aggressively reopen the economy in those states and counties that have warmer temperatures, low case and death rates per capita, declining case levels, and minimal mass transit. And of course, we should implement best health practices and protect those living or working in nursing homes, food processing facilities, and prisons.
Second, in places historically reliant on mass transit, focus on removing the friction that prevents employees from returning to work. Consider providing a business’s employees and self-employed individuals a tax credit of up to $1000/month for 3 months to be used to pay for parking, ride-sharing and taxis, rental cars, tolls, and gasoline. And, there is a large surplus capacity for each of these today. This would also help take demand pressure off of mass transit operators. The cost would be $30 billion for say 10 million currently unemployed individuals.
Third, places like California are mired in shut down orders and slow re-openings. According to data from Safegraph, San Francisco’s level of foot traffic has recovered to only 42 percent since its low of 33 percent in mid-April. Los Angeles is in a similar situation. Compare this to Dallas, where foot traffic is at 66 percent, up from 42 percent in mid-April. Atlanta and Houston have posted similar gains. Why is this happening, given that California is 33rd and 29th lowest respectively in cases and deaths per capita?
Fourth, get the facts straight about so-called spurts in cases and deaths. A May 14 headline about Texas blared: State reports largest daily increases in cases and deaths. Ignored was that Texas, the second largest state, is 39th and 40th lowest respectively in cases and deaths per capita. Also ignored was the fact that more than 16K prisoners and staff had been checked for COVID-19 in first 3 days of self-testing. Or that, thousands of Texas nursing home residents have tested positive for coronavirus.
Today’s unemployment is the result of a deliberate government emergency measure. For the sake of public health, the government shut down almost all social and economic activity. In a normal recession, economic activity decreases gradually; riding out the duration of the recession is what bring jobs back. Government policy can smooth out the rough edges, but the economic disease needs to run its course. In this case, the government intentionally suspended the economy. The recovery, or how fast the unemployment rate falls, depends on how fast we can reopen and what the government does along the way to encourage (or discourage) employment.
The duration of the shutdown is key. If a vaccine arrived tomorrow, and everyone got it, the government could switch the economy back on, and many—perhaps even 80 percent or more of the unemployed— would go back to their jobs. Pent-up demand would explode, we’d have a strong recovery, and the recession would end quickly. On the other extreme, if we stayed locked down until there’s a widely available vaccine— another year or two, even—many businesses would fold. Demand would crater because so few people would have jobs and money to spend. Skills would deteriorate, and some people would never go back to work. There would be massive economic destruction and unimaginable rates of unemployment. It would take many years to recover.
As states start to reopen, it’s likely that we’ll wind up somewhere between these two scenarios. Re-openings will be slow and uneven. Some states or regions will go too fast, risking future closures, and others too slow, risking needless economic damage. Even fast re-openings will see depressed economic activity. Re-opened businesses are at partial capacity, and some will continue to struggle. Unemployment will fall initially, as some people go back to work, but could then increase because of weak demand. The most realistic and hopeful scenario is that, as time goes on, people will become more comfortable, learn how to live with risk, and make responsible choices, while the virus stays at manageable levels until there is a vaccine. The economy will slowly recover.
You’ve probably been hearing a lot about contact tracing. It’s the process of identifying people who have come in contact with someone who has tested positive for COVID-19, instructing them to quarantine and monitoring their symptoms daily.
Contact tracers are usually hired by a state’s department of public health. They work with an infected person to get the names and phone numbers for everyone that infected person came in close contact with while possibly infectious. Those names and phone numbers are often kept in an online system.
People who had contact with someone infected with COVID-19 may first get a text message from the health department, telling them they’ll get a call from a specific number. The tracer who calls will not ask for personal information, like a Social Security number. At the end of the call, some states ask if the contact would like to enroll in a text message program, which sends daily health and safety reminders until the 14-day quarantine ends.
But tracers won’t ask you for money or information like your Social Security, bank account, or credit card number. Anyone who does is a scammer…
A candidate vaccine for Covid-19 developed by the drug maker Moderna appears to generate an immune response similar to the response seen in people who have been infected by the virus and recovered, the company said Monday.
In a Phase 1 trial, eight patients who received two doses of the vaccine at the lowest and middle doses tested — 25 and 100 micrograms — developed neutralizing antibodies to the virus at levels similar to people who had recovered from infection, the company said in a statement.
The data were limited and from only a small number of participants in the trial, led by the National Institute of Allergy and Infectious Diseases. But they are still likely to be seen as encouraging. Research aimed to develop a vaccine against SARS, a related virus responsible for a 2002-2003 outbreak, showed that neutralizing antibodies are pivotal for achieving protection.
How did a temporary plan to preserve hospital capacity turn into two-to-three months of near-universal house arrest that ended up causing worker furloughs at 256 hospitals, a stoppage of international travel, a 40% job loss among people earning less than $40K per year, devastation of every economic sector, mass confusion and demoralization, a complete ignoring of all fundamental rights and liberties, not to mention the mass confiscation of private property with forced closures of millions of businesses?
Whatever the answer, it’s got to be a bizarre tale. What’s truly surprising is just how recent the theory behind lockdown and forced distancing actually is. So far as anyone can tell, the intellectual machinery that made this mess was invented 14 years ago, and not by epidemiologists but by computer-simulation modelers. It was adopted not by experienced doctors – they warned ferociously against it – but by politicians.
Sweden’s policy might seem heartless from the perspective of the pandemic only, but its approach seeks a “golden middle” between evils – and it appears to be working. Dr. Mike Ryan, the WHO’s top emergencies expert, recently lauded the approach, saying “Sweden represents a model if we wish to get back to a society in which we don’t have lockdowns.”
There is good reason to avoid large-scale lockdowns, and Sweden’s approach recognizes the downside of such measures. While widespread disease has an expected cooling effect on the economy, the world’s adoption of China’s extreme measures has forced an end to the economic boom and pushed us into an apparent severe global recession.
Over 30 million Americans have been laid off, pushing unemployment from 3.5% to 19%. The shelter at home decrees keep many more millions at home climbing the walls. This grounding of many tens of millions of healthy and productive people puts further strain on already weakened production and supply chains. A quarter of businesses expect to be closing by June if restrictions are not lifted and sales don’t pick up.
This is not simply about economics. The economic impact goes beyond pure financial losses. Business closures cripple supply chains and will affect the availability of goods for the foreseeable future. This includes food shortages. More money can help those without savings or income cover immediate and necessary outlays, such as rent and utilities. But more money cannot buy food from empty shelves.
National Security Advisor Robert O’Brien revealed in an interview Friday that the New York Times and Los Angeles Times declined to publish his recent column on American ventilator diplomacy because it “didn’t fit their narrative.”
Back in early March, many experts feared that a shortage of ventilators in America could be a public health catastrophe because there would not be enough of the life-saving machines in hospitals to treat critically ill COVID-19 patients.
The column describes in detail how the Trump administration became a world leader in the fight against the coronavirus by ramping-up production of ventilators.
The Treasury Department released new federal spending and tax revenue data this week, and the U.S. government is spending and borrowing at a record-breaking rate.
The federal fiscal year begins in October, so we're now more than seven months in. Comparing the first seven months of this fiscal year with the same period of last year, the federal deficit of $1.48 trillion this year has ballooned to 70 percent above its previous peak of $869 billion reached during 2011…
Now, the Democrats are pushing for another round of stimulus packages totaling more than $3 trillion. The new round of stimulus will include more stimulus checks for individuals and families, bailouts for states, and rent assistance…
This will more than double total federal spending from 2019 to 2020, with deficits quickly rising as tax receipts fall or stagnate.
Needless to say, the national debt (i.e, the sum of the annual deficits) is ballooning as well. The additional spending will push the total national debt, which was $23 trillion at the end of 2019, sailing past $25 trillion. This will put the U.S. government's debt-to-GDP ratio at the highest level it's been since the Second World War.
How long can this sort of out-of-control spending last? That depends on how long the U.S. dollar remains the world reserve currency. So long as that's the case, the United States can likely get away with issuing trillions of dollars in new debt month after month after month. After all, in a world with normal, functioning debt markets — i.e., a world we don't live in — a government would need to pay higher interest on its debt as it issues more of it.
The U.S. already pays more than $200 billion in net interest paid on the debt. However, as we noted in 2018, even small increases in interest rates would force the federal government to pay hundreds of billions more in interest payments. This would force cuts to federal programs like Social Security and military spending while placing more pressure on federal lawmakers to raise taxes. Potentially, the currency could even collapse and the U.S. would be forced to default on the debt with huge cuts in federal spending resulting.
So far, the U.S. has avoided this fate. This is in part due to the fact the world still views U.S. bonds (for now) as a relatively risk-free investment compared to bonds from other countries…
Another reason the U.S. avoids its day of reckoning on debt is the fact the U.S. dollar itself is still in demand as a global world currency. Foreigners still want dollars, and that makes it easier for the U.S.'s central bank to buy up U.S. government debt in order to keep interest rates low — and thus government debt payments. The central bank creates new money to do this, but this can only be sustained because so many foreigners want U.S. dollars which helps keep U.S. domestic price inflation low. In fact, demand for both U.S. dollars and debt is so high at the moment, there is a "dollar shortage."
As long as this situation persists, U.S. debt can continue to accelerate and spiral upward. Nothing lasts forever, of course, and at some point even the dollar and U.S. debt will cease to inspire confidence. When exactly this will happen is impossible to predict.
Italy is trying to control the price of face masks, and it isn’t going well. On April 26, Domenico Arcuri, special commissioner for the coronavirus emergency, announced that surgical face masks must be sold at a fixed price of 50 European cents (around 54 U.S. cents) plus tax.
On May 8, a leaked draft of a new economic stimulus package mentioned a maximum price of €1.50, though this new mandate has not yet taken effect. The Italian newspaper Il Foglio reports that the government is buying face masks wholesale at a price between 38 and 70 European cents each—essentially admitting it can’t abide by its own price controls.
Face masks have been controversial since the beginning of the Covid-19 outbreak, in Italy and elsewhere. At first, the World Health Organization and Western governments counseled against the widespread use of face masks as a personal protection device. The WHO changed its mind in April. Now in Milan, where I live, face masks are required in public.
A good mask used to cost as little as 10 European cents, but prices surged after Covid-19. The Civil Protection Department, Italy’s national body that deals with emergencies, promptly discouraged entrepreneurs from importing masks, right as more masks were needed.
Companies were allowed to import only masks that were already allocated to health-care institutions. No one was allowed to import masks and sell them to the highest bidder. Those who were buying up masks to hoard risked government confiscation. These moves clamped down on price gouging but created a shortage. Through a later adjustment, importers were able to keep 20% of their masks to sell on the market. Yet the signal was clear: importing face masks is better not left to “animal spirits.”
But as soon as the lockdown ended, it became difficult to supply masks to the public. As a European manufacturing powerhouse, Italy is second only to Germany. And Italy has a glorious history in the textile industry dating to the 14th century. Many factories and producers during the lockdown started making masks, which was better than being idle and served a social purpose. These companies’ efforts to refocus their productive power were halted with the stroke of a pen.
