Wednesday, September 16, 2020

California (and the nation?) fading into the ashes...

The above graphic appeared in the July 19, 2009, post here Fading Into the Ashes  in which a fear was expressed:

Once known for its economic opportunities, for its schools and higher education system, and for its commitment to the social compact, California is fading into the ashes, the ashes from wildfires and the ashes from Californian's burning through their wealth.

Wildfire season is underway now. Maybe it won't be as bad as the past few years or as expensive.

On January 11, 2012, in the post The Golden State to become The Brown State: The 5-Year Plan the following warning was offered:

Next we have the spin on reducing the cost of CAL FIRE:

Under this proposal, responsibility for fire protection and medical emergency response in these populated wildland areas will be assumed by local government. As a result, this proposal will ensure that local jurisdictions making land use decisions which result in housing development encroaching in wildland areas are also responsible for providing the necessary emergency response services associated with more highly populated land use patterns.

...It is estimated that this proposal will result in the realignment of up to $250 million of CAL FIRE’s fire protection program to local governments.
This would have been a thoughtful, significant proposal thirty years ago, back in 1981 in Brown's first stint as Governor. But since then, thousands of homes have been built in the urban-forest interface. They aren't going away (unless they burn down).

The entire budget for the Department of Forestry and Fire Protection is/has been around $750 million. The Brown proposal is to shift a third of that budget to local fire departments with some funding for five years.

The problem with that theory is that local agencies are not in a position to contract for helicopters and other aircraft. What will happen is that many more fires will get away from under-equipped local firefighters in that urban-forest interface area, moving into the state responsibility areas, making it significantly harder for a later response of CAL FIRE units to suppress creating a corresponding cost increase to the state.

The whole program will take several years to implement. I assume Brown hopes it will be at least five years before anyone notices the wildfire damage problem.

Those are the two earliest of the 11 posts here that discussed the wildfire problem.

And it was "at least five years" from 2012 before the public started to notice the wildfire damage problem. As noted in Wikipedia: "In terms of property damage, 2017 was the most destructive wildfire season on record in California at the time, surpassed by only the 2018 season,"

The year 2020 is the year California finally ran into the firefighting wall - a shortage of firefighters and equipment, a shortage of money. The year 2020 has been the largest wildfire season recorded in California history, but since the peak of the wildfire season usually occurs between July and November we won't know just what "largest" will mean.

State and local government were already facing a financial crisis because of Covid-19. The fire fighting costs will exacerbate that. And the fires will compound the economic impact of the pandemic.

On January 12, 2019, John Poimiroo, California’s former state tourism director and an active outdoor and travel writer, wrote in The San Francisco Chronicle Why wildfires pose an existential threat to California tourism. Of course, in the middle of the 2020 Covid-19 pandemic, it may be difficult for those who depend on tourism for a livelihood to focus also on the wildfire problem. But the article began by quoting then-Governor Jerry Brown from a November 11, 2018 news conference:

    “New abnormal” was the expression Brown used when describing the spate of recent wildfires that have decimated the state. He predicted they will intensify and continue for the foreseeable future. “We have a real challenge here, threatening our whole way of life,” Brown said at a press briefing in November during the Woolsey and Camp fires.
    Between 1984 and 2010, the number of wildfire acres that burned at high intensity rose by 50 percent, and more than 60 million dead trees remain in the state's forests, according to the Sierra Nevada Conservancy, a state agency focused on conservation efforts.
    “Right now, the Sierra Nevada region is at a critical point. A century of fire suppression, a shortage of restoration efforts and years of drought have placed Sierra forests ... at incredible risk,” according to the conservancy.
    Has the ever-expanding wildfire season brought about, as Gov. Jerry Brown has suggested, a “new abnormal” for California travelers? The short answer is yes.
    Between 1984 and 2010, the number of wildfire acres that burned at high intensity rose by 50 percent, and more than 60 million dead trees remain in the state's forests, according to the Sierra Nevada Conservancy, a state agency focused on conservation efforts.
    “Right now, the Sierra Nevada region is at a critical point. A century of fire suppression, a shortage of restoration efforts and years of drought have placed Sierra forests ... at incredible risk,” according to the conservancy.
    What this means for California travelers is that the places we go and the things we love to do in the outdoors may be suffocated long term, not just during the ever-expanding fire season.
    Welcome to the new abnormal.

In the fall of 2019 which followed Poimiroo's article we read Kincade Fire’s destructive toll on Sonoma wineries, vintners which emphasizes the impact on just one industry - wine production and sales - which does involve tourism among other sources of revenue. But what most don't think about is wineries 'quietly dumping a smoke-tainted vintage."

Of course, the fires of 2017, 2018, 2019, and 2020-to-date destroyed an estimated 20,000 homes worth about $6 billion. This has created 60,000± homeless people whose real and personal property asset value depends entirely on insurance companies. In communities like Paradise, the place of employment of those people was destroyed by the fire, literally or as a side effect.

It is probable that Covid-19 will be addressed within a year with vaccines. But as Jerry Brown said just before he passed the Governor baton to Gavin Newsom, wildfires were the "new abnormal" in California - except they are the new normal.

We've had to suffer the specter of President Trump talking about California not maintaining their wildlands. This year to date more than 1.1 million acres have burned on federal lands in California, compared to 769,032 acres on non-federally managed lands. That's 59% on federal lands which, as can be seen on the chart to the left, is consistent with the share of wildland owned by the federal government.

With that said, for decades environmental groups in California have been fighting over proper maintenance of wildlands, fighting with timber companies and, most importantly, have been blocking federal decision-making. Keep in mind that the State of California and its political subdivisions own 3% of the land - comparatively not much raking involved, Donald.

The fact is right now the feds and the private sector together control 95% of California's forest lands.

But CalFire and local fire districts bear the brunt of the fire fighting to protect people and property.

The critical question now is how the private sector, State government, and local governments are going to survive the combined impact of Covid-19 and wildfires that have occurred during Donald Trump's Administration.

As noted here in 2009, California is fading into the ashes. Don't expect Google or Facebook to offset a potential collapse of California's economy. And remember: "As California goes, so goes the nation."

Monday, September 7, 2020

The American labor movement, Labor Day, and the Wealthiest 1%: Continuing ignorance makes losers

If you check your TV schedule for Labor Day weekend, you won't find an annual PBS show recognizing American workers. Nor will you find any national broadcast coverage of parades or fireworks or memorial day type ceremonies honoring workers who died advocating labor causes.

But then again, you won't see either Bernie Sanders or Donald Trump leading a celebration despite the fact that angry American workers were their base of support.

The American Labor Day Holiday was literally given to you to smooth over the killing of American workers on strike by U.S. Government officials. In 1894, President Grover Cleveland pushed Congress to establish the holiday as a way to reduce class tension following the Pullman Strike. During that strike thousands of United States Marshals and 12,000 United States Army troops were called out to suppress the strike and about ninety workers were gunned down.

Cleveland’s choice to establish Labor Day in September deflected attention away from another explosive labor action — the Haymarket massacre of 1886, where the deaths of American workers did contribute at least one lasting legacy to the international movement for working-class liberation — a workers’ holiday, May Day, celebrated around the world on May 1.

Tied to the socialist movement, May Day as a national holiday was unacceptable to the American Establishment of the late 1800's. But a response from the Government over the Pullman Strike deaths was needed, so Cleveland selected what we now celebrate as Labor Day in the hopes that working Americans would be mollified and someday forget the labor movement.

But that didn't happen rapidly. Thirty years later, in 1916, Congress passed the Adamson Act creating the first legally enshrined eight hour work day in order to avoid a nationwide railroad strike which would have resulted in deaths.

It would take years before most Americans would forget about the meaning of Labor Day - after The Great Depression, beyond the Revolutionary 1960's, really all the way to the 1980's when the Industrial Revolution was replaced by the Digital Revolution.

During the 1980's decade most Americans seem to have decided they had nothing in common with the laboring class, had no need for organized labor, and literally raised a generation that thinks Labor Day exists for stores to sell stuff much like the Valentines Day "holiday."

To learn a little more about the history of Labor Day you can read When Labor Day Meant Something and  Labor Day is May 1, today is a boss’s holiday, though you should learn a lot more about what the labor movement struggled to secure for you though that would require reading books. You should at least be aware that there is a Wikipedia entry List of worker deaths in United States labor disputes.

Or you could embrace your ignorance, sit back and enjoy an NPR Jazz Sampler Labor Day Blues And Grooves.

Just keep in mind that the 1% depend upon most workers not understanding that laws like the minimum wage, mandatory overtime, etc., exist not because of some benevolent President but because of the American labor movement. There has always been the 1%, but there isn't much of a labor movement now. Some thoughtful folks might wonder if there is any relationship between that and who benefits from the economic growth....

                                                   
This post was originally posted in 2016. In 2020 it seems more important than ever to encourage people to think about what benefits the labor movement gave us, beginning with the 8-hour day. Unfortunately, businesses have been allowed to ignore 8-hour day laws by paying a fixed salary and calling workers "professionals" when, in fact, the term means "following an occupation as a means of livelihood or for gain" and union plumbers are professionals paid by the hour.

Friday, September 4, 2020

The economy, Il Duce. Trump stirs the Squadrismo to violence to hide the Chinese economic recovery


A recent article in Foreign Affairs was headlined Xi Jinping Is Not Stalin: How a Lazy Historical Analogy Derailed Washington’s China Strategy points out:

    Chinese citizens enjoy much greater autonomy over their own economic well-being than Soviet citizens did in the early days of the Cold War—a product of China’s more open, market-oriented, and globally integrated economy. On this dimension, the comparison is not even close.
    Look to foreign policy, and the analogy unravels further. Stalin openly proclaimed his desire for a global communist revolution, hoping to create a network of socialist states under Moscow’s rule—and it wasn’t just talk. In the early years of the Cold War, his Red Army soldiers, intelligence officers, and Communist Party agents aggressively imposed communism across Eastern Europe. He provided aid to Mao’s Chinese Communist Party and covert assistance to communists in Greece, encouraged proxy military forces in the Korean War, and supported coups around the world.
    Xi, by contrast, has not orchestrated the overthrow of a single regime. ...Xi has yet to instigate a coup, arm insurgents, or invade a democracy and install a communist regime. Little suggests that he seeks to subvert American democracy. (Russian President Vladimir Putin has been much bolder and more aggressive on that front.)
    The Trump administration undoubtedly would like a Stalinist leader to be in charge in Beijing, if only to better mobilize and unite Americans against him. But China “as it is” is not ruled by a new Stalin. Asserting otherwise doesn’t change that fact and gets in the way of developing a sophisticated, successful U.S. policy to contain, deter, and engage China over the long haul.

Hidden in most of the anti-communist political rhetoric of this Presidential Election is the evidence of a significant failure in the Trump Administration's China trade policy. One might even assume that a significant reason why so many Republicans oppose the Great Economic Lockdown of 2020 is the subject of the article headlined at the top of this post.

A summary of the dilemma for the Paleoconservative Republican Trump Administration can be found in the article:

    Robert Gwynne, a shoe manufacturing and exports specialist in Guangdong, said reviving competitiveness in the United States and elsewhere to compete with China would not be quick or easy.
    “To get it back,” he said, “you’re looking at 20 to 30 years, depending on what business you’re in.”



The Use of Violence and Fear to Distract Voters



A rapid restructuring of a complex economy sustained by free trade cannot be done in a country committed to the idea of democracy. Effectively, this is a curse for Paleoconservative republicans who advocate:
  • ultranationalism embracing in law the aspects that characterize and distinguish the United States as an autonomous political community including a common language and shared cultural traditions reinforced by restrictions on immigration,
  • regionalism based upon states' rights as expressed in the 10th Amendment including the decentralization of government social policy which with regional differences should favor paternalism and Christian traditionalism while limiting multicultural programs,
  • economic nationalism through federal policy and treaties limiting free trade, establishing tariffs, and implementing protectionism, while facilitating capitalism by assuring the unrestricted ease of interstate commerce and facilitating workers sharing generally in business profits through stock ownership,
  • noninterventionism in the conduct of American foreign policy, limiting the size of military commitments outside the United States,
  • cohesiveness among individuals and prioritization of the group over the self in order to defend and to sustain ultranationalism, economic nationalism, regionalism, and noninterventionism.
Whether he understands the implications, every indication is Donald Trump's ideological preference for government, our government, is that of a paleoconservative republican, otherwise known as fascist. As expressed by Trump in March 2019 such a system depends upon the threat of violence from the military to police, from biker groups to racist groups. He is doubling-down on that in the campaign at this time.

All of this leads to a review of history and the similarities with Italy after WWI. The lack of an adequate political history education has resulted in Americans confusing Mussolini's Italian nationalist economic agenda with Hitler's Nazi movement that came to power in Germany a decade later. That is a potentially dangerous view.


Whether You Call It Paleoconservative or Fascist, It's UnAmerican

We won't re-explore the commonality between the personality cults of Trump and Mussolini. For more on the subject read Yes, Barack...Donald Trump is a fascist but not a Fascist, a paleoconservative not a conservative or enter "Mussolini Trump" in a Google search.

While there are some commonalities in their personas and even appearance, it is important to note that Mussolini was operating within the communications constraints of 1920. Trump has instant electronic media at his disposal in 2020.

Their lives have nothing in common. Benito Mussolini's father, Alessandro Mussolini, was a blacksmith and a socialist, while his mother, Rosa (née Maltoni), was a devout Catholic schoolteacher. Mussolini thought of himself as an intellectual and was considered to be well-read.

In 1902, Mussolini emigrated to Switzerland, partly to avoid compulsory military service which might make one think he was like Trump. But that move was specifically focused on objections to policy. In 1915 he volunteered to serve in WWI and in February 1917 was wounded in action severely enough that he had to be evacuated from the front.

Between 1919 and 1920 an intense social conflict occurred in Italy, particularly between militant groups we would call the left (Socialists) or the right (Squadrismo  aka Blackshirts which became the inspiration for Adolf Hitler's S.A.). To make a long story short, a 39-year-old Benito Mussolini came to power in 1922 under a parliamentary coalition until the National Fascist Party seized control and ushered in a one-party dictatorship by early 1925.

Italy at the time of Mussolini's rise had a serious lack of strategic resources to sustain competition in a 20the Century industrial economy. So Fascist Italy began exchanging natural resources from Soviet Russia for technical assistance from Italy in the fields of aviation, automobile and naval technology.

Referring to the economics of John Maynard Keynes as "useful introduction to fascist economics", Mussolini initially spent Italy into a structural deficit that grew exponentially, but did expand the economy.

Trump, who substantially increased the U.S. structural deficit, has identified for his constituents a serious strategic lack in the American technology economy. As explained in The New York Times article, much of the production of consumer technology is not done by Americans. Simply we cannot sustain a technology economy on our own. Yes, jobs in other countries support that economy. Now the focus has turned on China which does, in fact, seem to be evolving innovative technology built on earlier, now out-of-date American-developed technology.

In Trump's Administration, the United States has aggressively attempted to restrain trade with China with a goal to have Americans rebuild their own technology and other consumer goods production.

Unfortunately for Trump's goal, Covid-19 appeared at a time when the U.S. government had naively chosen to believe that pandemics were not a threat and therefore was not prepared to take appropriate action. It has effectively prevented many companies from implementing plans to move production.

Making the situation more complicated, unlike the 39-year-old Benito Mussolini who served 21 years as Prime Minister, Donald Trump is 74. And unlike Mussolini, President Trump is limited to two four-year terms within a national government designed to be unwieldy in a country divided into 50 self-governing states.

(In fact, in the Constitution the Presidency was not given strong powers in domestic affairs. Unfortunately it was Democratic Presidents who assumed more power and Democratic-led Congresses that transferred Congressional powers to the President. It wasn't until the rise of Paleoconservative Republicans that the problem with Democratic thinking became obvious...to Democrats.)

Trump does appeal to many middle class voters because the American middle class lost out during the economic globalization of the last few decades when compared to the wealthiest class in the first world and to almost everybody in Asia. As explained in another Foreign Affairs article The World Is Becoming More Equal: Even as Globalization Hurts Middle-Class Westerners:

    The results highlighted two important cleavages: one between middle-class Asians and middle-class Westerners and one between middle-class Westerners and their richer compatriots. In both comparisons, the Western middle class was on the losing end. Middle-class Westerners saw less income growth than (comparatively poorer) Asians, providing further evidence of one of the defining dynamics of globalization: in the last 40 years, many jobs in Europe and North America were either outsourced to Asia or eliminated as a result of competition with Chinese industries. This was the first tension of globalization: Asian growth seems to take place on the backs of the Western middle class.
    These facts supported the notion that the rise of “populist” political parties and leaders in the West stemmed from middle-class disenchantment. Our graph became emblematic not only of the economic effects of globalization but also of its political consequences.
    The COVID-19 pandemic has so far not disrupted these trends and in fact might lead to their intensification. The remarkable deceleration of global growth resulting from the novel coronavirus will not be uniform. Chinese economic growth, while much lower now than in any year since the 1980s, will still outpace economic growth in the West. This will accelerate the closing of the income gap between Asia and the Western world. If China’s growth continues to exceed Western countries’ growth by two to three percentage points annually, within the next decade many middle-class Chinese will become wealthier than their middle-class counterparts in the West. For the first time in two centuries, Westerners with middling incomes within their own nations will no longer be part of the global elite—that is, in the top quintile (20 percent) of global incomes. This will be a truly remarkable development. From the 1820s onward—when national economic data of this kind were first collected—the West has consistently been wealthier than any other part of the world. By the middle of the nineteenth century, even members of the working class in the West were well-off in global terms. That period is now coming to an end.

Third Way Democrats in power, of course, effectively have been unaware of the implications of this. In the February 16, 2016, post writen well before the 2016 party conventions, Hillary Clinton's Dilemma: the Centrist Third Way Policies of Bill's Presidency vs. Young Women the following was offered:

    Trump is right. And while pundits dismiss this as pandering to voters' anger and frustration, both Trump and Sanders frame the problem as that of the political economy of intertwined economic and political systems. All working class voters, not just the younger ones, know that there is something like this wrong in our country and believe correctly that this does them harm. The informed young Democrat realizes that the path to their stress was paved by Bill Clinton.
    Unfortunately, Bill Clinton embraced the centrist Third Way philosophy of governance. It is a hopeful philosophical construct that seeks the pursuit of greater egalitarianism in society through action to increase the distribution of skills, capacities, and productive endowments, while rejecting income redistribution as the means to achieve this. In doing this, it pretends to be a kind of change on democratic socialism that Bill Clinton embraced. To quote one Republican we all know: "I gotta ask the supporters of all that, 'How's that hopey, changey stuff working out?'"
    The problem is the centrist Third Way is not a variant on democratic socialism or even the philosopihical traditions of the New Deal and Great Society. It is a deviant. And every well-informed young black lesbian who grew up in a single-parent household knows this.
    I would prefer that the Hillary Clinton campaign, which has already moved slightly away from the centrist Third Way, move much further toward the political philosophy represented by the economic policies of Presidents Franklin Roosevelt and Lyndon Johnson. That would be better for America and for those critical Millennial Democratic women and for a very large number of unemployed young men.

We are now at a point that for 29 million people their source of income is unemployment insurance. Yes, the immediate cause is the pandemic. But the truth is most of those 29 million were struggling before Covid-19. They never experienced the union-built labor economy of the period between 1950-1970 that allowed expansion of a prosperous middle class. Other Americans did gain from that which makes it easy to identify one problem in the Democratic Party that must be corrected:


While two men in their 70's are running for President, those 29 million workers are facing a time when Americans who identify as white workers "with middling incomes...will no longer be part of the global elite—that is, in the top quintile (20 percent) of global incomes." It appears the pandemic will accelerate the timeline of that decline.

The are two ways to address this. The most pernicious would be to sacrifice real income improvements to freeze the existing hierarchical system of the global income distribution. That would also require slowing any gain in equity by minorities in the United States.

Any other option will require ingenious innovative thinking that must come from the Millennials. It's hard for someone as old as this writer to imagine success within the confines of the 18th Century governmental structure of the United States. It's easy for someone as old as this writer to imagine Paleoconservative thinking within the confines of the 18th Century governmental structure of the United States.

Having so many people in government being as old as this writer is a problem. But some of us know this about any battle between socialism and fascism over economics, beyond the fact that both are unAmerican. State socialism is a political and economic philosophy encompassing an economic and social system characterized by state ownership of the means of production. State fascism as practiced in Italy involved a controlling private sector economic policy that included:
  • the opposition to class struggle to create more productive society through the economic collaboration of the classes (fascist syndicalism);
  • the critical importance of economic productivity as a revolutionary force, ss productivists, rather than distributionists;
  • the elimination of free trade and initiation of protectionism;
  • the recognition and support of various cartels (consorzi) that had been created by Italian business leaders since Mussolini took office;
  • the nationalization of holdings by large banks which had accrued significant industrial securities;
  • the sale of most state-owned telephone networks and services;
  • the elimination of thestate monopoly on life insurance;
  • the return to private ownership of a metal machinery firm;
  • the awarding of concessions to private firms to set up tolls on motorways;
  • and more.
Some of this is more 1920's than 2020's. But take hard look at the Trump Administration's actions over the past three years and you'll find more than a slight resemblance. And in 2020 the gradual opening of federal lands to development in the face of Climate Change really stands out.

Ironically the Chinese single party government has mixed the use of state socialism and state fascism in an effort to become the significant economic world power. How we counter that without a one-party dictatorship should be the only concern of the two parties. It does not appear that the paleoconservatives in the current Administration see that as a concern.

Tuesday, September 1, 2020

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.

Wednesday, August 26, 2020

On March 9 Chinese researchers told the world that the Covid-19 virus travels at least 15 feet. New NBC story says 6-foot social distancing was too arbitrary.

The NBC news headline today, August 26, reads 6 feet may not always be enough distance to protect from COVID-19, new report suggests.

The NBC story summarizes "The current guidance for safe social distancing may not be enough to stop the spread of COVID-19, a new analysis suggests."

The South China Morning Post March 9 headline read Coronavirus can travel twice as far as official ‘safe distance’ and stay in air for 30 minutes, Chinese study finds.

The SCMP story told us: "The coronavirus that causes Covid-19 can linger in the air for at least 30 minutes and travel up to 4.5 metres – further than the “safe distance” advised by health authorities around the world, according to a study by a team of Chinese government epidemiologists."


The "4.5 metres" linear distance is approximately 15 feet.

Can the time distance between March 9 and August 26 - 170 days or nearly 6 months - also be measured in unnecessary deaths?

Monday, August 17, 2020

Will the Democrats allow the Koch Brothers machine through Trump finally kill the Post Office


The Post Office is a key community service for rural communities. That is as it was intended to be when in the late 19th Century the United States Post Office Department began Rural Free Delivery (RFD).

Long before that, the postal system was established as explained on this History site:

    In 1753, Benjamin Franklin, who had been postmaster of Philadelphia [since 1737], became one of two joint postmasters general for the colonies. He made numerous improvements to the mail system, including setting up new, more efficient colonial routes and cutting delivery time in half between Philadelphia and New York by having the weekly mail wagon travel both day and night via relay teams. Franklin also debuted the first rate chart, which standardized delivery costs based on distance and weight.
    In 1774, the British fired Franklin from his postmaster job because of his revolutionary activities. However, the following year, he was appointed postmaster general of the United Colonies by the Continental Congress. Franklin held the job until late in 1776, when he was sent to France as a diplomat. He left a vastly improved mail system, with routes from Florida to Maine and regular service between the colonies and Britain. President George Washington appointed Samuel Osgood, a former Massachusetts congressman, as the first postmaster general of the American nation under the new U.S. constitution in 1789. At the time, there were approximately 75 post offices in the country.

Since Franklin's time, private delivery services existed frequently lobbying against the Post Office Department seeking to replace it. However, the system expanded offering parcel service and stimulating the formation of catalog companies in the late 19th Century.

In March 1970, having virtually no plan and no big picture view, union postal workers in New York City - upset over low wages and poor working conditions, and emboldened by the Civil Rights Movement - organized a strike which eventually gained support of over 210,000 United States Post Office Department workers across the nation. This resulted in the Postal Reorganization Act of August 12, 1970, replacing the historical cabinet-level Post Office Department with a new federal agency, the United States Postal Service, that looked and felt more like a private company.

From the 1970's on, conservative organizations pushed hard behind the scenes for privatization of the new Postal Service. As noted in a Christian Science Monitor 1995 article Republicans Eye US Postal Service For Privatization Push during the Clinton Administration privatization even received backhanded support from Postmaster General Marvin Runyon, a former Ford Executive.

Now we are confronted with a stronger move to dismantle the Postal Service as noted in Trump Moves to Gut the Post Office: His war on Amazon expands to include the right wing’s campaign to abolish America’s oldest - and still successful - public service.

The popular press offer stories like Exclusive: UPS, FedEx warn they cannot carry ballots like U.S. Postal Service explaining complexities of the law while only mentioning at the end that costs would skyrocket since delivery firms charge significantly more for deliveries than the price of a 55-cent stamp and international costs would be astronomical.

And therein lies the truth of privatizing the Postal Service, the third largest non-rail logistics company by value in America. It generated $71 billion in annual sales in 2019, slightly less than UPS’s $76 billion and somewhat higher than FedEx’s $69 billion. But it could generate another 20% by substantially raising rates on some classes of mail at the expense of the average American and particularly rural Americans.

Republicans, of course, back privatization while enjoying the support of much of rural America. It's a puzzle. However, the conservative CATO Institute website offers a full explanation on why a Constitutional Amendment would not be necessary to privatize the Postal Service. Founded in 1974 by Ed Crane, Murray Rothbard, and Charles Koch, the Cato Institute has multiple pages on the Postal Service and its woes which accurate reflects Republican Party thinking.

Trump, of course, has taken advantage of the left's mindless labor-oriented attacks on Amazon in order to put the Postal Service in a bad light. It is simply another lie that Amazon doesn't pay enough. The picture below did not come about because the Post Office is cheap:


The issue is relatively simple and has been for 280+ years. Benjamin Franklin and others wished to assure an affordable, timely distribution system for information and goods for all Americans. In theory since the 1930's it should have always been a top Democratic Party issue. But panic over voting is the only thing that has even brought the matter to the forefront since Third Way or New Democrats in the Clinton Administration gained influence.1

While the urban young may think the Post office an antiquated system, it has come to the attention of some that internet technology is not available to a lot of students. Sadly, what has been lost is the 1930-1970 commitment to assure all Americans access to the basic utilities needed to assure everyone a fair, basic opportunity at life.

                                                   
FOOTNOTES:

  1.  New Democrats tend to identify as fiscally conservative and socially liberal. The Post Office is a good example of why that is inherently an untrustworthy combination. There is nothing about the funding of the Post Office that deserves support by a fiscal conservative. But if you care at all about non-wealthy, the Post Office is an essential service.

Thursday, August 13, 2020

California Democrats offer leadership on equity goals and anti-bigotry. As expected the Trump team is attacking Harris by attacking California.

The selection of Kamala Harris as Joe Biden's running mate offers real hope for a return of the Democratic Party to a focus on achieving equity goals through focused legislative and administrative actions.

Because of the domination of political rhetoric by ideologues and populists who like to talk at the expense of achievement, I have no idea what it means to be a "progressive" or a "liberal" in these times.

All I know is that I have always identified as a "California Democrat" with a clear understanding of what that means. It begins with a clear understanding that the endemic racial, ethnic, class, religious, ideological, and nationalist bigotry in the United States must be eliminated as that bigotry interferes with the achievement of equity goals. "Equity goals" were always clear in my lifetime, derived from the Franklin Roosevelt Administration's New Deal as expanded upon by Harry Truman's Administration's "Fair Deal" through Lyndon Johnson's Administration's Great Society:

  • to first protect all persons from harm resulting from intentional acts of others;
  • to manage and regulate Capitalism and the financial system (the latter including close focus on the banking industry) in order to assure all fair access to pride of ownership;
  • to sustain economic growth to keep pace with population growth while assuring all persons access to jobs at fair wages and access to housing at fair rents;
  • to share among all the benefits of agricultural abundance in the form of affordable nutritious food;
  • to assure universal health care;
  • to create access to quality education services for everyone; and
  • to assure all persons a minimum income necessary for access to sufficient food, clothing, shelter, and health care.

Harris has been part of the continuing struggle by California Democrats to achieve those goals including eliminating the end of bigotry. Because of what has been achieved in California despite our many failures and restarts, Donald Trump's campaign team has already begun to attack Harris for being a California Democrat. Simply they can attack Harris based on her Senate voting record which reflects her commitment to equity goals.


While I would like to say Californian's unequivocally support equity goals and oppose bigotry, that is a false idea. Consider two examples.

In the early 1960's, Governor Pat Brown established what was essentially tuition-free college in California while increasing funding for K-12 education. That was expensive and relied heavily on property taxes for funding. In 1978 Californians voted overwhelmingly for Proposition 13 which basically defunded tuition-free college. Kamala Harris was 14 when that happened, well before she became an effective politician. Today, as we can see from the chart above, she advocates for equity goals though political risk can arise from that advocacy even within California.

Harris has a solid record challenging bigotry even when bigotry was clearly supported by the majority of voters.

In 2000, voters passed ballot initiative Proposition 22 with a margin of 61%, which changed California Family Code to formally define marriage in California between a man and a woman. Proposition 22 was a statutory change via the initiative process, not a constitutional change via the initiative process.

In 2004, then San Francisco Mayor Gavin Newsom with the assitance of Kamala Harris performed same-sex marriages in his city, which were subsequently judicially annulled. This case, and some others, eventually led to a decision announced on May 15, 2008, of the California Supreme Court, which by a 4-3 vote struck down Proposition 22.

On November 4, 2008, Proposition 8 "Eliminates Right of Same-Sex Couples to Marry" was approved by the voters. The measure was challenged in federal court as unconstituional. In 2013 as the measure made its way to the U.S. Supreme Court, then California Attorney General Kamala Harris refused to defend the measure stating "It's well within the authority vested in me as the elected attorney general to use the discretion of my office to make decisions about how we will use our resources and what issue we will weigh in on or not."

As you can see from the maps above, California's voters do not have a consistent record regarding equity goals or anti-bigotry. Yet strangely, we keep electing politicians like Harris who methodically lead us towards those objectives. It takes considerable courage to provide that kind of leadership.

This is why as a California Democrat one easily can support the Biden-Harris ticket.

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 perspective...an 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.