Month: May 2020 Page 6 of 7

During the 2007/8 financial crisis, the Federal Reserve and other central banks printed trillions of dollars to support banks and big businesses. They prevented capitalism from working: While some firms that had nothing to do with the crisis should have been bailed out, those that caused the crisis by allocating money badly should have been allowed to go under.

This is supposed to be the virtue of capitalism: If people allocate resources (which we count with money) badly, they are supposed to lose the ability to allocate resources in the future. Those who allocate resources well are supposed to receive more resources. This has a lot of flaws (what makes money isn’t always what improves human welfare), but at least it’s a feedback loop.

It’s the GOOD thing about capitalism.

The Fed broke what was left of capitalism; there is very little that is good left when the allocation system doesn’t work– even under capitalism’s own terms.

It was clear that the central banks had decided that their primary purpose was to make sure that the rich stayed rich, no matter the cost to others. If they had let those firms go under, the economy would have fallen faster and recovered far better for over 90 percent of the population.

They patted themselves on the back for saving the world, and when Coronavirus hit they did the same thing.

At this point, the world economy–and especially the US economy–only works as long as you keep it hooked up to a ventilator, and it works badly.

I had been curious to see how this would be played out. As I have said many times, “there is a real economy.” There are people who make or grow things or provide actual necessary services (not your tax accountant, the people being labeled “essential workers” right now + farmers, factor workers, designers, and so on).

So, since the rich and powerful have decided that under no circumstances would they allow their class to lose money or power, no matter how badly they did their jobs, the question has been, “What are the effects of this?”

One of the effects is the complete bungling of Coronavirus in the US and the UK, the heartlands of neoliberalism. Another effect is suggested by this:

More than 40 percent of the U.S.’s 30 million small businesses could close permanently in the next six months because of the pandemic: Chamber of Commerce survey.

The stock market is doing fine, because it was bailed out. Small businesses aren’t, because they weren’t.

Covid-19 is no one’s fault, but how to deal with it is a policy decision. That policy decision reveals that the folks who run our economy will take care of the parts of the economy from which they directly benefit, and won’t help other parts of the economy.

Meanwhile, the US couldn’t make ventilators, couldn’t produce PPE, couldn’t track and trace infected people, and so on.

The effect of central bank and legislative policy is simple: There is a real economy, and the policies pursued by the elites will contract it. There’s a lot of bullshit around inflation stats, but the simple fact of the matter is that, for over 50 years, the cost of things people must actually have has risen faster than salaries. The BLS figures don’t show this, but you can’t run a middle class family with a 60s lifestyle on one middle class income today.

There is a real economy, which produces food and items people need or want. There is a financial economy, which produces financialized returns which are almost wholly disconnected from the health of the real economy. Billionaires pile up more billions as the economy gets sicker. The stock market is supported in the middle of a pandemic while actual businesses, comprising the real economy, are allowed to die.

So this is the future of neoliberal states: Elites will continue to produce “money” for themselves while damaging the real economy. At some point, a stressor will hit the economy which the actual production and logistics chains cannot handle. Elites, completely unable to do anything but manage financial numbers, will not be able to handle it, and there will be an actual economic collapse. Meanwhile, for most of the people in the US, the UK, and other neoliberal states, the long constriction of actual standards of living will continue.

If you want a good life, and you want to avoid, not disaster (like Coronavirus or huge wildfires) but absolute catastrophe, these elites and their entire supporting apparatus have to go.

If they don’t, they’re going to kill a lot of people–certainly including people you know.

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May 7th US Covid Data

By Ian Welsh

On May 7, 2020

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Our benefactor writes:

States must reconcile their data on Thursdays and Fridays, when we typically get our highest numbers. NY is now down to 12 percent of the total new cases. They started out at over 50 percent. The rest of the country can stop blaming NY.

At the current doubling rate, we will be at 140,000 deaths by the end of May. Positively genocidal.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

May 6th US Covid Data

By Ian Welsh

On May 6, 2020

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Our benefactor writes:

We’ve crossed 70,000 deaths. The spate of re-openings will likely lead to an increase of new cases and deaths over the next month. This is forecast by US leadership, even as they proceed. Those of us in sane states should proceed with extreme caution.

I ran the numbers on the states to compare consecutive seven-day averages using the color coding similar to the linked map. Two more states, PA and MI, have moved into the decreasing categories (light and dark teal) just in the last two days. Don’t believe Arkansas’ numbers for a minute. They are one of the most retrograde states in the US, and it would not be surprising if they were cooking their numbers. Four more states, LA, OR, AL, and CA have moved into the worsening categories (light and dark brown), CA significantly.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

The Dunning-Kruger Affect

By Eric Anderson

On May 6, 2020

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Affect: noun (a-fekt): a set of observable manifestations of a subjectively experienced emotion.

Benjamin Franklin popularized the phrase “time is money” circa 1748 in his essay “Advice to a Young Tradesman.” Never since have so few words of advice been accepted so wholeheartedly, while simultaneously being so pervasively destructive. You see, Ben embodied what once passed as the model of what it meant to be a man. He was a “Renaissance man.” But in an ironic twist of fate, his advice murdered the archetype.

As testimony to Mr. Franklin’s advice, speed has become virtually synonymous with business success. UPS moves “at the speed of business.” Mark Zuckerberg thinks we should “move fast and break things” because “unless you are breaking stuff, you are not moving fast enough.” Marc Benioff goes so far as to conflate the terms, stating “Speed is the currency of business.” Can there be any doubt that since Franklin’s time the world has just continued to move faster, and faster, and faster?

To compensate for the demands associated with maintaining such blistering speed, society has responded by delegating knowledge more diffusely. Meaning, of course, each of us knows our role more intimately, while simultaneously knowing less about the world writ large. And while the business community acts as if speed exists in a vacuum, in reality, speed invariably exists in relation to mass. Thus, as applied to society, the “turning the ship” metaphor is incomplete and must be extended. We’re not only a massive ship traveling at tremendous speed, but one powered by eight billion parts, each so singularly focused on the specialized task at hand that no single part has the ability to comprehend the danger posed by the rocks just off the bow. The ship is without a captain.

The tragedy in this is that extremely smart people abound today. What appears to be lacking is leadership born of wisdom. We can always refer to specialists as smart, intelligent, or knowledgable. But how often do we refer to them as possessing wisdom? And, do we necessarily equate specialists with good leadership? Sometimes, I suppose. However, we always seem to equate good leadership with wisdom.

So where does the wisdom that guides good leadership come from? What do the great leaders of the past share that the specialists of today do not? It’s simple. They share a high concentration of knowledge in its disparate forms. For example, Franklin had a wide range of interests including natural sciences, literature, and politics. He was an inventor, civil activist, diplomat, author, and political theorist. Thomas Jefferson was many things, including an architect, author, lawyer, musician, botanist, inventor, philosopher, political theorist, and naturalist. And while Abraham Lincoln didn’t fit the lettered tradition associated with the Renaissance archetype, he certainly made up for it by being a remarkable autodidact in business, military affairs, law, and engineering. For example, he still holds the distinction of being the only U.S. president to receive a patent by designing a system for lifting riverboats off sandbars.

The never-ending quest for speed through specialization appears to have come at a steep cost. We haven’t changed the way each one of us thinks about ourselves individually. Our egos still tell us all that we’re all of above average intelligence. However, we have drastically changed the way we educate ourselves by emphasizing, to an absurd degree, the value we place upon commodifying ourselves to be more marketable. Who has time to learn something that isn’t marketable? We’ve STEM’ed ourselves stupid.

Psychologists talk about the Dunning-Kruger effect. If we’re unaware of what we don’t know to such a degree that we can’t conceive of somebody knowing more about it, we tend to think we’re as knowledgable about the subject as those who actually do know the subject inside out; witness Donald Trump. As such, I think we need a new term to describe what society is suffering due to our dogmatic adherence to Franklin’s “time is money” maxim. Perhaps, the societal malaise can be summed up as mass suffering from the Dunning-Kruger effect.

May 5th US Covid Data

By Ian Welsh

On May 5, 2020

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So, multiple states are moving to reopen, despite not having crushed their curves.

In about two weeks after reopening, the effects will show up as new cases, and in about four weeks, as deaths.

As I suggested April 21st, this means that states which have dealt, or are dealing, with Covid responsibly will have to move to border controls, limiting access to those from states which have chosen to simply let people die. I expect this will mean using state police and calling up the National Guard.

There is simply no way the current policy mix in the US allows for sub 200K deaths this year, and half a million by fall is likely. It is not possible to reopen before crushing the curve, and, once you’ve reopened, you need sufficient testing, tracking, and quarantine, which the US does not have.

Other countries should close or keep closed their borders against US visitors, as well.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

A Word to Parents in the Time of Covid

By Ian Welsh

On May 4, 2020

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The pandemic has left a lot of children at home when they would usually be at school, with their parents having to care for them all day.

My parents were alcoholics who loved to argue. Being stuck at home with them would have been hell. But I remember many other children’s parents can think of nothing better, where I imagine it would have been the greatest thing ever.

This is probably the longest stretch of time you will spend with your school age children in their entire lives–and children don’t tend to remember much of the pre-school years.

How they remember this period is likely to define their entire childhood relationship with you. You can view it as a trial and an imposition, as I see so many parents doing, or you can view it as something great; a chance you otherwise wouldn’t have to be with them and to enjoy each other’s company.

I gently suggest you do the latter.

Caring for kids can be a drag and frustrating, I get that, but emphasizing the good parts to yourself will make this period far better for you and for them, and will create a future relationship you treasure.

You don’t want them looking back at when when they spent the most time with you and hating the memory or knowing that you didn’t like being with them. You do want them to remember it as awesome.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

May 4th US Covid Data

By Ian Welsh

On May 4, 2020

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Our benefactor writes:

As in past weeks, Sunday numbers are down. Some interesting new data in the NY Times from a study of seven states, indicating that deaths since the start of the pandemic are actually 50 percent higher than the norm when compared to what is accounted for by coronavirus deaths. See, https://www.nytimes.com/interactive/2020/04/28/us/coronavirus-death-toll-total.html. The seven states include New York, which has already restated its counts and is much closer to the expected number. So…not only are actual cases being severely under-counted, but deaths are being under-counted, too.

There are other implications, here, too, referenced in the article. Not all increases in deaths are directly attributable to coronavirus, but may be impacted by the social response. People don’t go to the hospital as readily for chest pain and end up dying at home from a heart attack. Fewer accidents on the road or even in the street might mean the death rate is even higher. In some horrific way, this appears to be strategic, not in a planned, conspiratorial way, but simply to minimize the danger, and to reduce government accountability for failures to act. No other states that we know of have restated deaths to account for the spike in death rates.