#171. Inflexion point

AT THE DEATH OF THE ‘V’

Though most people have better things to do than watch market indices, it hasn’t escaped public notice that stocks have risen at record rates just as economies have decelerated ever nearer to stall-speeds. Market logic, such as it is, seems to be that previous falls ‘priced in’ the consequences of the Wuhan coronavirus crisis, and that, latterly, investors have started to ‘buy the recovery’.

To put any trust at all in the thesis that has powered the market rebound, you’d need to place unquestioning faith in the concept of a ‘V-shaped’ economic recovery.

The hugely influential International Monetary Fund certainly endorses this view. In its latest, slimmed-down set of WEO projections, the IMF predicts that world economic output will fall by -3.0% in 2020, and then grow by +5.8% next year. This would mean that GDP was higher (by +2.6%) in 2021 than it was in 2019. It’s implicit, though it’s not stated, that growth will then revert to something not dissimilar to previously-anticipated annual rates of between 3.0% and 3.5%.

This is a classic ‘V assumption’.

The view that has been taken here throughout this crisis has been that this kind of rebound is extraordinarily implausible. If, as seems increasingly likely, the market now ditches the fiction of a ‘V-shaped recovery’, markets could be poised for catastrophic falls. If this is how things pan out, hindsight might decide that the ‘Lehmann moment’ in this second-wave crash was the news that investment guru Warren Buffett’s Berkshire Hathaway fund has liquidated its entire holdings of airline stocks.

Unless you’re an investor, none of this may seem to matter very much. After all, prolonged support from the Federal Reserve and other central banks has created a ‘positivity bias’ in the minds of investors, so it wouldn’t be a huge surprise to everyone else if the recent sharp rally in stocks turned out to be a colossal exercise in complacency and wishful thinking.

There are, though, far broader economic implications to the probability that, like investors, the government and business ‘high command’ has reached the point at which trust in a ‘V-shaped’ recovery starts to evaporate. Indeed, ‘ditching the V’ would have profound consequences, both for policy and for the practicalities of “exit” from lockdowns.

Airlines have become very much the bellwether for how the prospects for business and the economy are perceived.

Let’s remind ourselves that, prior to the crisis, the general expectation was that the aviation industry would continue to grow at annual rates of about 3%, implying aggregate expansion of around 90% by 2040.

Though it’s long been recognised that a sharp fall in passenger numbers during 2020 is inescapable, the ‘V-shaped’ assumption, hitherto, has dictated that this would be followed by a rapid rebound, with volumes pretty quickly recovering to (or very near) trend levels. This, it has been assumed, would leave the longer-term outlook largely intact, a scenario illustrated in the left-hand chart in fig. 1.

Fig. 1 

Air traffic

To believe this, you’d have had to assume that passengers would put away all of their fears about close proximity, dismiss from their minds any idea of a second wave of infections, and ignore their battered financial circumstances. If you did believe this, the only meaningful issues would be the duration of the crisis, and the ability of airlines to out-last it.

Where the longer-term outlook is concerned – and well before the advent of the coronavirus – the view here has been that continuing exponential growth in passenger aviation is implausible. This is a stance which forms part of a broader “peak travel” thesis.

This view isn’t confined to aviation, or to travel more generally. Rather, the Surplus Energy Economics interpretation is that the global economy has already reached the cusp of “de-growth”.

Simply stated, rapid rises in ECoE (the energy cost of energy) have put prior growth in prosperity into reverse, and are starting to exhaust the ability of financial gimmickry to hide this underlying reality.

This means that it would be counter-intuitive to expect exponential growth in any part of the economy, and particularly in any sector driven by discretionary consumer spending. The logic of de-growth is that we should now start to concentrate on those issues – including de-complexification, simplification, de-layering, loss of critical mass and falling utilization rates – which will determine the rate of de-growth, and the shape of the shrinking economy.

Returning to aviation, the outlook is likelier to be the “accelerated de-growth” scenario illustrated in the right-hand chart in fig. 1. The black line shows the “peak travel”, de-growth interpretation as it was understood before the pandemic, and the red one shows how the coronavirus crisis is likely to have modified this outlook. The gist of it is that any recovery in aviation from the 2020 slump will be very pedestrian indeed.

Of course, neither the consensus nor the ‘high command’ is going to accept the broader economic de-growth thesis any time soon – established ways of thinking are far too entrenched for that.

But what they are likely to do is to abandon trust in a ‘deep V’ recovery, not just in aviation, but more broadly too.

De-growth itself may remain a long way from acceptance, but two economic aspects of the coronavirus crisis are gradually gaining recognition.

One of these is that we face a very protracted period of “co-existence” between the virus itself and resumed economic activity.

The second is that some industries might not be able to survive for the duration of this extended co-existence. Together, these two considerations, extended across the economy as a whole, are likely to be more than enough to kill off the recovery in the markets. More importantly, we can expect ‘abandonment of V’ to have far-reaching implications for policy.

It’s important to note that, in the absence of an effective vaccine or treatment, lockdown has been the only policy response available to the authorities. Thus far, it has met with very high levels of public co-operation, flaunted only by small minorities of the obstinate and the anti-social. It seems to be succeeding in its stated aim of “flattening the curve” of virus transmission. Of course, there are alternative viewpoints, ranging from ‘coronavirus is just another flu’ to ‘this is the end of life as we know it’. Neither view has been accepted by governments as a reasonable basis for planning.

But the authorities have always known that lockdowns have two big problems.

The first is that, for as long as they continue, they inflict compounding damage to the economy.

The second is that, once restrictions are lifted, it would be very hard indeed to reimpose a “lockdown 2.0”. This latter consideration has inclined governments towards caution, despite the siren, often self-interested voices calling for an accelerated “exit”.

Recognition of “co-existence” seems to be moving the authorities away from an ‘everything stops, everything resumes’ stance towards a much more nuanced position, in which some economic activities can be restarted relatively quickly, whilst the resumption of other activities will take very much longer.

Aviation falls very much into the second category. If physical (wrongly labelled “social”) distancing needs to remain in situ, it’s almost impossible to see how airports and airlines can return to operation. Even if they could, it’s very hard to envisage passengers returning in their droves. Quite apart from the fact that most people are going to be a lot poorer after the crisis, there will remain an extreme and prolonged unwillingness to enter crowded spaces. Aviation has the additional handicap – which it shares with the cruise industry – that people will be reluctant to risk finding themselves put into extended isolation, either at their destination or on their return home.

Both the practical and the psychological implications of the crisis for consumers are likely to be profound, and to extend far beyond the international transport and tourism sectors. As and when the virus recedes, most households are likely to have experienced a draining of their savings, an increase in their debts and a meaningful reduction in their incomes. To health-related fears will have been added a new financial conservatism, reflected in a reduced propensity to engage in discretionary (non-essential) purchases.

Changes in consumer circumstances are likely to have their corollary in the commercial sector, too. Businesses which survive this crisis will, in a majority of instances, emerge with very stretched balance sheets and seriously impaired revenues and earnings. They can be expected to turn borrowing-averse, and to take an ultra-cautious line both on operating costs and on investment.

Just as consumers will be reluctant to spend on non-essential purchases, businesses are likely to keep discretionary outgoings to a minimum. This means that acceptance that a V-shaped recovery isn’t going to happen can be expected to have the same effect on sectors like advertising that it has on consumer areas such as travel.

Financially, both investor and government attitudes are likely to undergo significant alteration as the improbability of a V-shaped recovery becomes apparent.

Governments which might have been willing to support companies and sectors through a relatively short hiatus will take a markedly less accommodating line when faced with the prospect of providing such support for a very much longer time. They might also reflect that bankruptcy, whilst it wipes out shareholders, does not in fact ‘destroy’ businesses and their assets, but simply transfers ownership to creditors.

Framing these considerations will be recognition that the resources of governments face deep and permanent impairment, and that public priorities are very likely to have changed.

What is emerging now – and is likely to reach even into the rarefied levels of investor calculation – is that neither the assurance nor the comparative simplicity of a V-shaped recovery is persuasive.

The wise course from here would be an acceptance, if not (yet) of de-growth, then of a wholly altered economic, financial, political and social landscape. Denial will of course continue in many quarters, but the centre of gravity will move fundamentally as a single observation gains traction.

That observation is that a ‘V-shaped’ recovery is not going to happen.

 

398 thoughts on “#171. Inflexion point

    • Thanks. I’ve heard some discussion about this, too.

      Generally, financial risk is ‘the dog that didn’t bark in the night’ yet. Back in March, I scoped financial risk, which of course is enormous. There is simply no way that businesses and households can incur this much damage without triggering massive defaults. Equally, there is no way that any country’s banks can have reserve ratios high enough to cope with something as bad as this has to become.

      The UK’s banking system doesn’t seem to worse ratios per se. The problem is that UK financial sector exposure is simply too large in proportion to GDP.

  1. Thank you Dr Tim as always for your work

    I will state that whilst we are due a great reckoning from the great credit bubble, I am a lockdown sceptic the moment it moved from “protecting the NHS” (flattening the curve). The 4000 bed new Nightingale hospital has treated around 50 patients. So there is capacity.

    When the likes ex Supreme Court Judge Lord Sumption speak out against it we ought to listen to his reasoning. After all this man has been being listening to expert opinion his entire career.

    Toby Young, freedom of speech fighter has also gathered many views which simply are not heard on the MSM.

    https://lockdownsceptics.org/

    • In fairness to government, faced with a crisis of unknowable proportions, it was probably better to err on the side of having too many hospital beds than having too few – and, if there’s a second peak of infections, they might yet be needed.

      For me, the biggest mistakes made by governments have been their failure to shut down international travel at the earliest possible moment. Since the virus spreads person-to-person, if nobody at all had been permitted to enter, say, the UK from overseas, then it’s hard to see how the virus would have arrived at all. That ban would have to have been implemented early enough, with ‘no ifs, no buts, no exceptions’ (and no private/corporate jets).

      What influences me most is my belief that a second wave could kill the economy. If that’s true, or even highly probable, then taking unnecessary risks now would seem the height of folly.

      The EU, to give one example, wants to re-open international travel, ‘safely’ of course, ASAP. The argument is that tourism accounts for nearly 10% of GDP.

      That argument is spurious. First, a significant part of that is tourism within people’s own countries. Second, money not spent on travel is likely to be spent on something else. Third, I see no ‘safe’ way of re-opening airports, flights and hotels.

      Even if it were true, though, would it be worth risking most of the economy – in a worst-case scenario, maybe even the whole of it – to help 10% of it restart early, when the whole problem might be over in maybe six or twelve months? Makes no sense to me at all.

      Incidentally, the MSM should have a keen interest in lifting to the lockdown – they depend very heavily on advertising revenue, which has collapsed.

  2. Transition to Renewables?
    A nice article by Richard Heinberg
    https://www.resilience.org/stories/2020-05-20/nobody-takes-the-renewable-energy-transition-seriously/

    Richard notes that a transition to renewables, according to a study that Richard and David Fridley co-authored, might involve a reduction in energy use in a country like the US of 75 percent or more.

    All the timid approaches to the problem have failed now for decades. So I propose a radical solution:
    Substitute more biology based life-enhancing strategies which do not depend heavily on markets…but may require social re-engineering.

    The best most of us will ever feel is during sex with a loving partner. We get a little warm… but nothing like a cement plant or a coke furnace in a steel mill. The reason for the difference in temperature is that biology is incredibly energy efficient…likely even taking advantage of quantum effects. While man-made technologies are incredibly energy inefficient. One potential exception to that sweeping generalization is related to information. A living body is an incredible information processing machine, which does not get hot like a Google Data Center. But the heat generated by a Google Data Center is nothing compared to the cement plant or the coke furnace. If we think of living bodies as processors of materials, energy, AND information, then the potential for meeting our renewable energy goals MIGHT improve dramatically. (I think the physicist Paul Davies’ discussion in The Demon in the Machine illuminates the possibilities…although his book is mostly about the science as opposed to engineering.)

    In short, we need to stop approaching the issues from a ‘preserve the American Way of Life at all costs’ and move toward ‘redesigning our way of life by increasing the reliance on biology by orders of magnitude and reducing our dependence on thermal industrial processes by orders of magnitude’.

    For the historically minded, I recommend reading a little in Ramp Hollow, about how our American ancestors who moved to the mountains in what is now West Virginia lived a peaceful and satisfying life without very much in the way of a money economy. ‘Conservatives’ such as Alexander Hamilton used a military force to impose a debt economy on these stubborn people. Coal mine owners tried to shut down kitchen gardens to make the people more dependent on money and thus employment and debt to the company store. We need to get away from the notion that ‘good character implies working hard to pay your debts’.

    I agree it is radical…but temporizing and pretending hasn’t worked. Rather than Richard’s proposed ‘renewable energy powered industrial city’, I propose a ‘buy some land and form a village and maximize biology and freedom’. The available evidence that I have seen from Eco-Villages indicates that good life satisfaction can be achieved with 15 percent of Americans’ current energy consumption…but that the people spend way too much time in grooming (e.g., meetings)…just like our chimpanzee cousins. Which is one reason I think that re-engineered social systems are required. Stress-reduction is an essential feature of the evening camp-fire.

    Don Stewart

  3. Albert Bates on Mayan Response to Collapse
    Albert is sitting out the Covid 19 pandemic in a house he has owned for a long time on a barrier island off Yucatan. He knows quite a bit about the Mayans, who have inhabited this land for thousands of years. His article will appear in Medium this weekend. Two brief quotations:
    “In the case of the Maya city-state empires, what was fragile — both socially and ecologically — were concentrations of wealth and power in the hands of a select few, who inevitably mismanaged both. Abuses can still happen at a decentralized scale but consequences are more limited and the feedback more immediate. Decentralized systems tend to be anti-fragile. We are seeing that now with the impact of Covid on cities and in the ecological rejuvenation of remote natural areas.”

    “It needs to remember what its indigenous ancestors did when the climate changed, civil collapse came, or invasion threatened. They dispersed and downsized. They developed appropriate strategies and tactics. They went back to tree crops, chickens and pigs. They self-isolated. And because of that, they are still here today.”

    That’s a Mayan version of what I suggested in the post above. The Mayans were apparently able to act with more consensus than I expect from Americans. I would be content if some significant number of American chose to ‘disperse and downsize’…and thus to leave descendants who are survivors.

    Don Stewart

  4. Lord Sumption, as an historian, may know a lot of ancient facts and figures, but my guess is that he hasn’t got a clue about pathogens.

    He probably wouldn’t get a pass at “O” level biology.

  5. Dave Pollard on Covid-19 and Sincerely Motivated Misinformation
    http://howtosavetheworld.ca

    I’ll be upfront and say that I am not aware of anything Dave says which is not the truth as we understand it, right at this moment. But I will further suggest that our predicament arises from, first, a deep-seated human desire that ‘everything make sense’ and that ‘I am the center of the universe’. When we believe that, we come up with beautiful songs which celebrate ‘his eye is on the sparrow, and I know he watches over me’. Second is that our behavior has no inevitable consequences. So I can sustain habits which are highly likely to foster development of chronic diseases and thus greatly increase my risk from Covid-19…but it won’t happen to me, and if it does it is ‘unfair’, and society should pay whatever cost it takes to save me.

    I suggest that any person in power (radio preacher, politician, or business tycoon) can easily manipulate a population entertaining both of the fallacies. Couple such a scenario with a real physical world collapse of productive capacity and the result is likely to be, shall we say, most unpleasant.

    Don Stewart

    • With the virus anticipating two other challenges – de-growth, and the environment – the issue now might be whether, collectively, we are intelligent enough to respond effectively.

      This is about intelligence, not ‘cleverness’. We were ‘clever’ when we split the atom – but we were unintelligent (in fact downright idiotic) when we turned this knowledge into a bomb.

      When I see pictures of people cramming themselves on to beaches with, seemingly, physical distancing ignored, it’s hard to be optimistic.

    • In the main I agree with you and Pollard. Choice to alter things is questionable, though. We are social mammals, and act accordingly. This just in re Sweden:

      from Marketwatch:

      The World Health Organization said lessons could be learned from Sweden – now its daily deaths are soaring
      Published: May 22, 2020 at 5:41 a.m. ET
      By Archie Mitchell

      Sweden’s policy of keeping schools, restaurants and businesses open while practising social distancing to prevent the coronavirus pandemic from spreading was seen as bold, but now it has now it has the highest deaths per capita in Europe from COVID-19.

      Unlike many other countries, Sweden kept children in school and pubs and restaurants open while banning large gatherings and encouraging citizens to practice social distancing.

      Initially, it saw similar numbers of deaths and rates of transmission as other European countries without putting its economy on hold, and the World Health Organization said there were lessons to be learned from the country.

      Read:Why Sweden’s relaxed stance toward coronavirus will be difficult to replicate elsewhere, Goldman Sachs analysts say

      Now, Sweden’s daily coronavirus deaths are the highest per capita in Europe, calling into question the success of its relatively relaxed approach as new cases and deaths elsewhere begin to slow.

      President Donald Trump criticized the Nordic country’s handling of the crisis in April, saying: “Sweden did that, the herd, they call it the herd. Sweden’s suffering very, very badly.” Trump was referring to controversial strategy allowing a “herd immunity” to the spread of a contagious disease to build up in a community when a sufficiently high proportion of people have been infected and recovered.

      He also tweeted: “Despite reports to the contrary, Sweden is paying heavily for its decision not to lockdown. As of today, 2462 people have died there, a much higher number than the neighboring countries.”

      But some American politicians praised the model, with Kentucky senator Rand Paul saying in early May: “We need to observe with an open mind what went on in Sweden, where the kids kept going to school.”

      Read: Vodka, saunas, lockdown resistance and a gradual return to normal life: The countries taking a different approach to the coronavirus pandemic

      Sweden kept businesses and schools open, while neighbors Denmark and Norway closed schools and shut borders on March 12.

      Sweden’s daily death toll per 100,000 people is now 8.71, compared with 4.59 in the U.S. and is much higher than its neighbors such as Denmark or Norway, according to online publication Our World in Data.

    • Even worse pro rata than Belgium, then?

      My view – unfashionable, perhaps – is that lockdown has been the ‘least bad’ response, and that if our exit strategies are reckless (in which I would include re-opening international travel), we risk a “second wave” of infections from which economic recovery might not be possible at all.

      In short, it could make more sense to leave the international travel industries in lockdown for another six months, at least, if the alternative is to put the whole economy at risk.

  6. This article on the significance of shale hydrocarbons rings true, it’s now reached safety via ‘national security’ importance, with a direct seat at the public funding trough, just like big agriculture, pharma or the military industrial complex.

    https://www.zerohedge.com/energy/why-us-shale-too-important-fail

    If the ensuing debt to ‘afford’ a loss-making industry runs out of patsies to pay for it, like naive retail investors or forced institutional ones, (pension funds) then the Fed can just monetise it like all the other free money to the too-big-to-fail, chosen inner circle.

  7. Guest Post on Ugo Bardi’s site by Roberto Musso, an Energy expert:
    “So, the Covid-19 epidemic is not a problem unrelated to growth (that is, of people who haven’t yet experienced growth), it is a problem of growth. That’s the similarity with the past: an economic downturn is threatening many aspects of life and especially mobility. Diminishing returns of resources, especially fossil fuels, is an open issue. Many successes with renewables have been achieved but not for mobility, by far much dependent on oil than other energy sectors.

    Coming back to the cause-effect-feedback chain: an economic downturn (cause) created conditions for a pandemic (effect) then the world did not find a better solution than stopping mobility (negative feedback that stopped the effect). The growth failure of high mobility life may be the element that makes the current situation similar to past failures. ”

    From the book Entangled Life: How Fungi Make Our Worlds, Change Our Minds, and Shape Our Futures, by Merlin Sheldrake:
    “The ancestors of today’s plants didn’t acquire a bacterium with the ability to photosynthesize; they emerged from the combination of organisms that could photosynthesize with organisms that couldn’t”

    I suggest the following train of thought:
    *Flying somewhere and sitting on a beach sipping tropical drinks may be fun, but it isn’t productive…it’s pure consumption of a hugely inefficient energy system.
    *A number of years ago, someone observed that sunning oneself on a tar roof in Brooklyn could produce the same effect.
    *Having reached the apparent end of the heavy industrial civilization noted by Dr. Musso (and also on this blog), we need something fundamental to happen…our equivalent of the combination of what happened to create modern plants with chloroplasts (and also modern animals with mitochondria).
    *”Traveling widely in Concord” Massachusetts is a more productive way to think about our situation than it is to think about the ‘high mobility society’ described by Musso.

    Traveling widely in whatever place we happen to be living in, if we search diligently for people on the fringe, may reveal new possibilities for the emergence of a society which rebalances the biological and the human built. Sadly, most of the people in Concord did not ‘travel widely’ to visit Thoreau while he was alive…a pleasant walk from the center of town.

    I suggest that, 200 years from now, those who have a significant number of human genes will be the descendants of those who managed to merge two different strains of thinking: the biological and the industrial…with the energy efficient biological option always the first choice.

    Don Stewart

    • I wholly understand why people want or need to travel, myself included, and wouldn’t fancy ‘sunning myself on a tar roof in Brooklyn’.

      But the balance of risk is so extreme, given that a “second wave” of infections could be utterly devastating. Six or twelve months’ patience has to be set against the likelihood that this time-interval could give us enormous economic and broader benefits vs the frightening alternative of a second wave.

      I can only assume that those disagreeing either (a) don’t take the virus particularly seriously, (b) don’t understand what a second wave would do to the economy, or (c) are putting their own immediate wants over broader considerations.

      The conclusion here seems to be that there will be a second wave, the critical unknown being how big it will be. It’s interesting to read thje connection between the virus spread and the return of people from Alpine skiing trips in early March.

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  9. @Dr. Morgan
    Tar roofs in Brooklyn vs. Canterbury Tales
    The Canterbury Tales were written late in the 1300’s. The Black Death was in the rear-view mirror, there was relative prosperity, and the economy was producing middle-class people who could afford to take a couple of weeks off from work and go to Canterbury seeking adventure, or a spiritual experience, or just change. It was supposed to be ‘better’ than going to the village church…or at least different.

    Arguably, our current economic/social system is no longer capable of generating a middle class.

    So if we combine the scenario that the energy system which underpins almost all of our GDP is bankrupt, and we are going to have to struggle to replace it with something else, and we are also going to have to go through a cultural revolution in terms of our faith in ever increasing industrialization…then I won’t be surprised if, 200 years from now, tar roofs in Brooklyn offer scope for a vacation. Of course, it helps if the Brigette Bardot from God Created Woman is sunbathing on the other side of the sheet. But flying off to Cancun probably won’t be a choice.

    Don Stewart

    • Indeed so.

      We seem to have developed an extraordinary propensity for believing what we want to believe, rather than facing reality.

      In the Chaucer work, The Pardoner’s Tale is, obviously enough, about a man who sold ‘pardons’. These, like ‘indulgences’, gave the buyer numerous years of remission from the ‘heavenly waiting room’ of Purgatory.

      Today, we believe that anyone who handed over money for such promises must have been a completely gullible idiot. Yet we, in what we pride ourselves is a rational age, believe in perpetual growth on a finite planet, our ability to ensure it by creating money, and an ability to find happiness from money and celebrity. Plus ca change?

  10. Materials; Energy; and Information
    I agree wholeheartedly that energy is a critical consideration when talking about the economy…because energy permits us to construct the materials which support life and also operate those materials with moving parts (such as automobiles or trucks). But I would add Information to the list of critical considerations. If we look at biology, we see that the current literature is awash with ‘signaling’ phenomena. Why is gut health important? Because there is a vast amount of information transmitted, via the vagus nerve, from the gut to the brain, with some much smaller amount of information from the brain to the gut.

    As a piece of evidence for the significance of information for both biological health and economic health, I reference this discussion between Ari Whitten and Dr. Williams:
    https://www.theenergyblueprint.com/bending-the-curve/?

    I’ll observe the following:
    *Humans are acute observers of the information we are getting from others. You will pick up on Ari’s attempts to steer the conversation (after all, it’s his blog) and the pushback from Dr. Williams. Both men lament the amount of misinformation which is being peddled by people with agendas. But, more broadly, all humans are subject to the bias of selecting data which supports pre-conceived notions.
    *What our society elects to do in response to the virus and our personal response greatly affects the ability of our economic model to operate effectively. There has obviously been a lot of poor quality information involved in these decisions…some of the poor quality the result of genuine ignorance and some of it generated for political or economic gain.
    *When we describe ourselves as subject to ‘herd immunity’…the unsaid corollary is that we can also become just as spooked as a herd of cattle in a lightning storm. (I hesitate to draw a parallel with lemmings.)

    You can believe or not believe Dr. Williams recommendations in terms of what the society can do and what you as an individual can do. But I do believe that my perception of the centrality of information is correct.

    Don Stewart
    PS. Neoliberal economics assumes the problem away: everyone is assumed to have perfect information.

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  12. Larger Frameworks
    Reading Merlin Sheldrake’s recently published Entangled Life (the world from the perspective of fungi). Merlin was part of an experiment with LSD and Psylicibin. A researcher wrote:
    “Psychedelics open a window of mental flexibility in which people can let go of the mental models we use to organize reality.”
    Merlin has just finished his chapter on lichens, which forced scientists to surrender some of their most cherished concepts about how the world works. A compound made by mushrooms can force a similar opening to a new perspective. And, perhaps, a pandemic created by some stray bits of genetic material can force us to rethink how an economy works and what we actually need it for.

    The ‘reductio ad absurdum’ posed by a combination of Tim Garett (linear relationship between watts and GDP), Dr. Morgan (the inevitable increase in ECoE) and Wall Street (more debt with more GDP to pay for it…and damn the torpedoes), might cause us to re-examine the Wall Street Position. I’ll take the Garrett and Morgan positions as pretty much established science. But, as I suggested above, there is that other angle (perhaps available to us using psychedelics or religious trances or by reading good science) that the world is much larger than debt and repayment. Perhaps the Maxwell’s Demon in the biological machine that we are offers a way out? Still dependent on energy, but many orders of magnitude less energy. Perhaps we need to study the organization of fungi in order to suggest different ways of organizing our ‘debt and repayment and fossil fuels’ sector of life and the sector of life using biological ways to achieve human goals. Maybe biology needs to increase and fossil fuels decrease? Sheldrake quotes a researcher:
    “There have never been individuals. We are all lichens.”

    Don Stewart

    • There are those who hold biology primary in driving behavior, and there is overwhelming evidence that they are correct. Hierarchy is reinforced as women choose, in most cultures, which men they want to father their offspring.

      Economic behavior is involved, and the ability to provide security and sustenance is sought.

      Drugs might change perceptions, but on average we won’t behave like fungi in my opinion.

    • Interesting, certainly. There are bound to be inquiries when (if) this is all over. Someone sent me a link to an interview with Adair Turner, which I thought was interesting. One point he makes is that this is a low-probability, high-impact event. Another is that automation may increase, as machines don’t have to stay two metres apart.

      My own focus now is what the economy (and beyond) is going to look like after the crisis. Using the SEEDS prosperity measure, I expect the average person in the UK to be about 19% worse off this year than he or she was in 2019, with very little recovery to be expected after that. The situation in other Western countries is likely to be pretty similar. We can’t know, yet anyway, what effect taxes will have on that. This is sure to have a profound political and wider effect, with a much higher voter priority attached to economic issues.

    • 19% is a bit frightening and then we have reduced oil production capacity due to lack of investment on its way ( and rig closures due to the recent demand crash – which may not reopen )

      Forbes has noted that oil prices are rising again as the US begins to ease restrictions – but reduced drilling capacity may continue.

      Tim do you believe then that there will be no return to the relative prosperity of 2019 and that the 19% reduction is here to stay?

      If so it seems we’ve taken your forecast of a gradual reduction in prosperity in one big hit.

      Donald

    • Donald:

      First let me stress that I’m not forecasting – there’s too much uncertainty – but I am doing some scenarios.

      The best way to think of this might be ‘a 19% drop, then a small recovery, then a resumption of de-growth’. But, in answer to your question, no return to 2019.

      I’m working on two things at the moment. One is an overall scenario, and the other is a series of case studies for a number of economies, of which the UK is likely to be one.

    • Thanks Tim – as mentioned to Steve I’ve been away from the site for a while so have a lot of reading to catch up on.

      I’ve been composing songs by the way and now have to do the arrangements.

      Don’t worry though – I won’t be making the musical headlines anytime soon although I have created over 200 base melodies.

      Composing takes my mind off everything and is very cheap.

    • Two point I’ve made here before have brought no responses and are continually ignored.

      If you haven’t read, Sweden’s morality rate from COVID skyrocketed this month, and is higher p/capita than the rest of Europe and the US. So, the jury is still out on the herd immunity thesis.

      Also, mortality isn’t the only consideration. Do you fancy having permanent damage to your: brain, heart, kidneys, liver, vascular system, lungs, testes, and who knows what else? Just because you have a moderate or mild case and can function ok after a few weeks doesn’t mean that you don’t face possible future decades with serious health problems caused by this bug.

      If daredevils want to take risks that don’t endanger others, they can do so despite driving up insurance rates for the rest of us. Experience ratings can offset some of that, but only after the first couple of events. If they are young enough, they can get Darwin Awards, which suits me just fine.

    • @Steven Kurtz
      I have made the point on several occasions that gut health is a key to immune function. Dr. Bulsciewicz book Fiber Fueled explains everything in detail. He also says that 97 percent of Americans do not have healthy guts, and thus have sub-standard immune function. Can we do something about it? Yes we can. Buy the book and learn how.

      It is, in my opinion, a mistake to shut down an economy with huge costs in order to try to protect people who are poisoning themselves.

      There is no guarantee that a healthy young person won’t be damaged by the virus. For example, a person who is repeatedly exposed, whether a medical worker or a checker in the supermarket, is more likely to be harmed simply because of the continual reinforcement of the infection. So I am in favor of putting up those plastic screens between the customers and the supermarket checkers, and I think it was criminal to fail to make mask preparations for health workers. But shutting down the economy was not the right solution. I am pleased that airline travel has declined precipitously, and I hope some more frivolous amusements will also crash and burn, but those feelings are more a result of my belief that we desperately need to change our behavior.

      Don Stewart

    • We certainly do need to be more health Don. I now haven’t had a fizzy drink with either sugar or artificial sweeteners for over two months now.

      After an initial longing for them I have no further desire to ever drink them.

      I also eat far more fruit and veg and only wholegrain bread.

      Changes don’t happen overnight but I’m sure in another 6 months or so I’ll be a lot healthier.

    • Don S., It’s not just the US. Most people on Earth have less than the healthiest diets. Still, is it rational to put yourself in other than the safest situations …if you have a choice? I realize that most don’t have much choice as they need to make a living. Government has tried to step in with extra payments. I know a chap in his late 50s here who told me he makes more not working now.

      Tim has responded before so I was in error. In any case, if human average longevity declines, perhaps we are nearer peak population than the experts say. That would be good for the rest of nature. Perhaps Monty Python had it right: Always look on the sunny side of life!

    • @Steven Kurtz
      It’s a matter of personal choice. In my opinion, avoiding danger should not be the primary consideration. The primary consideration should be something like ‘pursuing a condition of thriving’…which cannot be without risk. All of us have to experience a few broken hearts on the way to true love.
      Don Stewart

    • According to many biologists and analytic philosophers, free will is vastly overrated. 😉

    • @Steven Kurtz
      Way too far off topic for here, I think. But take a look at Paul Davies.
      Don Stewart

    • Don S: You’re the one who stated that it all boils down to “choice.”

    • Steven
      Read Davies and you will understand. Any discussion here would range as wide as Davies book.
      Don Stewart

    • Don S. You are messianic. Religions point to “special” books. I’ll not respond further.

    • Good. I told you we would have trouble discussing serious issues.
      Don Stewart

    • It would be no surprise at all if financial cirmcumstances affected diet choices.

      One of the case-studies I’m working on -possibly for publication later – is the US. This suggests that prosperity per person will fall by about 19% this year. After taxes (which I expect to fall sharply), the average person’s discretionary prosperity looks to be down by 12.5%. Additionally, he or she is going to have much more debt, and very depleted savings.

      This has huge ramifications for all types of expenditures, with consumer discretionary (non-essential) purchasing looking likely to collapse. Lingering faith in a ‘V-shaped’ recovery seems to be hiding this from broader recognition.

      “Yes, Mr X, I know your income has halved, and your debts have doubled – but can I interest you in a new car/new smartphone/burger?”

      An aside on the Python song. After a British warship had been sunk in the Falklands, observers at a distance thought that survivors in a boat were screaming or moaning. They weren’t. They were singing “always look on the bright side of life”. (This is reported in Martin Middlebrook’s definitive account of that war).

    • Steve I’ve been away from this site for quite a while and am not up to date with all the comments.

      I feel as though the lockdown was sensible. There was so much we didn’t know about the virus when it hit that no chances could be taken.

      Hopefully at some point in the future we will have a comprehensive analysis of the virus including its longer term effects.

      But the analysis must include the effect of delayed treatment on other serious medical conditions to best understand how any future outbreaks can be dealt with effectively

    • Steve:

      If I’ve not responded to those points before, I’ve certainly intended to do so.

      There are just two points I’d make now.

      First, this is a ‘low probability, high impact’ event. Nobody thought it was likely, or planned for it, but its costs are enormous. The same applies to a ‘second wave’ of infections. The probability might be considered low – though I don’t think it’s that low – but the costs would be catastrophic.

      Second, and obviously, there’s so much that we still don’t know about this.

      Exit from lockdown has to happen. But these two points suggest to me a cautious exit, in steps of which each is capable of reversal if conditions change.

    • It wasn’t calm and it was far from correct as @Steve Kurtz rightly points out. Humans have a real tendency to block out very bad things that seemingly occur at random as the parallels with the Spanish Flu are frightening as well as predictable so far. I watched the American Experience episode concerning the Spanish Flu (2018) and it was damned prophetic in identifying that people just forgot, but still have a specter of fear like a deep distant memory.

      I would also take issue with this statement concerning COVID as it was not a “‘low probability, high impact’ event” as Dr. Fauci and the Science boys have been saying it was inevitable for this to occur. It was not low probability, it was likely and the government is paid to mitigate these longer term risks. It is funny that George W. Bush put all the work into Pandemic response, with Obama refining it, even while getting chastised as he implemented it and All of it thrown out when the USA elected Trump. Good Times.

      Dr. Morgon, thanks for the link to the Simple Living in Somerset…great writer as the linkages to Rahm, Asimov, Morgon and Machiavelli is some really good stuff….I do take issue with is LtG premise, but it was on point about loss of local anything as well as the public’s weakness in seeing anything positive in a new paradigm.

      I went down the rabbit hole, a little, with the Paul Davies reference as I am endlessly fascinated by the diverse groups of people the embrace the Judeo Christian faith. I will say as a kid brought up in a Southern Baptist home that became a Geologist, I wish those that are rigorous with science would be as rigorous with that supposed divinely inspired book and I am left wanting. When I was in high school, at the dawn of the Reagan/Thatcher years, the religious were debating Scientists about the first two chapters in Genesis which the Creationists lost, but then the scientists quit on the rest of bible and went home, much to our detriment. I look at the world now and think the people of Earth won the Galactic Lottery and can observe and opine on the Universe; instead we have people argue that the dead end philosophy in the bible (see Revelations) is our fate. Wasting Sunday after Sunday celebrating this crap instead of reading about or studying the world around is us is destroying the US and the rest of the world with it.

      I would love for the Founders to come back and look at the make up and philosophy of Congress and the Supreme Court as they would be appalled at whom makes the laws as well as those that interpret the Constitution. I truly wish we put the Bible back in public school as it would be destroyed by the harsh sunlight of analysis. For instance Gen 3 is a sex story not a bad apple story.

      Be well on this Memorial Day….time to walk the dogs.

    • Greg
      Steven Kurtz wants to damn the Davies book by linking it to religion. I find that absurd. Here is the review by David Deutsch:
      “Davies takes us on a fascinating tour of what is known about what life is. Along the way he speculates interestingly about what may become known. His theme, drawn from Darwin, Schrodinger, Turing, and von Neumann, is that what separates life from nonlife is Information. But how? Exploring that question illuminates biology by revealing its deep roots in physics, mathematics, and computer science.”

      No appeal to Genesis or the Koran or Indian and Tibetan mysticism…except to note some parallels.

      Don Stewart
      PS. He convinces me about the central role of Information, which he expands far beyond Shannon’s definition. Which is why I think it is essential to think not only about materials and energy but also about Information.

    • I wrote that you were messianic, not Davies! Where did I mention religion?

  13. have you noticed pharmaceutrical companies are starting to flap because the virus might be sufficiently suppressed by traditional isolation methods that they may not have sufficient infections happening to test their vaccines when they eventually arrive?!

    billions spent on hi tech solutions may eventually have no problem to solve,

    meanwhile, 4 months into the virus we still aren’t doing anything about distributing and wearing inexpensive, washable, fabric surgical masks for the general population to wear in public situations which would enable the resumption of nearer normal activity and further suppress infections,

    on a brighter note I’m seeing the figure of 17% being quoted for the drop in co2 emissions worldwide,
    who would have imagined that incompetent leadership could achieve more in a few months than any environmental activist has in the last 30 years!

  14. I posted a comment here earlier today but apparently it didn’t take. Darn it! It’s a good reminder to me to always copy what I’m typing every few minutes. This seems to happen with my WordPress account occasionally. I’ll try my best to replicate what I wrote earlier.

    In the United States, where I live, I’ve become aware of an advancing anti-mask hostility, even to the extreme of persons of anti-mask persuasion physically assaulting and killing others. It find it both terribly perplexing and disconcerting.

    My position is that we can significantly reduce, or even perhaps eliminate, the need for lockdowns if everyone wears a mask whenever and wherever physically interacting with others at close range. And that, when/where that isn’t the case, no mask is needed. An additional benefit to this simple practice may be acquiring a smaller viral load for anyone becoming infected even while wearing a mask, reducing the severity and potential long-term complications of their illness.

    My greatest concern is that if not everyone (within reason) is willing to engage this prevention method then we will have ongoing, severe waves of infection until other measures may become available to reduce or destroy this virus.

    Many are already practicing something like this mask protocol in their daily lives. However, there remains a significant cohort who seem either oblivious or intentionally hostile to wearing a mask. Maybe in the hyperpolarized cultural atmospheres which currently prevail it’s simply not possible to find common ground on this matter. Are we destined to, as Dr. Morgan has speculated with concern, have multiple lockdowns which may truly destroy our economies and remaining civilities?

    I appreciate the previous comments posted here on (or related to) this topic, especially from Dr. Morgan, Pintada, Steven Kurtz, Matt and several others and I warmly welcome further observations and opinions to help me come to better terms with this issue.

    • Thanks David.

      I’ve checked, and I’ve no idea why your earlier contribution was blocked – it’s WP, not me.

      I try not to be cynical, but I can imagine that if I was a billionaire, sitting in safety up a mountain somewhere and watching my on-paper billions being destroyed because lockdown is crippling my business(es), I’d be making the case for ending lockdown quickly (for everyone else). Likewise, if I owned part of the MSM, and was watching my all-important ad revenues collapse, that might influence my view on what others (but not me) should be doing. Right now the UK is having a ‘do as I say, not as I do’ debate over a senior government advisor’s trip(s) during lockdown.

      My point – not popular in some quarters – is simply that we should weigh probability x impact, and proceed with caution. I’m aware that we can’t stay in lockdown but am convinced that a second wave would be a disaster.

    • On your point about anti-mask hostility, to the point of violence, what does it matter if another person wears a mask? I can understand, though, why people fearful of catching the virus might resent others choosing not to wear masks.

      Something that I do worry about slightly is local xenophobia. If, say, people living in a sparsely populated rural area, with few infections but limited hospital capacity, are faced with an influx of possibly infected visitors from urban areas, I can see how they might think about protesting, or blocking roads.

    • The leaders recommending (from their bunkers) no masks and immediate reopening always make me think of Zapp Branigan.

      If you have an N95, N99 or N100 mask (the mask with the valve in front), you are wearing it for your protection. The valve lets viruses out, but the mask prevents droplets from reaching your nose and mouth. In a world where there are people who refuse to wear anything, that is the way to go. My N100s (purchased for a welding project years ago) are very hot and uncomfortable, but guess what I wear.

      If everyone was polite, and sensible, the more comfortable surgical mask would be sufficient since that type keeps some (most?) of the droplets in. It is worn to keep others safe.

      The virus enters your body through your “face holes” (as Chris Martenson says). I generally wear aviator type sunglasses, or my big bifocals to protect my eyes.

      … Yes, its a crazy way to live.

    • It is indeed. My late grandfather – gassed multiple times on the Western Front in the First World War, with permanent health impairment – would be familiar with these masks, I think.

      It seems to me that telling people they can do things isn’t the same as convincing them to do so. Anecdotally, the imposition of lockdown in the UK simply put into law what was already happening anyway.

    • translated from Der Spiegel today:

      Medical researchers are increasingly understanding what Sars-CoV-2 does to the body and how dangerous the virus really is. It can attack almost anywhere – and even kill young infected at lightning speed. Doctors now seem to want to treat only slightly ill people earlier.

      Therapy is an experiment with the life of the victim.

      Until recently, doctors initially prescribed a rather fatalistic therapy for their infected patients: stay at home and wait and see. Only if the fever does not go down after a few days or if you suddenly have difficulty breathing, go to the hospital!
      This treatment strategy is sufficient for most patients. You will get well on your own. But
      Meanwhile, medical professionals are increasingly observing cases that prove that waiting too long can be life-threatening:
      A 41-year-old Covid-19 patient who had hardly any symptoms died suddenly – as a result of pulmonary embolism. A 72-year-old man also died unexpectedly, the virus damaged his heart and caused it to go off the beat.
      Many doctors report that even seriously ill patients often do not experience shortness of breath – and therefore go to the hospital too late. “Many wait too long at home,” says Torsten Feldt, an infectiologist and senior physician at the University Clinic in Düsseldorf. “When they come to us, they very often have severe pneumonia with far too low oxygen saturation.”
      The treating doctors are now increasingly understanding that Covid-19 is completely different from the classic flu. The virus can attack in all possible places in the body: heart, liver, kidneys. And it is more treacherous than other pathogens, sometimes kills unexpectedly and alarmingly quickly. Therefore, new treatment recommendations are being worked on at high pressure.
      Probably the most important finding of the past few weeks: blood coagulation is often extremely unbalanced by Sars-CoV-2. Covid 19 patients are therefore at risk of thrombosis and pulmonary embolism.
      When he autopsied twelve people who had died of coronavirus infection, the Hamburg medical examiner Klaus Püschel discovered such blood clots in seven of them. And Dutch researchers found that almost a third of 184 Covid-19 intensive care patients had thrombosis or pulmonary embolism – even though the patients had even received prophylactic medication for thrombosis. Case reports from around the world confirm this finding.
      The Society for Thrombosis and Hemostasis Research is therefore now recommending that every Covid-19 patient treated in hospital, unless there is nothing to prevent it, be provided with the blood thinner heparin in high doses.
      Even in outpatient-treated patients, doctors should clarify whether they need thrombosis prophylaxis.
      “We still have no explanation as to why Covid-19’s coagulation is increased so massively,” says Johannes Oldenburg, director of the Institute for Experimental Hematology and Transfusion Medicine at the University Clinic in Bonn.
      “But we are observing that, for example, the so-called factor VIII of the coagulation cascade, which gives the blood coagulation an almost explosive thrust, can be four to ten times the normal value.”
      To put it simply, the blood clots dramatically in many Covid 19 patients.
      “We do not yet know which type and intensity of anticoagulation is best for which patient,” says infectiologist Feldt. And of course, blood thinners increase the risk of bleeding, for example in the brain. Nevertheless, the doctors are now using the drugs early and generously because the advantages outweigh the disadvantages.
      The medical guidelines for intensive care treatment of Covid-19 patients are currently being improved at a rapid pace, says Stefan Kluge, pulmonologist and intensive care physician at the University Medical Center Hamburg-Eppendorf. Oldenburg even considers the coagulation problem to be so serious that he would recommend general practitioners to give any patient with Covid-19 suspected of giving anticoagulants “if they show symptoms”.
      Michael Cooking, emeritus professor of general medicine, is currently carrying out a study together with colleagues in retirement homes. The oxygen saturation of the residents is measured daily. If it drops noticeably, a coronavirus test is carried out and, among other things, a coagulation value of the blood is determined. If it is increased, patients are immediately offered preventive heparin therapy in addition to an antibiotic.
      Blood tests that predict the further course of the disease would also be helpful for initially mildly ill patients who try to cure themselves at home. But blood would have to be drawn every time – no problem in the hospital, but hardly feasible for family doctors with highly infectious patients.
      That is why Göttingen researchers now have a U in the medical journal »Lancet«

    • Be aware that the linked “This” doesn’t work in the emailed version, at least on my MacBook with Apple Mail. It works fine on the WP web version.

    • Yes, the Wuhan bat lady …

      No conspiracy needed – just hubris, a desire to take “small” risks for the greater good and human nature.

  15. I have no opinion on how bad a “second wave” would be. My experience with the reporting on this pandemic is that I now have less ability to believe anyone in authority than before, and it was already close to non-existent.

    According to an article on Zerohedge, based on a recent CDC report, “For the first time, the CDC has attempted to offer a real estimate of the overall death rate for COVID-19, and under its most likely scenario, the number is 0.26%.

    Officials estimate a 0.4% fatality rate among those who are symptomatic and project a 35% rate of asymptomatic cases among those infected, which drops the overall infection fatality rate (IFR) to just 0.26% – almost exactly where Stanford researchers pegged it a month ago.”

    The other supposed fact is that the average age of those who have died from this is over 80 years and those who die have multiple co-morbidities. So, IF I take this as true, I conclude we have had an epic panic and overreaction. I am pretty sure that if the media focused 24/7 on an ordinary flu season, reported on a few particularly horrible cases about seemingly amazingly healthy people who succumbed to the flu, daily reported the new infections and deaths and breathlessly speculated on possible outcomes, we could generate the same level of hysteria.

    Problem is, I have no reason to believe anyone, and I am not going to go unearth and read the medical journal articles to come to my own conclusion.

    The CDC has been pretty inept through this whole thing, and is politicized, so I have no more reason to believe it than I do WHO, which took forever to declare this a pandemic because of its financial conflicts of interest. Meanwhile, the financial conflicts of interest that Dr. Fauci has (his connections with pharma companies working on vaccines) render it impossible to trust a single word that comes out of his mouth.

    So the upshot for me is that I am increasingly left to the world as actually observed by my own senses. Too bad, but this is the inevitable result of the way our current political, scientific and medical institutions and corporations work. I see no legitimacy anywhere in any of our institutions. There are financial conflicts of interest everywhere, I live in a society that wants to monetize everything, and there is zero personal integrity. As a result of the pandemic, a real test for this society, a real test for our medical institutions outside of the realm of business as usual, I now have even less reason to believe anything anyone in a position of authority ever tells me. So hypernomalisation either works or backfires, depending on your perspective, because I now draw a line through everything, leaving the people in power with no opposition and a clear playing field. Not that my opinion matters anyway, except insofar as I can change my own personal behavior.

    I am more convinced than ever that only way forward is very locally, with people you can actually physically interact with, in a world based on our senses and not symbolic representations, i.e., take the red pill and leave the Matrix. See Charles Hugh Smith’s latest podcast on youtube, AxisofEasy Salon # 5 on the great opt-out.

    Based on what I can perceive, I can tell you I did not see people dropping in the streets, I have not seen the bring out your dead wagon rolling through town, there have been almost no ambulances with sirens blaring for the last few months – probably because (i) there are far fewer traffic incidents, and (ii) the hospitals refused treating any one except covid patients, and were then surprised when it dawned on them a few months later to ask where all the heart attack and stroke patients were. (And that’s the other conclusion I have come to because of the pandemic — that the managers running this show are even more inept that I had previously thought.)

    Lastly, I confess to not understanding concerns that a second wave would “destroy the economy.” I have no idea what that means. I am pretty sure that even during the Black Plague, people still had an economy because the structure of agricultural based civilization requires people to trade. The first wave has gone far to ending a lot of BAU – the travel industry will never be the same, e.g., so maybe the first wave has already “destroyed the economy” – i.e., inflicted the fatal wound, it will just take a bit of time to die? The “destroy the economy” meme is far too vague and far too fear mongering / apocalyptic to have any meaning to me. Also, would the “second wave” destroy the economy, or is it locking down again that would “destroy the economy”? Which is it? Because if the fatality rate is really on the order of 0.26%, I have trouble seeing how the disease would “destroy the economy.”

    • Patience, Tagio. The full story has yet to be told. Rates of hospital admissions are rising wherever restrictions were loosened. I expect 3-4 waves before a vaccine is developed to put a dent in it. With flues, different vaccines need to be given yearly, and they don’t always get them right.

    • The reason that 2 million people did not die in the US as predicted is because someone predicted that if nothing was done (if nothing was done) 2 million people would die.

      Remember the ozone hole? Many say it was a hoax/farce. People predicted that the ecosystem would collapse if nothing was done. Freon was banned world wide, and so there was no catastrophe.

      Remember Y2K? Many say it was a hoax. People predicted that the entire computer system for the world would implode if nothing was done. An army of programmers fixed the code, and so there was no catastrophe.

      Two million people will die unless the economy is shut down, and everyone stays indoors for a long time! Many say it was a hoax. Since the economy was shut down and everyone stayed home, 2 million people have not died, so it must have been a hoax, right? The difference this time, is that the problem is still out there. This time, there doesn’t seem to be an easy fix. 2 million people in the US may yet die. We shall see.

    • Indeed, trust in governments (though some might say trust in elites) keeps plumbing new lows. Perhaps we can’t even trust ‘public opinion’, as seen on the net? After all, many have believed that governments (such as Russia) have tried to manipulate public opinion in the past and, if Russia, why not some big corporates, threatened with collapse unless they can get lockdown lifted via a change in public opinion?

      It’s possible that a public stripped of trust in what they’re told might make their own decisions. Being ‘allowed to’ do something doesn’t mean that most people will do it. Lockdowns seem to have enforced a lot of limits on things that people were already avoiding.

      Where the economic consequences of a second wave are concerned, much of what has sustained people through this has been a narrative of hope – ‘if we just stick to the guidelines, we’ll get through this, and return to normal’. A second wave – ‘and if a second, why not a third, or fourth?’ – would take away this hope. We could find ourselves back in lockdown, and this time for longer. The financial consequences of ‘lockdown 1.1’ are only now starting to show up. This is why a second wave could be so dangerous.

    • It strikes me as way to early to talk about epic panic and overreaction to a situation we’re still learning about every day, and from which consequences of the wrong approach could be dire. Humbleness and safety first are values we should stay with going forward imo.

      With that said I think you touch on one of the most important aspects of our problems: ” So the upshot for me is that I am increasingly left to the world as actually observed by my own senses…. There are financial conflicts of interest everywhere, I live in a society that wants to monetize everything, and there is zero personal integrity.” – Add to that the general imbedded growth obligations in our system a lot of this is a manifestation of, as well as our increasingly powerful tools for spreading (mis-)information which plays a very important role in affecting markets and elections. It seems to me that a, to some extent, healthy and shared information ecology is absolutely essential for human co-operation, and its currently being corrupted at a alarming rate.

      Which brings me to your last point I also sympathise with. What does it mean to “destroy the economy”? This site is full of so much information around the huge challenges we need to deal with as we’re facing increasing energy costs and climate change. The current economic system is completely inept at facing these challenges in a way that serves the long term well being of humanity. I’m in no way in favour of the suffering that will happen if/when the economic system collapses, either as a result of the virus or somewhere further down the road. But I am way more worried about the conflicts that’ll arise from fighting over diminishing resources if we don’t change course. We desperately need deep changes in how we organise ourselves and our economy, and if there’s a chance for that to happen some things also needs to be destroyed.

    • There are some people who, often from the very best of motives, urge “de-growth” as a choice that we should make. I respect this point of view, though it might be unrealistically idealistic.

      My view, though, is that de-growth isn’t a choice that we can make. It’s being enforced on us, whether we like it or not, by a weakening in the energy dynamic that has driven industralisation and growth ever since 1760. Fossil fuel energy is ceasing to be cheap enough to support our current assumptions about prosperity. Renewables might become cheaper than FFs, but are unlikely ever to be cheap enough to restore prior levels of prosperity (and complexity).

      So I don’t feel called upon to have an opinion about whether growth or de-growth are “good” or “bad”. Our value-judgements on these things won’t change them. De-growth cannot be wished away. The requirement now is that we look at the situation objectively, face the reality and plan accordingly.

      The powers that be either don’t understand this, and/or don’t want to understand it. Ever since the 1990s, economic and financial policy, whether intentionally or not, has been a futile and costly exercise in denial. The assumption is that monetary policy can defeat “secular stagnation” (which in reality is de-growth). This is impossible. Money is a human artefact, created as a means of exchange. It helps determine how prosperity is shared, but it doesn’t, and cannot, create prosperity.

      European governments are now in full-on ‘rescue mode’ – airlines, car makers, tour companies and so on are getting the same rescues that banks got in 2008-09. This is an exercise in futility.

  16. @Tagio, fully agreed. This concurs with history too, societies have collectively turned hysterical many times for countless reasons, often destroying themselves, their economies, civilisations even. From the war on drugs turning Mexico for example into a narco state, to IS turning its conquered territory back to the middle ages for a while. There truly is nothing new under the sun. The uncomfortable truth is that people can still be easily manipulated into hysteria by fearmongering and nudged into self harm at the drop of a hat, evolution hath not changed them one iota.

  17. Good article hinting at the potentially epochal changes to New York City because of the virus.
    https://www.thehour.com/news/article/Frustrated-and-struggling-New-Yorkers-15294345.php

    “Some artists left town and accidentally found a new home. Kevin Hertzog, 55, a set designer and Gays Against Guns activist, absconded to a friend’s mother’s cabin three hours north of the city because he’s HIV-positive and recently had cancer, so is immunosuppressed. Long walks in the woods with his dog inspired him to look for property – and he has found houses selling for just $50,000. “I’ve started to look back at my New York life in a new light,” he said. “It seems analogous to seeing images of planet Earth from the moon for the first time. Suddenly, I could see a bigger picture.”

    • Ah, Zerohedge. I never know what to make of it. On one hand, they manage to curate interesting articles on occasion and find sources way before the mainstream media but the commentary from “Tyler Durden” always seems to not get the point and the rest of the comments seem to be very disappointing.

      Let me give back to this site, which has so illuminated me with regards to the biophysical underpinnings of the economy, for the first time by explaining what the study they featured seems to suggest. Viruses, as you all know, infect cells and the antibodies your body eventually produces cannot get to viruses ensconced within cells most of the time. The body has special cells which can kill virally infected cells. Killer T cells (also known as cytotoxic T cells) and natural killer cells are the most pertinent here. When a cell detects that it has been compromised by a virus (which it can do via a variety of very complex sensory pathways), it can present a warning of sorts on its surface indicating that it is infected. Then, cytotoxic T cells, amongst others, can come along and kill the cell. This can reduce the viral reservoir in the body and help bring an acute infection to an end. MHC class-1 is a protein commonly used as one of these “warnings”. Think of it as Blu-Tack. The cell takes a viral antigen (part of the virus – a viral protein or piece of viral DNA or RNA), sticks it to the MHC class-1 and sticks that on its surface. Other cells can recognise that the antigen bound to the MHC is viral and off we go.

      SARS-COV-2 (the proper name of this virus) seems to reduce the amount of MHC class-1 protein available for this process of antigen presentation using the protein ORF8. Think of ORF8 as a highwayman within the cell, waylaying the MHC class-1 before it reaches its destination: the surface. As a result, less antigen presentation occurs. This has two effects: the specific immune response develops more slowly (as less warnings are given about the nature of the viral infection) and cytotoxic T cells are less able to find infected cells and destroy them. These infected cells can then act as a reservoir of virus and prolong the duration of the infection. This is a strategy which is seen in more viruses than just HIV and HIV employs a number of more sophisticated immune evasion strategies. Natural killer cells, however, do the same function as cytotoxic T cells, but do not rely on MHC class-1 to detect infection. In fact, the downregulation of MHC class-1 in these infected cells will cause them to be targeted by NK cells for destruction as that, in itself, is a warning sign. This would tie in with what we know about this virus already as natural killer cells are part of the innate immune system whereas cytotoxic T cells are part of the adaptive immune system. We know that demographics with weaker innate immune systems, as opposed to their adaptive systems, do worse with the virus like the elderly.

      This study means that, if we consider the phenomenon to be reproducible, vaccines should be not be targeting the generation of cytotoxic T cells as much as you normally would. This is not necessarily the end of vaccine production or the sign of direct genetic insertion of HIV DNA into that of the SARS-COV-2 virus. If you see this study in 2015, https://jvi.asm.org/content/89/20/10532.short, the ORF8 protein in the original SARS was determined to have undergone considerable evolution from those in civet bat coronaviruses as it is perhaps the most important SARS virulence factor in making animal-human transmission easier.

  18. The Irish are the Culprits!
    Science Newsfrom research organizations
    New way that HIV evades the immune system
    Date:
    April 17, 2018
    Source:
    Trinity College Dublin
    Summary:
    HIV uses our own cellular machinery to disable a signalling pathway (an assembly line of molecules) that produces anti-viral weaponry in the body. The scientists behind the discovery believe It should open the door to a new era of HIV research aiming to cure and eradicate this deadly virus.

    Don Stewart

  19. Paul Gilding
    https://paulgilding.com/2020/05/26/it-will-get-darker-before-the-dawn/

    Paul thinks that “we” have a lot of capacity for change, that the Covid-19 experience has shaken us up, but is not sufficient to cause a deep re-examination of our stories about how the world actually works. It isn’t clear to me whether ‘we’ is Americans or humans in general. He is very critical of the US, and thinks it is an empire in decline. He quotes Churchill, in the famous statement about the ‘age of consequences’.

    Don Stewart

  20. Dr John Lee, eminent physician in the Spectator magazine

    “What we have been living through is not so much an epidemic, as a crisis of awareness. After 75 years of blessed peace and increasing prosperity, we were suddenly faced with something that took many out of their comfort zone. They were suddenly confronted with the potential of unavoidable death on a large scale, amplified dramatically in the echo-chamber of a largely uncritical media. The reality, fortunately, was different this time. But how did we respond? With fortitude and common sense? Unfortunately not. We responded with perhaps the biggest own goal in our recent history. And when our over-reaction had been clear for several weeks, what did we do then? Did we change course in a reasoned and timely manner? No. We devoted several days to hounding someone who tried to look after his family, at a time when each day longer on this path costs billions in economic loss and directly increases the lockdown-related morbidity and death toll.

    After this experience, I no longer believe that the institutions of our society are capable of ‘following the science’, and that fills me with foreboding. If science can be hijacked to fuel mass hysteria once, maybe it could easily enough happen again.”

    Alistair Haimes using ONS stats shows excess deaths are not Covid-19.

    • That’s his opinion. The WHO says otherwise, as do studies I referred to in Germany yesterday. And the Chinese study posted here indicated it’s like HIV. Pick your poison. I know several people who’ve “recovered” from it over a month ago, and they say they are not the same as before it. Fatigue, mood changes, etc. This is not like a regular flue.

    • My view is that the evidence is conflicting, we simply don’t know, and I’m pretty sceptical about any source which claims otherwise.

      From an economic point of view, it seems a matter of weighing the definite cost of a cautious exit from lockdown vs the potential cost of a second wave.

    • As an engineer/ scientist who loves their unfiltered data to help form my own evidence based opinions, I have to say I’m rather bemused by the actions / ongoing performance of many reputable institutions, watching the peak prosperity YouTube channel coverage has been a particularly wonderful invaluable source of enlightenment to me over the past four months influencing my must have self treatment shopping ‘bucket’ list… I continue to very much admire your work Tim, hope you and the boffins on your comments section stay healthy during this horrible period…

    • If the excess deaths are a result of mental illness, I would say buckle up, buttercup, you ain’t seen nothing yet. You think, Mr. Haimes, would be clearer on why lockdown is leading to excess deaths.

  21. Fate of Neoliberalism
    Entangled Life by Sheldrake
    Resorting to an analogy from a relatively non-politically charged topic: the Wood Wide Web…the enormous connective material which is the fungal mass under our feet. Jaron Lanier, one of the Godfathers of the Internet:
    “Reading this book, I felt surrounded by a web of wonder. The natural world is more fantastic than any fantasy, so long as you have the means to perceive it. This book provides the means”
    JARON LANIER, author of Ten Arguments for Deleting Your Social Media Accounts Right Now

    So let’s take a brief look inside the book:
    “Collaboration is always an alloy of competition AND cooperation. The main problem for the myco-utopia is that, like the internet, shared mycorrhizal networks aren’t always beneficial. Wood wide webs are complex amplifiers of plant, fungal, and bacterial interactions.”

    Neo-liberalism aspires to be a World Wide Web with negligible interference from government. And so, the good folks at Trinity College in Dublin can enthusiastically get behind studies which aim to attack HIV at its vulnerable point. BUT, as I posted a note from Dr. Michael Murray on this site months ago, the research may well be ‘very dangerous’. (Murray is a Naturopath, favoring natural solutions where possible.) The world wide web made the discoveries about HIV available virtually overnight to all the labs in the world. And since an HIV vaccine might be a very profitable product, lots of people got interested. Or…maybe it was really some solitary individual who had gone to the bat caves in southern China, came back infected, and began to infect people first around the train station in Wuhan. Only later did it spread to the market. And then, of course, the neoliberal world order spread it around the world.

    In either case, we see that neoliberalism, the internet, and wood wide web have upside potential and downside potential. We have historically used government to try to make wise balancing acts. But the current low-repute in which governments (and official institutions in general) are held makes it very difficult to achieve anything except pedal-to-the-metal. I think Tagio correctly described the dominant views of much of the public. Unfortunately, I am not a mother so I am not smart enough to know how to kiss the bubu and make everything better.

    Don Stewart

  22. Thanks to all who replied. My takeaway from these replies is that, at least for a subset of readers here, there remains significant difference of opinion and perspective on even how seriously this virus should be taken, let alone how to most effectively deal with it. That disturbs me, but it helps me to better gauge how people see this situation.

    I agree that the phrase “destroy our economies” was somewhat hyperbolic. It was poor phrasing on my part. I was primarily referring to our local economies, particularly small businesses, sustaining further damage if additional lockdowns (both self and government enforced) occur.

    My primary point, if I could restate it, is that widespread (80% plus) mask usage could significantly reduce, or even prevent, further lockdowns. I see this as a win-win in that it placates both those who consider this virus a very real threat to public health and safety, and those who consider the reaction to it overblown or hysterical. More mask usage equals reduced spread of infection AND less need for staying home and locking down. This is the common ground I wish we could inhabit.

    Maybe the deeper issue is that many people object to the use of masks on a more fundamental, unappeasable level, in which case we’re facing a very wicked problem indeed.

  23. Thankfully we have the level-headed Scandis in a crisis for perspective:

    https://www.thelocal.no/20200522/norway-could-have-controlled-infection-without-lockdown-health-chief

    Perhaps, as with matters financial, sometimes doing nothing is the best solution, maybe that is why our rulers in the UK are so cavalier about their own laws, because they aren’t worried for their health and their rules are only to calm their subjects. As in settle down dear, don’t frighten the kids.

    • Please consider this from Postkey’s comment:

      “The problem is, as we now know, there is no such thing as The Science; and that the original modelling used by government proved to be wildly inaccurate. The fact that former government science advisor David King was moved to set up an alternative science committee is evidence enough that there are several scientific perspectives on the best approach to tackling the pandemic. In particular, scientists have raised concern with the slow pace of the government response, the failure to vigorously track and trace cases, and the failure to protect the most vulnerable; for example, by discharging infected patients into care homes or failing to provide adequate protection to front line black and minority ethnic workers.”

      Cherrypicking stats is the norm to confirm one’s bias.

  24. Steve Keen sends Coronavirus Update from Thailand
    Search on
    Personal #Coronavirus Update 03 May 23rd 2020 Automatic Earth

    It’s hard to argue with success.

    Don Stewart

  25. This article about South Korea is interesting.

    https://www.theguardian.com/world/2020/may/28/south-korea-faces-return-to-coronavirus-restrictions-after-spike-in-new-cases

    On the face of it, the story is that SK relaxed lockdowns, experienced a spike in infections, and had to tighten the rules.

    The reality, though, is that it was only the re-opening of bars and nightclubs that caused the problem. The implication seems to be ‘be selective about what you reopen’.

  26. It looks like the one-two punch of Covid and lockdown are well on their way to “destroying the economy”! At least here in the U.S. In past 10 weeks, 40.676 million Americans have filed for unemployment. As Zerohedge points out, “almost twice as many Americans have filed for unemployment than jobs gained during the last decade since the end of the Great Recession… (22.13 million gained in a decade, 40.767 million lost in 10 weeks).” I’d call that a Seneca Cliff.

    Still to come, the wave of evictions after the government payments stop, the additional layoffs as companies downsize can’t hold on anymore in the face of continued lack of demand, like Boeing’s announcement that it will slash 10% of its workforce (about 16,000).

    • Yes, it’s horrendous. Additionally, many of the jobs created in the US and elsewhere since 2008 seem to have been poorly paid and insecure.

      It seems to me, from this distance, that these current and impending events could have been enough to put Bernie Sanders (or someone like him) into the White House…….

    • @dr Morgan
      My perception is that the Democratic National Committee will never permit Bernie Sanders to have any shot at national office. They do not control the popular vote, but they have a huge block of voting delegates at their disposal. The DNC represents the big donors, who often thrive on government mandated red tape. For example, the convoluted idea of ‘private insurance’ where the companies are restricted in what they can offer and where information about who they are insuring is hidden, is the idea of ‘choice’ popular with the DNC. A pharmacist friend of mine described it as ‘computer jockeys figuring out the cheapest combinations of drugs that meet the mandates’. The DNC is so opposed to Bernies ‘Medicare for All’ because it eliminates all that false choice and instead focuses on universal coverage at minimum cost…which eliminates a whole lot of BS jobs and companies.

      Don Stewart

    • As you expect, given my interpretation of the economy as a deteriorating energy dynamic, what we’re having now is a preview of de-growth. I’m not wholly informed about what’s happening in Minneapolis, but it would be unrealistic to expect the public to go along with a combination of worsening hardship, worsening insecurity and extremes of inequality.

    • @Dr. Morgan
      I don’t know everything about Minneapolis. But in contrast to quite a few police shootings where it was the cops word against someone else, in the Minneapolis video we literally see a man die with a cops knee on his neck. He struggles, and then is very quiet…obviously dead. None of the 3 cops seem to be paying any attention to him.

      Since the cops are not paying attention, I assume that what they are doing is standard police procedure. But I can’t see it happening with a white bank embezzler.

      Don Stewart

    • Your two posts indicate socio-economic collapse, while the stock market roars ahead. Who is buying? I smell government beards.

  27. My question is, has Steve Keen bugged out to Thailand as his new home during the coming apocalypse? Or did he just take an extended vacation there?

    • @tagio
      He posted a while ago that he was frightened of being stricken by the virus where he was living in The Netherlands. His wife is from Thailand. He thought that it would take a while for the virus to get that far. But he thought that it would eventually find him. Now, as he explains in this post, it seems that Thailand has eradicated the virus in their country. As you probably know, Belgium has about the worst record per capita for the virus. Does he think that the Low Countries are in for Phase II, or is it all over? I have no idea.

      It seems to me that he is a lost lamb. His university job in Australia was eliminated. He could only find routine teaching work in Britain (not much time for his independent work). Now he is in Thailand working on his expose of the economists who claim that climate change is no big deal and growth will take care of everything. I know he has also been working with Tim Garrett and a mathematician on an energy based model of the economy.

      There was a character on the children’s television program Sesame Street who sang about ‘it’s not easy being green’.

      Don Stewart

  28. @Tagio
    Took a look at Tim Garrett’s tweets and found that Steve Keen is appearing here in a couple of weeks:
    https://www.patreon.com/posts/two-on-bad-of-in-37571708

    This should be worth the price of admission. Unless I am missing something, Adrian Bejan is all about better and better, while Steve Keen is about reaping the harvest of our ridiculous ways.

    If you look at the list of speakers, you can see why I want to talk about Information. Bejan can be understood in terms of better and better information: e.g., a developing watershed evolves in the direction of easier flow of the water; automobiles evolve in the direction of easier movement; etc. Keen, I think, believes his Minsky model permits humans to model the economic results giving us better information to guide decisions. So both men are using thermodynamics, but it is not just a linear descent into entropy purgatory.

    One good effect of the virus is that more of these kinds of conferences are being put on-line, so we unwashed can attend if we like.

    Don Stewart

    • Thanks. “This should be worth the price of admission.” It is free, on-line.

  29. It’s interesting to note that car manufacturers, aircraft-makers and airlines are cutting capacity, including plant closures, and making skilled employees redundant. This is happening despite government support schemes for businesses and employees.

    These cutbacks aren’t things you’d be doing if you thought that the previous economic conditions would be restored in months, or even in a year or two.

    As we know, car sales had been falling markedly, well before this crisis (with the same trends affecting smartphones, chips and electronic componehts). A case could be (and, here, was) made for the approach of ‘peak travel’, again before the pandemic.

    Unless there’s an assumption that this crisis is going to last for several years, these moves might indicate dawning recognition of de-growth, in some sectors at least.

    • For many years i always bought my cars. Since 3/4 years i switched to private lease, next to my company car. Maybe i’ll buy again when second hand car prices have collapsed.

      There’s a risk in this though. When things really go south, i still have to pay my monthly lease contract.

      Watch what second hand EV prices will do. Who wants a refurbishd Tesla from a drooling car salesman?

      Anyone?

  30. Multiple Paths
    We all know, or at least have seen, the reward paths tickled when someone goes to an expensive restaurant. But one of the laws of biology is that there is almost always an alternative pathway which can achieve the same result. I suggest eavesdropping on this conversation, and then I’ll come back to comment on it from a SEEDS perspective:

    Ken Rubin:I’ve been watching this whole sourdough bread and some other internet phenomenon around media, and it’s an interest of mine, as well as teaching people to cook… interested in how people sort of represent these things, as well. I think the same thing that’s driving the sourdough phenomenon, I think, is why people have found an interest in something like what we do… is that people, I think, ultimately, when their world is sort of disrupted and things are turned upside down, and some things become very, very routine, but other things become very unknown… I think people look for new rituals, new behaviors, new things that they can show some discipline or some attention or some process around. People define that differently for different reasons, of course, but I think it gives you something to do, something to look forward to, something that is on a schedule of sorts, and you know when you have success; and it’s useful, it’s shareable, it’s a point of conversation.

    Ken Rubin:It’s more than just, “Oh, I’m making this thing that I’m going to put over here on the counter, and then eventually, I’ll use it, and it’s a thing that I use it for and that I care about.” No, it’s like the starter itself and the sourdough itself becomes the story, it becomes the process, it becomes almost why we care about.

    Rip Esselstyn:Yeah. No, that’s interesting you mention in these uncertain times wanting to have something that you’re learning, it’s kind of ritualistic. My wife, for example, literally probably a month and a half ago started a garden, right? We’ve been living in this house for five years; never even thought about a garden, and all of a sudden, she’s like, “I’m going to get into gardening.” It’s great because you can see the results, they’re very tangible. It’s very physical.

    Ken Rubin is the head chef at a well-established online culinary school. The point of the school is to teach the students how to construct more flavor intense dishes, which are also healthy. From a SEEDS perspective, the ‘sourdough bread’ phenomenon on social media in response to COVID-19 is disastrous. People are spending practically no money and are tickling the same emotional circuits as hundred dollar meals or processed foods designed to tickle the sugar/ salt/ fat circuits, made in factories, and distributed in boxes and bottles at supermarkets and fast food places. If we ignore the fact that GDP is going down and people probably won’t be able to pay their rent, this all sounds like a very good deal for society at large: people are healthier and happier and are living within planetary boundaries. The problem, of course, is the debt. We are not a collection of debt free families and clans with access to land and resources living with barter and a gift economy and small amounts of trading.

    So my provisional conclusions:
    *The path we are on is insane
    *But we have enormous forces designed to keep our nose to the grindstone
    *We can only escape through some sort of political action
    *But our faith in political systems is almost non-existent
    I have no idea how this will turn out.

    Don Stewart

    • I disagree Don that “we can only escape through some sort of political action.” What you mean, “we,” Kemosabe?

      People who escaped the fall of Rome by becoming part of monasteries, not just monks, but the people who worked around them to support them in relatively self-sufficient small communities, did not need or wait for political action. They “opted-out,” to use Charles Hugh Smith’s phrase. Or they adopted a “dual process” approach toward living, to use Morris Berman’s terminology for his recommended course of action. You yourself pointed out the example of the Hutterites not so long ago.

      If you generally find Charles Hugh Smith’s work interesting or helpful, I recommend that you watch a series of five youtube podcasts that feature him and a couple of his friends. Each is about an hour long, and they discuss many topics that are of interest to those on this forum. Go to youtube and search axisofeasy salon.

    • @tagio
      As usual, you point out my lapses of logic or language. In fact, I ‘opted out’ in 2006 and started working on a nearby small farm as insurance against what I saw as imminent collapse. I quit working there when I turned 75, and really couldn’t keep up with the kids in terms of stoop labor. So now I guess I have joined the camp of ‘all you young people really OWE something to your elders’…although I don’t believe it for a minute. Old people need to earn their keep by keeping the young ones occupied…and it will keep them younger.

      Don Stewart

    • Charles Hugh Smith is brilliant – one of the most astute commenters around.

      ‘Political action’ is a broad term. I place zero faith in retreating into bunkers, or ‘climb a tree and pull it up after you’. So in that sense political (meaning combined) responses are our only choice. To be effective this would have to involve shared decisions, common goals and collective intelligence. Put like that, it’s hard to be optimistic.

    • Yes, though I need to read it again more thoroughly.

      Only a month or so back I was seeing forecasts (from official sources) that 2020 full year GDP in various countries would fall by about 3%(!). Then it became 10-12%. It’s getting like an auction – ‘am I bid 15%?’

      Unless one’s job requires it, forecasting is only for the brave. My current scenario planning – more tentative than ‘forecasting’ – is a fall in world GDP of 17-20% this year, with only a modest recovery (c4-5%) in 2021.

      The first issue for me is prosperity. For the US I’m expecting prosperity per person to fall 20% this year. For the average person, this might be cushioned by a slump in tax collection. But it doesn’t get better after that.

      Consumers are likely to become (or be forced to become) a lot more cautious. Whole sectors might not survive. Critical linkages might fail (supply of components, for example). To take you back to some conversations here just before Wuhan, this is ‘decomplexification’, ‘delayering’, ‘simplification’ – in a word, de-growth.

  31. Interesting article on why Lombardy is apparently worst affected by the Corona situation, diminishing the contribution of pollution, instead suggesting the particular nature of localised healthcare privatisation was the main culprit, with population density and an incompetent local administration contributary factors.

    https://www.theguardian.com/world/2020/may/29/why-was-lombardy-hit-harder-covid-19-than-italys-other-regions

    If that is confirmed to be true, it’s no wonder the UK’s record is turning out at least as bad, given those afflictions are institutionally embedded, systemic, signature traits here.

  32. Scanning this morning’s news – strife in American cities, a daily count of 8,000 new virus cases in England alone (not counting Wales, Scotland and Northern Ireland) – it’s tempting to think that the US and the UK are ‘worst in class’ responders to this crisis.

    True? And if so, why?

    • Could it be because the complex system of government and establishment organisations we’ve built are all focused too heavily on financialisation and attendant high growth rather than including broader socio-political priorities in better balance although slower organic growth, and those organisations have developed into too big a unit, possibly like a tanker. The current crew are chosen specifically for their loyalty to the principles, strategy and direction of the single-purpose financialisation tanker, and drawn from the background most likely to reinforce and maintain the direction and speed of the tanker with unthinking, unquestioning devotion. The tanker analogy comes to mind because if the difficulty stopping it or changing course in the face a sudden shock or event blocking forward motion. The crew have got complacent because they’ve enjoyed the handsome rewards of their loyalty and stewardship so far (or they’re hoping to), and have been able to ignore potential shocks and surprise events (or game them away) so far without too much inconvenience to themselves. Their experience with or desire to understand possible shocks (beyond those associated with narrow interest financialisation) is limited and that narrow perspective means everyone’s come to believe their management of the tanker’s direction is infallible. Hence the underwhelming and baffled response in the face a sudden obstacle?

    • Some random thoughts.

      Having spent ten years living in Portugal I found that the average person has a much deeper understanding of their bodies, health and ailments compared with the average Brit. They are all much more switched on to keeping healthy as is the whole of society. In fact they generally respect knowledge and education, especially scientific. I don’t think many Brits do.

      When visiting a Portuguese GP they will always send you for blood tests (not just tell you to take a paracetamol), so every small town has a testing lab where you go to get your tests. There are private clinics and pharmacies everywhere. Also the patients keep their own health notes, Xrays etc in their own personal folders, so they know exactly what is going on with their own bodies. It has a better health service than UK.

      Of course you cannot say that the NHS is in any way flawed (that is heresy), but I think that there are far better systems around the world. Unfortunately if you do criticise the NHS the reaction is that you want to privatise the service (wrong), which shuts down the conversation. But if you cannot criticise something it will never improve.

      I understand that Portugal rapidly upgraded their ability to test for Covid (I assume due to the many labs) and when reagents were not easily available they made their own. The politicians didn’t simply say they were difficult to obtain on the open market – so what can we do.

      I find the UK to be very bureaucratic (with complex systems that don’t work) and is fundamentally bad at organising anything really. It is only when there are eccentrics and mavericks that cut through the system that anything gets done.
      Of course our politicians are a disaster. Only good at waffling and winning debating points. The last people you would actually want to run a country.

      The hubris of our politicians and academics is quite shocking. They say that the UK is always ‘the world leader’ in everything. Complete nonsense. It means we never learn from other countries’ successes. That is a very fundamental problem with UK. Probably the biggest problem.

      Finally the media is appalling. It is all knee jerk reactions to the latest ‘scandal’. I really don’t care who went to bed with whom, or that Cummings broke some rules. I want to know why UK has had so many Covid deaths and still has such a high infection rate. There is no point in simply asking the politicians the same question over and over again. They will never give a straight answer. Journalists should get off their backsides and do some in depth investigation. But it is so much easier to endlessly ask people how they feel about the situation.

      Rant over!

  33. @TrevorC, I think you hit the nails on their heads. I remember working at a London hospital a long time ago when MRSA was terrifying, with people justifiably scared to go in for ops because they thought they risked dying of infection instead. It seemed lunacy that something as basic as the neglect of systems like cleaning procedures were killing people in a nominally advanced country, but creeping privatisation and the curse of over-management culture was already entrenched in the NHS. ‘Low value’ staff like cleaners, porters and technicians checking slides all day while on minimum wages and more worried about making the rent are not the best motivated to concentrate and when these errors cost lives immediately, tragedy is guaranteed. Not enough people cared back then and so the mission creep continued, inevitably then, today even nurses, the backbone of the service end up on the list of demoralised staff, topdown decisions are always political and micromanagement in a blame-culture the norm. We’re collectively just reaping the fruits of our past complacency and worse still, never look to be learning from any mistakes, short-termism always.

  34. @Dr. Morgan
    Why the US and UK? A tentative answer from me: the hubris of their political leaders plus the most advanced cases of Neo-liberalism. But what about China? I recently heard a Chinese-American and a Chinese national talking about the films being made in China, and comparing them to the Noir films made in the US from the late Depression years up through the early 1950s. Their thesis was that the Noir films and the current crop of dystopian Chinese films represent public discontent with raw capitalism. They joked that the Chinese Communist Party has managed to create the most hyper-capitalist economic system on the planet. When the President of the US is told that his policies are creating problems for the country in 2024 and beyond, he shrugs it off as ‘not my problem’.

    But more deeply than political malfunction, we need to take a look at “health” vs. “disease and early symptoms of disease”. Here is an article by Dr. Jeffrey Bland on the subject:
    View at Medium.com

    “Could compromised immune resilience be a public health crisis that is not yet adequately measured or tracked in a way that encourages individuals to engage deeply and personally with this critical biological system?”

    “Is there a silver lining to the COVID-19 pandemic? Are people now asking more questions about climate change, pollution, our reliance on ultra-processed foods, our sedentary lifestyles, our excessive alcohol intake, our use of medications and drugs, and our stress — SO MUCH STRESS — from being over-scheduled and dependent on smart-devices?”

    “How will COVID-19 result in a new awareness of planetary health? What is a worldwide pandemic if not a “grand challenge”? Spaceship Earth keeps spinning. On its beautiful surface, many of us are still in quarantine, awaiting humanity’s next chapter. Let’s write it collectively. Let’s get it right. We’re in this together.”

    In short, the end, or at least tapering, of the ‘pill for an ill’ era of medicine.

    Don Stewart

  35. Jackie, Trevor, FI Warrior, Don:

    Thanks all – some great points to reflect upon.

    Apart from obvious concerns, my reason for asking is that I’m pondering “intelligence” in a rather specialised way.

    I believe that “de-growth” is a challenge that we certainly haven’t faced since industrialisation began, and that the environment poses another challenge, probably also without precedent. I’m therefore minded to see the virus crisis as a dress-rehearsal for big challenges ahead, and as (quite probably) the curtain-raiser for de-growth (my stats studies, taking up a lot of time at the moment, are suggesting very little scope for ‘recovery’).

    As I see it, two kinds of intelligence will be needed in facing these challenges. The first is individual and/or group intelligence, and the second is “systems” intelligence (government, business, institutions etc).

    In some countries, I think we’ve seen encouraging signs of both – but not in the UK or the US. Are the British and the Americans, I wonder, just not very clever about these things? Too individualistic? Are their institutions simply not up to the job? How else can we explain why other countries, notably in the Far East, seem to be coping better?

    Opinions differ on covid risk, of course, and we seem to have huge numbers of ‘instant experts’ around the world. But I’d think that opinions differ between people just as much in, say, Japan or Thailand. There seems to be more of something else there – more respect for rules, for the precautionary principle, for others? Less “selfishness” (for want of a better word)?

    If we see “who can tackle covid best?” as a competition (I don’t mean a conflict, but more like economic competition), why do the UK and the US seem to be “losing”?

    • A thought. The US and UK won WW2. At least in their own minds. In reality the USSR had a lot to do with it! But this meant that ever since then neither country has seen the need to learn anything from anyone else. It has become ingrained in both countries that they are the best, admired by every other country and they have nothing to learn – especially from foreigners. Of course UK had a head start having the Empire. They have also felt no need to do any of the sort of self examination and restructuring that the other nations of Europe went through after the war. Now they are incapable of it. And – whisper it – they are not the best at everything.

    • The problem with the US and the UK is the ascendancy of the basic attitude underpinning Reaganism and Thatcherism, both of whom believed that the state was a malign influence on the integrity of society and the proper functioning of the economy.

      If people believe, like Reagan, that, “government is not the solution to our problem; government is the problem” or, like Thatcher, in admiration of that American attitude, “The American traditionally emphasizes the need for limited government, light regulations, low taxes and maximum labour-market flexibility”, and go on to put as much effort as possible into the process of shrinking government, so that, as Grover Norquist hoped, they might “get it down to the size where we can drown it in the bathtub”, then how can we expect a government to function well at anything?

      The present administration in the US is the apotheosis of this decades-long desire for the deliberate degradation of government functionality. Huge numbers of appointments go unfilled, and for those that are, the primary qualification is loyalty to Trump rather than executive capability. Is it any wonder that the US federal government has botched its response to the pandemic? I suspect that the same corrosive influences on the British body politic have undermined government functionality there as well.

      Tackling a pandemic requires a collective response at all levels of government that is very rapid, coordinated and effective. The effort required to create governments capable of that kind of response is anathema to conservatives on both sides of the Atlantic. They only want to focus on making life easy for the “wealth creators” and making government as irrelevant as possible. We are now reaping what they have sown.

    • Thanks, a very spot-on interpretation I’m sure.

      Purely subjectively, back when I used to travel between the UK and the US, one of the most striking differences was that, whilst Brits so often said ‘government should do something about this’, Americans, seemingly irrespective of party affiliation, put little or no faith in government ever fixing anything. This seemed, to me, positive, in that, if Americans wanted something to be fixed, they had to fix it for themselves, not wait around, British-style, waiting for the government to do it. In the UK, opponents of the incumbent government often said that things would be fixed if their own party was elected. Again, Americans seldom if ever seemed to think that things would get fixed if their own party replaced the one in power. I well remember a lifelong Democrat telling me, breezily, that things would be no better if the Dems replaced the Reps.

      I used to think the American attitude was better, because it was self-reliant and self-motivating.

      Now, though, I’m re-thinking the limits of individualism.

      People often cite WW2 as a precedent. It’s not a great analogy. But, if people in England in 1940, instead of following the official line, had all done things in their own way (some following the black-out regulations, say, whilst others had their homes lit up like Christmas trees) then I suspect the war might have turned out very differently.

    • The US has a lot of corruption in government. It is pervasive in military expenditures, major national and regional infrastructure projects, and even sporadically at the local level once towns get sufficiently large to hide many details. The Common Good as a focus is the rare exception in my opinion. In smaller developed countries, with long histories of homogenous cultures/values/populations, government can more easily be held to task.

    • The classic instance of the latter might be Iceland, where the public voted not to reimburse the UK and Holland for losses incurred in the GFC meltdown in the Icelandic financial system. The government proposed to commit to reimbursement, but the public voted not to do so.

    • @Steven Kurtz and Dr. Morgan
      On corruption. Consider the example of the large contributions from the nursing home people in New York state to the re-election campaign of Mario Cuomo. The reward was that they got liability relief enacted into law. With the subsequent huge number of deaths from Covid-19 in New York nursing homes, their contribution was a very small price to pay. Now I hear that other states are just copying the New York law.

      From a larger perspective, I think it illustrates that we mostly cannot have our cake and eat it too. If we want to warehouse old people in commercially operated nursing homes (and as a people, we do), and if it is true that old people get out of nursing homes when they die (which it is) and if it is true that studies indicate that going into a nursing home accelerates death (which they did the last time I looked several years ago), then we are forced to draw the conclusion that we have to provide liability protection to the the companies that run them.

      A situation like the Canadian army finding atrocious conditions when they moved into nursing homes as a response to the Covid-19 explosion, calls for a more in-depth analysis. I assume that all those nursing homes were periodically inspected by local health authorities. So if the army found such bad conditions, why didn’t the local governments do something? Governments, of course, routinely exempt themselves from the laws they pass. And what government wants to shut down nursing homes? The converse happened when Ronald Reagan shut down mental hospitals and put the patients out on the streets. Reagan figured, correctly, that most voters would see the homeless as moral degenerates. No politician I know has figured out how to do that trick with Grandma.

      At a larger scale, I think we find that there are seldom great advances that don’t also carry negative consequences. The disgust that many internet pioneers have for what the internet has become is an example. The physical abilities of the internet to transmit and store bits has surpassed what they hoped to achieve. But the ‘intelligent analysis of the bits’ is terribly absent to many of the pioneers. I quoted Garth Davis above. I heard about what he had done in a conversation with the Doctors Sherzai, who are neurologists. Garth said he is going to limit himself to little homilies and not permit any responses…take it or leave it. Dean Sherzai, who with his wife Ayesha, are quite active on Facebook responded “this is the medium we have to use…it’s the only way to reach people…TINA”.

      The Civilization and Its Discontents quandary for those (foolish enough to?) try to save the world.

      Don Stewart

  36. @Dr. Morgan
    Regarding ‘systems intelligence’ in the US. Bush II and Obama both had brushes with situations which required systems intelligence. Bush appointed a dog show judge who was a political hack to the job of Emergency Management…and lived to regret it after Katrina in New Orleans. FEMA became a somewhat bloated but effective force in subsequent hurricanes and other emergencies. Obama confronted the threat from some viruses, and set up a virus coordinating committee to manage the Federal response in the future.

    Trump views the federal agencies as either simple conduits for tax money to flow from citizens to his favorite private enterprises, or as simply too stupid in comparison with his massive brain. And so his destruction of the Deep State in those agencies has destroyed a lot of expertise. Opinions vary on exactly WHY he has chosen the path of destruction. Some think it is just his narcissism. I agree with that assessment, but would add the thought that he probably believes that so long as there are private enterprises focused on making a profit, a government bureau is just a waste of good money which could instead be funneled to the private sector.

    David Katz, the recently retired head of the Public Health school at Yale, commented about his appearance at a government hearing. He came in and gave his presentation from the standpoint of the well-being of everyone. He saw all these people in the room, waiting their turn to speak. He didn’t recognize them…he found they were industry lobbyists. So one man spoke for the public and 25 or 30 spoke for corporations. That’s one of the ways we get dysfunction in the US.

    Regarding ‘individual’ intelligence. Garth Davis, MD, is a surgeon and weight loss doctor in Asheville, NC. He has a facebook page. He has recently announced that there will no longer be responses to his posts. His explanation is a good snapshot of the difficulty we face in using social media tools to get any reasonably accurate information to the public:

    Dr. Garth Davis

    April 27 · Public

    I am doing something I never thought I would do: blocking all comments. On FB you can comment but it will be hidden to me and any others, so knock yourself out.
    I am doing this for my own sanity and because I feel like I may be giving oxygen to the ludicrous nonsense in social media. My only goal on these pages is to give what little knowledge I have to help make sense of the glut of information out there.
    First time I encountered a conspiracy theory was in college. I was Student Body President and on the board for the Student Newspaper. A guy wanted to run an ad in the paper claiming the Holocaust never happened. He denied all the historical evidence and didn’t care that during the trials no Nazi ever denied what happened. Regardless of the baseless claim we ran the ad because we felt a duty to free exchange of ideas, regardless of how baseless they may be.
    Now, I find myself in similar situation. I am all for differing opinions but what I see in comment sections is basically tantamount to a mindless robot repeating verbatim what was fed to them from conspiracy based YouTube channels and other Social media accounts and comment sections. I see now what I didn’t see back in college: people abuse the free exchange of ideas to control minds with baseless, and possibly harmful ideas.
    I am not an angry guy who likes belittling people, but there are no logical arguments in comment sections, and absolutely no recognition of nuance in science. There is only sharing of complete nonsense by people who have NO expertise in the field, haven’t looked at both sides of the argument, and are completely resistant to reason and facts. This would all be amusing if it weren’t dangerous.
    I highly recommend watching American Dharma and The Great Hack. The basic message of these movies is that the real conspiracy is the fact that political factions and ideologues have figured out that you can weaponize social media comment sections (Steve Bannon’s exact words).
    So while I appreciate the freedom we have to express ideas, my concern is there is so much information out there and not enough knowledge. I do not have the time to respond to all comments and my fear is that in my attempt to explain information, I may allow commenters to steal the narrative and spread poison and nonsense.
    Also, I really believe we should be spreading love and peace, not hate. Yet the comment section baits me into expressing a side of myself I would rather suppress. I have considered completely leaving social media but I think too many reasonable people are following that route, which makes for a fertile ground for the virus of conspiracy and idiocy to spread. So no more comments. I will not being answering messages. If you feel I have anything to offer than keep following. If not, no worries.
    Take care in these trying times.

    Don Stewart

  37. @Dr. Morgan and Anyone Else who is Interested
    And interview with Dr. Evian Gordon conducted by Ari Whitten on the subject of non-conscious biases (e.g., confirmation bias and 99 other examples).

    https://www.theenergyblueprint.com/how-to-think/
    There is a transcript with some obvious errors…computers aren’t perfect.

    It strikes me that Dr. Gordon knows what he is talking about, and his analyses help anyone trying to deal with either the Covid-19 OR Degrowth.

    One curious note: the phrase “My late-night FM DJ voice” appears. I have been having dreams now for about a year featuring the late-night FM DJ voice (or the voice of the MSM newscaster) talking to me. When I wake up, I am sometimes not sure that I didn’t actually hear what I dreamt. It’s a curious circumstance…maybe a sign of paranoia?

    Don Stewart

  38. @Steven Kurtz and Dr. Morgan
    I always go back to Edward Bernays when I think about corruption:
    “The conscious intelligent manipulation of the organized opinions and habits of the masses is an important element in a democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds molded, our tastes formed, our ideas suggested largely by men we have never heard of. In almost every act of our lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind.” ~ Edward Bernays

    Bernays thought that the manipulation was essential in a democratic society because otherwise people would just mill around aimlessly. He was also a believer in the Marxian theory of excess production capacity from high output machines requiring constant government pumping up of ‘final demand’. You can see why the Captains of Industry liked his message.

    As I have thought about the neuroscience, I have come to the tentative conclusion that:
    *The only way we can behave is the way we almost instantly perceive is in our best interest. ‘Instantly’ being in the order of half a second.
    *It is possible to modify our framework of what is desirable and what is not. We call those habits. Thus, a person can come to realize that sugary beverages are indeed the work of the devil, and experience disgust in their presence. Similarly, humans can come to perceive that their immune system won’t operate correctly if they don’t take care to feed their microbes the food that the microbes need…which changes our perception of a ‘healthy diet’.
    *But the disciples of Bernays are constantly working to stop us from actually establishing any framework which doesn’t maximize their profits. And so we get political corruption, pervasive advertising, and the sort of mind (b)ucks which dominate social media.

    Caveat Emptor

    Don Stewart

  39. Steve Keen; Thailand vs. Holland; Automatic Earth
    We previously had some discussion about Steve leaving Holland for Thailand to avoid the virus, and how that has worked out very well for Steve. Here is the story about leaving Greece to return to Holland, and how that has worked out so badly:
    https://www.theautomaticearth.com/2020/05/automatic-earth-not-in-athens/

    Just based on the statistics presented, the medical system in Greece has performed much better in its much slimmed down mode (due to the financial crisis and austerity) than the Dutch system because of the strict lockdown in Greece.

    Don Stewart

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