Wednesday, July 22, 2020

Who’s That Masked Man!

By David Stockman - July 22, 2020 at 01:46PM

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It should be evident by now that the Donald’s one and only north star is his own glorification and self-aggrandizement. That’s why he’s totally flat-footed at this crucial moment in the pandemic saga.

What he needs to be doing is taking off the gloves for a bare-knuckled counter-attack against the Virus Patrol, which is ruining America’s economic and fiscal future.

Instead, yesterday he put on the Mask and the tweeted a juvenile boast that he’s the most patriotic muzzle-wearer in the land. Apparently, there is no place the Donald won’t go to reverse his sagging poll results:
We are United in our effort to defeat the Invisible China Virus, and many people say that it is Patriotic to wear a face mask when you can’t socially distance. There is nobody more Patriotic than me, your favorite President!

But no, Donald, you ain’t no favorite among lovers of liberty, capitalist prosperity, free market opportunity and the constitutional fettering of state power.

After all, you said you came to Washington to drain the Swamp, yet there is no more odious set of Swamp Creatures than the camarilla of NIH/CDC/FDA doctors and apparatchiks, along with their Big Pharma and Gates Vaccine lobby allies, who bamboozled you into the folly of Lockdown Nation last March.

But now—when its way past time to reverse course and repudiate your malpracticing doctors— you actually genuflect to their Mask Totem, when you should be declaring loudly and unequivocally the opposite: Namely, that the the coronavirus has meet it match in the immune systems of the overwhelming share of Americans, and that it’s beating a fast retreat into the archives of still another infectious winter virus that passed through the population and moved on.

On the one hand, the Grim Reaper of Covid has long since vacated the epicenter of its brief rampage in New York, where the foolish actions of Gauleiter Cuomo caused a surge in nursing home infections, sickness and death, which accounts almost entirely for the four week surge in the state’s WITH-Covid death count during April.

By contrast, during the current month thru July 20, New York has tested like crazy, but has come up with no cigar with respect to new Covid cases. Compared to a total of 1,250,000 tests during that 20-day period, only 13,872 have tested positive, and many of those are surely the same people taking and re-taking their PCP swab in order to gain license to go back to work.

In any event, the gross positive rate is just 1.1 percent and would probably well less than that if the data were de-duped.

Likewise, there have been an average of just 10 WITH-Covid deaths reported during the first three weeks of July, which self-evidently is a tiny fraction of 500-800 deaths per day—heavily in the nursing homes—reported during April. Moreover, there is no real mystery as to why the curve is (thankfully) plunging to the lower right of the chart and heading right off the page. This virus like other virulent influenza’s strikes the weakest and most vulnerable population first, and thereafter tends to meet its match as the immune systems of the healthier parts of the population join the battle.

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What that natural progression of the contagion means, of course, is that Governor Cuomo’s economically destructive lockdown orders had virtually nothing to do with the coronavirus’ welcome retreat.

That’s evident by comparison with Sweden, which had virtually no lockdowns at all. As of yesterday, however, the WITH-Covid death rate was 130 per 100,000 persons for New York state overall, and 235, 223 and 200 per 100,000, respectively, in the Bronx, Queens and Brooklyn.

By contrast, the mortality rate in Sweden has been about 55 per 100,000, and the preponderant share of those have been people over 70 years, heavily institutionalized in care facilities. In any event, the chart below says it all. Governor Cuomo’s boot heels did not “flatten the curve” relative to the open social and economic regime in Sweden, and also resulted in a 2.5X higher mortality rate on a cumulative basis.

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By the same token, there is no “second wave” crisis in the so-called hot spot areas of the Sunbelt, either. Like in the case of New York, the virus is simply moving through the population in a time frame that is a month or two lagged relative to the original contagion’s spread in the Northeast; and, again, it is meeting its match in the immune systems of the healthier parts of the population.

The proof for that is straight-forward and is measured by the hospitalization rate per new case. The latter has plunged from 15-20 percent in the early days of the contagion in these new so-called hot spot states, but is now in the low single digits. The data for new cases, hospitalizations and the hospitalization ratio for the first 20 days of July includes the following:

· Florida: 207,960 new cases, 6,726 additional hospitalizations=3.2 percent;

· Arizona: 65,968 new cases, 1,962 additional hospitalizations=3.0 percent;

· Tennessee: 36,245 new cases, 1,047 additional hospitalizations=2.9 percent;

· Georgia: 64,284 new cases, 3,996 additional hospitalizations=6.2 percent;

· Arkansas: 13,150 new cases, 883 additional hospitalizations=6.0 percent;

· South Carolina: 35,046 new cases, 1,328 additional hospitalizations=3.8 percent;

· Mississippi: 21,642 new cases, 610 additional hospitalizations=2.8 percent

In a word, hospitalization rates of 3-6 percent are not indicative of a public health crisis or a dread disease laying waste to the population. In fact, they are only slightly above the hospitalization rates for normal winter influenza.

The chart below is the CDC’s assessment for the 2010-2018 seasons, and shows that the hospitalization rate per infected case has averaged 1.5 percent-2.0 percent over that eight year period; and that’s against a generous guesstimate of total influenza illnesses, not lab confirmed cases as with the current Covid stats.

Still, the point hardly needs saying. We do not close the bars, restaurants, gyms, hair salons, movies, malls etc. every winter owing to the flu. Yet that’s exactly what the Donald’ camarilla of malpracticing doctors are now urging for the states listed above in the face of a virus that is only slightly more severe than normal.

Stated differently, even now 94-97 percent of the ballyhooed “new cases” in the so-called Red Zone states are either asymptomatic or result in mild illness and recovery at home. The fact that what the Donald mistakenly thought was the Greatest Economy Ever is now swamped in unemployment, business failures, payment delinquencies and a fearful, muzzle-ridden public is ultimately the doing of the Masked Man above.

Harry Truman was right. The buck stops in the Oval Office.

At the end of the day, it was the Donald who empowered Dr. Fauci, who, in turn, paved the way for the governors, public health departments, mayors and lesser officials to attack the livelihoods and well-being of their own constituents in their tens of millions.

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To add insult to injury, however, you can leave it to Dr. Fauci. The man had the gall to offer New York state as a shinning example to the rest of the nation when, in fact, it’s governor is damn near criminally negligent on the state’s nursing home death tsunami alone.

The fact is, New York’s mortality rate per 100,000 is well more than 2X greater than the European basket cases of Italy, Spain and the UK, and is actually more than 4.5X higher than Florida’s and 9.5X higher than that of Texas.

In the face of such abysmal judgement, the Donald’s trademark “you’re fired” would be the least that might be expected. But what we got was not just the ostentatious tweet of POTUS in a muzzle, but a renewed signal for the power-grabbing, Trump-hating local Dem officialdom to intensify their attacks on the main street economy.

The Dem rulers of Broward County, Florida, for example, have just now issued an order requiring homeowners to enforce the mask rule against visitors in their own homes-–upon penalty of fine or jail and subject to county inspector surveillance.

Likewise, County mayor Dale Holness’ announced a curfew and criminal penalties for having more than 10 people in your own home, or being part of a gathering of more than 10 people inside a PRIVATE RESIDENCE.

Of course, Broward County is just a microcosm of the economy-crushing mayhem that has been unleashed by the Donald’s own presumptive subordinates. This is no longer just a few aggressive governors like those of New York, New Jersey and Michigan in the early days of the pandemic: What you have now is a veritable army of petty officialdom, enforcers and self-appointed snitches literally tearing apart the fabric of economic and social life in much of America.

Of course, the Donald is clueless about this because the retainers and sycophants who surround him insure he doesn’t grasp the enormity of the economic collapse that has been triggered, and which shows no sign of some kind of miraculous “V”-shaped rebound.

Nor does he realize that the pre-Covid economy was a fragile tinder-box of debt, speculation and malinvestment that was stumbling forward on cyclical fumes and the residual growth momentum of capitalism—even in the face of the giant obstacles to sustainable prosperity stood up by the state and especially its central banking branch.

So any old Black Swan could have triggered the deep recession now underway. But owing to the sudden, concentrated blunderbuss attacks of Lockdown Nation, this one will prove to be the blackist avian visitor of all.

For instance, nothing like this chart has ever been seen before in the annals of modern history. Compared to a peak of 6.6 million UI beneficiaries at the bottom of the Great Recession (May 2009), there are now upwards of 32 million workers drawing state and Federal UI benefits. That’s more than 20 percent of the 158 million employed workers as of February.

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Ordinarily, the jolt to income and spending from a 32 million person army of the unemployed would have sent the US economy reeling months ago because in the hand-to-mouth world that the Donald inherited, 80 percent of the households have no meaningful financial cushion or rainy day funds.

Of course, that unemployment based income and spending plunge is now being temporarily cushioned by the unprecedented eruption of free stuff from Uncle Sam that was packed into the Everything Bailouts three months ago. That includes upwards of $500 billion of wage support via the PPP program at the SBA, the $1,200 helicopter checks which went out to 160 million citizens and especially the $600 per week Federal “top-up” on UI benefits.

The impact of the latter in disguising the economic pain implicit in the UI chart above cannot be over-emphasized. On a nationwide average basis, the regular state UI program pays about $500 per week or an annualized rate of $26,000 to covered workers.

In the middle of the night during the frenzied legislative sessions of late March, however, Congress upped the ante to $1,100 per week, which annualizes to $57,200.

Them there is different kettles of fish entirely!

But the Federal top-up also costs $75 billion per month and has put nearly two-thirds of unemployed recipients in a higher income bracket than when they were on the job drawing a paycheck; and, also, by the way, producing output of goods and services which are the real building blocks of the macro-economy.

It now comes to pass that at least some of the sleep-walking GOP senators have figured out that you can’t shell out a $75 billion per month dole for unemployment and expect the engines of economic life to restart or the tattered remains of Washington’s fiscal accounts to ever be repaired.

So there is a rather considerable chance that the battle over the impending Everything Bailout 4.0 will be prolonged, and that the giant air-cushion of transfer payments which has disguised the Lockdown Nation disaster will be abruptly deflated in August.

The chart below, in fact, shows how the phantasmagoria of free stuff from Washington since March has tuned upside down the traditional notion of a recession, and especially one where one-fifth of the labor force is unemployed. The chart shows total monthly household personal income—including dividends, interest and proprietors profits which mostly goes to the top 10 percent—-since January.

Incredibly, during April when the bottom literally dropped out of industries ranging from air travel to neighborhood restaurants and bars, total household income was actually 5 percent higher than it was during January—a time when both Wall Street and the Donald claimed the US economy was booming like never before.

Since then, household income has managed to stay right at the pre-Covid January level, notwithstanding a loss of wage and salary disbursements that is still running at a negative $850 billion annual rate.

What portends for August and many months to come, therefore, is the delayed income and spending contraction of a battered economy which has already experienced a double-digit plunge in the actual production of goods and services.

Needless to say, that’s going to shock both Wall Street and the Masked Man alike.

And it will be enough of a blow to voter confidence—even in the Trumpite precincts of Flyover America—so as to insure that the best outcome possible on November 3 will be the Mother-of-All-Hanging Chad battles at the Electoral College and Supreme Court, while the likely outcome is a return of the vengeful coalition of Clintonista poltroons and Progressive-Left ideologues to the seats of power on both ends of Pennsylvania Avenue.

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In either contingency, today’s lagging indicators of the underlying economic distress generated by Lockdown nation will be aggravated enormously. These charts on failing rent collections and small business closures are, in fact, just the tip of the iceberg—and will continue to worsen even if some gussied-up Everything Bailout 4.0 is cobbled together on Capitol Hill before the real election season blood-lettings get underway.

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Indeed, on any number of high-frequency variables, the data has already plateaued and that’s before the August plunge and the most vicious election battle in modern history have taken their toll.

And now with the new lockdown orders and a renewed MSM campaign of Covid-Hysteria in the Sunbelt, there is indeed a “second wave” coming—that is, more hemorrhaging of jobs, incomes, defaults and business failures across the length and breath of main street America.

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As we said, anyone who actually believed the Donald had any semblance of a plan for MAGA should now be asking “Who’s that Masked Man”?

We’re not.

Reprinted with permission from David Stockman's Contra Corner.



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