Monday, August 10, 2020

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?

Sunday, August 9, 2020

Governor Gavin Newsom's California "don't get no respect" by the news media in the Covid-19 Crisis

In the midst of the Covid-19 pandemic, this writer is suffering from news coverage about California. Unfortunately, what Donald Trump calls the "fake news media" is living up to his description. So for the record here is the truth.
The graph above indicates a remarkable success by California state and local government dealing with the pandemic. On March 19, 2020, California Governor Gavin Newsom issued the state's initial "stay-at-home" order in light of modeling by experts indicating numbers that would require nearly 20,000 more hospital beds than the state could provide if no action were taken. The day before, Newsom sent a letter to President Trump stating as follows:

    I write to respectfully request you immediately deploy the USNS Mercy Hospital Ship to be stationed at the port of Los Angeles through September l, 2020, to help decompress our current health care delivery system.
    This resource will help decompress the health care delivery system to allow the Los Angeles region to ensure that it has the ability to address critical acute care needs, such as heart attacks and strokes or vehicle accidents, in addition to the rapid rise in COVID-19 cases. The population density in the Los Angeles Region is similar to New York City, will be disproportionately impacted by the number of COVID-19 cases.

In explaining the high number of case projections, Newsom explained: "The point of the stay-at-home order is to make those numbers moot." He noted: "We are confident that the people of the state of California will abide by it, will do the right thing."

Around the end of May, Newsom began the process of lifting some of the pieces of the stay-at-home rules. As expected, hospitalizations climbed dramatically while state and local government attempted to tweak the lifting of the rules. As can be seen in the chart, by the third week in July, the number of persons infected with Covid-19 in hospitals peaked and is declining almost as dramatically as it climbed.

Notice that at no time did anyone suggest that people would not be infected by the virus, nor did anyone suggest that people would not die because of the virus.

And yet, none of this is discussed in the news media.

What you may see is that California has more cases or increasing daily deaths or such other headlines. California does have more cases than any other state. Of course, California does have about 33% more people than Texas, the next largest state, and double the population of New York. One other way to view the case numbers is to note that California ranks 22 among the 50 states in cases per capita and 28 among the 50 states in deaths per capita.
As some may be aware, for two decades this writer has advocated dividing California into three states as indicated in the image to the left. The statistics in the image indicate why. (Click on the image to see a larger version.)

If the state were divided as suggested, in population Southern California would be the second largest state, Coastal California would be 11th and Northern California would be 19th.

But Coastal California in terms of per capita cases would rank 41 and per capita deaths, 43. Southern California would rank 14 and 19,, Northern California would rank 25 and 32.

What this writer cannot help but note is the while Coastal California would be the 11th largest state, it would rank 41 in per capital cases and 43 in per capital deaths.

I believe that despite the fact that parts of the San Francisco Bay Area have a large highly dense population, the folks in Coastal California have a stronger sense of "social compact" leading them to, as Newsom said, "do the right thing."

Tuesday, August 4, 2020

Waves??? Covid-19 and the problem with analogies.

What if we thought of the Covid-19 virus as sparks floating around in the air, some hotter, some in clusters coming off a nearby fire? What if we thought of the guy refusing to wear a mask in the same way we thought of the guy who throws a lighted cigarette out the car window into the grass along the roadside? Only you and your family are the dry grass.

Humans apparently have a desperate need to assign analogies to that which they do not understand. Only a calendar quarter after the Western press started noticing the Covid-19 pandemic, politicians and the press were seriously discussing "waves" of the disease, as in arguing over whether we were in the first wave or second wave. It got so bad that on April 30 Oxford's Centre for Evidence-Based Medicine felt compelled to publish an article that noted in part:

    Waves, as in the sea, are usually preceded by a trough, but this visual analogy is hardly ever mentioned; nor the appropriateness of forecasting waves in a coronavirus pandemic. We reviewed the evidence (Search strategy at the end) underpinning second-wave theory.
    Most of our thinking on second-wave theory arises from the 1918-20 “Spanish Flu” that infected 500 million people worldwide and reportedly killed an estimated 20 million to 50 million. By August of 1918, a deadlier strain of the “Spanish flu” emerged. When reading the “Spanish flu” story we must remember the role of military censorship. The identity of the index case remains a mystery. ...Censorship is also responsible for the sobriquet “Spanish” attached to the pandemic. As Spain was not in the war and had no censorship, all cases appeared to originate from Spain – an example of ascertainment bias.
    For influenza, school vacations are thought to be one of the mechanisms for reduced transmission. Contact reductions in the summer vacation of the 2009 outbreak, led to the summer ‘trough; before the infection picked up again – the ‘wave’ – into the winter.
    Both the 1918 and 2009 outbreaks are similar in that they started in the ‘spring wave’ and went on into the summer. These spring/ summer delays in the initial numbers infected are thought to have little impact on the overall attack rate.
    We do not know for certain whether COVID will recur in phases, or sporadic outbreaks or disappear altogether.
    Making absolute statements of certainty about ‘ second waves’ is unwise, given the current substantial uncertainties and novelty of the evidence. As we cannot see the future and our understanding of this new agent is in its infancy we think preparedness planning should be inspired by robust surveillance, the flexibility of response and rigid separation of suspected or confirmed cases. These measures should stand for all serious outbreaks of respiratory illness.

Focusing both on history and science, that article immediately caught the attention of almost nobody, most particularly among politicians and the press. Thus, most folks are sitting around waiting for some kind of break followed by more infections while the press and politicians are assigning "wave" terminology when local stay-at-home orders resulted in downturns followed by opening up followed by expanding infections.

Three months after the April 30 Oxford's Centre for Evidence-Based Medicine's article, on August 3 The Guardian, also from the UK, published this piece We're thinking about Covid-19 the wrong way. It's not a 'wave' – it's a wildfire written by Director of the Center for Infectious Disease Research and Policy at the University of Minnesota Michael T. Osterholm, PhD, and writer and documentary film-maker Mark Olshaker who were the authors of the 2017 book Deadliest Enemy: Our War Against Killer Germs. You can read the article, but consider this from a review of that book published three years ago:

    For decades, Osterholm has been in the business of telling people what they don't necessarily want to hear: Pandemics are inevitable; outbreaks can be devastating; bioterrorism is a threat. Several real infectious disease threats exist that could stop the world in its tracks, and by and large government officials, industry professionals, and researchers are not acting together to stop them, he warns.
    But his latest book hopes to help in our fight against these epidemics. In Deadliest Enemy, Osterholm lays out a "Battle Plan for Survival" with a nine-point strategy on how we can keep ourselves safer from emerging infectious disease threats. Preventing a global flu pandemic is the top priority of the plan.
    "If we know how to greatly reduce the risk of these public health problems and we don't, then we become an accomplice to the morbidity and mortality they cause," he says. "We need a new generation of public health experts who can effectively address these issues in ways we're not addressing them now."
    "I have the reputation as 'Bad News Mike,'" said Osterholm. "But it's not just bad news [in the book]. I'm also saying, 'Wake up, there's something you can do about it.' I guess I'm at the age where I'm looking at what kind of world I'm leaving for my kids and grandkids, and I want to make sure we do what we can to stop disease."

Unfortunately for "Bad News Mike" not only did no one do anything based on his book but reporters who daily cover such enlightened folks such as politicians like Donald Trump bought right into the "wave" concept. Of course, for the most part those reporters don't read scholarly books about "killer germs" which leaves us with a press corps equally as informed as Trump.

If we must have an analogy, look at each person's uncovered mouth and nose as potentially emitting over a distance of 16 feet fireworks which may or may not explode. You and all people are made of dry grass and brush. The more people around, the more who are potentially emitting fireworks in a field of dry grass and brush.

That's the analogy to use.

Saturday, August 1, 2020

"Societal Paperlessness" - Could Covid-19 actually cause a major reduction in the use of paper?

In a recent story Wisconsin's paper mills are the latest victim of the pandemic we learn that the Wisconsin Rapids Mill was closing citing figures indicating that the demand for printing paper fell 38 percent year-over-year in April and research indicating an even greater plunge to come.

Paper. Could it become a significant part of the Extended Economic Distortion? From this writer's old computer guy...we shouldn't even be here.

In 1975 the head of Xerox Corp.’s Palo Alto, CA Research Center George E. Pake noted in a Business Week article that by 1995 the typical business will be paperless and employees will have a TV-display terminal with keyboard sitting on their desks.

He explained: “I’ll be able to call up documents from my files on the screen, or by pressing a button. I can get my mail or any messages. I don’t know how much hard copy I’ll want in this world.”

In 1978, University of Illinois professor Frederick W. Lancaster in Toward Paperless Information Systems reinforced the idea that humans would through technology reduce or eliminate the use of paper.

The chart above based on data from the Food and Agriculture Organization of the UN indicates just how accurate the forecasts of the 1970's  were. Since Pake made his observations the volume of paper used worldwide since 1975 has increased 85%. Of course, on a per capita basis, from 1975 through 2018 the use had dropped, though by a mere ½%.

The graph above indicates that drops in paper production do coincide with recessions. Between 2007 and 2009, production plunged 11%.

But then again, "paper" isn't really a single product. For instant, the Great Economic Lockdown of 2020 resulted in a crash in the sale of commercial toilet paper while people stuck at home vied for a roll of the softer, cushier home-use toilet paper.

During the Covid-19 Crisis service businesses such as salons have eliminated magazines, as have airlines. With their employees working from home, other businesses have stopped ordering copy paper.  While there has been some increase in packaging paper sales to online retailers, indications are that many of those catalogues that go directly from our mailbox to our recycling can may not arrive this fall.

This kind of change isn't new to the paper manufacturing industry. In the 1930s Wisconsin Rapids Mill became the sole manufacturer of the stock used to print Life magazine. But things have changed.

While the per capita sales of paper products may have kept pace with population growth, the fact is that much of the growth was outside the U.S., much in third world nations  From 1990 to 2003, while its Gross Domestic Product doubled China’s consumption of toilet paper alone increased at an average annual rate of 11%. The market for household papers generally has more than doubled in the past ten years. However, in 2016 China ended requirements for retaining business accounting records in paper form which is also true for the IRS in the U.S.

The fact is most books, magazines, financial transactions, written communications, etc. are in electronic format. Some are also on paper form. But with the broad use of "devices" we can expect to see less use of paper. (At least until the electronic world experiences its own Covid-19 outbreak.)

Many significant changes in day-to-day activities that we cannot predict will come out of the Covid-19 crisis, initially as a part of the Extended Economic Distortion. As noted in the article about the Wisconsin Rapids Mill:

    “It impacts the 900 employees directly in the plant,” said Missy Hughes, secretary and CEO of the Wisconsin Economic Development Corporation. “But the important thing to keep in mind is that the plant purchases and processes 25 percent of the timber coming off of Wisconsin’s land. That impacts the haulers who are bringing the wood to the plant, it impacts the loggers who are cutting down the wood, and then it affects the landowners.
    “In Wisconsin, 2.4 million acres of managed forest is owned by counties, and they use the proceeds of the sales to fund their government operations,” Hughes said.

And, of course, that doesn't take into account the local businesses that serve the affected employees and their families.

All because of paper.

Friday, July 31, 2020

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.

Monday, July 27, 2020

For What It's Worth - Will the wind of "I've got mine" selfishness sweep aside BLM goals as it did to California's '60's racial equality protest goals

Being old during this time of protest means trigger-memories are being activated. One of those is the Buffalo Springfield song "For What It's Worth" (view the YouTube video above).

Beginning March 1, 1964, in response to the racially discriminatory hiring practices at the Sheraton Palace Hotel in San Francisco approximately 4000 people protested, occupying the hotel, seeking equal hiring practices and for the hotel to have black individuals in executive positions.  Reminiscent of current political thinking, as explained in Wikipedia:

    The administration of UC Berkeley believed that on campus political advocacy was partially to blame for the high percentage of student involvement in the widely media publicized Sheraton Palace demonstration. In response to such student political activity, on September 16, 1964, Dean of Students Katherine Towle released a letter stating that political organization was no longer permitted on the corner of Bancroft and Telegraph. This intersection had served for years as a gathering place for students to hand out pamphlets and organize for political means. In protest of the recent ban on political activity and on-campus political organizations, the student group, CORE, erected a table in front of Sproul Hall.

U.C. Berkeley became infamous for the protests of the 1960's. Note that at the beginning the issue was racial equity, not Vietnam.

Fast-forward to the Sunset Strip riots in West Hollywood, California in 1966, early counterculture-era clashes that took place between Los Angeles County Sheriff's Deputies acting at the behest of city administration and young people of the hippie and rock and roll counterculture. As described in 2016's What Were the 1966 Sunset Strip Riots Really Like? Eyewitnesses Look Back:

    It all climaxed on Nov. 12, 1966, outside teen hangout Pandora’s Box, with the infamous “Riot on the Sunset Strip.” The riot itself was a long-simmering eruption triggered by weeks of harassment of teenage freaks by the L.A. County Sheriff's Department, which had begun to aggressively enforce the 10 p.m. curfew after a ceaseless tide of complaints from Sunset Boulevard business owners annoyed by the sidewalk-clogging congregation of youths.
    “The curfew enforcement was just a tool because all these long-haired kids were out ’til 2 a.m.,” says Michael Rummans, a founding member of Pandora’s Box staples The Sloths. “Walking down the street, sitting on bus benches, just hanging out. The merchants said it was bad for business, we were scaring customers away, and they influenced the Sheriff’s Department to start cracking down.”
    "Next Saturday...the one thousand came: frat party boys, Marines on leave, pre-hippies and stoned high schoolers, plus cameos by Peter Fonda, Sonny and Cher and even Gilligan, Bob Denver. As we headed up Crescent Heights, we could see the battle lines being drawn up ahead. Two squad cars roared past us — the pigs were shutting it down, man.”
    Kids stalked around with corny protest placards (“We're Your Children! Don't Destroy Us,” “Ban the Billyclub”), blocked traffic, broke a few windows. Sonny and Cher pleaded for calm outside Pandora’s Box. That was about it. They weren’t even riots...."

The irony is the Sunset Strip riots' most lasting effect had to do with the music that came out of the event. "For What It's Worth (Stop, Hey What's That Sound)" written by Stephen Stills because of the Sunsent Strip riots became an anti-Vietnam War song. But in truth it is about the conflict between the police and protesters. Here are the lyrics:

And so for my generation of Californians, it seemed that the 1964 protests about the racially discriminatory hiring practices at the Sheraton Palace Hotel in San Francisco and the Sunset Strip police-versus-the-defiant riots in 1966 evolved into the nationwide 1968 violence-of-the-right culminating in the Kent State shootings of 1970. We still remember the Chicago Police, at the urging of a Democratic Chicago Mayor, using violence against "anti-patriotic" protesters objecting to both Civil Rights and Vietnam War policy failures at the Democratic National Convention held during a year of violence, political turbulence, and civil unrest, particularly riots in more than 100 cities following the assassination of Martin Luther King Jr. on April 4 and then Robert F. Kennedy on June 5.

Just as in today's protests, none of the state-sponsored violence was necessary. Just as today the state-sponsored violence comes from an underlying popularity of fascist beliefs associated with the fear-of-others-tradition of American greed. The economics of business was pitted against the objection to racial inequity and the police misuse of authority. Then, of course, it was buttressed with anti-communist propaganda creating a fear of loss of capitalism.

Today businesses, particular small businesses in huge numbers, are threatened by the Covid-19 pandemic. The Covid-19 pandemic has deliberately been made into an issue for the right akin to the Vietnam War - protecting the freedom of Americans versus left-extremists who must be suppressed.

In addition the right-wing elements in the federal national and international security apparatus and the military have effectively created an unwarranted fear of the only remaining meaningful "communist" nation, China, as a source of business and job losses. And while to some not paying much attention it may seem that it is a Trump Administration/Republican effort, in fact Democrats in the Senate and House are supporting this propaganda.

And if you haven't noticed, small groups split off from the BLM protests to damage property. Initially they were a few vandals and petty crooks. But the number and nature incidents are growing leading to indignant condemnations from the middle-aged, middle class white community.

I recognize that many, maybe most, would consider these thoughts as some kind of paranoia. But having lived through the 1960's, working as a reporter on a daily newspaper in 1967-69, what I see happening today looks thematically all too familiar.

Ultimately, the real issue is whether the goals of the current protests will blow away in the wind of American business-owner "I've got mine" outrage as it did by the mid-1970's. It will be sad if that happens.

Wednesday, July 15, 2020

Covid-19: Will it become the annual "cold" infection that kills people forcing major lifestyle changes?

The above drawing offers an assumption that "this" will be "all over." Still it suggests that "everything" should change. But what if Covid-19 will never be "all over"?

Hopes and promises expressed about Covid-19 herd immunity gained from...
  • widespread infections or 
  • a vaccine 
...should be received with considerable skepticism.

On April 21 we noted here in a post regarding herd immunity:

    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 mid-June some of us read Chinese study: Antibodies in COVID-19 patients fade quickly telling us: "The authors said the findings suggest that it could be risky to assume that recovered patients are immune to reinfection, which may have implications for how long to maintain physical distancing restrictions."

This week an article in The Guardian Immunity to Covid-19 could be lost in months, UK study suggests explains:

    People who have recovered from Covid-19 may lose their immunity to the disease within months, according to research suggesting the virus could reinfect people year after year, like common colds.
    Prof Jonathan Heeney, a virologist at the University of Cambridge, said the study confirmed a growing body of evidence that immunity to Covid-19 is short-lived. “Most importantly, it puts another nail in the coffin of the dangerous concept of herd immunity,” he said.
    “I cannot underscore how important it is that the public understands that getting infected by this virus is not a good thing. Some of the public, especially the youth, have become somewhat cavalier about getting infected, thinking that they would contribute to herd immunity. Not only will they place themselves at risk, and others, by getting infected, and losing immunity, they may even put themselves at greater risk of more severe lung disease if they get infected again in the years to come.”
    Prof Robin Shattock of Imperial College London said the study was important and indicated that neutralising antibodies rapidly wane. “This certainly suggests that we cannot be confident natural infection will be protective for a significant proportion of individuals, nor certain of the duration of any protection.”
    “It does indicate that vaccines need to do better than natural infection, providing consistent responses in the majority of individuals and sustained levels of protective antibodies. Ultimately this may require the use of annual boosting immunisations, particularly for the most vulnerable. This could be delivered alongside annual influenza immunisations.”

Of course, it would be great if we get a vaccine. Unfortunately for the United States there is a significant overlap between the anti-vaccination crowd and the anti-mask folks. If Covid-19 becomes the annual "cold" infection that kills people, instead of herd immunity we might see a thinning of the herd in the U.S.

But what if we never achieve "herd immunity" because we never find a really good vaccine? It might be worthwhile to consider how life would change beyond regularly working from home for those who can.

Wednesday, July 8, 2020

Musings from a fading surveillance state of mind

Many, if not most, of the posts in this blog are long. They are not reflective of the myriad of thoughts that randomly come about because of the odd world we live in.

Still many musings come to mind as this 'free range old guy' surveils the intense flow of words and data streaming through the internet in the 21st Century.

Much of the time I am astounded, even aghast, at the "misinformation" that is passed from one source to another, be it from a news media source or a random individual on social media.

This regularly updated post will contain musings from my surveillance state of mind.

California's Racism: A Different History- July 8, 2020

Reports indicate that 832 anti-Asian hate incidents in California have been reported in three months of the Covid-19 pandemic.

In the midst of the national Black Lives Matter revolution, Californians need to remember that our state's population is about 39% Hispanic and 15% Asian while only 6% Black and 37% non-Hispanic white. Blacks and whites together make up only 43% of our population.

As noted in previous posts 28 members of my high school class were born in the American concentration camps to which their Japanese-heritage parents were shipped off to by the U.S. government in WWII. Prior to that we had the 1892 - 1940 Chinese Exclusion Act, the only U.S. law ever to prevent immigration and naturalization on the basis of race.

In California we have a complex multi-racial history that dates back to the mid-16th Century.

Covid-19. What happens when voluminous words offer little meaning within reality.- June 8, 2020

Sometimes just observing without offering ill-informed and uninformed opinion is best. On the last day we ventured off our property, March 13, 2020, a George Mason University Ph.D. candidate in computer science, Adam Elkus, offered a post in his blog. The following is from that post, though a bit reorganized with some minor language structure changes and omissions. I can only hope should he be made aware of this that he will forgive my temerity:

    Managing public health and disease was one of the core tasks that helped build the legitimacy of industrial era government in the 19th and 20th centuries.
    By the beginning of the 21st Century, civil servants responsible for those tasks had become too burdened by the need to perform political face-work and bureaucratic red tape to properly pursue this endeavor. It is a sign that Western society cares more about declining trust in institutions than what institutions have substantively done to deserve trust.
    Which is where our virus comes in. It is incredible that something so small, so insignificant, and aggressively stupid as COVID-19 could be upending the world right now. But it is doing so. Scientists and philosophers debate whether viruses are even properly counted among the living. As tiny as it is, the virus has the power to inflict significant human harm. It reproduces, it kills, and those it does not kill it may nonetheless leave with lasting injuries.
    But the virus has another power, a power that makes it uniquely dangerous to Western society. It does not think, it does not feel, and it lies totally outside the elaborate social nuances humans have carved out through patterns of communication, representation, and discourse. And this, above all else, makes it a lethal adversary for the West. It has exposed how much of Western society – but American society in particular – is permeated with influential people who have deluded themselves into thinking that their ability to manipulate words, images, and sounds gives them the ability to control reality itself.
    They implicitly or explicitly assume that by attaching labels and names to things, they can control them. They implicitly or explicitly behave as if control over narrative is control over the things narrative is attached to. The virus therefore was a problem of psychology before it was a problem of microbiology, because people did not have the “right” attitudes and words for something that in and of itself was incapable of having attitudes or making words. And from the President on down, politicians behaved (and are still behaving) as if it was something that could be spun or narrativized away.
    There were endless attempts early on to compare the virus to a less-threatening entity, the flu or even the common cold. In doing so, institutional actors tried to take something new and uncertain and fit it into a tame pre-existing mental model that they preferred. Acknowledging the virus as a creature of fate – of fortuna – would be to admit that it could collapse the elaborate machinery for making narrative and reveal the narrative-makers as utterly impotent.
    There is no one “problem” because watching so many things fail in real time makes it obvious that the failure is diverse and cumulative. We could talk about the primacy of advertising or something closely related to it in shaping our political and media environment. We could go on to examine how decaying legacy institutions projected their own sickness and incompetence onto their rivals rather than living up to their responsibilities. And we could debate the various dueling theories of social and institutional decay that have been bandied about since 2015-2016.
    The virus is a very simple creature, unburdened by all of this discursive weight. To the extent it can be said to have desires and needs, they are very humble. It exists, and the only thing it wants is targets.

Three months of healthy, wise seclusion in rural California during the 2020 Covid-19 pandemic- June 5, 2020

Being old and cautious in the time of Covid-19 makes one aware of certain ambiguous or even unreliable news stories.

Today we saw stories about new guidelines by the World Health Organization (WHO) stating that old people should wear medical masks. Assuming that the stories were unreliable or failed to reflect ambiguity typical for medical guidelines, we downloaded the new guidelines.

What the new guidelines state is that in circumstances where other protective measures such as social distancing may be compromised "medical masks could be used by older people, immunocompromised patients and people with comorbidities."

Uh...why the word "could" not "should."

It will soon be three months, 13 weeks, 91 days since the last time we left our property. On March 13, 2020, we made a trip to the store to buy some groceries. Since then as with most older people, we have been in seclusion which resolves any confusion about WHO or CDC or local county guidelines.

We use the term "seclusion" when people who for purposes of health, safety, privacy, or peace and quiet are in a place sheltered or screened from general activity involving limited human or social interaction from outside the location. It does not refer a "reclusive" person withdrawn from society, shut out of the world, like a hermit.

In our case, we see the delivery folks regularly - our postal delivery person, our Instacart shopper, our Schwan's guy, and folks from UPS, FedEx, OnTrac, etc. Not every day, but several times a week.

We had been concerned we might have to go out shopping where, as we see in news video and pictures, social distancing gets compromised. We could have worn simple fabric masks which now appear would have been a bit of a compromise. But the delivery folks eliminated the shopping problem.

In addition to groceries from Safeway literally shopped for us by the Instacart shopper and frozen foods every two weeks from the Schwan's guy, during the pandemic we were able to get much of what we wanted from Amazon, BevMo!, Omaha Steaks, Wolferman's, Harry & David, etc. And we have them set every package down maintaining social distancing.

On the other hand, some typical old folks regular outings like going to the doctor, dentist and our old dog's vet have been delayed.

It is the 21st Century, so we can see through online sources what's going on and interact with people. We talk with family on the phone. Heck, we even Zoomed a couple of times. (Yeah, "to zoom" is a new verb.)

Life could be worse, a lot worse....

Epidemics and spring flowers were an expectation of American life for people prior to 1960 - May 27, 2020

Americans have enjoyed the blossoms of spring since Colonial times. Today spring flowers still bring us pleasure even here in our yard such as those in the picture to the left. Americans from Colonial times on also experienced deadly epidemics such as what we are experiencing today.

The death of relatives and friends from contagious (infectious) diseases was a common experience in Colonial times as it was in the decades, centuries, and millenniums prior to the end of WWII.

Consider Philadelphia. Yellow Fever made its first appearance in America in 1668, in Philadelphia. In 1793 it reappeared in that city of 50,000 people, killing about 10% of the population, while another 40% fled.

Then there was 1918. The Spanish Flu first hit Philadelphia, through the Philadelphia Navy Yard, on September 19, 1918, from sailors who were returning from WWI Europe. The City had decided to raise money for the war effort by holding a parade. While parts of the U.S. had already put rules in place regarding the Spanish Flu, Philadelphia held the parade. It was patriotic and who would allow themselves to appear weak. More than 200,000 Philadelphians (probably including some fat guys who brought their rifles) flocked to see the parade. At the time, it was the largest parade in Philadelphia's history. The parade raised more than $600 million for the war efforts.

Twenty-four hours after the parade had ended, 118 Philadelphians were described as coming down with "a mysterious, deadly influenza." Two days later, Dr. Wilmer Krusen concluded that the Spanish flu was now present in the civilian population. One day after this announcement, every bed in Philadelphia's 31 hospitals was filled. One week later, 4,500 Philadelphians were declared dead of the Spanish flu and 47,000 people were infected. No memorial to the more than 17,000 Philadelphians that were killed by the Spanish flu exists in the city of Philadelphia today. The Center for Disease Control's Division of Global Migration and Quarantine uses the Philadelphia Liberty Loans Parade as an example of how not handle a pandemic.

The chart below indicates how the generation break looked with regard to experiencing epidemics, before Covid-19.

In fact, until the eradication of polio from vaccines, Americans in generations born before the early 1950's remember what the fear of an epidemic felt like. (Yes, that is ignoring AIDS which mostly affected a generally disdained portion of the population, ignoring Ebola which mostly affected parts of the world the vast majority of Americans cannot seem to find on a map, and ignoring for whatever reason the annual flu epidemics which kill tens of thousands even though we have vaccines.)

So China is hiding information regarding Covid-19 which is why Trump's people are so ignorant ill-informed - May 26, 2020

Recently I was surveilling several stories in the news about the first human trial in China on a possible Covid-19 vaccine that offers some promise. It's as iffy as vaccines prematurely publicized in Europe and the United States.

Until now I haven't commented on all the untruths about China hiding from Donald Trump information about the virus. Here are a few stories that appeared in the news in December and early January. I realize these were not formal communiques nor informal notes from the Chinese President Xi to Donald Trump. But I took a look at these stories when they appeared. One has to wonder if there is anyone in the top 20 or so aides to Trump who read the news about anything that isn't perceived as information that would make them personally rich and famous.

What is clear from these stories is that more than adequate information about the spread of Covid-19 in China was available in early January to permit a U.S. government not totally focused on making rich people richer and reelecting Trump to mobilize for a pandemic.

Published:  December 31, 2019, 2:35pm South China Morning Post Hong Kong takes emergency measures as mystery ‘pneumonia’ infects dozens in China’s Wuhan city
Published:  January 4, 2020, 12:10 am Bloomberg China Pneumonia Outbreak Spurs WHO Action as Mystery Lingers
Published:  January 5, 2020, 1:33pm South China Morning Post China says Wuhan pneumonia not Sars, but virus remains unidentified, more people hospitalised
Published:  January 7, 2020 Macau News Government says steps in place to respond to ‘Wuhan virus’
Published:  January 8, 2020, 8:00pm Focus Taiwan CDC lists mysterious Wuhan virus as serious communicable disease
Published:  January 9, 2020, 12:51pm South China Morning Post Wuhan pneumonia: what we know about the new virus and how you can stop yourself getting sick
Published:  January 9, 2020 Journal Cretien Un coronavirus de type nouveau provoque la pneumonie virale à Wuhan
Published:  January 10, 2020 Al Jazeera/Reuters China reports first death from mysterious outbreak in Wuhan
Published:  January 11, 2020, 3:00pm Science Chinese researchers reveal draft genome of virus implicated in Wuhan pneumonia outbreak

About Amazon and Jeff Bezos - May 23, 2020

Over the past several years I've noticed incessant attacks on Amazon and its founder, Jeff Bezos. My first observation is that they aren't the same thing. Donald Trump and followers attack him because he owns (and basically saved from bankruptcy) The Washington Post which editorially has opposed Trump. As the owner, Bezos has ultimate authority over the editorial content. But those aren't the attacks I'm puzzled over.

Jeff really doesn't need defending. As long as someone who attacks him has read the Wikipedia entry on Jeffrey Preston Bezos né Jorgensen, presumably the critic has decided what is and is not important about the man. I assume that most of the attacks comes from a generic hate for billionaires.

What is most bemusing is how much wealth the press says he has - he apparently is headed towards being a trillionaire according to reports. Like a lot of headline news, at best that is based on a series assumptions only someone financially naive would make.

If one considers the chart to the right, you discover some curious comparative information about Amazon, Google, and Facebook.

Amazon has the highest revenue. Of course, it sells real, tangible goods to people which neither Google nor Facebook do. It's 2019 earnings per share were less than half of Google, but over three times that of Facebook. It's Stockholders Equity, the value an accountant calculates as the investor's value, is the lowest of the three.

But it's Market Cap on the Friday before Memorial Day was the highest of the three at $1.2 trillion. Market Cap is, of course, a meaningless figure since it is based on the last sale price per share for the day. Nonetheless, it is the number the news media says the companies are worth, despite the fact that on Tuesday morning following Memorial Day those prices could double or drop 75%.

"Market Cap" is a number that appeared with the Nasdaq, a stock exchange oriented to the tech world where gamblers invest in startups which fail at a rate of 99 out of 100. But that 1!

When the news talks about Bezos wealth, keep in mind it is the Market Cap they are talking about. And also keep in mind that Amazon's earnings per share is less than 1% of its May 22 closing price of $2,436 while Costco's $8.52 annual earnings per share is nearly 3% of its closing price of $302.43.

See also Fact: Donald Trump hates Jeff Bezos. Is anything you read and "know" about Inc. true?

Saturday, July 4, 2020

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.

Saturday, June 13, 2020

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:
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.