Are the Props Collapsing?

The stock market fell another gazillion points today. I take it that putting Mike “prayer is the answer” Pence in charge of the Covid-19 response didn’t soothe anyone’s nerves. See Let’s Revisit Coronavirus Czar Mike Pence’s History on Public Health Initiatives to be further not soothed.

Pence famously does not believe in science. But never fear; Pence is merely in charge of the messaging about the coronavirus. “The White House moved on Thursday to tighten control of coronavirus messaging by government health officials and scientists, directing them to coordinate all statements and public appearance with the office of Vice President Mike Pence, according to several officials familiar with the new approach.” So Pence will be in charge of being sure no one will know what’s going on. Public health officials will no longer be able to speak without being censored. It’s not clear if anyone is in charge of the science.

I know I don’t feel better already.

It’s possible the pandemic will not be as severe as feared. But even if the spread of the disease is contained in the U.S., it’s likely we’re going to feel some effects. See Matt Stoller in Wired — Covid-19 Will Mark the End of Affluence Politics.

As Jon Stokes notes, we will, in all likelihood, be locking down travel in some areas of the US for several weeks, as they did in China. People may be advised against gathering in large groups. It’s not clear what any of this will mean for campaigning or primary voting, whether most of us will vote by mail or have our votes delayed.

Moreover, the coronavirus is going to introduce economic conditions with which few people in modern America are familiar: the prospect of shortages. After 25 years of offshoring and consolidation, we now rely on overseas production for just about everything. Now in the wake of the coronavirus, China has shut down much of its production; South Korea and Italy will shut down as well. Once the final imports from these countries have worked their way through the supply chains and hit our shores, it could be a while before we get more. This coronavirus will reveal, in other words, a crisis of production—and one that’s coming just in time for a presidential election.

The supply of pharmaceuticals is especially vulnerable, I understand, so if there is a drug you really need to live and function, you might want to be very careful with your existing supply.

Not only are many medications used in the United States manufactured overseas, but critical ingredients — and the chemicals used to make them — also are overwhelmingly made in China and other countries. The supply chain’s roots now run so deep that it’s difficult to fully anticipate where critical shortages could emerge.

Rosemary Gibson, author of the book “China Rx” and a senior adviser at the Hastings Center, a bioethics think tank, said China has a “global choke hold” on the chemical components that make up key ingredients.

It might have occurred to someone that it was really stupid of the U.S. to become dependent on another country for our medicines. But of course, nobody is really in charge of these things but the glorious Free Market, which doesn’t give a fig about who lives and who dies.

Again, it’s possible the effects of the virus won’t be that severe. But if they aren’t, it sure as hell won’t be because the government was on the ball about it. Trump really did fire the pandemic response team and cut much of the CDC’s budget for responding to global disease outbreaks. We are grotesquely unprepared for whatever is about to hit us. See also U.S. workers without protective gear assisted coronavirus evacuees, HHS whistleblower says.

Our lack of a national health care system also makes us more vulnerable. Helaine Olen writes in WaPo about a concerned citizen who came down with flu-like symptoms after returning from a trip to China. So the man went to a hospital to be tested. It appears the tests were negative, but he got slapped with a $3,000 invoice for a blood test and nasal swab.

It’s very possible there are people among us already carrying the virus but staying away from doctors because they are uninsured. “We don’t want people to be wondering whether they can afford to visit the doctor if they think they’ve got this contagious and possibly deadly disease,” Olen writes. “But by happenstance, ideology and shortsighted, penny-wise-pound-foolish thinking, we’ve set up a situation that will force many to do just that.”

Don’t forget to reflect on all the food service and other service workers who don’t get paid sick days.

Stoller writes that the pandemic could put an end to the politics of affluence.

Affluence politics is not the politics of being wealthy, though, but rather the politics of not paying attention to what creates wealth in the first place. That is to say, it’s the politics of ignoring our ability to make and distribute the things people need.

This is something we’ve been doing more and more badly, I think. Somehow, our economy is not responding to the desperate need for lower-cost homes in urban areas. It is not providing affordable insulin. It is not giving us safe drinking water. On the other hand, Vox reported in 2018 that millions of dollars worth of unsold merchandise is destroyed every year to be sure a surplus doesn’t erode the value of brands. Something is deeply and fundamentally screwy.

Stoller compares the potential disruptions of the Covid-19 pandemic to the Great Depression.

Congress held hearings, but businessmen, academics, and bankers proffered only belt-tightening. Within the Republican establishment, President Herbert Hoover worked 18-hour days, exhorting confidence while refusing to take even basic steps such as having the government guarantee bank deposits. Instead, his administration’s army attacked hungry protesters in Washington, DC, a move that prompted an angry Republican congressman, Fiorello La Guardia of New York, to remind the president: “Soup is cheaper than tear gas bombs.”

For the record, I don’t believe Hoover ordered the attacks on the bonus marchers. I understand that was done on the initiative of Gen. Douglas MacArthur.

Meanwhile on the Democratic side, conservatives and progressives in the party were locked in a bitter battle for the nomination. Many Democrats agreed with Hoover. Maryland governor and presidential candidate Albert Ritchie, for instance, argued that we should rely “less on politics, less on laws, less on government.” Another candidate, Speaker of the House John Nance Garner, claimed the greatest threat was the “tendency toward socialism and communism” and pledged a massive cut in government spending, as well as a sales tax increase. Others turned to extreme racism and xenophobia. Only Franklin Delano Roosevelt, who went on to win a contested convention, campaigned on aggressive government involvement in the economy—or as he put it, a “workable program of reconstruction,” which later became the New Deal.

It does look as if we’re setting ourselves up for a replay of these arguments in 2020. But again, it’s possible this situation will blow over in a month or two and be forgotten. Until  next time.

23 thoughts on “Are the Props Collapsing?

  1. China has a “global choke hold” on the chemical components that make up key ingredients.

    This is the same pharmaceutical industry that bribed their puppet politicians to ban pill imports from Canada with the excuse that our impeccable standards of pharmaceutical quality and integrity might slip.

    But hey, if we can save 5c a ton, source it all out to China!

  2. This is going to be cute. We probably just heard the last "official" CDC count of infected people in the US. Pence will give the "official" count but only after his trained hamster has verified the results… and the hamster works VERY slowly. 

    IMO, Trump's reaction has been (and was yesterday) deny there is a problem. "We have everything under control." It's the reality show producer – Trump is trying to change the facts to fit the script. This may work and I'll be happy if only a few dozen are infected and no one dies. Responding to the threat means spending a lot of money and doing things that are conspicuously absent. (Setting up regions, putting people in centers, recruiting and training medical response teams in ADVANCE of the outbreak. Get what I'm describing. It's not happening.)

    However, there are some truly evil people in the WH. I'm thinking Steven Miller. The POTUS has used emergency powers with great success. Instead of regional response teams of medical pros, will there be a central gulag and propaganda instead of real statistics? Gawd, I hope I'm wrong.

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  3. doug,

    Sadly, I believe you're right.

    At this potentially perilous time, with our government controlled by truly stupid and ignorant people who care more about the stock market and the economy than people's lives, the only joy I can hold in my heart, is watching tRUMP sweat, whine, and lie.

    By the way, to help him, Mike "The Dense" Pence has brought in "Mental Midget" Mnuchin and that other noted medical expert, Larry KKKudlow!

    Oy…

    Pence is recommending that everyone say two prayers, and not to call him or the White (Supremacists) House in the morning, OR EVER!

    We are fucking doomed.  Not ALL of Americans, of course, but surely those in urban and suburban areas.  Rural people might be better off, since there'll be fewer people to spread the disease.

    Hair Furor and Oberleutnant Miller couldn't have dreamed of anything better than a pandemic that will most likely kill-off the urban and suburban dwellers, minorities, and the poor of all colors, and leave the rich and rural largely unaffected.

     

    • Gulag…Kudlow isn't a medical expert. He's a marriage expert. I mean after 3 marriages I would assume he's got it down and would qualify as an expert in marriages.

  4. OT, for probably the first time in my life, I don't know who to vote for. I'm torn b/t 3 candidates (Warren, Sanders, and yes Bloomberg – who sent me more mail today, total of 7 pieces so far). I don't know if Saturday's contest in South Carolina will make a difference (probably not), everyone is waiting for Super Tuesday, when my ballot is due. I've gone back and forth among the 3, can make arguments for and against all of them. Such an interesting and unsettling conundrum, emblematic of how disordered our politics has become. Wish I had more time to sort it out.

    I'm loading up on vitamins and rest, pulling out the stops to build resistance in the face of the pandemic. I don't expect to die from this (could be wrong), but will probably suffer flu-like symptoms. The mortality rate is low, but no comfort if you're elderly.

    • Moonbat.. I took Maha's advice and voted for the candidate I wanted regardless of the probability of them getting the nomination. I would have voted for Corey Booker but he was no longer in the contest and I didn't see the wisdom of making a protest vote.

       So for me, it's que sera sera..and whoever gets the nomination I'll get behind them 100%.

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      • Thanks Gulag. I realized I should vote for the person I would not regret voting for, that I could live with myself.  Your advice rephrased.

    • I like Warren, but I went Biden because, while any of the Dems seem to beat Trump in the polls, Biden has the biggest margin. You can’t rely on opinion polls — tampering and the electoral college BS are likely to narrow the margin. The race could be close in spite of Trump’s breathtaking incompetence.

  5. I can't remember which website I read this in, but someone called the Covid-19 (coronavirus), "tRUMP Flu."

    I LOVE THAT:  tRUMP FLU!!!!!

    I'm going to use that in my comments at every site that talks about this nasty bug, both to help normalize tRUMP Flu to anger tRUMP, and inform and remind people of how badly he has, is, and will respond to the potential Covid-19 crisis.

    tRUMP FLU!

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    • The flu is not a coronavirus. I think of Covid-19 as a cousin of the common cold, with common cold's commonness, but with a Spanish flu attitude.

      It's about 2% lethal. If it infects half of us, then about 1% of us will die. That's 3,500,000 here in the States, and 70,000,000 worldwide. That's about as many as World War Two killed.

      You probably won't die of it; but if it goes pandemic, then you probably know someone who will.

       

  6. Test kits , personal protective equipment, drugs, hospital beds. Workplaces schools shuttered. Food distribution disrupted.

    Do you know the exposure, the incubation period, the treatment protocols , the symptoms, how long it lasts?

    Zero facts being told.

    Not even talking money. Personally i cheer every time there is a drop. Maybe that is the cure for zombie brain.

  7. Are we in a black swan economic event?  Do you even know there was such a thing as a black swan?  If so join the club.  The black swan event was a black swan to me also.  From Wikipedia:

    J

    A black swan (Cygnus atratus) in Australia

    The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying that presumed black swans did not exist – a saying that became reinterpreted to teach a different lesson after black swans were discovered in the wild.

    The theory was developed by Nassim Nicholas Taleb to explain:

    1. The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
    2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
    3. The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event's massive role in historical affairs.

    That psychological biases link goes to:

    A cognitive bias is a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own "subjective reality" from their perception of the input. An individual's construction of reality, not the objective input, may dictate their behavior in the world. Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality.

    1. Does cognitive bias sound like Trumpism?  Ergo, blindsided by reality, we have been caught without any plan Bs at all.  Affluence politics has quickly become necessity politics, and we must be prepared to provide some real, socialized, health care for all on short notice.  An emergency limited socialized medicine program out of thin air on borrowed money.  Oh, did I mention, this has to be done by a band of reality impaired administrators, a.k.a. the Trump administration.  The prognosis is not good.  
  8. I'm not making predictions on Covfefe-19's direct effects (deaths, disruption). 

    But I agree with Stoller, that it will – indeed, already has – triggered the end of the recent economic "boom".  I put "boom" in scare-quote because it's really been more of a Finance Bubble (Stock Market Hits Record High Again, Again!) than a true Boom of real economic production.  Assets (stocks, Real Estate, even Art) have been over-valued for a while.  Interest Rates have been crazy low for a while; Hedge Funds and "Family Offices" (google that, ugh) have been struggling to get decent rates of return for their 1%-er clients, which has led them to put money into more & more "risky assets".  The Unicorn IPO market already collapsed (WeWork).  Many big Corps wasted their Trump Tax Bonus on Stock Buy-backs to prop up Stock prices rather than investing in new machinery, etc. 

    Oh, also, Boeing.

    I've been expecting this for a while; just a matter of When.  It seemed like the Fed was trying to put it off until after the election (see "Repo" posts on WallStreetOnParade), to help Trump.  At first look, I'm really glad it's happening now, for reasons both political (hurst GOP, hastens Green New Deal) and economic (bigger the bubble, the harder the crash).  The next President will have more than one hell of a mess to clean up.

    Trump won't be able to talk his way out of this one.  Covfefe-19 is likely to be his Katrina ("heckuva job, Brownie"), only way worse.  I'm hoping it exposes the entire anti-life agenda of the GOP.

    OTOH, it makes bombing Iran more attractive.

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  9. Pence had a 40% or lower approval rating as governor of Indiana, which is no doubt why he took the veep spot when other Republicans wouldn't. His Maker had come to him in a tremulous dream to say reelection was not in his future. It's not hard to image he sold himself as an ambassador to the evangelical community. During the times he releases the sucker that keeps him attached to Trump's mighty tuchas, he will probably reveal such heavenly insights as Covid-19 being God's revenge for Planned Parenthood and so on. It's doubtful the general public will hear much from him.

    Matt Stoller's idea that Covid-19 will mark the end of affluence politics might have some merit, but it's doubtful it will repatriate many jobs. For one thing, manufacturing in the modern era has routinely calculated deaths from their products as just another cost of doing business. For another, if some things are considered essential to be produced within the US, many of them will be made by robots. AI is advancing far faster than most people realize.

    It's possible this situation will blow over in a month or two, but it's not at all likely. The full effect on the economy and election will be unfolding in the next several month. It's going to be fascinating.

     

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  10. I think Pence has just been set up to take the fall if the coronavirus turns out to be a public health catastrophe. Trump will make Jeff Sessions' public emasculation for incompetence seem tame compared to what is in store for Pence if the situation gets away from him.

    I can hear Trump now.."If I would have known Milk-toast Mike was so weak and incompetent I never would have chosen him for a running mate."

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  11. Not much OT: Barr is another like Mike. This explains a lot:

    "But Barr is a smooth gaslighter, and he represents his argument for theocratic authoritarianism as a defense of “liberal democracy.” Barr’s European (and sometimes American) antecedents were often more honest, admitting that they viewed liberal democracy, due to its supposed godlessness and concomitant lack of truth, as a failure that would have to be replaced with either “totalitarianism” (the “ersatz religions” of fascism or Communism) or “a religious society.”

    https://www.alternet.org/2020/02/william-barr-promotes-christian-tyranny-in-latest-speech/

     

  12. Trump reportedly referred to the coronavirus as a "fraud" at a relly last night. My fervent wish for those who heard and believe it's all a deep state conspiracy – ignore symptoms. Continue with your daily lives and by all means, attend as many Trump rallies as possible. 

    Am I the only person cynical enough to recognize the virus is most lethal in those demographic groups which frequently support Trump. Maybe this is what a just god does when he runs out of locusts.

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  13. If I were into writing sci-fi novels, I would have one with a plot of the aliens coming to earth as a virus to create havoc and just basically have a ball.  Viruses are just weird, they are not classified as "living" yet they seem to have an agenda and are capable of getting around and making clones of  themselves.  And to what purpose?  Haven't figured that out yet. The virus that causes chickenpox does not go away but hides in the nerve cells waiting for a chance to return and cause shingles. Perhaps if they are deadly enough, viruses can cull the human  population.  If I remember correctly, the 1918 Spanish flu killed a lot of people.  The bubonic plague was bacteria so that doesn't count.  Anyway, the coronavirus is here so we just have to deal with it and the government isn't helping.

  14. I haven't seen follow-up stories, but a couple of years ago one of the blogs I read had a post about the fact that our military is totally dependent on Chinese manufacturers for replacement parts for just about everything. These things have not been manufactured in America for years. And those things that are not made in China are often still dependent on parts or material that are imported from China; so called "rare earths," for example.

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