It’s Time for Conscious Uncoupling With China

Of all the lessons that plagues teach us, surely the most valuable one is humility.

Look around you. The most advanced, sophisticated, and wealthy civilization ever to exist on planet Earth — our glorious, multinational, globalized, technological miracle — has now been brought to a screeching halt by a pathogen so tiny no one was able to see their complex structures until the last century. For all our unparalleled wealth and knowledge, our streets are empty; our businesses for the most part are suspended; and our efficiency and technological mastery have been mocked by a speck of nature. This minuscule organism that isn’t even technically alive could, all by itself, generate a global depression unlike any since the 1930s.

All our carefully maintained, just-in-time supply lines have crashed in a matter of days. Our addictive elixir, economic growth, has evaporated. Global trade has been put on ice. We have no vaccine — and, barring a miracle, we won’t until next year. We have no effective treatments, although that may, with any luck, change. We have only very porous defenses — social distancing — which amount to a drastic, utterly unsustainable shift in how we live from day to day. And that’s it. We don’t know how contagious this virus is, how exactly it may mutate, how widespread it already is in the population at large, and even if it can reactivate in those who have recovered from infection.

We obsess about the responses of our governments, as is only proper, and we parse charts and debate tactics, to gain some sort of edge on tackling it. But when you look at the graphs of the viral curve in most of the major countries, most of them are unsettlingly similar. Yes, there are some more successful countries like Germany, and some outliers, like South Korea, but the rest seem to be following the same rough trajectory. And yes, we are flattening the curve … but it’s a temporary flattening due to unprecedented global shutdown of human activity. We may well be able, by suspending our entire way of life for a long while, to keep this virus from wreaking excessive and immediate damage, and overwhelming our hospitals. But we will not have beaten COVID-19. We will merely have stretched out the time it takes to spread.

The moment we relax, it will come back. Singapore, an early model for suppressing the virus, is now seeing a new wave after relaxing some controls. A leaked draft of a memo from the E.U. notes that “any level of [gradual] relaxation of the confinement will unavoidably lead to a corresponding increase in new cases.” The same risks of a rebound are being seen in China, in so far as we can believe a word that murderous dictatorship tells us. Meanwhile, I look around me and see a slow attenuation of social distancing — the park where I walk my dogs is increasingly crammed. Humans are social animals. There is a limit to our capacity to remain alone. In crises, in particular, our instinct is to seek one another, gather strength from our common experience. The virus exploits this mercilessly.

It’s a brutal reality check, this thing — relentlessly ripping the veil off our delusions of control. So much is being laid bare. The promise of a truly globalized world, where government is increasingly international, and trade free, and all would benefit, was already under acute strain. Now, it’s broken, perhaps irrevocably.

The nation-state was beginning to reassert itself before, but COVID-19 has revealed its indispensability. Europeans realized, if they hadn’t already, that a truly continental response was beyond the E.U. Borders were suddenly enforced, resources hoarded by individual nations, and the most important decisions were made by national governments, in national interests. Americans, for their part, saw their own dependence on foreign countries, especially dictatorships, for core needs — like medicine, or medical equipment — as something to be corrected in the future. Japan is now spending a fortune paying its own companies to relocate from China to the homeland.

And for both Europe and America, the delusions that sustained the 21st-century engagement with China have begun to crack. We still don’t know how this virus emerged — and China hasn’t given any serious explanation of its origins. What we do know is that the regime punished and silenced those who wanted to sound the alarm as early as last December, and hid the true extent of the crisis from the rest of the world. There had been 104 cases in Wuhan by December 31, including 15 deaths. Yet as late as mid-January, the Chinese were insisting, in the words of the World Health Organization, that there was “no clear evidence of human-to-human transmission.” On January 18, despite the obvious danger, the Chinese dictatorship allowed a huge festival in Wuhan that drew tens of thousands of people.

On January 23, President Xi locked down all air traffic from Wuhan to the rest of China — but, as Niall Ferguson pointed out, not to the rest of the world. It’s as if they said to themselves, “Well, we’re going under, so we might as well bring the rest of the world down with us.” This is not the behavior of a responsible international state actor. Trump’s ban on Chinese travel was better than nothing, but it did not prevent over 400,000 non-Chinese from arriving in the U.S. from China as COVID-19 was gaining momentum. It’s fair to say, I think, that after the immediate, unforgivable cover-up in China, a global pandemic was inevitable.

I’m not excusing Trump for his delusions, denial, and dithering — he is very much at fault — but the core source of the destruction was and is Beijing. Bringing a totalitarian country, which is herding its Muslim inhabitants into concentration camps, into the heart of the Western world was, in retrospect, a gamble that has not paid off. I remember the old debate from the 1990s about how to engage China, and the persuasiveness of those who believed that economic prosperity would lead to greater democracy. COVID-19 is the final reminder of how wrong they actually were.

The Chinese dictatorship is, in fact, through recklessness and cover-up, responsible for a global plague and tipping the entire world into a deep depression. It has also corrupted the World Health Organization, which was so desperate for China’s cooperation it swallowed Xi’s coronavirus lies and regurgutated them. At the most critical juncture — mid-January — the WHO actually tweeted out Communist Party propaganda: “Preliminary investigations by the Chinese authorities have found no clear evidence of human-to-human transmission of the novel Coronavirus.” On the same day, another WHO official was telling the world that there was “limited spread” of COVID-19 by human-to-human transmission, and alerted hospitals about the risk of super-spreading the virus. And so the virus has forced us to accept another discomforting reality: Integrating a communist dictatorship into a democratic world economy is a mug’s game. From now on, conscious decoupling is the order of the day.

In other cases, the cold triumph of reality represented by the virus has been salutary. It’s been remarkable to observe something Donald Trump cannot lie his way out of. He tried. And he’s still trying. He’s gaming out various ways to get himself reelected in a pandemic, but the pandemic keeps reminding us that this is in its control, not his. His daily performances are not informing anyone about anything — they are failing attempts to impose a narrative on an epidemic which has its own narrative, and doesn’t give two fucks about Trump.

And this is the truth about reality. It really does exist (whatever the postmodernists might argue). It’s complicated. And even if it can be ignored or forgotten in our very human discourses, it wins in the end. This virus is, in a way, a symbol of that reality. It can be stymied for a while; it can be suppressed and avoided. It can be controlled so it doesn’t overwhelm us in one fell swoop, metastasizing the damage. But it is unbeatable and is winning this war, as it was always going to, and only a vaccine can make a real difference. The coming months will be an unsatisfying series of starts and stops as we struggle to live with it. We are not, in other words, fighting and winning this war — we are merely negotiating the terms of our surrender to reality. And there is nothing more humbling for humans than that. And nothing more clarifying either.

by Andrew Sullivan, NY Magazine |  Read more:

Image: Susan Walsh/AP/Shutterstock

Bernie Wanted To Change America, But Could He Change Himself?

[ed. From June, 2019; and now we know the answer. Thanks, Bernie for staying true to yourself and your ideals.]

Bernie Sanders wants to make a joke. Pretty good joke, he thinks. He is slumped in a window seat in coach on a plane parked at Chicago O’Hare. He has about an hour in transit to get the joke into his next speech. Before deplaning, he pulls his hair forward, but only on the left, the side one may call Bernie, as opposed to the more combed right hemisphere—Senator Sanders. Off the plane. The selfie requests start. O.K., but quickly. O.K., why not, sure. Ooh, was that a Macaroni Grill? Anyone want to go in on a pizza with him? Sausage pizza, O.K. Then selfies with the kitchen staff. Good people. Hardworking people. His people.

His speech for tonight is ready, but Sanders wants to scrap the planned opening for his pretty good joke. Does Terrel—­Terrel Champion, his body man, who has mastered the art of knowing when to talk to the Senator and when to leave him be—have the printer? Of course. Last-minute checks about tonight. RSVPs? Good shape—better than early 2015, when barely anyone knew him. A woman at the gate wants a selfie, but Sanders is fixated on the printout of the joke. “Onnnnnnnnne minuuuuuute,” he barks. He loves The People. People can be trickier.

The junior Senator from Vermont flies over the country he aspires to govern, with its crop circles and caterpillar-shaped suburbs and community pools and rail yards full of shipping containers. Soon his silver SUV is rolling through Davenport, Iowa, past a brick building with a sign for German mustard and a soon-to-open hookah bar. The election is a year and a half out, but the crowd at the venue is feverish. Men in boots just off shifts. Young people who may or may not work in the gig economy and listen to the podcast Chapo Trap House. A woman in a purple nurse’s uniform. Beefy guys in trompe l’oeil camo.

He takes the stage and tosses off his blazer. He is taller in real life than on television, though he shrinks by stooping. His cuffs aren’t carefully folded once or twice à la Farm State Casual, but rather jammed up his forearm. “Before I get into my remarks here in Davenport,” he begins, “I did want to make a few comments.” But now, instead of just launching the joke he worked so hard to print out, he first warns them about it. “I wanted to tell you—I’m being funny here, so don’t get excited—that I was a little bit apprehensive about coming back to Iowa.” He reminds them how President Trump had falsely linked wind turbines, which are ubiquitous in Iowa, to cancer. “So I was sitting here wondering,” he says, “if I come to Iowa, am I and my staff going to get cancer?”

Running for President is like doing stand-up. You try bits, see what sticks. The room liked it, so the next morning the joke resurfaces in Muscatine, again with a warning, because Sanders, who can be funny unintentionally, is making an effort at some of the performative aspects of politics he has long sneered at. “I told a funny joke yesterday,” he says to the audience, adding: “I try. I don’t have the world’s greatest sense of humor.” Several hours later, in Fairfield, he tries again. It takes another day for Sanders to offer the joke without advance notice.

On the way out of Oskaloosa, wind turbines appear. A viral video opportunity. The SUV carrying Sanders, the staff van and the luggage-­bearing minivan all swerve to the side of US 63. Sanders, with a few aides, prepares to cross the two-lane highway. “Be careful!” he yells. It’s the kind of Old World, survivalist caring Sanders is capable of in public: Don’t die; Have you eaten?; Remember your luggage; Don’t leave your charger­.

Now the Senator, 77, stands before the wind farm in his gold-buttoned blazer and slacks, looking like a traveling Rotary Club speaker, facing a cameraman in yellow skinny jeans who looks young enough to be his grandson. He improvises, theatrically throwing his hands over his ears, as if protecting himself from the allegedly carcinogenic turbine sound. “Oooohh, that noise,” he cries. “Can’t think.” He takes his hands down. “Just kidding. No noise.” He moves into a more serious riff. The opener is funny, but his video team finds it gimmicky. So they cut it.

Sanders first ran for office in 1972, campaigning for an open Vermont Senate seat on the Liberty Union Party ticket. He lost, attracting 2% of the vote. One of his opponents was a Democratic state representative named Randolph Major. As Sanders recalls in a memoir, Major invented a “brilliant publicity gimmick”: skiing around the state to meet voters. Sanders later complained, “Here I was, giving ­long-winded statements to a bored media about the major problems facing humanity, and the TV cameras were literally focused on Randy’s blisters.” Sanders was 31. He was, even as a young man, an old man.

Now, nearly a half-century later, he is an old man who enraptures the young. The Senator who once rejected gimmicks and complained “modern American politics is about image and technique” now scripts jokes and asks after his Twitter likes. He is pretty much the same man he has always been, but he is determined to take advantage of being one of the more improbable top-tier presidential contenders in American history.

When Sanders ran for President in 2016, it was because he felt important ideas were unrepresented. Many of his positions were dismissed as radical, vague, wide-eyed. Yet as the 2020 race gathers intensity, much of the Sanders program has become de rigueur for progressive and centrist Democrats alike: single-payer health care, massively subsidized college education, a $15 minimum wage, a federal jobs program. Senator Cory Booker of New Jersey supports some form of Medicare for All. Former Vice President Joe Biden recently embraced a $15 minimum wage. The idea of federally provided jobs, evocative of the New Deal, has gone from being a far-out Sanders talking point to an idea that has more moderate adherents like Senators Kamala Harris of California and Kirsten Gillibrand of New York.

During eight days on the campaign trail with Sanders this spring, I heard one refrain as much as any other: a “funny thing had happened” since 2016, and Sanders’ ideas were no longer “radical.” “Brothers and sisters, we should be enormously proud that we have come a long way in transforming politics in America over the last four years,” he told a crowd one sunny April afternoon in Warren, Mich.

Sanders has changed the debate in great measure because he has never really changed himself. His consistency is the selling point—his mantras against billionaires stealing the American Dream, the system being rigged, working people needing to form a movement to take power back. And yet he is now running against nearly two dozen competitors, many of whom have chipped away at his distinctiveness by emulating his stances, and just being Bernie may not get the job done. (...)

The woke primary is a challenge for Sanders. In part because he is an old-style leftist whose overriding lens is class, not identity. In part because woke culture often craves the kind of gesture­making to which he’s allergic. And in part because Sanders seems to struggle with the expectation that a 77-year-old white guy needs to learn, evolve and prove that he “gets it,” even if he was at Dr. King’s march.

The 2016 campaign left a residue of doubt about Sanders’ ability to navigate both ends of I-94. Critics complained that his signature campaign advertisement, set to Simon and Garfunkel’s “America,” featured overwhelmingly white faces. His campaign leadership was “too white, too male,” as Sanders himself has put it. There was the time in 2015 when Black Lives Matter activists, unsatisfied with Sanders’ responses to the problem of police violence against African Americans, interrupted a town hall at which Sanders was speaking. “Shall I continue or leave?” Sanders asked. “I’ve spent 50 years of my life fighting for civil rights and for dignity,” Sanders added, turning toward the protesters. “But if you don’t want me to be here, that’s O.K.” (...)

But what makes Sanders an awkward fit with the woke era goes deeper than missteps. He is philosophically committed­ to a view of the world that can sometimes conflict with the expectations of 2019 identity politics. As a democratic socialist, he sees economic inequality as the paramount issue in American life—and racism and other injustices as derivative of it. When asked, for example, about the 2015 death of Freddie Gray after being taken into custody by Baltimore police officers, Sanders talked about the “short-term” fix of police reform, before suggesting that the “long-term” solution was better employment opportunities to get young African Americans off the streets—which isn’t necessarily a fix given that police have also gunned down unarmed black men in their cars and backyards. (...)

He made his message mainstream enough to win 22 states, pulling Clinton to the left in the process. He helped change the conversation about capitalism and how it relates to that other great national institution, democracy. He inspired many young activists who worked for his campaign in 2016 to run for office—­including an organizer who is now Representative Alexandria Ocasio-Cortez of New York. Yet those years of shouting, feeling unheard, being unheard, left scars. And belated validation can rewrite, or reinforce, habits bred by marginalization: It can inspire magnanimity and outreach—or harden a feeling that you were always right and most others wrong or corrupt. It can foster growth—or justify a refusal to evolve, because what got you where you are is consistency. It can make you feel safe—or justify a siege mentality, because the higher you rise, the harder They are going to work to stop you.

What will it be for Sanders? Can he seize upon the moment he created? Can the warrior for justice learn to be open, adaptive and human in ways that give his message a wider airing? Even in this late season of his life, Sanders has a choice about which version of himself he wants to present to the American voting public, and what he is willing to let himself become.

I keep thinking of a moment in Las Vegas that made me realize we don’t know the answer yet. We had just landed at the airport. We headed for the SUV that would take us to the Paris hotel and casino. But there was a mishap: the local organizers hadn’t known I was joining. When we found the SUV, we realized we were one seat short. Sanders’ aides, in a hurry, looked at me like, “Bye, dude.”

Sanders, who had been preoccupied with luggage, now caught wind of the issue. And I watched it come over him: a transfixing, physical sense of righteousness. It wasn’t about logistics; it was about justice. At that point, he had spoken to me just once in any real way in days of traveling together. He had no interest in me in the normal ways. Oh, you live in Brooklyn? I used to live in Brooklyn. What part? But the prospect of my exclusion bothered him. Even as I said I was fine, he asked if there was any way to squeeze me in. Checked the back row. Maybe I could put a suitcase beside him, between the seats, and sit on top. But something had to be done, because to him it just was not right. And in that moment Sanders became a little clearer to me: He isn’t the person you want sitting beside you on a long boat ride, passing time. He’s the person who will notice when you fall overboard and begin to drown.

by Anand Giridharadas, Time | Read more:
Image: David Brandon Geeting

The good old days
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Harry Stooshinoff
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'Let Them Fail' - Billionaire Explains How Capitalism is Supposed to Work

With millions of Americans sitting at home working on their laptops, the passive viewership of cable news channels like CNBC must be waaaay up this month, as finance nerds welcome normies to the strange and often hilarious world of live markets news.

In terms of drama, CNBC is usually pretty staid. But every once in a while, there's a fight, or a contentious interview, that really grabs people's attention. On Thursday, such a confrontation occurred during "the Halftime Report" as Scott "The Judge" Wapner interviewed early Facebook investor and uber-wealthy VC investor Chamath Palihapitiya.

Wapner brought up the question of the bailouts for main street and corporate America that the Trump Administration has packaged as part of its $2.2 trillion plan. Palihapitiya raised an issue with the program, arguing that the administration would be using taxpayer money to prop up "zombie companies."

Then Wapner asked: "Are you arguing to let airlines fail?

Palihapitiya, who was speaking on the phone, responded with a very assertive "Yes."

Wapner seemed blown away by this. Struggling to process the answer he had just been given, he followed-up, incredulously: "But how does that make sense in the broader scheme of the economy."

Then Palihapitiya went off.

"This is a lie that's been propagated by Wall Street. When a company fails, it does not fire its employees...it goes through a packaged bankruptcy...if anything, what happens is the employees end up owning more of the company. The people who get wiped out are the people who own the unsecured debt and the equity...but the employees don't get wiped out and the pensions don't get wiped out."
[...] 

"And if a bunch of hedge funds get wiped out - what's the big deal? Let them fail. So they don't get the summer in the Hamptons - who cares."

Out in the real world, people say mean things about the rich all the time. But it doesn't happen quite as often on CNBC. In fact, sometimes CNBC's hosts seem downright confused when people don't seem to care about asset prices above all else - like that time Rick Santelli said we should all just go get infected and let grandma die to save the stock market. What's more, Wapner seemed almost personally insulted by Palihapitiya's response.

As to why, well, we can't be certain.

Because after all, airlines as an industry are especially prone to bankruptcy (the president once owned an airline that went bankrupt), even under completely normal circumstances.

Hell, even if such a vitally important company as the aerospace and defense giant Boeing went bankrupt, its factories in Washington State wouldn't stop running.

Remember when the CEO of Boeing demanded a taxpayer-funded bailout, but said he wouldn't accept the money if the federal government demanded a stake in Boeing in return (note: exchange money for equity is standard practice for...literally every investor in the world)?

How is Boeing able to so blithely bite the hand that feeds? Because it has alternatives should the bailout not come through. If Boeing really needs the money, it's free to sell stock and raise cash - the opposite of what it did for decades when it bought up shares, shrinking its float and helping maintain a buoyant valuation.

Say this isn't enough, and Boeing fails: The company could file a prepackaged Chapter 11 where the creditors take over all the equity and the company emerges from bankruptcy debt-free in one day. Without a dollar of debt, Boeing should be able to weather any disruption no matter how long, and once the economy normalizes it should be able to rehire all the workers that had been laid off. In reality, the company could probably manage to get through it without firing so many employees...or offering "voluntary buyouts".

Which brings us to our next point. After Palihapitiya explained the bankruptcy process, Wapner responded with a question that's probably asked on his channel at least half a dozen times a day: "What about the 401(k)s?"

"But you don't think the employees of these companies own stocks, own the company's stocks?"

To which Palihapitiya had another point ready.

"These things are owned by these huge amorphous organizations...ultimately downstream the employees own a few hundred dollars or a few thousand dollars of shares."

That's right: After the world saw what happened to Enron employees who invested their entire retirement savings in Enron stock, there probably isn't a single American who keeps literally all of their money in the shares of their employer. Even employee pension plans are typically managed by third parties and don't consist of a larger percentage of the company's stock.

As Palihapitiya explained, while people absolutely need jobs to come back to, not every business will fail during this shut down. Many small businesses, like a small cafe or a restaurant, if they can't pay the rent, it's over. There really is not "business", it's just a lease and the restaurant setup. You can have partial owners, but if that restaurant goes under, it'll likely shut down immediately, firing all of its staff. If a company like, say a large chain of newspapers that's publicly traded, goes bankrupt, it will continue to operate.

While the rich certainly didn't cause the coronavirus, they typically aren't also responsible for the many unanticipated risks that can make an investment or a business go south.

But on Main Street, it's a different story. There's not as much nuance: People are panicking and scrambling to apply for government benefits because they don't know how they're going to keep a roof over their heads.

"On main street today, people are getting wiped out, and right now rich CEOs are not, boards that had horrible governance are not, hedge funds are not...6 million people just this week along said 'holy mackerel, I don't know how I'm going to pay my rent.'" 

"And what we've done is protect CEOs and boards...when you have to wash these people out."

Just last year, millions of investors were forced to face up to the fact that not every new enterprise, including companies who grow to the point that they can raise money in an IPO, is profitable. In fact, thanks to various levels of government intervention in the free market, many of these 'zombie' companies exist in countries around the world, to varying degrees. (...)

To quote Bob Rodriguez, as we did during Thursday's market wrap:

With the initiation of the Fed’s complete takeover and control of the US financial economy, there is now absolutely no accurate pricing discovery in the capital markets and we have entered a period of total manipulation. In light of this, the only markets I have an interest in are those where the heavy hand of government is not involved or only minimally involved. This leads me to rare commodities and collectibles. The public equity and debt markets are now nothing more than greater fool markets that are led by the greatest fools of all, the Fed and the Congress. US capital markets, RIP! 

When all market risk is essentially socialized, a return vs risk evaluation is essentially meaningless. (...)

* * *

Simply put, the global business environment is being transformed: Like AOC and George W Bush, we are all socialists now.

And Wapner's incredulity at being confronted by an investor who doesn't accept bailouts as nothing short of a moral imperative just shows how badly the public has been brainwashed to simply accept this dynamic, where the wealthiest business owners are always given priority.

by Tyler Durden, ZeroHedge |  Read more:

Image: CNBC

[ed. Seems like the Fed, in trying to save the market, is operating on the hope that it'll return to its normal pre-pandemic self soon (a market that has been distorted by years of intervention and low interest rates). Or, maybe everything is just too interconnected, ie. a house of cards. See also: The Fed's now apparently propping up junk bonds and high-yield ETFs (ZH). And: QE-4 Cut in Half this Week. Fed’s Helicopter Money for Wall Street & the Wealthy Hits $1.8 Trillion in 4 Weeks (Wolf Street):

Since March 11, the Fed created $1.77 trillion and handed it to Wall Street either by purchasing financial instruments or as loans. The sole purpose of this was to inflate asset prices and bail out asset holders. It’s apparently against the law in the US for the Fed to allow the wealthy to lose their shirts, or something. The crumbs offered to small businesses or the real economy have not materialized yet. Those are future projects, if they ever materialize.

If the Fed had sent that $1.77 Trillion to the 130 million households in the US, each household would have received $13,600. But no, this was helicopter money exclusively for Wall Street and for asset holders.]

Japanese Chef Draws Every Meal He Eats. For 32 Years.

For 32 Years, This Japanese Chef Has Been Making a Painting of Every Single Meal He Eats. (ArtNet)

[ed. Additional images here and here.]

Beware of Using the Coronavirus For War With Iran

The news is all coronavirus. Whether it’s cable news, national newspapers, public radio, or even my own Intercept podcast, we can’t get away from it.

The pandemic has overwhelmed us all; we talk, think, dream of little else.

But let me try and grab your attention for a few moments and point you in a different direction. How many of you noticed a rather disturbing New York Times story from Mark Mazzetti and Eric Schmitt last week that was headlined, “Pentagon Order to Plan for Escalation in Iraq Meets Warning From Top Commander”? You didn’t? Well, in the midst of all the virus-related doom and gloom, it managed to send new shivers down my spine.

From the Times:

The Pentagon has ordered military commanders to plan for an escalation of American combat in Iraq, issuing a directive last week to prepare a campaign to destroy an Iranian-backed militia group that has threatened more attacks against American troops. 

But the United States’ top commander in Iraq has warned that such a campaign could be bloody and counterproductive and risks war with Iran. In a blunt memo last week, the commander, Lt. Gen. Robert P. White, wrote that a new military campaign would also require thousands more American troops be sent to Iraq and divert resources from what has been the primary American military mission there: training Iraqi troops to combat the Islamic State.

Got that? A new military escalation in Iraq by the U.S. government “risks war with Iran.” That’s the “blunt” view of … the top U.S. general on the ground.

A conflict with Iran, as I have repeatedly pointed out, would be a strategic and humanitarian disaster. The United States would end up killing thousands of innocent Iranians; Tehran would lash out via proxy groups across the region, as well as the wider world; U.S. troops in Iraq would have a target on their backs; oil and gas prices would skyrocket. To quote the former head of U.S. Central Command, Gen. Anthony Zinni, “Like I tell my friends, if you like Iraq and Afghanistan, you’ll love Iran.”

Question: What kind of maniac risks such a war in the middle of a global pandemic?

Answer: President Donald Trump, aided and abetted by Secretary of State Mike Pompeo and national security adviser Robert O’Brien. As the Times notes, they “have been pushing for aggressive new action against Iran and its proxy forces — and see an opportunity to try to destroy Iranian-backed militia groups in Iraq as leaders in Iran are distracted by the pandemic crisis in their country.

To be clear: An Iranian dies from Covid-19 every 10 minutes, while 50 people become infected in the Islamic Republic every single hour. The death toll is fast approaching 3,000. Yet for Trump and his top aides, this is an “opportunity” to push their hawkish, nay ghoulish, agenda.

As is so often the case, though, the U.S. military leadership is less keen on a new Middle East conflagration than the U.S. civilian leadership. “Military leaders, including Defense Secretary Mark T. Esper and Gen. Mark A. Milley, the chairman of the Joint Chiefs of Staff, have been wary of a sharp military escalation,” reports the Times, “warning it could further destabilize the Middle East at a time when President Trump has said he hopes to reduce the number of American troops in the region.” (...)

Less than two weeks ago, in a piece about the cruelty and callousness of maintaining sanctions on Iran while a pandemic rages across that country, I described the people in charge of the U.S. government as “sociopaths.” Now we discover, courtesy of an internal memo written by a U.S. general and leaked to the New York Times, that strangling the Iranian economy isn’t enough for Trump and Co. They are bent on using the spread of a deadly disease as cover for a new war.

Perhaps “sociopaths” was an understatement.

by Mehdi Hasan, The Intercept | Read more:
Image: Fatemah Bahrami/Anadolu Agency via Getty Images
[ed. What we're doing to Iran is a moral disgrace. See also: US ready to block Iran's requests for coronavirus aid from the IMF, officials say (CNN).]

B-52s

The 9/11 Era is Over

In 2019, I taught a course at UCLA on presidential rhetoric and American foreign policy. One of the speeches I had my students read was Bush’s address to Congress after 9/11, which still stands out as an exceptional piece of speechwriting. Just a couple of years younger than I was when I found those words so stirring, my students read the text as if it came from a different planet. Had the United States really made its entire national purpose a war against a group of terrorists? I asked them to list what they believed were the most pressing issues facing the country. Climate change topped the list. Economic inequality, student debt, structural racism, and a host of other issues filled it out. Not a single student mentioned terrorism. The generational appeal of Bernie Sanders—so out of step with the Democratic establishment I’d been a part of—was obvious in that room.

Trump likes to talk about ending America’s post-9/11 wars. But his latest defense budget is $112 billion higher than it was the year he took office. This additional spending appears guided by little beyond the president’s desire to declare that he’s investing more in the American military. The use of drones has increased. In Afghanistan and against ISIS, rules of engagement to limit civilian casualties have been relaxed. The number of U.S. troops in Afghanistan was increased. With the notable exception of a bizarre and hasty retreat from our counter-ISIS mission in Syria, the post-9/11 resourcing of America’s military and intelligence infrastructure is more robust than ever. Obama’s efforts to formulate a post-9/11 foreign policy—anchored in the Trans-Pacific Partnership and Paris Agreement—were scrapped. In their place came a constellation of policies under the “America first” banner—a mixture of restrictive immigration practices, scorn for traditional allies and international institutions, and a trade war with China.

Most acutely, Trump has fixated on Iran as a top priority. Since pulling out of the Iran deal, he has placed America on a constant precipice of war with the country. In addition to renewed sanctions, Trump has deployed nearly 20,000 additional U.S. troops to the Middle East, fueling Iranian provocations in response. (From the vantage point of quarantine, it’s hard to fathom that a couple of months ago we almost found ourselves in yet another post-9/11 war based on a presidential decision to kill someone.)

In his attitude and approach, Trump himself remains very much a president of the 9/11 era. He could not have become president without the architecture of right-wing media, chiefly Fox News, that blossomed after the attacks of 9/11. His personal lawyer Rudy Giuliani turned his laudable response to those attacks into a career of profiteering that led him all the way to Ukraine in pursuit of conspiracy theories about Joe Biden. Trump’s lie that Muslims in New Jersey celebrated the fall of the Twin Towers completes the distortion of that day from a moment of American common purpose to an expression of white identity politics against an encroaching “other.”

Trump successfully harnessed anger, grievance, nationalism, and crude racism to win political support. But that approach is useless in responding to an actual crisis. In COVID-19, Trump faces an adversary that doesn’t care what it’s called, recognizes no border, and plays not by the rules of America’s broken politics but rather by the rules of science and objective reality.

Whereas the attacks on 9/11 took place in only three locations, COVID-19 has already affected nearly everyone in the country. Most of the U.S. is under social-distancing orders. Clearly, we are entering a period of severe trauma. Many—if not most—of our fellow citizens will get the disease. An unspeakable number of people may die. Social order and cohesion may be tested in unforeseen ways. The American economy will go through a shock likely to rival the 2008 financial crisis and the Great Depression. As with those events, the geopolitical fallout will be profound and enduring.

The first months of this crisis suggest that the world order that emerges on the other end is likely to be permanently altered. America’s response to 9/11 committed the familiar mistake of hastening a superpower’s decline through overreach; the Trump presidency, and our failure to respond effectively to COVID-19, show us the dangers of a world in which America makes no effort at leadership at all.

Enormous upheaval, however, also offers the opportunity for enormous change. And that is what America needs. This is not simply a matter of winding down the remaining 9/11 wars—we need a transformation of what has been our whole way of looking at the world since 9/11. Yes, we have a continued need to fight terrorist groups, but the greatest threats we face going forward will come not from groups like al-Qaeda or ISIS, but from climate change, pandemics, the risks posed by emerging technologies, and the spread of a blend of nationalist authoritarianism and Chinese-style totalitarianism that could transform the way human beings live in every country, including our own.

To meet those challenges, Americans will have to rethink the current orientation of our own government and society, and move past our post-9/11 mindset. Any serious effort must change our government’s spending priorities. It makes no sense that the Pentagon budget is 13 times larger than the entire international-affairs budget, which funds the State Department, USAID, and global programs at other agencies. The entire pandemic-preparedness budget is a rounding error compared with a trillion-dollar plan to modernize America’s nuclear-weapons infrastructure. Smart investments in research and development, including for agencies such as the National Institutes of Health and the National Science Foundation, used to help make America a global leader in health, science, and technology; now we are behind countries such as Germany and South Korea—countries we helped rebuild or build during the Cold War—in developing and deploying COVID-19 tests.

We need to change the way we think about national security and foreign policy. In the Obama administration, efforts to ramp up climate-change and global-health security didn’t mesh well with America’s sprawling counterterrorism infrastructure, or with the interests of Congress. These defining challenges must become the focus of far more personnel—at the White House, the State Department, and other agencies—and they must galvanize partnerships outside government. Meanwhile, if we are to continue to deploy the rhetoric about democracy that we have used since 9/11 toward our adversaries, we and our allies must live up to it ourselves.

We need to change our attitude about government itself. The multidecade assault on the role of government in American life led to a Trump administration that disregards expertise and disdains career civil servants. The COVID-19 crisis has revealed that government is essential; that public service is valuable; that facts and science should guide decisions; and that competence matters more than Washington’s endless gamesmanship.

Donald Trump is the embodiment of trends that have been advancing for a long time—the crudeness of our culture, the meanness of our politics, the disintegration of our media. All those trends have accelerated since September 11, 2001. As we go through an indeterminate period of time separated from the normal rhythm of our lives, Americans are going to be forced to consider what’s most important to them. The answer, so far, appears to be family, community, and a sense of decency—whether it’s in the heroism of health-care workers or in the video that your friend shared of some random act of kindness. Our politics and government should reflect that decency in the priorities we set at home and the actions we take abroad.

by Ben Rhodes, The Atlantic |  Read more:

Image: Ray Stubblebine/Reuters

Possible Developments in the Treatment of Critical COVID-19 #2

Yesterday I noted an emerging debate within the critical care community of whether at least some critical COVID-19 cases are significantly different from standard Acute Respiratory Distress Syndrome (ARDS) and require a different treatment protocol. Since posting that piece I’ve found more evidence that this is a rapidly emerging discussion among critical care doctors and perhaps even some emerging consensus about how critical COVID-19 cases are different from ARDS.

First here’s an update from TPM Reader WC (not their actual initials), a critical care doctor on the West Coast who our team has been in touch with since early in the crisis …

Saw your post on the “Developments on the treatment of Covid-19.” 

As someone who has managed my fair share of ventilated Covid patients, I can say that the opinions offered by Dr Kyle-Sidell seem to have face validity and represent something of a developing consensus in the EM/Critical Care community. 

The Covid-19 epidemic has been interesting from a medical perspective in that so much about it has been new and the management strategies have been in flux since the beginning. I don’t want to get to into the weeds technically, but the concepts have ranged widely as we have gotten more experience with this fairly new disease. We went from early intubation strategies with a paradigm of using ventilator protocols similar to ARDS (Adult Respiratory Distress Syndrome) to strategies trying to delay intubation as long as possible using modalities such as noninvasive positive pressure ventilation (aka CPAP or BiPAP) or High Flow Nasal Cannula oxygen — both controversial as they may raise the amount of virus aerosolized. And now there is this very wild notion of “permissive hypoxia” which is the concept that if the oxygen level is low but the patient looks OK you just let them run low (previously a low oxygen level – one can quibble about the threshold – was an absolute indication for intubation). Anyway, while Dr Kyle-Sidell’s comments were provocative, it’s just one more day, one more change in the management. Whether it’s a game-changer, I doubt, but rather one more step in the road of figuring out how best to serve the sickest of the sick patients with this disease.

Here’s a note we received from longtime TPM Reader AM …

I am a physician and actively treating a number of COVID patients. Something you may not be fully aware of is that MDs nationwide have formed large (tens of thousands strong), private communities on social media to facilitate exchange of information on PPE best practices and PPE shortages, telehealth best practices, and most importantly information on what works and what doesn’t in COVID patients. We have been fortunate to have input from physicians in Italy in particular who have shared their experiences just as our first wave of patients was hitting the ICUs. I would go so far as to say that these groups have supplanted many traditional sources of information for front-line physicians. There is a broad lack of trust in our national leadership so we are relying on the only ones we can believe in ~ one another. 

In this context, Dr. Kyle-Sidell’s video was widely shared and has garnered intense interest. It is buttressed by some very interesting laboratory data that suggests that COVID interacts with hemoglobin in a way that could explain both the hypoxia and other diffuse clinical manifestations of the disease ~ i.e., there is some plausible biochemistry supporting the clinical observation. We will see whether this line of thought goes anywhere but my impression is that many physicians are starting to think along these lines.

WC sent this note in our on-going exchange of emails last night …

In most cases of respiratory failure (pneumonia, heart failure, ARDS) the small air cells, the alveoli, fill up with fluid or collapse. So we maintain a higher constant pressure (PEEP: Positive End Expiratory Pressure) in the airways to hold them open, and it works well. Um, usually. But COVID seems to be different. More oxygen (normal room air = 21% O2) by which I mean a higher fraction of oxygen delivery up to 100% definitely helps. But the positive pressure ladder which worked well in ARDS seems maybe not to work in covid, and maybe even harms the lungs. We’ve always known that a high level of positive pressure is a double edged sword, but in covid maybe the harms clearly exceed the benefits, which would be truly new. 

This is not to say we should not ever intubate. But it does mean that a) we should avoid intubation as much as possible by increasing the inhaled oxygen and b) if we do have to intubate, then the high positive pressures we have traditionally used maybe are to be avoided, even if it means allowing the blood to have less oxygen in it that we would traditionally accept. 

So why would we intubate if it’s harmful? So traditionally we would intubate for “low oxygen level” – and this (maybe) is out the window. But if a patient is too exhausted to continue to draw air in, or too out of it to protect their airway, these are still obligatory reasons to intubate. We can’t get around those. But it’s seeming clear that anything we can do to increase the number of ventilator-free days is a good thing, and this is a new understanding. 

And having seen the videos, I also have to say the “crazy” hypothesis remains valid. But Dr Kyle-Sidell may be crazy but I don’t think he’s wrong. To be clear, he is also not a “lone voice” in the wilderness. He’s reflecting an evolving consensus among docs who have managed a lot of covid.

Let me emphasize a basic editorial point. TPM is not the place to litigate emerging clinical protocols for novel diseases. And we’re not trying to. See this more as a window into emerging discussions among clinicians around the country wrestling with a novel disease. This isn’t unexpected. It is a truism of modern medical history that wars often see major advances in medicine. Doctors are overwhelmed with large numbers of novel or seldom seen injuries and through a grim process of trial and error they develop new insights into treatment. The origins of modern epidemiology are often traced to the work of John Snow who traced the origins of an 1854 cholera outbreak in London to hand pumped wells that were communicating the contagion. It would be surprising if new methods or certainly more targeted treatments for COVID-19 didn’t emerge from this. Whether this points to one of them is a different matter entirely.

I would recommend people who are interested in this read this article that was published this morning in the must-read StatNews. It looks at these general treatment questions, the different doctors I’ve referenced above in a more global (in both senses of the word) context. Anyone who is reading this for more than news curiosity and general knowledge I highly recommend you focus on the articles I’ve referenced in Medscape and StatNews in this and the earlier post. (Here is the preprint of the Gattinoni article I referenced yesterday.)

Meanwhile TPM Reader NC, an intensivist and pulmonologist at a major academic medical center, sounds a more cautionary note …

Please be cautious with pieces like this. To be horribly blunt, this came off not dissimilar to Trumps uninformed grasping at hydroxychloroquine. While there is a well know (and respected) expert in the distant background (Gattinoni), a grainy YouTube video of a random critical care doc without training in pulmonary disease is … well, the optics are bad. 

For the details. What is being proposed isn’t something terribly new. Our field is full of horrible disappointments, treatments that were based on large, very well run randomized controlled trials and then turned out to be useless, or even harmful. The list is long, activated protein C for sepsis, tight glycemic control, early goal directed therapy for sepsis, pulmonary artery catheters, steroids for x, y and z. However the treatment of ARDS using low tidal volume ventilation is the exception. It not only works, its made a visible change in patient outcomes in ICUs over the past decade.

These are cautions I hope it is clear I take very much to heart.

In a follow up email NC provided this helpful context.

Yes, the observation that this disease is very much hypoxia driven and less about stiff lungs is true, and being discussed a lot, but doesn’t really get into the media as its kind of esoteric. Its the driver behind the deaths, rather than how our usual ARDS patients die. ARDS isn’t a disease, its a fixed set of clinical findings that are used to define a syndrome that we treat with a single common model. COVID patients fit the definition, but behave outside the norm. So they absolutely have ARDS (since its a syndrome, not a disease), but maybe their form of ARDS doesn’t slide neatly into the standard treatment model. 

Re Gattinoni. It’s hard to say. It’s very much inside baseball. Gattinoni is super smart and has made massive contributions to this very field, but we’re still talking about stuff thats pretty theoretical and his articles are not going through the normal peer review process to publication. 

My take would be in a different direction. Gattinoni is noting that there is variability in the disease and that treatment can’t be entirely protocol driven. ARDS is the poster child for protocol driven care. So we badly need physicians on the front line that can make decisions about when to follow protocols and when not to. I think most of us who are Pulmonary Critical Care trained are doing that now. However when you burn through us due due to lack of PPE etc, then the remaining providers will have to use protocols.

This is the most interesting part of the discussion to me as an outside, lay observer. The point of common agreement appears to be that the standards ARDS protocol is not appropriate for all patients; that you need experienced clinicians who can depart from standard protocol based on the nuances of specific patients’ course of disease. The complication is that clinicians with deep experience in respiratory critical care are in short supply at the moment. And an additional hurdle is that the less invasive interventions are actually more dangerous to the clinicians who are often using inadequate personal protective equipment. There is a highly complicated set of trade offs in a context where there is limited knowledge, limited resources (human and technical) and mass mortality.

Josh Marshall, TPM |  Read more:

Image: YouTube

[ed. Do check out the original post. See also: This post about ventilators, and how they could be doing more harm than good (which seems to dovetail with what's being said here) (TPM). Finally there's this: From Fine to Flailing (Reuters).]

Fashion week
via:

Online Education in the Covid-19 Crisis: “It’s Like Coke Dealers Handing Out Free Samples”

Economist Gordon Lafer, author of The One Percent Solution: How Corporations Are Remaking America One State at a Time, has delved deeply into the highly-orchestrated political activities of corporate-backed groups set on changing the American education system in ways that he believes are detrimental to the country’s future. Lafer, who teaches at the University of Oregon Labor Education and Research Center, is a member of the Eugene School District Board and once served as senior policy advisor to the Education and Labor Committee of the U.S. House of Representatives. He sees the Covid-19 crisis as the perfect opportunity for companies far more interested in the bottom line than student learning to seize America’s education system and turn it into a robotic, one-size-fits-all program where teachers eventually disappear from the scene and students, especially the most vulnerable, get left behind. He joined the Institute for New Economic Thinking for a conversation about what’s at state in online learning and how technology, if properly guided, can be good for students, teachers, and parents.

Lynn Parramore: This crisis differs from previous ones in the abrupt movement to online learning that is affecting so many people. Many are cheering tech companies for providing education platforms during school closures. Yet your work issues a cautionary message – warning that Big Business and corporate-backed groups like the American Legislative Exchange Council (ALEC) have coordinated in the past to undermine public education through things like lowering accreditation requirements for teachers, replacing public schools with privately run charters, and – here we come to the Covid-19 moment – to move students to online learning. Is this crisis an opportunity to further their agenda?

Gordon Lafer: I think there’s no question that they view it as a huge opportunity. As you know, I was elected to the board of education in Eugene last year. When the pandemic hit, right away we got a list of all these technology companies that make education software that were offering free access to their products for the duration of the coronavirus crisis. They pitch these offerings as stepping up to help out the country in a moment of crisis. But it’s also like coke dealers handing out free samples.

I can see this in my own school system, where you have pressure from everybody, from students and parents who are saying, okay, seniors need to graduate, and kids need to learn whatever they’re supposed to learn. The easiest thing, the laziest thing to do, is to just get some outside apps and put everybody on that. Well, that’s great for those technology companies and their investors. But it’s terrible for education, partly because so much of education depends on the personal relationship between teachers and students.

LP: Surely that is even more true for the less advantaged students?

GL: That’s right. The kids who are most needy are most in need of an adult point of contact, which is harder to get with online learning. The truth is – and we’ve been talking about this here in Oregon – if we would take the time, and put more work into it, we’re at a point where technology allows much more creative forms of online education than what tech companies are offering.

Parents want somebody who pays attention to their kid. Maybe the kid is shy or has anger problems, whatever it is. The learning platforms the tech companies want aren’t interested in that. They only want to see how fast you do the problem. That’s not going to work for the kids from the most marginalized communities who are not getting education support at home, who come from various kinds of trauma. They, more than anybody, need to be taught by a skilled teacher who knows them as an individual. I think, to some degree, that may be what every parent wants, but teachers will have to take the initiative to create these models.

What makes sense for investors in tech companies, first of all, is uniformity and a product that is scalable. Second of all, they do not want to be dependent on teachers. But online learning doesn’t have to be this way. Technology offers many ways to do it. Unfortunately, the software companies want to do it in this one way that is actually a one-pedagogy-fits-all approach.

In some ways, we may be in a race against the education technology industry, which is just going to try to roll their programs out as fast as they can. In light of that, we really need to work through these better alternatives so we can say, look, this is what we can do instead. We can do something which is much better for everybody’s kids.

LP: What might those creative platforms look like? How might they benefit teachers and students?

GL: There are some interesting ideas that I’ve been talking to people about and that teachers here have been investigating. Suppose you needed to learn seventh-grade English. There might be a teacher who teaches it through poetry. Another teacher might look at it through science fiction or memoir-writing. You could really have more choice for kids, right? Instead of just having your one teacher, you could say, here are three different ways you could learn this material. You can choose because the teachers are online.

Maybe somebody is going to teach elementary school math from the textbook. Another is going to teach it by drawing and allow kids to draw interactively online. Yet another might teach it by saying, I’d like you to go walk around your house and find a shoebox and an egg and a cup, and we can talk about shapes and the relationship of shapes to each other.

We’ve even discussed a possibility where, let’s say a social studies teacher has four classes a day and they’re teaching the same thing four times. Well, they could decide that part of the class – the part that is just repeating a presentation — could be done just once. Everybody could watch that part whenever they want, and that frees up time for the teacher either to have more individual time for phone calls with students or small groups through Zoom chats. You end up with much more personal interaction.

The ironic thing is that we’re at a point where the technology actually enables a lot creative, engaged, teacher-driven education that still maintains, and maybe even strengthens, the personal relationship between teachers and their students.

LP: What is at stake for our kids and the country’s future if we go the one-size-fits all, less engaged route that many tech companies and their investors would prefer?

GL: Well, some kids would do ok with it, but a lot of kids won’t. They won’t be able to learn, and their experience will be one of failure. You can kind of tell how it would happen. While other kids are advancing to the next level, they’re not. And the response to failure provided by the tech company software may not be adequate to that situation. Instead of a teacher helping a student to find a book that makes reading fun while they’re learning phonemes, you might have a program that just offers more drilling. Which is probably not going to help.

You also have to realize that kids, even high school kids, are not going to spend six hours a day sitting in front of a screen doing classes. Some will just stop doing it. In the short-run, I think you’re going to see a lot of problems with that kind of disengagement.

There’s also a huge inequity issue of who has access to Wi-Fi and computers. In the long-run, I think what these companies really want is to say, look, our platforms worked during the crisis, so this is what we should do going forward. We should get rid of teachers. They’ll promote all the reasons why they think it’s better not just for now, but long after the crisis has passed.

LP: Get rid of teachers altogether? How would they get the public to accept that?

GL: One of the things that will help them make that argument is budgets. Assuming we’re in a serious recession for a year or more — that means everybody’s budget is going to get cut. Here in Eugene, the school funding is based on income tax. Whether it’s based on income tax or property tax, you can be sure budgets are going to go down, which means that you’re going to see cuts. Then the tech companies are going to come and say, well, instead of spending $10,000 for a kid to be educated in a classroom, you could spend $7,000 per kid to put them online. The tech companies will be happy, still able to make a 20 percent profit. When you have budget cuts, some people will find this sort of thing becoming more attractive.

by Lynn Parramore, Institute for New Economic Thinking |  Read more:

Image: uncredited

Wisconsin Primary Voters Receive ‘I Voted’ Gravestones

via: The Onion
[ed. See previously: Wisconsin Election Held Amid Virus Fears: Here's What You Need To Know (Duck Soup).

Turin Brakes

New York Fed, FDIC Tout “Opacity in a Banking Crisis” to Keep Corporations, Hedge Funds, PE Firms & Counterparties in the Dark about Weak Banks

US banks are now finding themselves in a situation where homeowners don’t have to make mortgage payments for few months, and renters don’t have to pay rent for a while, which leaves many landlords unable to make their mortgage payments – not to speak of the many Airbnb hosts that have no guests and won’t be able to make their mortgage payments. Commercial real estate is in turmoil because the tenants have closed shop and cannot or won’t make rent payments, and these landlords are going to have long discussions with their bankers about skipping mortgage payments. And subprime auto loans and subprime credit card loans, which were already blowing up before the crisis, are now an unspeakable mess, as tens of millions of people have suddenly lost their jobs.

Amid this toxic environment for the banks, here come the New York Fed and the FDIC and tout the “Value of Opacity in a Banking Crisis,” explaining, supported by empirical data from the Great Depression, that it’s better to stop disclosing balance sheet information about individual banks.

So here we go, as to why it’s important for “authorities” to lie about banks during a crisis. It’s not directed at households, as we’ll see in a moment – but at corporations, hedge funds, PE firms, state and local government entities, and other institutional bank customers whose bank balances by far exceed deposit insurance limits and that would yank their mega-deposits out of that bank at the first sign of trouble.

The authors of the article, a joint production by the FDIC and the New York Fed, cite Great Depression data before the arrival of FDIC deposit insurance to show how lying about balance sheets of individual banks is beneficial in ending runs on weak banks. They’re talking about accounts that were uninsured at the time, and that’s the key for today, as we’ll see in a moment. (...)

Having deposit insurance makes household depositors much less sensitive to bank-level information; once they are insured, depositors no longer have an incentive to monitor banks and so they pay less attention to the publication of balance-sheet statistics. 

As a result, the introduction of deposit insurance makes irrelevant the gains from making the balance sheets of state-charter banks more opaque, placing national‑charter and state-charter back on an equal footing.

But wait… That’s not where this story goes.

It U-turns right at this spot in a conclusion, titled “Why Does This Result Matter Today?”

Even with the FDIC’s deposit insurance program, public disclosure of the portfolio of assets held by banks matters because banks issue significant amounts of debt that is not insured (for example, a significant fraction of bank deposits today are not insured by the FDIC).

These uninsured deposits are in accounts that exceed by a wide margin the FDIC deposit insurance limit of $250,000. They’re held mostly by businesses, institutions, state and local government entities, hedge funds, PE firms, and the like. They may have hundreds of millions or even billions of dollars in their transaction accounts.

Few households have daily liquidity needs that exceed FDIC deposit insurance limits, and savers can spread their bank deposits to different banks and stay within the FDIC limits with each deposit account.

Also, these “call reports” are not easy to dig up and read – though they’re available online. This is something that normal households have neither the time nor the expertise to deal with. So this suppression of information is not directed at savers and households.

But it is directed at businesses, state and local government entities, hedge funds, PE firms, and other institutional bank customers that need big balances in their accounts to fund their operations on a daily basis, engage in transactions, and the like, and that have the staff and expertise to study the call reports and use them as actionable data. And they’d yank their mega-deposits out of that bank at the first sign of trouble appearing in the call reports. (...)

It is interesting that the “value” of suppressing information about bank balance sheets are being touted now as banks are suddenly finding themselves stuck in a financial crisis so vast that the Fed decided to unleash the biggest amount of money printing in history in an attempt to bail out all aspects of Wall Street.

And it is even more interesting that this is so clearly directed at business and institutional bank customers and counterparties that apparently need to be kept in the dark about the health of their banks, lest they yank out their large deposits.

Runs on the bank don’t take place today by people waiting in line at the branch to take out their $500 in savings. They happen when corporations, financial entities, and counterparties lose confidence in the bank and yank their millions and billions out.

by Wolf Richter, Wolf Street |  Read more:

[ed. Kind of raises a red flag, don't you think? See also: ‘It will not go forgotten’: One Seattle business and its tale of two landlords during the coronavirus crisis (Seattle Times).]

This Is Trump’s Fault

"I don’t take responsibility at all,” said President Donald Trump in the Rose Garden on March 13. Those words will probably end up as the epitaph of his presidency, the single sentence that sums it all up.

Trump now fancies himself a “wartime president.” How is his war going? By the end of March, the coronavirus had killed more Americans than the 9/11 attacks. By the first weekend in April, the virus had killed more Americans than any single battle of the Civil War. By Easter, it may have killed more Americans than the Korean War. On the present trajectory, it will kill, by late April, more Americans than Vietnam. Having earlier promised that casualties could be held near zero, Trump now claims he will have done a “very good job” if the toll is held below 200,000 dead.

The United States is on trajectory to suffer more sickness, more dying, and more economic harm from this virus than any other comparably developed country.

That the pandemic occurred is not Trump’s fault. The utter unpreparedness of the United States for a pandemic is Trump’s fault. The loss of stockpiled respirators to breakage because the federal government let maintenance contracts lapse in 2018 is Trump’s fault. The failure to store sufficient protective medical gear in the national arsenal is Trump’s fault. That states are bidding against other states for equipment, paying many multiples of the precrisis price for ventilators, is Trump’s fault. Air travelers summoned home and forced to stand for hours in dense airport crowds alongside infected people? That was Trump’s fault too. Ten weeks of insisting that the coronavirus is a harmless flu that would miraculously go away on its own? Trump’s fault again. The refusal of red-state governors to act promptly, the failure to close Florida and Gulf Coast beaches until late March? That fault is more widely shared, but again, responsibility rests with Trump: He could have stopped it, and he did not.

The lying about the coronavirus by hosts on Fox News and conservative talk radio is Trump’s fault: They did it to protect him. The false hope of instant cures and nonexistent vaccines is Trump’s fault, because he told those lies to cover up his failure to act in time. The severity of the economic crisis is Trump’s fault; things would have been less bad if he had acted faster instead of sending out his chief economic adviser and his son Eric to assure Americans that the first stock-market dips were buying opportunities. The firing of a Navy captain for speaking truthfully about the virus’s threat to his crew? Trump’s fault. The fact that so many key government jobs were either empty or filled by mediocrities? Trump’s fault. The insertion of Trump’s arrogant and incompetent son-in-law as commander in chief of the national medical supply chain? Trump’s fault.

For three years, Trump has blathered and bluffed and bullied his way through an office for which he is utterly inadequate. But sooner or later, every president must face a supreme test, a test that cannot be evaded by blather and bluff and bullying. That test has overwhelmed Trump.

Trump failed. He is failing. He will continue to fail. And Americans are paying for his failures.

by David Frum, The Atlantic |  Read more:

Image: Image: Ray Stubblebine/Reuters

[ed. I try to avoid finger-pointing in the middle of a crisis - there'll be plenty of time for that later - but this article provides an excellent chronology of how the US response to the coronavirus threat unfolded (up to this point - 4/8/2020).]

Joni James

Reflections on a Disaster (Update)

From the Duck Soup post: Reflections on a Disaster. Updated occasionally to see how closely we're following the script.

Update (4/7/2020): I forgot to add the main issue of conflict once the response/execution process is in full swing: More Harm Than Good. At the time of this writing we're closing in on what experts hope will be peak contagion/recorded deaths. Expect to see an escalating struggle between health experts/politicians/others vs. economists/politicians/business leaders/others on the issue of when to ease up on social distancing measures (basically, defining "success"). I'm already seeing calls to isolate the most vulnerable (old, underlying health conditions, etc.) and letting everyone else take their chances (possibly developing 'herd immunity' in the process). In other words, pitting numbers of deaths against numbers of unemployed and the health of the economy - which itself is on life-support at the moment.

And, if there's a second wave?

See also: The Fight Against COVID-19: “Bending the Curve” & Then What? (Wolf Street); and Wishful Thinking on Ending Coronavirus Lockdowns (Naked Capitalism).

Real World Depression Measurement

The largest non-pharma antidepressant trial ever conducted just confirmed what we already knew: scientists love naming things after pandas.

We already had PANDAS (Pediatric Autoimmune Neuropsychiatric Disorders Associated with Streptococcus) and PANDA (Proton ANnhilator At DArmstadt). But the latest in this pandemic of panda pandering is the PANDA (Prescribing ANtiDepressants Appropriately) Study. A group of British scientists followed 655 complicated patients who received either placebo or the antidepressant sertraline (Zoloft®).

The PANDA trial was unique in two ways. First, as mentioned, it was the largest ever trial for a single antidepressant not funded by a pharmaceutical company. Second, it was designed to mimic “the real world” as closely as possible. In most antidepressant trials, researchers wait to gather the perfect patients: people who definitely have depression and definitely don’t have anything else. Then they get top psychiatrists to carefully evaluate each patient, monitor the way they take the medication, and exhaustively test every aspect of their progress with complicated questionnaires. PANDA looked for normal people going to their GP’s (US English: PCP’s) office, with all of the mishmash of problems and comorbidities that implies.

Measuring real-world efficacy is especially important for antidepressant research because past studies have failed to match up with common sense. Most studies show antidepressants having “clinically insignificant” effects on depression; that is, although scientists can find a statistical difference between treatment and placebo groups, it seems too small to matter. But in the real world, most doctors find antidepressants very useful, and many patients credit them for impressive recoveries. Maybe a big real-world study would help bridge the gap between study vs. real-world results.

The study used an interesting selection criteria – you were allowed in if you and your doctor reported “uncertainty…about the possible benefit of an antidepressant”. That is, people who definitely didn’t need antidepressants were sent home without an antidepressant, people who definitely did need antidepressants got the antidepressant, and people on the borderline made it into the study. This is very different from the usual pharma company method of using the people who desperately need antidepressants the most in order to inflate success rates. And it’s more relevant to clinical practice – part of what it means for studies to guide our clinical practice is to tell us what to do in cases where we’re otherwise not sure. And unlike most studies, which use strict diagnostic criteria, this study just used a perception of needing help – not even necessarily for depression, some of these patients were anxious or had other issues. Again, more relevant for clinical practice, where the borders between depression, anxiety, etc aren’t always that clear.

They ended up with 655 people, ages 18-74, from Bristol, Liverpool, London, and York. They followed up on how they were doing at 2, 6, and 12 weeks after they started medication. As usual, they scored patients on a bunch of different psychiatric tests.

In the end, PANDA confirmed what we already know: it is really hard to measure antidepressant outcomes, and all the endpoints conflict with each other.

I am going to be much nicer to you than the authors of the original paper were to their readers, and give you a convenient table with all of the results converted to effect sizes. All values are positive, meaning the antidepressant group beat the placebo group. I calculated some of this by hand, so it may be wrong.

PHQ-9 is a common depression test. BDI is another common depression test. GAD-7 is an anxiety test. SF-12 is a vague test of how mentally healthy you’re feeling. Remission indicates percent of patients whose test scores have improved enough that they qualify as “no longer depressed”. General improvement was just asking patients if they felt any better.

I like this study because it examines some of the mystery of why antidepressants do much worse in clinical trials than according to anecdotal doctor and patient intuitions. One possibility has always been that we’re measuring these things wrong. This study goes to exactly the kind of naturalistic setting where people report good results, and measures things a bunch of different ways to see what happens.

The results are broadly consistent with previous studies. Usually people think of effect sizes less than 0.2 as miniscule, less than 0.5 as small, and less than 0.8 as medium. This study showed only small to low-medium effect sizes for everything. (...)

What does this mean in real life? 59% of patients in the antidepressant group, compared to 42% of patients in the placebo group, said they felt better. I’m actually okay with this. It means that for every 58 patients who wouldn’t have gotten better on placebo, 17 of them would get better on an antidepressant – in other words, the antidepressant successfully converted 30% of people from nonresponder to responder. This obviously isn’t as good as 50% or 100%. But it doesn’t strike me as consistent with the claims of “clinically insignificant” and “why would anyone ever use these medications”?

by Scott Alexander, Slate Star Codex |  Read more:

Image: SSC