Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

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Geopolitics and the Economy After Covid-19

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On April 7, 2020

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Nope, not yet

First the good/bad news. Covid-19 isn’t going to bring down the “system.” It’s not a hard enough shock.

There are things we should learn from it, about what work is actually needed, about the fact that more people will not die because of reduced pollution during isolation periods than from the virus, and so on.

Mostly, we won’t learn those lessons.

One lesson which will be, not exactly learned, but used, is that if you don’t make it in your country, you can’t be sure of having it when it matters. Physical manufacturing matters: It can be designed in the US, but if it’s made in China, well…Trump almost stopped 3m from selling masks to Canada, be sure that the fact that he can has also been noticed.

There were already powerful forces, and not just in the Trump administration, who were unhappy with the current world trade and offshoring system. The more intelligent parts of the American permanent ruling class have noticed that the actual threat to American hegemony is China, and that when China makes things the US needs, China has the US by the balls.

They’ve been wanting to bring as much production back to the US as possible and they’ve been wanting to force the world into two trading blocs. These are the sort people who become livid when a European country chooses Huawei 5G, and start making threats about NATO.

They are, of course, right to be worried. The offshoring of production had catastrophic effects for Britain, when they off-shored to the US in the 19th century. They said the same sort of things Americans say now, “We still design, they just make the stuff.” That didn’t last: Manufacturing produces designers in time, there are things learned best when you’re right next to the plants. It took about three decades, but the design moved to the US, and Britain never recovered, eventually surviving through financialization, a weak shadow of itself, sustained on rents which the rest of the world can easily, one day, decide not to pay.

So Covid-19, which is putting shocks through the trade system anyway, is going to be used to justify bringing production back to various countries, to re-shoring. Trade will go down, not up, the supply chain will be less broken into pieces, and there will be a push towards a new cold war with two trade blocs. There may wind up being three depending on what Europe does, but the plan is to force Europeans into the US bloc.

In general economic terms in the US and UK, what will happen is just what happened after 2008—the big boys will be bailed out, those who have money (or are given trillions by the Fed and Treasury) will then buy up distressed assets. There will be fewer, bigger players again, the general economy will be worse for ordinary people, blah, blah. You know the play.

This won’t lead to revolution or revolutionary change yet, I suspect. I think it’ll take at least one more big shock before people become desperate enough. And, of course, the right play is to pick some part of the poor and have them oppress the other half of the poor in exchange for not-too-shitty a life. Poor white sharecroppers who get to call the equivalent of African Americans “boy.”

That play, given the weakness of the left in America and the UK, may well work. We shall see.

But be sure of this, there will be more shocks. This is a system which has no “give.” It has no surplus capacity to handle shocks, not at the real economy level: All our elites know is politics and printing digital money and giving it to their friends, without insisting on real production. Oh, they’ll try to re-shore production, but they are fundamentally incompetent and will run it badly. Be sure of that.

So this isn’t the big one. But climate change is rumbling, resource shortages are onrushing, and our sclerotic society and incompetent elites will turn what should be shocks that are easily handled into crisis after crisis.

The future is going to be interesting. Be prepared. The old world is dying, the new world has not yet been born, and there will be a great deal of pain and screaming in both the death and birth.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

 

April 7th US Covid Data: Some Signs of Flattening

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On April 7, 2020

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Our benefactor wrote:

You can visibly see the trendline in the bar chart starting to curve. (A doctor) and I were discussing what flattening the curve means from a data perspective. Most graphs are log graphs. Ours is a linear one. From his, a doctor’s perspective, flattening would be the number of cases showing up at the hospital every day. In that sense, nationally, we’re right there. It varies from state to state.

I did a three-day average for new (usually tested) cases, and we’ve peaked over the last two days. Hopefully, that trend continues. It’s hard to tell, because the daily numbers are much more erratic.

Seems like good news. Remember that all of this is on a delay, people walk around without symptoms, then get symptoms, then they get worse and they go to the hospital and usually that’s when they get tested unless they’re important. You can see something similar in the doubling rate for cases vs. deaths: The cases doubling rate peaks eight days before deaths–people get to the hospital, then it takes them some time to die.

If this is the peak, it’s far better than it could have been. Do remember that there’s a long tail even if it is brought down, and even if there’s good testing (like in South Korea). In the US, there may well be multiple peaks.

Still a ways to go.

In other news, UK Prime Minister Boris Johnson is in the hospital and has been intubated. At this point his odds of survival are about 30%, and being on a ventilator sometimes does long term damage, including to brain function.

Boris, of course, deliberately shook hands with infected patients and his original plan for Covid-19 was to not bother with self-isolation. It’s safe to say that his delays will probably be responsible for perhaps a couple thousand avoidable UK deaths.

I dislike anyone suffering, so I hope he’s well-sedated. Ventilators, having had one in briefly in my 20s for surgery and afterwards, feel unbelievably bad. It’s not an exaggeration to say I have lived a life filled with massive pain and suffering, sometimes at levels that pain killers couldn’t deal with, but I think having that ventilator breathe for me may top the list.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

April 6th US Covid-19 Data

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On April 6, 2020

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There as been significant improvement in the rate of increase of both deaths and existing cases. Original predictions were a peak at April 9th (at a 0 percent rate); our benefactor notes that seems unlikely, but we’re definitely moving in the right direction.

Note that when cases drop and we are taken off isolation, what will happen is another round of infections, then another round of isolation. Some states are still not isolating and some started only recently, so there’s still road to go, and those non-isolating states constitute pools of infection. I expect a significant spike from Florida, assuming the deaths and cases are counted.

Both death and infection rates remain understated. We will only find out the actual number of deaths when population studies are done afterwards.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

April 5th Covid Data

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On April 5, 2020

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A note from our benefactor:

April 4th’s report was skipped because the data were from 2:25 pm Saturday afternoon. The drop in doubling rates reflect the additional six hours of delay.

Today’s data normalize.

 

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

April 3rd US Covid-19 Data

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On April 3, 2020

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From our benefactor. There’s been a slight reduction in speed of increase of cases. The death rate continues to increase. I think we still have some serious undercounting going on, and in particular I think it’s a good idea to keep an eye on Florida.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

Why Western Elites Are So Incompetent and What the Consequences Are

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On April 2, 2020

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The Course of Empire by Thomas Cole

The Course of Empire by Thomas Cole

The coronavirus has been striking for the fact that Asian societies have mostly handled the crisis competently (though there’s been variation in how competent), and Western elites, with some exceptions (Germany, for example) have not. At the extreme incompetence level are the US and the UK.

Let’s chalk this up to aristocratic elites. Aristocrats, unlike nobles, are decadent, but don’t stop with that word; understand what it means.

Elites who are not aligned with the actual productive activities of society and are engaged primarily in activities which are contrary to production, are decadent. This was true in Ancien Regime France (and deliberately fostered by Louis XIV as a way of emasculating the nobility). It is true today of most Western elites; they concentrate on financial numbers, and not on actual production. Even those who are somewhat competent tend not to be truly productive: see the Waltons, who made their money as distributers–merchants.

The techies have mostly outsourced production; they don’t make things, they design them. That didn’t work out for England in the late 19th and early 20th centuries and it hasn’t worked well for the US, though thanks to Covid-19 and US fears surrounding China, the US may re-shore their production capacity before it is too late.

We also have a situation where Western elites are far removed from the actual creation of the systems they run. This is most true in in the US, and to a lesser extent in the UK, which did not suffer the massive bombing and destruction of most of the rest of Europe (the Blitz was minor compared to the bombs dropped on Germany, for example). Of course, reconstructing bombed societies is not the same as pulling oneself out of poverty.

The best handling of the coronavirus crisis in the world was possibly Vietnam, who are run by a generation that just pulled themselves out of poverty. Other excellent handling has happened in societies which still remember times of poverty or which were conquered and set free (Japan/Germany). China’s Xi, probably the most incompetent, also managed the crisis badly, but still better than the US/UK: Once he got serious, he got really serious. Xi, while a princeling, had a hard early life and was forced to work on the communes and so on.

This is all standard three-generation stuff: The first generation builds, the second generation manages, and the third generation wastes and takes it for granted because they’ve never known anything else. Sometimes that extends to four generations or more, but that requires a system which properly inculcates its elites, plus something to force the elites into at least some of the same experiences as the peons. We do not have that kind of a system.

Nobles, as Stirling Newberry explained to me years ago, are elites who make a point of being better than the people below them: better fighters, better farmers, and so on. Aristocrats are people who play court games, which is what financialized economies supported by central banks and bought politicians are. These people aren’t even good at finance. They were actually wiped out in 2008, but used politics to restore their losses and they were/are wiped out by this crisis, but are using politics (the Fed/Congress/the presidency) to restore their losses. The Fed is doing one trillion of operations a day.

So our elites are fantastically incompetent even at finance. The vast majority are completely disconnected from actual production, at best they are distributors. All they are good for is playing court games, i.e., politics. They can’t manage the real economy, they don’t run it, they don’t live in it, and they aren’t subject to its rigors. They live in a Versailles, almost completely disconnected from society except in crises, when they print money to save themselves, and download costs onto the peasantry.

A society such as this cannot survive in this form. Eventually there is an existential crisis which cannot be papered over by the printing of (virtual) money. Perhaps it is a real economic collapse, perhaps it is a natural catastrophe of near-Biblical proportions, or perhaps it is simply the peasants revolting and paying a visit to Versailles.

The vast spread of guillotine memes over the past four years should alarm our elites, but mostly, they seem to feel invulnerable and are still working to preserve their position in the system rather than fix the system and the society. You can see this in how Democrats are standing up a clearly senile Biden and denying the peasantry health care, even in the face of pandemic.

An elite which refuses to manage the economy will either cause its own end, the end of its country’s prosperity and dominance, or both.

Often both.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

April 2nd US Covid-19 Update

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On April 2, 2020

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A note from our benefactor about changes to data calculations today:

The charts are slightly different this morning. Due to the inimitable comments of Stormcrow, I have changed the doubling rate to account for compounding. Previously, I was using an arithmetic doubling. This way is more accurate, but but also measurably reduces the doubling time. The exponential function is partly what makes COVID-19 dangerous. I am using the following formula: =Ln(2)/Ln(1+(percent increase), where Ln = natural Log and return the same results as Stormcrow did in his post.

Also, for those of you checking the Johns Hopkins data, it is not identical. I typically pull the data after 8:30 am every day, but remove Puerto Rico, Guam, and the Virgin Islands, because JH does not always include them in the data sets. It’s very hard to include them intermittently.

Again, thanks to Stormcrow for making this better,
gnogknoh

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

April 1st US Covid-19 Data

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On April 1, 2020

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Courtesy of our benefactor. Death rate continues to climb. The best practice death rate seems to be about 1%, this is 2.1%, but much of that may be due to under-counting cases given the lack of testing. Deaths will also be under-counts, but not as much as infections.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

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