A trade war, gig economy, and lack of immigrant workers will be the key factors in prolonging the post-pandemic Extended Economic Distortion

Because the differences between the 20th Century and 21st Century economies are significant, though not commonly identified, they will become significant elements in the post-pandemic Extended Economic Distortion.

Like most centuries, what is significantly different from the last century is confusing because the source of changes seem to escape clarity. For instance, as late as April 2009 international finance guru Randy Charles Epping's book The 21st Century Economy--A Beginner's Guide was released to acclaim and was regarded Bookauthority.or as among the "40 Best New Economy Books".

In that book according to one description: "Epping defines key ideas and commonly used words and phrases like carbon footprint, WTO, economy of scale, NAFTA, and outsourcing [and] illustrates how central banks help navigate global crises and drive the global economy, discusses the benefits of Green Economics, shows how trade wars can be avoided...."

Uh, shows how trade wars can be avoided?

One thing 2016 and 1916 have in common is that the economics of the previous century was about to come to an end. In 1916 we had WWI followed by The Great Depression and WWII.  In 2016 when Donald Trump took control of the Republican Party and won the U.S. Presidency, he began a nationalist trade war with the rest of the world completely disrupting the norms of the global economy, a trade war that appears to be expanding into hostilities when it comes to China.

Then came 2020's pandemic shutting down travel and commerce for many months - we don't know how many, because it's still going on and does not appear to be on a course towards full recovery. Except for China which, as explained in The New York Times:

    This was supposed to be the year that China’s export machine began to stall. President Trump had imposed broad tariffs on Chinese goods. Countries like Japan and France pushed companies to shift production from China. The pandemic had crippled China’s factories by the end of January.
    Instead, China Inc. has come roaring back.
    After reopening in late February and early March, China’s factories began an export blitz that is still gaining steam. Exports soared in July to their second-highest level ever, nearly matching the record-setting Christmas rush last December. The country has grabbed a much larger share of global markets this summer from other manufacturing nations, entrenching a dominance in trade that could last long after the world begins to recover from the pandemic.
    China is showing its export machine cannot be stopped — not by the coronavirus and not by the Trump administration. Its resilience lies not only in the country’s low-cost, skilled labor and efficient infrastructure but also in a state-controlled banking system that has been offering small and large businesses extra loans to cope with the pandemic.
    The pandemic has also found China better placed than other exporting nations. It is making what the world’s hospitals and housebound families need right now: personal protection gear, home improvement products and lots of consumer electronics.

The irony of this is important to California. As explained here in the lengthy November 24, 2016 post #Calexit. Perhaps 170 years of invidious doubtful scorn is enough California's early European influence was Spanish trade with Asia:

    Effectively the Pacific Coast (and more) of the Americas was left to the Spaniards, good Roman Catholics all, to colonize and they did so from Northern California to Cape Horn.
    The first European contact in California was a Spanish sailing expedition, led by Portuguese (?) captain Juan Rodríguez Cabrillo, in 1542, which traveled up the Pacific Coast as far north as the Russian River. Subsequent Spanish expeditions, followed....
    In 1565 the Spanish developed a trading route where they took gold and silver from the Americas and traded it for goods and spices from China and other Asian areas. The Spanish set up their main base in the Philippines. The trade with Mexico involved using an annual passage of Manila galleons, which would traverse somewhere near Cape Mendocino, then could turn south down the California coast towards their home port in Mexico.
    When the value of California for trade routes became obvious to several other European interests, particularly the Russians whose fur traders were traveling from Alaska down the coast, the Spanish sent the Portola Expedition both over land and sailing up the coast in 1769.
    The Portola Expedition's original assignment was to travel to the "port of Monterey" described by the Vizcaino expedition and establish a settlement there. After that, the explorers were to continue north to locate Cermeño's "Bay of San Francisco" (the northern end of which is now called Drake's Bay), chase away any Russians encountered, plant the Spanish flag and determine whether the bay would make a good port.
    After the Portolà expedition of 1769-70, Spanish Catholic missionaries began setting up 21 California Missions on or near the coast of Alta (Upper) California, beginning in San Diego. During the same period, Spanish military forces built several forts (presidios) and three small towns (pueblos). Two of the pueblos grew into the cities of Los Angeles and San Jose. And so California became a part of Viceroyalty of New Spain.

Except in the midst of WWII, trade with Asia has been critical for California's economy since the 17th Century. In the past four decades, trade with Asia has been integral to the U.S. economy as a whole. In 2018 Asian trade for the U.S. totaled $1.6+ trillion. In the first six months of 2020 it was $115 billion less.

A new 21st Century economy integral element is the so-called "Gig Economy." For many it is hard to understand the significance of the Gig Economy. Apparently the federal government has no lack of understanding.

There was no hesitation on the part of the federal government as reflected in the red in the chart to the right. Those red bars are the people on Unemployment Insurance (UI) under federal programs established by the CARES Act and some other programs

Under the CARES Act states are permitted to provide Pandemic Unemployment Assistance (PUA) to individuals who are self-employed, seeking part-time employment, or who otherwise would not qualify for regular unemployment compensation.

The important thing to recognize is that news stories such as in today's New York Times begin with "just over one million Americans filed new claims for state jobless benefits last week" before noting further down on the page "another 608,000 people filed for benefits under the federal Pandemic Unemployment Assistance program."

The truth is last week 1.43 million new unemployment claims were filed, and 42.5% were under the PUA many of whom, if not most, fall under the vague definition of gig workers who were working in the Gig Economy. And it is this subject that also relates to California's history.

If you know about the film industry you know that today actors, writers, and almost all other production folks are effectively gig workers, meaning they don't have jobs until they are hired for specific productions then laid off. Many work enough to get UI for a period, but then must do jobs like wait tables. It wasn't always this way as a 1984 New York Times article noted:

    In 1938, Metro-Goldwyn-Mayer had 120 actors and actresses under contract, including Clark Gable, Greta Garbo, Robert Benchley, Dame May Whitty, Judy Garland, and Freddie Bartholomew. Nearly a hundred writers and directors were under contract to M-G-M that year, too. And 1938 was hardly a peak year during the golden era of the Hollywood studio system.
    Although the movie industry has often yearned publicly for the old days - Francis Coppola, for example, bought a nine-acre studio in the heart of Hollywood a few years ago in order to re-create the old system, and every decade Universal has announced a ''new talent'' contract program - the studio system, with its old authoritarianism, has stubbornly remained as dead as the dodo bird and passenger pigeon that it followed into oblivion. Mr. Coppola's Zoetrope, which put four promising actors under long-term contract, is bankrupt; and somehow the new talent programs, which tried to do the same thing with beginning actors, never worked.

In the film industry there is some evolved benefits programs through unions for some of the quarter of a million California film industry UI applicants. But that isn't true for the bulk of the Gig Economy that began in the past two decades. Investopedia lays the subject out straightforwardly:

    In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees. A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.

Wikipedia offers considerably more discussion but gives this piece of critical information:

    In the 2000s, the digitalization of the economy and industry was carried out rapidly due to the development of information and communication technologies such as the Internet and the popularization of smartphones. As a result, on-demand platform based on digital technology has created jobs and employment forms that are differentiated from existing offline transactions based on accessibility, convenience and price competitiveness, the so-called Gig economy has become a focus.

Within the overall economy, the Gig Economy has complicated things because as noted in Wikipedia "36% of U.S. workers join in the gig economy through either their primary or secondary jobs." And they are likely the bulk of the 42.5% of new filings for unemployment.

Complicating the matter further, California is in the middle of a policy battle over whether gig workers are should be employees, not independent contractors. It's complicated and the outcome could impact the future of the national economy.

Foreign trade and the Gig Economy are two integral elements of the 21st Century American economy facing significant change. A third is the role of immigrant workers.

We are generally familiar with the nearly-century-old policy debate - perhaps battle - over immigrants, both legal and illegal, who work in agriculture. The Trump Administration has instituted policies that reduce the number of available workers, implying that the goal is zero. That would have a significant impact on the cost of food.

Then there is the complicated issue of the H-1B visa, on which U.S. technology companies have become dependent for workers. The issue is complicated because some companies use those visas to tie workers to a job and pay less than the market wage. But the United States and China are in a growing competition for technological leadership in areas such as artificial intelligence, biotechnology, quantum computing, and other sectors vital to future economic and military prowess. The Trump Administration's has acted to restrict both student and H-1B visas.

In the pandemic with its travel restrictions many actual and potential technology workers have gone home and others have not been able to come to the United States. In effect the pandemic has implemented Trump policies. This is going to disrupt American technology leadership already being effectively challenged by China. It is not clear that this will change in the next few years.

The post-pandemic Extended Economic Distortion is going to result from, among other factors, reduced world trade, reevaluation and potential reorganization of the Gig Economy, and a loss of immigrant worker efficiency and expertise.

A reason for the surprising ease that the early $500 billion in direct intervention for American families passed both houses of Congress. Without it, 17 million people would have dropped below the poverty line. That's why Trump bypassed a stalled Congress with the $300 per week second round add-on to UI.

Getting restaurant and personal care workers back to work is a goal to avoid some potential deep poverty. But post-pandemic economic issues go well beyond the service industry and well beyond the time when a vaccine will push Covid-19 onto the same shelf in people's minds as "the flu."

No historical period exists that is identical to this time. But the sharp deflationary recession across Europe and in the United States known as the Depression of 1920–1921 was stimulated by the return to the civilian economy of troops after the end of World War I.

But it created an economic distortion further twisted by the Spanish Flu and the rise of labor unions. Each country responded differently. Italy's response to the social unrest offers a cautionary lesson for dealing with an Extended Economic Distortion in 2020. We will explore the Mussolini-effect here in the future.

Last week's multitude of confusing statistics help mystify The Great Economic Distortion's impact

Having said innumerable times over the decades "figures don't lie but lairs sure can figure" it seems like reading, seeing, and hearing inane reporting on statistics in the news media should not be bothersome.

After all, clearly embedded in the term is the truth of its history - stat istics - as the term is intimately connected with the development of the modern sovereign state, specifically within European states following the peace of Westphalia (1648).

If you didn't know it, scholars have recognized the Peace of Westphalia as the origin of principles crucial to the concept of the modern self-governing independent nation, including the inviolability of borders and non-interference from outside the borders in the domestic affairs states.

It shouldn't surprise anyone that statistics, a mathematical science grounded in probability theory, became a tool for elected politicians. Statistics can be confusing for we non-statisticians, even those of us who took a statistics course in college.

For instance, last Thursday the U.S. Department of Labor reported 1.186 million new initial unemployment insurance claims for the preceding week. While that is a number that needs no interpretation, we can learn that the normal weekly initial unemployment insurance claims in 2019 was 200,000-250,000. That range extended into early March as can be seen on the chart below (numbers are in thousands, so the first number is 211,000 and themost recent is  1,186,000):

Again, these are just numbers. If you total the numbers shown on the graph, the reported weekly initial unemployment insurance claims during this period is 55,814,000 - yes, 55.8 million!

Again, these are just numbers. But the news media can't just report the numbers - that's just boring news. So on July 16 CNBC reported that the continuing claims as of July 4 were 17.3 million as asserted by the Federal Reserve Bank of St. Louis. Then on July 24 The New York Times headline was About 30 Million Workers Are Collecting Jobless Benefits explaining that "the Labor Department reported that the total number of people claiming unemployment insurance for the week ending July 4 — without any seasonal adjustments — equaled 31.8 million."

Yeah, ah, there is quite a difference between 17.3 million and 31.8 million continuing claims. If you total the weekly initial unemployment insurance claims on the chart above only through the July 4 period, there were 50.5 million. If the CNBC 17.3 million number were correct it would seem that 65.7% of those that filed between March and July went back to work. If The New York Times 31.8 million number were correct it would seem that 34.3% of those that filed between March and July went back to work.

For this writer, this kind of crap reporting is unacceptable albeit it has been the new normal for decades. Those continuing claims numbers don't seem to be included in news stories about real people nor by this writer's personal knowledge, albeit both are anecdotal. IF we join in these speculative games, even if 20% of those initial claims numbers include errors, false claims, and people who have returned to work, the continuing claims today would be 44.7 million. But I certainly wouldn't pretend to report that to the public as news.

A paranoid political junkie might even suspect that the stat istics might be being used for purposes of the state. And the headline news last Friday would reinforce that view. We were told that the U.S. Bureau of Labor Statistics (BLS) reported that 16.3 million people were unemployed in mid-July making the official unemployment rate for mid-July 10.2% down from its peak in mid-April. The implication is that 68.5% of those that filed between March and July went back to work!

Wow! Things are really looking up! But wait! What is the U.S. Bureau of Labor Statistics (BLS). It even has stat istics in its name.

If one digs down ever so slightly one learns that the headline BLS unemployment rate is the "U-3 rate." It turns out that the BLS has a broader "U-6" measure of unemployment, which includes such people as those working part-time but not of their volition and people who have given up, is at 16.5%. In fact, there are rates labeled U-1 through U-6, all of which are reported in a table (but not in headline news) as follows:

In the 12 months before the pandemic, the BLS household employment survey had a response rate of 83%. The July survey had a response rate of 67% which should make one wonder if they didn't get an adequate response for statistical probability analysis. But these folks are statisticians whose data could be useful for government planning. Unfortunately, it is useful for politicians who over the years have made sure the news media get the statistics.

As noted earlier, the anecdotal information available indicates a whole lot of families (aka households) have seen their wage-earner members lose their jobs. Lo and behold, another federal agency, the Census Bureau, in a Household Pulse Survey found last week that found that 50.8% of adults live in households that "experienced loss of employment income since March 13, 2020 (for self or household member)" and 26.5% of surveyed adults either missed their last rent or mortgage payment or have either slight or no confidence they can pay the next one.

According to the Census Bureau, in collaboration with five federal agencies the Household Pulse Survey was designed to deploy quickly and efficiently, collecting data on a range of ways in which people’s lives have been impacted by the pandemic. Data will be disseminated in near real-time to inform federal and state response and recovery planning. But keep in mind that it is a "survey" which like other "polls" has a limited number of responses (typically 80,000±).

Many news articles now assert we're in a depression. The problem with that is there is no definition of a depression based on statistics. Other articles and government agencies say we are in a recession based on statistics. Unfortunately, they are really asserting that the data indicates a probability of an event something like the recessions since WWII for which they have data. As asserted here in prior posts, that is incorrect. We don't know what's going on and have chosen to call it The Great Economic Distortion of 2020.

So what seems likely about The Great Economic Distortion of 2020? It appears a large number of households have seen a drop in income during the pandemic. That is because since the since April at any one time a significant percentage of Americans of working age who wish to be participating in the work force are unemployed or significantly under-employed.

Keep in mind that the economic impacts of the pandemic began in mid-March and the data is for mid-July, a mere 4 months. At the beginning of The Great Depression, the stock market crash was in October 1929 but unemployment did not hit double digits until the end of 1930.

As noted in a previous post, the effects of a crippling world-wide pandemic have not been experienced since modern economic statistical data, such as unemployment and GDP, began to be systematically compiled on a regular, standardized, though on occasion revised, basis after World War II.

Given that the United States was considered the world's economic leader from 1946 through 2016, it is clear that life for people around the world is about to begin a significant long-term change with no model to emulate.

China's 4000+ years history of empires created its peculiar civil perspective. The traditional Chinese form of national government has been an oligarchy with a touch (sometimes a heavy hand) of autocracy led by an emperor or, since the middle of the 20th Century, a paramount leader. It's culture is built around one ethnic group. Fundamentally the autocratic state controls the economy. It does not offer others an appealing road to follow.

In contrast the United States is a country that has existed less than 250 years. It claims to be a democracy. Two of the last three Presidents lost the popular vote but were appointed to office. The U.S. Senate majority was elected by less than 8% of eligible American voters. Together they have secured control of the Supreme Court. The truth of the matter is the U.S. form of national government has been an oligarchy with a touch of autocracy. Fundamentally, state-favored organized greed controls the economy. Because it's population is ethnically diverse, it has no stable culture. It does not offer others an appealing road to follow.

The most significant challenge facing humanity over the 21st Century is Climate Change. International action is needed to address the multitude of problems. The Great Economic Distortion of 2020 will make it more difficult. It appears that no single influential or powerful leader is likely to step forward.

The future looks...interesting?

The Covid-19 Pandemic Crisis, the Great Great Economic Lockdown of 2020, and the Extended Economic Distortion: A Californian's Timeline.

   “We are in a worse place than we were in March. Back then we had one epicenter. Now we have lots.”
          - Dr. Leana S. Wen, former Baltimore health commissioner.

   “This is not a once-in-a-century event. It’s a harbinger of things to come.”
          - Dr. Julie Gerberding, former director of the C.D.C.

   "If you look at what happened in Europe, when they shut down or locked down or went to shelter in place - however you want to describe it - they really did it to the tune of about 95% plus of the country did that. When you actually look at what we did - even though we shut down, even though it created a great deal of difficulty - we really functionally shut down only about 50% in the sense of the totality of the country."
          - Director of the National Institute of Allergy and Infectious Diseases
            Dr. Anthony Fauci, testifying before the House Select Subcommittee
            on the Coronavirus Crisis.
 

The Covid-19 Pandemic Crisis, the Great Great Economic Lockdown of 2020, and the  Extended Economic Distortion continue to plague the image of the Dream held by the overconfident American.

The pandemic again demonstrates that Americans have little understanding of the importance of the most basic government services, in this case public health. Partly this is a simple outcome of the inherent bigotry built into capitalism - the "I'm better than you" theme.

We've seen bits and pieces of this in such happenings as the Flint, Michigan, water crisis that began in 2014 and the AIDS pandemic of the 1980's.

Epidemics with fatal consequences caused by microbes which human behavior spreads through the population are not unusual events in history (and pre-history).

It is clear that within the United States the potentially effective Great Economic Lockdown failed because, as noted above by Dr. Fauci, we as a people cannot shift how we think within two months. We simply are unable to abandon the greed inherent in capitalism, shifting to government economic dependency without a definite end date.

In fact, members of Congress are still bickering among themselves, between the two parties, between the Senate and House, and with the Administration, over an extension of foolishly time-limited, about to expire, programs to shore up the economy.

This is all in the midst of the Extended Economic Distortion, the existence of which appears intuitively obvious but is clear from these two charts based on data released this week (click on charts to see full size):




Regarding the 9.5% second quarter drop in the Gross Domestic Product (GDP) which when combined with the 4.8% drop in the first quarter represents a 13.8% drop for half the year, we need to understand that if this loss were annualized we would see a drop of 28%± in the GDP.

About distortion. The reality is that the drop in the GDP has not affected the so-called 1%, the wealthy. In terms of wealth it also has impacted only a low percentage of upper middle class wage earners as opposed to low income service workers. Distortion.

With the formal unemployment number at around 17 million, or about 12%, and evidence that the number is increasing there is little doubt that our economy is now distorted.

The extreme distortion is that the unemployed are primarily lower-paid workers. While the initial $1,200 aid payment to all plus the additional $600 per week to the unemployed limited the distortion, as of August 1 the effect of those limiting efforts will cease.

How will all this play out in the future? It would have been better if we were one nation of united peoples, but the United States was not created for that purpose. Perhaps the only time in our history that we offered such a picture of unity was during WWII.

We know that different nations have achieved different levels of infection, some having minimized the infection spread.

But we must acknowledge the quote by Dr. Wen - the U.S. has "lots" of epicenters. At some point the pandemic became hundreds of smaller epidemics, each with its own characteristics based upon the behavior of people of local cultures.

It has become clear that with each state having its own Covid-19 policy, the result is a 50 state epidemic management program.

Within each state, localities have seen infections develop and spread differently creating local epidemics with differing impacts. For instance, this week the last county in California without a confirmed case, Modoc County, reported two.

As the Covid-19 pandemic continues, in our household we have begun to limit our tracking of the illness statistics to California and to our county.

When California issued the first statewide "stay-at-home order" the stated purpose was to gain time to prepare our hospitals. So how is California doing? Let's look at the graphs (click on graphs to see larger version):



In fact, California successfully kept the hospitalizations low for the three months from mid-March to mid-June. Since the lifting of elements of the stay-at-home orders, the hospitalizations climbed and has begun to flatten, as expected.

The "as expected" is emphasized because at no time did any knowledgeable Californian think that Covid-19 infections were not going to climb. If you look at the deaths chart you will see a reflection of the increasing caseload. A steady increase can be seen, until after the Fourth of July when the line started a slight curving upward.

Essentially, that is about the best that can be expected as the days, weeks, and months pass. (No caseload chart is offered as the testing effort is not a reliable indicator of actual cases.)

The hope is that the hospitalization graph line will continue over time to turn downward. That would indicate what is happening in terms of the number of cases.

Because we don't know enough about the virus to predict when it might take a pause, all we can do is scroll down looking at the timeline to the right.

Hopefully that will help maintain perspective and patience. We will need that because the Extended Economic Distortion will not be corrected in the period of the timeline.

Living "self-cloistered without self-sufficingness" on the Fourth of July in the year of COVID-19. About a new context for old Californians and others

The Fourth of July in the year of Covid-19 certainly offers a new context for an old Californian.

Four months ago, March 4, 2020, our Mendocino County Health Officer declared a local health emergency due to the COVID-19 pandemic. On that day monitoring the expanding pandemic became a fierce focus in our household.

We are among Californians over the age of 75, among the group identified as having the highest health risk in the pandemic. We are among those who remember Polio epidemics. We are among those who remember parents and grandparents who lived through, but rarely discussed, other disease epidemics. Fortunately through the efforts of public health programs those diseases were eradicated or effectively suppressed.

Subsequent to the availability of a Polio vaccine, we saw and felt the impact of annual flu epidemics, though they were and are limited by imperfect vaccines. We lived through the HIV tragedy feeling the sorrow of death among acquaintances. We read with concern the stories of Ebola.

Truthfully, those of us who have lived most of our lives in the post-1958 "Western world" have simply been lucky.


Why and how to live self-cloistered without self-sufficingness

On the July 4, 2020, aka The Fourth of July, it will have been 160 days or 5⅓ months since the first confirmed Covid-19 case arrived in California, 166 days or 5½ months since the first confirmed U.S case, 230 days or 7⅔ months since the World's first confirmed case occurred. (Click on the timeline to right to see relevant dates.)

It has also been 109 days or 3⅔ months since March 16 when public health officials in seven counties around the Bay Area introduced approximately 7 million residents to the concept of mandated "protective sequestration."

"Protective sequestration, in public health," according to Wikipedia, refers to "social distancing measures taken to protect a small, defined, and still-healthy population from an epidemic (or pandemic) before the infection reaches that population."

It must be truly baffling for Americans who remember living through the four years of rationing and fighting of WWII to watch the widespread lack of patriotism in the current generations. People today have been asked to give up some of the life they led prior to 2020 for less than four months to protect the lives of other Americans and they have balked at the idea.

California's "shelter-in-place" protective sequestration efforts were for the purpose of "flattening the curve" for a sufficient time period to expand hospital capacity to deal with the inevitable infection surge. Based on the charts below reflecting data through June 30, California succeeded in keeping infections down. Now that we are "opening up" it is obvious what's going to happen, what is happening.

By Fathers Day, June 21, the expected Covid-19 infection "First Wave" surge had begun using those hospital beds. In some California hospitals the ICU beds are full.

We do have widespread testing for infections which are very useful for slowing the infection surge. Finding the infected persons allows officials to place them in quarantine. But the data is not yet useful for defining the extent and impact of the surge.

Yes, today more people have been infected compared to yesterday. But those statistics also show that more people have been tested. And what they show is a very small percentage of Californians are infected (see table at right).

Since we know that 10% of the population has been tested, it might be reasonable to assume one could multiply those percentages in the table by 10. But we also know that prior to mid-June most of the testing subjects were people with symptoms. Further, the testing only indicates who is currently infected, not who was infected a month ago or will be infected a week from now.

It also appears from the chart below that death statistics are not good indicators of surge levels.

In fact from the February 6 when the first Californian died, through the end of June, Covid-19 has killed 6,000+ Californians, which is 0.017% of the population. That is over a period of 21 weeks. On average every five weeks an equivalent number of Californians die of heart disease. Of the deaths in California to date, 94.0% are persons 50 years of age and older, indeed 75.4% are 65+.

Today no protective sequestration stay-at-home order is in effect. But with or without an order, a choice exists.

On March 13 we chose to become "self-cloistered without self-sufficingness" The goal is simple. Avoid being hospitalized because of a Covid-19 infection.

The death data suggests that for those of us over 65 being "self-cloistered without self-sufficingness" is prudent. We are "self-cloistered" meaning we are staying at home. Being "without self-sufficingness" simply means acknowledging that we are not self-sufficient, we do not grow all our own food, we do not create our own soap. So to safely sustain the basics of our manner of living within the time of the current pandemic, we choose to interact with people only from a distance mostly through 21st Century technology.

In practice that means ordering food and other necessities online which results in deliveries via the U.S. Postal Service, UPS, FedEx, Instacart, and others.

We have not left our home, our property, since March 13, 2020. That was three days in advance of those first "shelter in place" orders covering the Bay Area, five days in advance of the first Mendocino County order, and one week in advance of the first California state order. On the Fourth of July we will have been "self-cloistered without self-sufficingness" for 3¾ months, or 16 weeks, or 113 days.

But while Californians like us who live in the forest can limit our risk from Covid-19 by staying home, the risk from wildfire is another story. This past Sunday 40 homes were lost to a wildfire in rural Niland. One resident died. For us Covid-19 is an add-on risk

Unfortunately it is one which has seriously damaged the economy.


Labor Day and the Extended Economic Distortion

News reports on Thursday announced that the unemployment rate in mid-June fell to 11.1%. The headlines offered feelings ranging from "great news" to "hopeful." What the headlines didn't say is:

• unemployment levels remained higher than any time since The Great Depression;
• there were still nearly 15 million fewer jobs in June than in February;
• data was collected in mid-June, before coronavirus cases began to surge causing many cities, counties, and states to roll back the phased reopenings that brought many jobless workers back into the labor force;
• because those unemployed do not include anyone who works only one hour or more a week, the headlines did not indicate that full-time employment remains 12 percent lower than it was in February while part-time employee numbers are above pre-pandemic levels with twice as many working part-time involuntarily; and,
• on the same day those mid-June unemployment numbers were reported the same news sources reported  that 1.4 million filed new claims for state unemployment benefits last week, the 15th straight week that the figure exceeded 1 million, and another 840,000 filed for benefits under the federal Pandemic Unemployment Assistance program.

Nor did the headlines mention the probable continuing reporting error affecting the level of unemployment:

Finally, with regard to unemployment there is the matter of rising numbers of layoffs becoming permanent:

The number of permanent layoffs has doubled since April reflecting a growing awareness by employers that the "great" economy ended sometime in February replaced by an Extended Economic Distortion discussed here on May 7 in Expect a consumer-based Extended Economic Distortion after the Great Economic Lockdown. In terms of employment we likely will have a clear indication of the level of the problem in the private sector by Thanksgiving. We will not get a clear picture of the impact on the 3 million jobs in California state and local government including school districts until next Spring.

By Labor Day we likely will begin to see from the Covid-19 Hospital Patients graph how extended and how distorted the economy will become prior to a Second Wave which likely will happen if we are unable to produce a reliable vaccine.


This too shall pass, though it may take entire decade

As noted at the beginning of this post, the Fourth of July in the year of Covid-19 certainly offers a new context for old Californians like us.

What we don't know about the cause of the immediate crisis, a virus, after these few months leaves us ignorant of long-term impact on many, many people ages 14-50 who become infected but survive.

What we don't know about the short- and long-term impacts of the crisis on California's economy, the world's 5th largest, is significant. The Trump Administration's trade war and disdain for other economic powers now being reflected in international travel bans imposed against Americans will magnify the damage to California's economy. All this triggered by the pandemic Trump supporters denied was happening while their grandparents were prematurely dying.

As noted in the above-referenced May 5 post, in the 20th Century, beginning intensively in 1929 and lasting 50± years,  massive changes in the legal, economic, political, social, cultural, environmental, and technological subsystems were implemented. This created not only the established reality of two "seniors" ordering goods and receiving entertainment over the internet, but the possibility of a significant percentage of workers effectively working from home.

Covid-19 forced the expanded working-from-home trial which could be indicative of more massive changes in the legal, economic, political, social, cultural, environmental, and technological subsystems. It is not surprising that the pandemic enabled younger generations to push more visibly for major revisions to the legal, economic, political, social, cultural, and environmental subsystems to assure some greater semblance of equity by the mid-21st Century.

Yep, the Fourth of July in the year of Covid-19 certainly offers a new context for an old Californian.

Evonomics and Doughnut Economics: The GenX, Millennial and GenZ voters must shift the economic debate out of the candlelight onto device screens

For 100 years, beginning with WWI in 1916 and ending in 2016, a sequence of events assured the economic dominance of the U.S. dollar and the strength of the post-WWII U.S. economy.

Since 2017 the actions of the Trump Administration have undermined that dominance. Within the American consumer economy The Coronavirus Crisis and The Great Economic Lockdown of 2020 have further undermined the dominance of the dollar.

It also became clear last year that the the People's Bank of China and the European Central Bank are both alarmed by, and have rejected the idea that, a consortium of American-led private corporations with a digital global, super-sovereign currency will replace the dollar as the world's reserve currency.

In far less than a decade it appears Americans will see the end of the dollar as the World's reserve currency. It won't be replaced by a currency controlled by Mark Zuckerberg. It will be replaced by a sovereign digital currency probably not involving the United States, most likely multinational but possibly controlled by a single nation.

When that happens, the Extended Economic Distortion could continue American economic stagnation for a decade or more. To address this the GenX, Millennial and GenZ generations must move the economic discussion out of the era of 19 Century candlelight into the 21st Century era of device screens.


Coping with statistics and political terms

In four previous posts here the term "Extended Economic Distortion" was used to label the likely outcome of the world-wide pandemic.

The phrase is suggested instead of using the term"depression", which is not recognized within the economic statistics world, and in lieu of   "recession", which is defined within the economic statistics world.

Since this writer is not an economist, it might be said that this suggestion reflects unwarranted hubris. Perhaps. But that also is an unfortunate trait among economists.

"Extended Economic Distortion" is suggested because:

1. economists don't agree on the details of the definition of "recession" which has led to some recent confusion; plus
2. the effects of a crippling world-wide pandemic have not been experienced since modern economic statistical data, such as unemployment and GDP, began to be compiled on a regular and standardized basis after World War II.

Flaws in the understanding of the term "recession" led to these two headlines this week:

• Monday, A US recession began in February in the face of coronavirus 
• Tuesday, The NBER is wrong — the recession didn’t begin in February, it began in March

The world still has an international economy which very much involves the economy of the United States despite Trump's flailing about. Then a pandemic began in China, the world's largest nation which by some measurements had the world's largest economy. Indeed, our understanding of economics in 2020 has been very much complicated by the pandemic and Donald Trump

By late December parts of the Chinese economy were being shut down with results indicated by this Newsweek headline in April: China Economy Has Worst Quarter in 40 Years After Coronavirus Lockdowns, Leading the World Into Recession. Well, yes, it had the appearance of a "recession."

But the Monday article discussing the Friday US jobs report indicating that more people are working led one economist to state: "We could have the shortest recession in history — it seems ridiculous, but we could. This bottom is going to be uniquely deep, and we don’t know how fast we will get out of the bottom."

Regarding the Monday and Tuesday stories, the National Bureau of Economic Research (NBER), a private economic research organization, is the authority for dating US recessions. The NBER defines an economic recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." Academics, economists, policy makers, and corporations rely on the NBER for the precise dating of a recession's onset and end.

To be clear, the NBER has not declared the recession at an end. Rather individual economists are puzzling out loud to news media representatives about how to interpret the statistics.

There is a problem with those statistics as indicated in these two headlines: Surprise: The BLS Admits Another Phony Jobs Report and The May jobs report ‘misclassification error’ explained.

In the real world, not the world of politicized statistics, since February most State employment departments were handling a huge, unprecedented workload with the pressure being to get the paper processed so people could get their money. To address the paperwork problem hundreds of  new employees were hired, many if not most unfamiliar with the job. If the only error discovered is "misclassification" that will be a miracle

This week another 1.5 million unemployment claims were filed. In the real world, not the world of politicized statistics, these numbers represent Americans struggling to pay for food, clothing, shelter, health care, transportation, and communications.


What's going to happen to our dollar? It doesn't look good!

As is the case with the professionals in the biological and medical sciences communities learning about Covid-19, professional economists don't know enough about a coronavirus pandemic accompanied by a "Great Lockdown" to offer us meaningful information, particularly for interpretation.

An unprecedented event has distorted our statistical view of money, meaning it has been pulled or twisted out of shape rendering statistical results that are difficult, if not impossible, to interpret in terms of anticipating the economic future.

Unemployment numbers are not as clear an indicator of the scope of the problem as we might think. The jobless rate statistic in April with whatever errors it may contain indicated an unemployment rate of 14.7%. Unfortunately, discussion in the press compared it to the 1930's Great Depression numbers. Any such comparison is worthless.

You see, 2019 America was not 1929 America. Consider, for instance, that in 1929 America only about one-fourth of women worked, while about 80% of men worked. Most households were supported by one income.

In contrast, in 2019 more women were working than men, about 60% of households depend upon two incomes, and at least 35% of children under the age of 18 live in single parent households.

So it shouldn't be surprising that the Pew Research Center reported in mid-April (as new layoffs were/are still continuing) that 43% of all households had one or more persons who had lost a job or taken a cut in pay and that among lower income households the number rises to 52%.

Those 2020 American households will struggle with a reduction in income. How they will react doesn't require complex statistical projections. Those consumers will spend less. For how long, it is impossible to know.

This is the situation in a nation, indeed a world, in which everyone describes the economy as a "Consumer Economy",  an economy driven by consumer spending as a percent of its gross domestic product (GDP), as opposed to manufacturing and the other major components of GDP. Most economists say that in the U.S. about 70% of spending is consumer-driven.

(Like everything else in economics there are variations in definitions for GDP.  To be totally confused, one need only read the entire Wikipedia entry.)

Had the United States Government during the preceding three years not engaged in a successful effort to stall the international economic agenda, this Extended Economic Distortion might have been limited to a five-year recovery. (That assumees that the longer-term unemployment and business stresses will be felt mostly within the personal service sector, an assumption that has yet to be supported by data.)

However, with an international economic structure in disarray, "money" becomes a potentially serious problem. The Fed and Congress are trying to prop up an economy by expanding the money supply. That theoretically makes the dollar "worth" significantly less.

A measurement of "money" called M2 includes "liquid" cash and checking deposits plus savings deposits, money market securities, mutual funds, and other time deposits. We are confronted with this comparison:

1. In the ten years to February 2020, the U.S. M2 money supply increased by an annual rate of 6.3%.
2. In the six weeks to leading to April 6, the M2 money supply was increased by 7.7%, an annual compounded rate of 90.4%. 

According to economists, 18 to 24 months from now we should get inflation close to triple digits, offering the specter of pushing wheelbarrows full of money to McDonald's to buy a cheeseburger. Fortunately the economists haven't been right about the relationship of M2 to inflation in the 21st Century...yet.

The complication is the U.S. dollar has been the world's reserve currency preference  This has benefited the U.S. economy since WWII. But the fact is world reserve currencies change with the fortunes of countries.

Globalization supported the U.S.reserve currency dominance. Deglobalization would be expected to erode that dominance over a period of time. An Extended Economic Distortion may accelerate that erosion causing a material depreciation in the value of the dollar as the world begins to view the U.S. as just another country among the industrialized capitalist countries, so-called First World countries.

There is nothing stable in the 21st Century world, a world in which only 4% of the population lives in the United States. Both China and India each have over four times that population, and the European Union has a population that is over 50% larger than the U.S.

Even if Donald Trump were to lose the election this year, China, India, and the member nations of the European Union will never again trust Americans.

Almost ironically, last year Facebook CEO Mark Zuckerberg unveiled Libra, a new more convenient method of payment within international transactions. Libra is a digital token administered by a consortium of mostly technology and finance companies and backed by a basket of U.S. dollars, British pounds, euros, and Japanese yen.

In response, a top official of the People's Bank of China stated: “If Libra is accepted by everyone and becomes a widely used payment tool, then after some time, it is entirely possible that it will develop into a global, super-sovereign currency. We need to plan ahead to protect our monetary sovereignty.”

French Finance Minister Bruno Le Maire stated that France would not allow development of Libra in the European Union, as it would be a threat to the monetary sovereignty of states. He also spoke about the potential for abuse of marketing dominance and systemic financial risks.

Bank of England governor Mark Carney proposed the creation of a network of central bank digital currencies as a means of overcoming the destabilizing dominance of the U.S. Dollar on international trade. He proposed a new Synthetic Hegemonic Currency (SHC) provided by the public sector, perhaps supported a network of central bank digital currencies.

The European Central Bank has created a working group with the central banks of Canada, Japan, Sweden, Switzerland, and the United Kingdom to explore cross-border interoperability of national digital currency projects.

This April while Donald Trump struggled to maintain his image because of Covid-19, China became the first major economy to conduct a real-world test of a national digital currency, making it clear that China is years ahead of other nations in the development a central component of a digital world economy.

Like cash, China’s central bank-issued digital currency is a liability of the state. Unlike bitcoin, the digital yuan is hypercentralized, controlled by the People’s Bank of China, and integrated with China’s current banking system.

Simply, the rest of the world is not enchanted with the idea of corporations taking control of the world's currency system. And because the United States government has not moved to issue a national digital currency for cross-border use, the end of the dollar as the World's reserve currency seems likely within the period needed for a full economic recovery from the Coronavirus Crisis.


Will economic restructuring after Covid-19 create a healthy economy?

Even after the end of the time frame that included The Great Depression and WWII, a majority of the U.S voters were still beguiled by the American Dream in which freedom includes the opportunity for prosperity and success, as well as an upward social mobility for the family and children, achieved through hard work in a society with few barriers. Those voters elected a Republican majority in Congress that attempted to roll back federal economic policy to 1920's standards. That Republican reactionary conservatism immediately caused a rapid decline in the economy.

Republican reactionary conservatism took a back seat for much of the remainder of the 20th Century. But in the first 20 years of the 21st Century, it has taken control. This has occurred because of, not in spite of, the threat of the Climate Change movement to the American Dream fantasy which relies on unrestricted use of natural resources and penalty free environmental damage.

Of the remaining 80 years of the 21st Century, a radical restructuring of the World's economy, including the United States, is needed to address Climate Change and gross economic inequality. The changes needed will require over the next 10 years the abandoning most of the 18th-20th Century assumptions that permitted the creation of the post-WWII American 20th Century economy. It will require embracing a level of selflessness involving abandoning economic selfishness sufficiently to protect endangered toads.

This burden will fall on members of the GenX, Millennial and GenZ generations who will live through most of the remaining 21st Century. A period of Extended Economic Distortion would seemingly create an opportunity to create a potentially healthier and more egalitarian economic system. Whether those three generations and the one following them will have the will to achieve the necessary radical changes is unclear.

Their first problem will be to, within the next four years, kindly and firmly retire any political office-holders who are members of the Silent and the Baby Boomer generations. It is depressing that the two candidates for President in 2020 are in their 70's. It is even more depressing that the candidate most popular with the younger population was even older and was popular for advocating 19th Century socialism.

Which brings us to a hopeful movement known as Evonomics.

To get a feel for the movement, read Seven Ways to Transform 21st-Century Economics - and Economists: Economics matters enormously for the future, but its fundamental ideas are centuries out of date. Written by renegade economist Kate Raworth known for her book Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, tells us:

    No one can deny it: economics matters. Its theories are the mother tongue of public policy, the rationale for multi-billion-dollar investments, and the tools used to tackle global poverty and manage our planetary home. Pity then that its fundamental ideas are centuries out of date yet still dominate decision-making for the future.
    Today’s economics students will be among the influential citizens and policymakers shaping human societies in 2050. But the economic mindset that they are being taught is rooted in the textbooks of 1950 which, in turn, are grounded in the theories of 1850. Given the challenges of the 21st century—from climate change and extreme inequalities to recurring financial crises—this is shaping up to be a disaster. We stand little chance of writing a new economic story that is fit for our times if we keep falling back on last-century’s economic storybooks.
    When I studied economics at university 25 years ago I believed it would empower me to help tackle humanity’s social and environmental challenges. But like many of today’s disillusioned students its disconnect from relevance and reality left me deeply frustrated. So I walked away from its theories and immersed myself in real-world economic challenges, from the villages of Zanzibar to the headquarters of the United Nations, and on to the campaign frontlines of Oxfam.
    In the process I realized the obvious: that you can’t walk away from economics because it frames the world we inhabit, so I decided to walk back towards it and flip it on its head. What if we started economics with humanity’s goals for the 21st century, and then asked what economic mindset would give us half a chance of achieving them?

On February 13, 2012, then a Senior Researcher for Oxfam, Raworth published a discussion paper A Safe and Just Space for Humanity: Can we live within the doughnut? which sets out a visual framework for sustainable development – shaped like a doughnut – by combining the concept of planetary boundaries with the complementary concept of social boundaries.

Doughnut Economics offers a way of visualizing world economics working to benefit humanity. Raworth's doughnut image depicts a sweet spot of human prosperity (an image that appealed to the Occupy Movement, the United Nations, eco-activists, and business leaders alike), an economics offering a radically new compass for guiding global development, government policy, and corporate strategy, and sets new standards for what economic success looks like.

In terms of economic theory, the 21st Century is well into the Industry 4.0, aka the Fourth Industrial Revolution, having moved through the Digital Revolution, aka the Third Industrial Revolution, which began in the mid-20th Century.

Industry 4.0 enbraces the combination of traditional manufacturing and industrial platforms with practices with the latest smart technology reducing the role of labor to a minimum. This primarily focuses on the use of large-scale machine to machine communication (M2M) and Internet of Things (IoT) deployments to provide increased automation, improved communication and self-monitoring, as well as smart machines that can analyse and diagnose issues without the need for human intervention.

Which brings us to the curious continuing debate over elements of capitalist versus socialism, effectively a discussion of late 18th to early 20th Century issues.

''The Father of Capitalism'' Adam Smith published his An Inquiry into the Nature and Causes of the Wealth of Nations (aka Wealth of Nations) in 1776. At that time the Industrial Revolution was just beginning. Over 70 years later, in 1848, at the beginning of what is known as the "Second Industrial Revolution", Karl Marx and Friedrich Engels published The Communist Manifesto presenting an analytical approach to the class struggle (historical and then current) and the conflicts within capitalism and the capitalist mode of production.

You could fill a sizeable library with printed paper publications related to, even extolling the theories within these 18th and 19th Century books, some written after the year 2000. You could sit and read them by candlelight. Why not? That's what folks did immediately after Wealth of Nations and The Communist Manifesto were written.

The point is members of the GenX, Millennial and GenZ generations need to move beyond the mythology of American Dream, beyond discussion of capitalism versus socialism. The discussion must shift to Evonomics and Doughnut Economics, it must move out of the candlelight era onto the screens of devices.

If they don't, by the mid-21st Century the American economy will become no more relevant than the post-Colonial British economy did by mid-20th Century.

To have a Memorial Day of remembrances and new beginnings we must remain scientifically steadfast

Less than a month ago, in a March 29 post here Memorial Day 2020 - A Day of New Beginnings?, a hope was offered:

    Hopefully, Memorial Day 2020 will not only be a day of remembrance for those lost in wars plus those lost in the 2020 Covid-19 Pandemic, but it will mark a week of new beginnings. Hopefully, new cases will have become minimal permitting many states to soon lift business closure orders and "shelter-in-place" orders for people under 65 (but not "safe distance"rules).
    ...This all assumes that the peak caseload in most of the United States will occur shortly before or after Easter Week. Hopefully this timeline is not full of wishful thinking....

The following is a ray of hope based on an daily updated data graph in an article in the New York Times:

Indeed, the peak for new cases of Covid-19 appears to have occurred around Easter Week and that New York Times article notes: "Even as new hospitalizations in the state slowed and the period of explosive, day-over-day growth in case numbers seemed to be ending, familiar routines remained a distant vision."

It has been suggested that "money is more important then love" to Americans. And indeed our state and local leaders are facing protesters demanding the lifting of the Great Economic Lockdown of 2020, that impairment to their freedom of movement and freedom of association in order to earn and spend money.

So now in many states and locales it appears that politicians are responding to that idea by lifting many restrictions within shelter-in-place orders. The infamous Texas Lt. Gov. Dan Patrick yesterday called for the reopening of his state and the country late Monday, restating his mantra there are "more important things than living.”

It is, of course, too soon and that natural human interaction which will result will simply stop the progress on the graph above and increase deaths.

Simply, if we cannot have a Memorial Day that not only involves remembrances but offers new beginnings, we will have confirmed that money is more important to too many Americans than love of their family, friends, and coworkers.

What will be interesting is the extent to which using the map below one will be able to see which color the states that lift restrictions too soon and see increases in new cases and deaths:

Still it is reasonable to have hope that Memorial Day 2020 will not only be a day of remembrance for those lost in wars plus those lost in the 2020 Covid-19 Pandemic, but it also will mark a week of new beginnings, at least for those of us who in a state where the leadership eschews denial and believes in science (the press conference begins at 3:36):

The Coronavirus Crisis dilemma: Immunizing the herd without a vaccine to end the Great Economic Lockdown of 2020 could kill 7 million Americans

In the face of the Coronavirus Crisis of 2020, responsible local and state governments initiated the Great Economic Lockdown of 2020 to minimize deaths and hospitalizations from Covid-19.

Today two sources of political pressure to "open" the Great Economic Lockdown of 2020 are rising.

One is the obvious group of "you can't do that to me" folks who are outwardly seeming to advocate a "give me liberty or give me death" philosophy while ignoring what they are really advocating - "give me liberty to spread disease and kill you." Ironically, most are the folks that claim to be "Pro-Life" who are advocating "Pro-Choice" as their right. Donald Trump is cheering them on because he needs them to win reelection.

President George Washington would be turning over in his grave, of course. As he made clear during the Whiskey Rebellion personally leading troops to squash the protest, nothing in the Constitution or American history guarantees freedom from government regulation. We are a government of laws, not men.

But the sign-waving, out-on-the-streets-with-guns protesters are not alone.Not quite as obvious are those criticizing the lack of progress on badly needed testing that's holding up ending the Lockdown, the other folks questioning whether we can wait.

A good example is Dear Governor Newsom: Where Is Our Coronavirus Testing? subtitled A letter to the much-lauded California governor — because we know very little, and it’s frustrating. It was written by Sharon Waxman, the founder, CEO and Editor in Chief of TheWrap. She is an award-winning journalist and best-selling author, and was a Hollywood correspondent for The New York Times.

I have to believe that Waxman may have done well in college - she graduated from Barnard College in 1985 and from St. Antony's College, Oxford University in 1987 with a Masters of Philosophy in Modern Middle East Studies. But she must have avoided math classes. And her criticism reflects others who can't do math.

You see, there are about 340,000,000 people (that's 340 million) in the United States. If we tested 1,000,000 (that's 1 million) a day, it would take 340 days to test everyone.  And based on California's share of the population Californians would be testing 117,000 people a day.

Fortunately, however, we don't need to test everyone to know if we've achieved "herd immunity."

In the midst of this Covid-19 pandemic officials or public health specialists refer to "herd immunity." Herd immunity is a form of indirect protection from infectious disease that occurs when a large percentage of a population has become immune to an infection, whether through previous infections or vaccination. This provides a measure of protection for individuals who are not immune.

It sounds simple enough. But it takes a substantial percentage of the population to become immune to protect those who are not immune. If enough people are vaccinated, we have herd immunity.

If there is no vaccine for a disease, enough people have to get the disease and survive to achieve herd immunity. Another way to explain it is that a population reaches herd immunity when enough people have survived to achieve the herd immunity threshold (HIT). Oh, and inevitably and unavoidably that means enough people have died!

Consider the chart at the right. Smallpox is a good example of a disease. If smallpox appears in a localized population of 1,000 people and  980 fall ill and 80 survive, those 80 are immune offering "herd immunity" resistance against a future epidemic developing thereby protecting the 20 who were not infected of the original population of 1,000.

Harvard University experts say to reopen the United States by mid-May, the number of daily tests performed between now and then should be 500,000 to 700,000. So if population size is the factor California's share would be 7,200 tests a day.  While mid-May is perhaps overly optimistic, it actually appears California is getting there:

But we need to understand the goal for this level of testing. It is to measure our gains towards "herd immunity" through the spreading of the infection. This will be accomplished by letting people go back to doing their thing thereby contracting the disease. But not too many at a time. And while still trying to protect those most vulnerable to death.

Regarding Covid-19, California Governor Gavin Newsom has used the term to explain the levels of achieving a new normal. One reporter wrote:

    What does “herd immunity” look like in the age of COVID-19? Without a vaccine, about 28 million infected Californians.
    Based on current estimates, about 5 percent of infected people — or roughly 1.4 million Californians — would get severely ill. Of these, 840,000 could die, although there’s hope of holding that number down.
    This bleak strategy may be the only way through a pandemic that is causing profound economic, social and education paralysis. A vaccine, which also could provide herd immunity, is 12 to 18 months away, with likely additional months needed to scale up manufacturing and distribution.
    It’s also very scary. The governor’s promised “light at the end of the tunnel” could instead be the glaring halogens over an ICU bed.

The reporter is using a 70% HIT which if you look at the chart seems reasonable. If you extend those numbers to the entire US., it would mean 231 million Americans will have to get Covid-19 to create a national herd immunity. That would mean 11.6 million would get severely ill with as many as 7 million deaths.

But we don't even know if that will work.

Though people who recover from Covid-19 likely will have some degree of immunity for some period of time, the specifics are unknown. For instance, we don’t yet know why some who’ve been diagnosed as “fully recovered” from the virus have tested positive a second time after leaving quarantine. For instance, we don’t know why some recovered patients have low levels of antibodies.

 In fact there is much we don't know.

We don’t know today  how many people have been infected with Covid-19 and we have no way to estimate that number based on many years of experience like we do the flu. We don’t know the full range of symptoms. We don’t always know why some infections develop into fatal severe disease.

We don’t know what percentage of adults or what percentage of children are asymptomatic and don't know if we will ever be able to know. That is because we don’t know if the United States will ever be able to deploy the 22-million-people-per-day mass testing needed to develop reliable data before next outbreak of Covid-19. Heck, we don’t know when states will be able to test everyone who has symptoms.

We don't know how many virus particles it takes to launch an infection, how far the virus travels in outdoor spaces or in indoor settings (though experts now are saying 4 meters or 13 feet, not 6 feet), or if airborne movements affected the course of the pandemic.

We don’t know for certain if the virus will subside as the Northern Hemisphere enters the warmer months of spring and summer, as many other viruses do. And we don't know that whether it will return perhaps mutated in the fall or winter if it does subside, as many other viruses do.

Assuming a best case scenario we are at least 24 months away from achieving herd immunity with a vaccine. But we don’t know if or when researchers will develop a successful vaccine or whether the coronavirus will or already has mutated thwarting the future effectiveness of vaccines.

In order to give us time to gear up to treat victims, we have instituted the Great Economic Lockdown of 2020 which among other things includes insuring social distancing, also called “physical distancing,” which means keeping space between yourself and other people outside of your home. To practice social or physical distancing as prescribed:

• Stay at least 6 feet (2 meters) from other people
• Do not gather in groups
• Stay out of crowded places and avoid mass gatherings

Note the words "at least" relative to the 6 feet (2 meters) measurement and again note that experts have discovered that the airborne movements of the virus seems to be 4 meters or 13 feet. So people are also being asked to wear masks.

Members of the pro-Trump right are opposing the Lockdown essentially saying that they have the right to choose how to protect their own safety while retaining all freedom of movement and association. As pictures appear of unmasked folks with guns standing next to each other demonstrating against the Great Economic Lockdown of 2020, one has to puzzle how they relate the Coronavirus Crisis to the common understanding of public safety - are they planning on shooting the virus if it doesn't turn itself in at a the police station?

There is a reason we frequently say "health and safety." They are not the same thing.

A difference exist between laws protecting public safety and regulations protecting public health. The protesters are confused as they don't understand the concept of a local or state government "Public Health Department" which is a government department authorized by law to use the science and art of preventing disease, prolonging life, and promoting health through organized efforts based on informed choices.

This is different from the concept of "Public Safety" departments like police departments which are the government departments authorized by law to use guns to enforce laws regarding criminal behavior. In general there is little commonality between the skills and expertise needed to handle public safety issues versus public health issues. It is police officers who use guns, not health officers.

The fact is that the ability to use a gun is a skill that in no way will protect you or your family from Covid-19. There are a growing number of families that include or included a police officer that will testify to that.

The one fact we know about the disease is that it is personal interaction between people, just socializing or engaging in business, is the human behavior that ultimately kills people. To not be free to interact with people for business or social purposes is contrary to everything Americans believe, except when the obvious result of the interaction will be to unintentionally kill human life.

The real problem is Americans under the age of 100 years old have never seen a worldwide pandemic from a virulent disease that seemingly randomly kills humans and against which no one has any immunity nor can obtain immunity from a vaccine. In fact only those of us older than age 65 can remember in the United States an epidemic such as polio. Fear of epidemics (a widespread occurrence of an infectious disease in a community at a particular time) and pandemics (an occurrence of an infectious disease over a whole country or the world) was once a part of human life.

Yes, annual influenza pandemics still kill people. In countries such as the United States vaccines though imperfect are available. Because the HIT for influenza is 33-44%, people frequently have some degree of immunity sometimes from prior year similar strains, Yes, deaths from the flu are normally limited to those who have prior unrelated health conditions which makes it seem similar to Covid-19 deaths. But one thing we do know is that a severe Covid-19 coronavirus infection looks nothing like influenza, not even the 1918 Spanish Flu. We do know that Covid-19 attacks the lungs and blood vessels in ways unlike the flu.

Just exactly how much risk are we willing to take to reopen our economy and society to personal interaction? Having had no similar experience, we don’t know how to open things up again, What if the actual safe social distance is 13 feet, not six?

We could, of course, create herd immunity by just ending all restrictions. But we in California quite literally have set a goal to reduce restrictions in order to infect the most people possible while avoiding high hospitalization and death rates.

Last Tuesday Governor Newsom said at his  news briefing: "There's no light switch here. It's more like a dimmer. That dimmer is this toggling back and forth between more restrictive and less restrictive measures."

Make no mistake about it. Ending the Great Economic Lockdown of 2020 will not end the Coronavirus Crisis of 2020. We will discover when we've ended a specific restriction too soon by the level of jumps in hospitalizations and deaths.

With that said, I trust Newsom's approach. And because I know most of them know how to do math, I also trust the group of people he has appointed to his Task Force on Business and Jobs Recovery (see below) to help California thread the needle required to stitch our economy back together while minimizing deaths.