New Great Depression

Now that politicians have declared the pandemic over what better book than one subtitled “Winners and Losers in a Post-Pandemic World”?

None of the six known human coronaviruses has ever yielded to immunization by vaccine. The miracle drugs you hear about in the media can immunize against other diseases, such as influenza, that opportunistically attack patients weakened by the virus. Other drugs in development may treat complications from infection by the virus, ease suffering, and save lives. These drugs are valuable and will help the world to cope with the virus. Yet they are not cures. There may never be a cure, just a modus vivendi with an invisible assailant. (pages 1-2)

The evidence is now strong that overuse of ventilators did more harm than good in COVID-19 cases and caused death in many cases. Most patients don’t need a mechanical lung. They need oxygen. (page 3)

Italy was a warning to the rest of the world in part because earlier ?Chinese data was fabricated and could not be relied upon by policy makers as a guide. In contrast, Italian data was reliable and told a horrifying story of contagion and exponential spread. This was why other developed economies were late in implementing protective measures. Chinese data, although flawed, suggested containment was possible. The Italian data showed the epidemic was not contained in China and would spread explosively in other high-density environments,. It was the unfolding disaster in Italy that finally put the United States and Europe on high alert. (page8)

The lockdown of the U.S. economy and the end of social intercourse beginning in stages in March 2020 will be viewed as one of the great blunders in history. The lockdown was unnecessary, ineffective, and based on both official deception and bad science….Above all, it represented a failure of leadership, as politicians hid behind bureaucrats instead of widening the circle of cognitive diversity and leading from the front. (pages 27-8)

Georgia was among the last states to lock down; it did so on April 3. South Dakota never did. (page 28)

Experts and politicians hid behind their flattening charts without making it clear that they were aiming for timing differences, not a long-term reduction in cases or fatalities. Fear was their most effective weapon. Trust was the first victim. (page 33)

Economics aside, there are a host of other costs that argue against a lockdown. The first is immunity loss. While we were all working from home (if we could) to avoid SARS-CoV-2, we were also evading a long list of other viruses and bacteria that we routinely encounter. Those encounters help us to maintain immunities. By staying in place, our immune systems have now weakened. As we venture out again, those viruses and bacteria will be waiting for us. Many will sicken and die because we have squandered our immunities. (page 36)

Petty bureaucrats assumed dictatorial power over people’s lives at the federal, state, and local levels And for what? This destruction of wealth, deprivation of rights and degradation of communities have been supported by epidemiologists and virologist who know little of law, economics, or sociology and who were empowered by panicked politicians afraid to lead. (pages 37-8)

The S&P is a cap-weighted index, which means that stock prices of companies with a larger market capitalization have a disproportionate impact on the performance of the overall index. The market cap heavyweights in the S&P 500 are the familiar tech giants – Amazon, Apple, Microsoft, Netflix, Facebook, and Alphabet (better known as Google). What those stocks have in common is limited reliance on physical retail space….In short, our major stock indices are divorced from the real economy and relatively unscathed by 60 million newly unemployed Americans and the near wipeout of small and medium-sized enterprises. (page 51)

Meanwhile, the waiters and bartenders not hired back will lose skills and networks, and some will drift from the labor force entirely to the point where, while not technically unemployed as the government defines it, they are unemployed as common sense would see it. (page 53)

An estimated 50 million to 100 million people died during the Spanish flu, yet the global economy continued and the postpandemic business expansion was strong in most developed economies. What has happened to the U.S. economy because of COVID-19 is unheard of. (page 55)

All of these elements – more layoffs, more bankruptcies, feedback loops, and a spending strike in the form of higher savings – mean the recovery will be slow and unemployment will stay high. There will be no V-shaped recovery.
There are no green shoots, despite what you hear from the media. We are in the New Great Depression and will remain so for years. (page 74)

Behind these multitrillion-dollar deficit- and debt-monetization efforts is an ersatz economic melange called Modern Monetary Theory (MMT), which purports to alleviate concerns about debt sustainability. Until recently MMT was a fringe view with some support on the far left. Today it is de facto the economic law of the land even if most of the legislators who enshrined MMT have never heard of it. (pages 76-7)

The Fed failed to foresee a dollar-liquidity crisis coming in September 2019. Now the Fed has abandoned any pretense of integrity by increasing its balance sheet from $4.2 trillion to $7.2 trillion between March 1 and June 1, 2020. Additional trillions of dollars of balance sheet expansion are expected in 2021.The Fed is capable of only one task – inflating stock market valuations as needed. (page 85)

Another factor, confined mainly to Europe, the United ?States, and Canada, was that wartime censorship severely limited the ability to discuss the pandemic candidly, because it was deemed bad for morale. Reporters and others were routinely arrested and charged with sedition for writing articles that even mentioned wartime hardships or battlefield reverses. The [Spanish] flu was off-limits as a topic. (page 100)

The pandemic will fade, perhaps not as quickly as some expect. A more lethal second wave is a possibility. Let’s pray it doesn’t happen. The depression will fade, but not anytime soon. Growth will be persistently weak; unemployment will be persistently high. Social life will resume, but it will not be the same. We’ll get used to it, but it won’t be the same. Social disorder will grow worse, at which point America will face hard choices about getting it under control. The one certainty is that the longer America waits, the harder those choices will be. The factor that will not fade freely is the debt burden. Debt leads to deflation, which worsens the burden. The answer is to use inflation to break the back of deflation. FDR showed us how to achieve that. His solution was gold. Our solution today is the same. (page 161)

5 responses to this post.

  1. Posted by Stephen Douglas on June 13, 2021 at 2:20 pm

    Or not.


  2. Posted by Stephen Douglas on June 13, 2021 at 3:21 pm

    damned if you do and damned if you don’t

    “Mayor RAY NAGIN (Democrat, New Orleans): If I would have done anything differently, I wish I could have spoken with Max earlier, because when he called and said in his 33 years of experience with hurricanes, he had never seen an event like this, conditions like this and that this hurricane was definitely coming for New Orleans–yes, if I could have gotten that word earlier, I would have issued it earlier.”
    No matter what he decided, half the population would have hated him, and the other half loved him. ( I don’t think his later felony convictions had anything to do with Katrina.)

    Always the movie dilemma. Warn the public too early and cause panic or don’t warn them and increase death and injury.

    Or try to have it both ways? Our President at the time clearly didn’t want to deal with it at all.
    “You know, a lot of people think that goes away in April with the heat — as the heat comes in. Typically, that will go away in April.”
    “…when you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done.”
    “It’s going to disappear. One day — it’s like a miracle — it will disappear. And from our shores, we — you know, it could get worse before it gets better. It could maybe go away. We’ll see what happens. Nobody really knows.

    And “herd immunity”. Clearly the path he wanted to take. In other words, do nothing. How can you get in trouble if you don’t do anything?
    Anything except try to thwart any precautions to try to prevent or slow the spread, like holding super spreader rallies in violation of CDC guidelines and state and local regulations.

    Still, like Mayor RAY NAGIN, half the people hate him and half the people love him.

    “63 million Trump voters will never leave him!”

    for some reason


    • Posted by Rex the Wonder Dog!🐶🐶🐶🐾🐾🐾 on June 14, 2021 at 3:18 pm

      “Why do some people ⏫⏫⏫seem to talk just to hear themselves talk?”
      Well, lets review the 14 answers… No, lets review the Dougieeeee answer, yep, this is dougieee, 100% on the money! … I wonder if Dougieeeee will recognize himself:

      ⏩⏩⏩”Sometimes people talk bc they like to hear themselves talk. It seems selfish not to include you in a conversation. I have to say something “Are you aware that you talk incessantly and yet say nothing? How is it even possible to use so many words and actually not have a coherent point or anything resembling a meaningful idea. Just listening to you I feel somehow dumber””⏪⏪⏪


  3. Posted by Rex the Wonder Dog!🐶🐶🐶🐾🐾🐾 on June 15, 2021 at 2:23 am

    Time to feed the Monkey Boi!😺😺😺


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