"What Kind of Show Is This?"
By Bill Bonner
YOUGHAL, IRELAND – "Yesterday, Sen. Rand Paul and Dr. Fauci went head-to-head, again. Paul wanted to know why people who have had the virus… or the vaccination… should wear masks, when there is almost zero chance of either getting the virus or spreading it. Fauci replied that there were “variants” that we needed to watch out for, implying that we will have to wear masks forever. It is “just theatre,” Paul shot back. Today, we wonder – and not for the first time – what kind of show we’re talking about.
Inflate or Die: But first, an update on the markets. In a nutshell, Federal Reserve chief Jerome Powell spoke on Wednesday. Bond prices (which move inversely to yields) fell. And Bloomberg has the story: "Treasury Yields Top 1.75% After Powell Spurs Bets on Inflation." "Treasury yields breached more key levels as bond traders boosted bets that the Federal Reserve will allow inflation to overshoot as the U.S. economy recovers.
Yields on the benchmark 10-year note climbed as much as 11 basis points to 1.75% – the highest since January 2020, while the 30-year breached 2.5% for the first time since August 2019. Market measures of inflation expectations are now trading near multi-year highs, with traders paring back bets the Fed would start tightening as soon as late next year. The dollar rebounded against its major peers.
The moves came after Fed Chair Jerome Powell indicated he wasn’t concerned over the recent surge in long-term yields – with his focus still on whether financial conditions remained accommodative. Rates have surged this year on expectations that stimulus spending and vaccine rollouts will fuel a sharper economic recovery and a pick up in inflation."
The bond bull market – which began 41 years ago – seems to have come to an end last August. If this is so, watch out. It’s “Inflate or Die,” remember. And what’s going to die first are investments that depend on bonds and all forms of fixed income streams – including mortgages, pensions, rents that can’t be raised, and so forth. But let’s leave that for Monday… Today… What to make of the last 12 months? What kind of spectacle was it?
Shutdowns and Fearmongering: Not wishing to keep you in suspense, here’s our advice to policymakers: It’s time to bring down the curtain. At the beginning of March a year ago, the State of Washington confirmed the second coronavirus death in the nation. A year later, some 539,000 have died reportedly from the disease in the U.S. Most of those still living – and many of those who are already dead (depending on their last tax return) – are now getting thousands of dollars’ worth of stimmy checks, unemployment comp, and tax credits to help them through these trying times.
Altogether, the cost of Dr. Fauci’s masks, shutdowns, and fear-mongering (with widespread support from the public and blue-state governors) has risen to about $800 billion (or a bit more than 3% of GDP)…plus five remedial boondoggles – the Families First Act, CARES Act, Payroll Protection Program, Response and Relief Act, and the last one, the American Rescue Plan – at a cost of $5 trillion, bringing the total to nearly $6 trillion.
Big Mistake: Also in March of last year, it was obvious that this – like the War on Terror and the Wall Street Bailout – was another big mistake. The first reports from Italy showed that the coronavirus was not an indiscriminate killer. Instead, it, like many other diseases, took down the old and the weak… and even as to them, it was not especially frightful.
Which leads us to our first insight: We’re all going to die. And since death cannot be put off forever, the question is “when.” The Centers for Disease Control and Prevention (CDC) reported that, in the first half of 2020, Americans’ life expectancies had dropped by a “full year” to 77.8 years – blaming COVID-19. This was reported with a straight face by both The New York Times and The Washington Post. And yet, as near as we’ve been able to determine, the average age of a person dying from COVID-19 is… are you ready for this?… 78. In other words, the typical person is better off dying from the coronavirus than from other causes.
Homicidal Instinct: Meanwhile, the only statistics we trust… and then only somewhat… are the death counts. We want to see the bodies laid out… cold and stiff. Everything else is inferred… contrived… modeled… or subject to interpretation. And what does the body count tell us?
Well, here’s our second insight: The COVID-19 was not so bad after all. The plague that struck Athens in 430 BC killed Pericles (Athens’ leader) and a quarter of the population. The Great Plague of 1348 killed half the population of Paris. By contrast, the Plague of 2020 seemed to lack the homicidal instinct. In a year when the killer was on the loose all over the world, the global population actually grew – by 81 million people.
Vestigial Responsibility: What else did we learn? Public health measures are a vestigial responsibility of state and local governments, and some were more eager to join the panic than others. This, of course, was the whole idea of “federalism,” wherein each state would compete with the others to create a more perfect democracy.
In the COVID year, the states put in place a rather haphazard and sloppy set of prophylactic measures. Though by no means a perfect laboratory test, it still gives us a chance to compare the different strategies for fighting the coronavirus. In short, some states fought the bug vigorously and aggressively. Others shirked… claimed heel spurs… or otherwise failed to join the fight. And now, with declining caseloads… and a full year of statistical evidence… we are able to draw some tentative conclusions.
Tentative Conclusions: As of March 8, Hawaii had the fewest deaths – just 32 per 100,000. New Jersey had the most, 270. So, our third insight: If you want to avoid dying from an infectious disease, it is best to live on an island. Between New Jersey and Hawaii is a whole continent with a whole range of death statistics. And here’s our next takeaway: In the end, it didn’t seem to matter what the states did.
In this regard, Florida is worth looking at more closely, which is just what The New York Times did last week. We’ll let the “Old Grey Lady” provide the takeaway: The lockdowns didn’t work…
Florida reopened months before much of the rest of the nation, which only in recent days has begun to emerge from the better part of a year under lockdown… The unemployment rate is 5.1%, compared to 9.3% in California, 8.7% in New York and 6.9% in Texas. That debate about opening schools? It came and went months ago. Children have been in classrooms since the fall…
Yet Florida’s death rate is no worse than the national average, and better than that of some other states that imposed more restrictions, despite its large numbers of retirees, young partyers and tourists. Caseloads and hospitalizations across most of the state are down.
The Times cannot bring itself to admit that it was partly to blame for whipping up the hysteria. Instead, as if it had failed to understand its own insight, it adds: "The tens of thousands of people who died were in some ways the result of an unspoken grand bargain - the price paid for keeping as many people as possible employed, educated and, some Floridians would argue, sane." But that was just the point. The death rates – which are all over the place – show no such bargain.
Which is our final insight: The show turned out to be a surprising farce. Whether you locked down tightly or not at all seemed to make no statistical difference...And the heroes (such as New York governor Andrew Cuomo) turned into villains… while the buffoon (Gov. Ron DeSantis of Florida) turned out to be not such an idiot after all."
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