Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared in Project Syndicate February 24th.
February 26, 2020 — At the start of the year, the economic mood was tending toward the optimistic. True, growth had slowed a bit in 2019. US GDP grew 2.3 % in 2019, down from 2.9 % in 2018. World growth was weak in 2019 as well: 2.9% according to IMF estimates, down from 3.6 % the year before. Still, there had been no recession. And forecasts as recently as January called for world growth to rebound in 2020.
Now, just since January, there is new reason for pessimism. Recessions are exceedingly difficult to forecast and the wise economist avoids trying. But the odds of a global recession have risen dramatically. The reason is the coronavirus that originated in Wuhan, technically named COVID-19.
Early appraisals of the economic impact of the virus were reassuring. The historical record from other similar epidemics, such as the 2003 SARS virus, is relatively sanguine: an individual country may take a hit to GDP in a given quarter (an estimated minus 2 % for China in the 2nd quarter of that year), but the macroeconomic impact is limited in time and space. Typically, the country’s economy bounces back quickly in the subsequent quarters, as consumers release pent-up demand and firms rush to fill back orders and re-stock inventories. The result is that it can be hard to discern an impact in the country’s GDP for the year as a whole. The same pattern usually holds for the effects of a much broader class of natural disasters such as hurricanes.
This coronavirus, however, has now become a more serious case than 2003 or other precedents. It could well push the world into recession. One criterion for global recession sometimes used by the IMF is world growth below 2 ½ %. (Unlike growth in advanced countries, global growth very rarely falls below zero – with the exception of the Great Recession of 2008-09 — because developing countries average higher trend growth.) Another, much tougher, criterion is negative growth in per capita GDP.
Why this time could be worse
It is not just that the number of reported deaths this time far exceeds the corresponding number of SARS casualties. The economic effect is likely to be substantially bigger for a number of reasons.
To begin with, the Chinese economy is more vulnerable. Its growth has been substantially slower in the most recent decade than in the preceding one. A slowdown from the 10 per cent growth rates of earlier decades was only natural and had hitherto been accomplished without a hard landing. But high levels of outstanding bad loans leave the economy vulnerable to a shock like the current one. Some signs already point logically to a sharp slowdown in economic activity, presaging growth significantly below the official 6.1 % rate last year.
Next, the virus might spread to other countries in a more major way. Korea and others in the region have already been hard-hit, responding with some emergency measures. It is not necessary for a high proportion of the population to be infected in order to impact a high proportion of a country’s economy. The effect of contagious disease tends to be disproportionate (even though understandable), in the sense that healthy people refrain from travel, shopping and work, even when such individual decisions are voluntary.
For another thing, the world economy is more dependent on China today than it was in 2003. Back then, China constituted only 4 % of global GDP. In 2020, it makes up 17% (at current exchange rates). Long supply chains mean that output in other countries can be held up by disruptions of one or more stages of value-added in the production process in China.
Which economies are vulnerable?
Many parts of the world economy are vulnerable. Commodity-exporters are high on the list, as China tends to be their largest customer. This means Australia and most of Latin America, Africa and the Middle East. Chinese booms in 2003-08 and 2010 boosted world commodity prices and the subsequent Chinese slowdown had already worked to dampen commodity markets since 2015. Even developing countries that are not commodity-exporters are likely to be hit through financial channels, as investors have now moved sharply to a “risk-off” footing.
Japan has already suffered a jolting drop in GDP in the most recent quarter [minus 6.3%, annualized]. This resulted from an October increase in its consumption tax. The negative effect was as predictable as were the recessionary effects of earlier hikes in the consumption tax in April 1997 and April 2014. Adding on top of this the loss of trade with China now makes likely a Japanese recession, defined as two quarters of declining GDP.
European manufacturing is vulnerable. Europe is more dependent on trade — linked even more extensively to China through a web of supply chains — than is the United States. Italy has been hit directly by the contagion. Germany narrowly escaped recession last year, but might not be so lucky this year in the absence of some fiscal expansion. The reality of Brexit may finally have the long-feared negative economic impact in the United Kingdom.
What about trade policy?
The common story at the start of 2020 was that earlier fears of a recession in 2019 had arisen from the trade wars launched by Donald Trump the year before, but that significant negotiating progress had recently been made (specifically ratification of the USMCA and Phase 1 of an agreement with China). These agreements, it was said, had alleviated risk concerns among businesspeople and had restored a positive economic outlook.
I don’t buy this story. True, the agreements with China and Mexico/Canada are improvements relative to the alarming path that Trump had previously threatened, including his threat to withdraw from NAFTA and his plans to put tariffs on the remaining imports from China. But the new agreements are fragile. They are no improvement relative to where we were two years ago.
To the contrary. The various changes made by the USMCA relative to NAFTA are generally small. Their net impact is likely, if anything, to be negative. This is especially true of the uncertainty about the longer-term future of the FTA.
The China “Phase I” deal leaves high tariffs in place. Moreover, it is a fragile creature with low credibility on both sides. Claims that China will buy an extra $200 billion of US exports are unlikely to translate into higher US exports. China may not be able to deliver on this promise and, even if it does, the result would be to divert US exports from other customers.
The stock market appeared remarkably unconcerned about risks arising from US trade policy, the coronavirus, or anything else, continuing to climb in the first eight weeks of this year. Finally on February 24 it began to fall, evidently registering that the virus was serious after all.
By measures such as P/E ratios, the market is still high. Maybe investors have had it wrong. They correctly point out that a comparison of stock yields with interest rates says the stock market is not too high. But this just means that the bond market is even higher than the stock market. Investors may take too much comfort from the Federal Reserve’s three interest rate cuts last year. It is self-evident that, should the US economy falter, there is nowhere near enough room for the Fed to cut interest rates by 500 basis points as it has in past recessions. It would not be able to save us.
Even if a recession does not materialize in the near-term, Trump’s trade policy may signal a long-term break in post-war history, a definitive end to the six-decade era in which international trade steadily rose as a share of the economy, accompanying an historic period of prosperity and peace. We may be looking at a new trend of decoupling from China in particular and de-globalization in general – almost unthinkable until recently. In this, the coronavirus could be just more fuel for the fire.
This post written by Jeffrey Frankel.
“Commodity-exporters are high on the list, as China tends to be their largest customer. This means Australia and most of Latin America, Africa and the Middle East. Chinese booms in 2003-08 and 2010 boosted world commodity prices and the subsequent Chinese slowdown had already worked to dampen commodity markets since 2015.”
Australia sells a lot of commodities such as copper to China, which had me thinking what is happening to copper prices:
At the beginning of the year, the price had risen to $2.87 per pound. But then copper prices began to plummet. Of course, commodity prices are known for their volatility. Which of course makes the Stephen Moore view that we should based monetary policy on commodity prices kind of insane!
‘True, the agreements with China and Mexico/Canada are improvements relative to the alarming path that Trump had previously threatened, including his threat to withdraw from NAFTA and his plans to put tariffs on the remaining imports from China. But the new agreements are fragile. They are no improvement relative to where we were two years ago. To the contrary. The various changes made by the USMCA relative to NAFTA are generally small. Their net impact is likely, if anything, to be negative. This is especially true of the uncertainty about the longer-term future of the FTA.’
Wait, wait – Trump told us NAFTA was the worst trade deal ever and USMCA was perfect. Of course, Jeff is right here but can you imagine the Trump twitter rage if Trump ever reads this!
A brutal week for the stock market:
Excellent post, Jeffrey. Agree with pretty much all of it. Needless to say, stock market has continued to fall (although I have not checked since morning, maybe it is going up now), most notably the futures market going from positive to negative while Trump incompetently spoke last night, appointing anti-science Pence to run the response to this and who will have veto power over public statements by experts out of CDC and NIH. Food job, Mikey!
Clearly the epidemic is spreading widely, but there is one positive sign suggesting limits that may keep this from being a 1918 Spanish flu in terms of deaths, although the interconnectedness of the world economy may make it more economically damaging than that event, is that new cases in China are declining, and some factories there have begun to reopen. There is an end in sight, but how far away it is and how far down we go remains unclear. Certainly “everything under control” statements out of Trump make him look even more incompetent than W. Bush with is “Mission Accomplished” and “Good job, Brownie!” remarks. When the s hits the fan, genuine incompetence shows itself all too clearly.
Update on the stock market – another very brutal day.
“is that new cases in China are declining,”
this indeed is good news. however, it occurred because of the chinese governments willingness and ability to lock down the second largest economy for nearly a month. if indeed this is what is necessary to slow down the spread (note it has only slowed, not stopped), what other countries will be capable of such a dramatic move? ponder this question: trump must decide whether to shutdown the us economy for a month to stop the spread, but by doing so he inevitably will cause a dramatic drop (in addition to what we already have) in the markets, his own measure of self worth. do you think he will do so in an election year? he appears to be focusing on the blame game already.
Interesting 2007 report on the 1918 flu pandemic from the Federal Reserve Bank of Saint Louis.
“The possibility of a worldwide influenza pandemic (e.g., the avian flu) in the near future is of growing concern for many countries around the globe. The World Bank estimates that a global influenza pandemic would cost the world economy $800 billion and kill tens-of-millions of people. Researchers at the U.S. Centers for Disease Control and Prevention calculate that deaths in the United States could reach 207,000 and the initial cost to the economy could approach $166 billion, or roughly 1.5 percent of the GDP. Longrun costs are expected to be much greater. The U.S. Department of Health and Human Services paints a more dire picture—up to 1.9 million dead in the United States and initial
economic costs near $200 billion.”
Whoa! Let’s hope the current virus is nowhere nearly this bad.
Mike Pence is officially running the COVID-19 dark comedy TV show. What is there to be worried about??
Only pay for what you need. And Pence does not need to pay for lesbians, gay dudes, black, Hispanics, Asians, etc. So masks for only white KKK members!
If only Trump had promised to build a wall on the Pacific Coast that California would pay for.
Trump claimed he closed the border. I guess the CoronaVirus is traveling across the Pacific Ocean on skiis!
Are you agreeing with the NYTimes science writer?
The problem with these epidemic scares is that they generally fall into the realm of hyperbole. Yes, like the flu, many people around the world will become ill and some will have complications that lead to death. But others may be genetically immune or have little or no response to an infection by Covid19… that’s already been observed.
Right now, this makes for great political fodder, but not much in the way of scientific debate. This is the viewpoint of a Czech scientist and former professor at Harvard. https://motls.blogspot.com/2020/02/not-even-omnipresent-seasonal-covid-19.html?fbclid=IwAR0LVCL0EvP8pJVY8TjRWUL3AeSjDbZPyQKCM00TwgD5aP1tL-YV0qS4Pi4#more
That’s kind of the opposite of the NYT science writer’s viewpoint.
Bruce Hall: Well, we can come back to this in a few weeks and assess whether say Goldman Sachs’ assessment (see Calculated Risk, https://www.calculatedriskblog.com/2020/02/the-economic-impact-of-covid-19.html ) is hyperbole or not.
You are endorsing this Czech fellow as he writes:
“Instead, what would be needed would be a rule similar to India’s. India has already declared that in the case of epidemics, weak people won’t be admitted to hospitals.”
How Republican can you get? The let them die approach. Real doctors argue that we should prepare for the worse and pray for the best. But I guess this gets in the way of what really matters to you – Trump’s poll ratings.
From CalculatedRisk: “If the epidemic slows sharply (perhaps due to seasonality), then the economy should recover quickly. However, if the epidemic continues to spread rapidly, then we could be looking at a global recession (and an enormous human tragedy).”
We are all hoping that the first sentence turns out. Of course the Trump-Bruce Hall pollyanna approach increases the likelihood that we will endure the second quoted sentence.
Bill McBride later writes we need accurate information. He is right but Trump is suppressing accurate information.And you? You are spreading pollyanna BS. Which of course increases the likelihood that we will not be properly prepared. What we expect from Bruce “no relationship to Robert” Hall.
“So the Trumpian response to crisis is completely self-centered, entirely focused on making Trump look good rather than protecting America,” he writes. “If the facts don’t make Trump look good, he and his allies attack the messengers, blaming the news media and the Democrats — while trying to prevent scientists from keeping us informed.” – I posted a link discussing what Krugman said about the White House response. In a way – it applies to Bruce Pollyanna Hall’s latest!
Luboš Motl studied string theory and was an assistant professor at Harvard for only three years. Only a total dimwit would call this person an expert with respect to this issue. Come on Bruce – your sources are generally BS bordering on dishonesty but this one was beyond the pale.
Menzie, it will take more than a few weeks to assess the severity of this new virus. It is a coronavirus which is similar to the viruses that cause the common cold. It can mutate and become more or less severe. No doubt it will become widespread; that’s not really the issue. The main concern is how deadly it is. Without meaningful data, the true rate of infection and the true mortality rate is still uncertain.
For two decades, we have been subjected to all manner of hysteria about potential epidemics which have either been contained or have been far less serious than anticipated. Maybe we can’t trust the Chinese government to give accurate data: https://www.xjtlu.edu.cn/en/news/2020/02/model-indicates-current-covid-19-infections-in-china-already-declining. Maybe our ability to detect the virus is insufficient: https://www.propublica.org/article/cdc-coronavirus-covid-19-test.
What seems to be certain is that the demographics of Covid19 mortality favor the younger population: https://www.the-scientist.com/news-opinion/why-some-covid-19-cases-are-worse-than-others-67160
Is Covid19 disruptive? Yes. Is it disruptive because our response has been too reactive? Quite possibly. Fear of the new and unknown can cause overreaction and disruption. If 50 million people in the U.S. became ill with the Covid19 virus, would that be a disaster? Answer: that depends… https://www.cdc.gov/flu/about/burden/preliminary-in-season-estimates.htm
Bruce Hall: We have so far been spared the impact of supply chain disruptions because firms anticipated the Lunar New Year shutdown. But hi frequency indicators indicate very slow pickup in Chinese production, an increasing impact in S. Korea, and probably heightened policy uncertainty which seems to depress business fixed investment.
Wait until iPhones are in short supply (already happening) and electronic car components are unavailable …
Two of the bigger items I saw yesterday was a Hyundai plant was shutdown, and also two Disney theme parks were shutdown in Japan. There were others, those are just the two I could remember from the top of my head. Britain was discussing the possibility of shutting down schools for two weeks. How much are Italy’s exports and consumer purchases going to be affected?? A TON of other countries have been infected, mostly from travelers in and out of Iran. All of this added together with China, and the fact we’re most likely NOT on a downward trajectory in cases. Whatever a person thinks about the COVID-19 itself, it’s hard not to imagine it does shave some decimal points off of GDP. And as a finance fan, how do you figure 5%+ being shaved off of people’s 401ks and brokerage accounts affects consumer spending?? Apparently the idiot box already had a person on the news this morning telling people not to withdraw money they had in accounts that slapped penalties on for withdrawals. So we already have people eyeing withdrawals from retirement accounts as they watch thousands of dollars in losses appear on there computer monitor.
What might be worrisome to our pseudo-intellectual Mr Bruce Hall is, all these old fuddy-duddies looking at their retirement account values going down the toilet whirlpool apparently don’t even think their magical red MAGA hats are going to make them immune to this.
*their computer monitor
NYT is saying 11.5% was the loss this week for the S&P 500. I happen to think a lot of that was false value anyway. (Can I say “false value” like trump says “fake news”??). Whether it’s false value or not, many people were counting that as their personal wealth, and no doubt, in their own personal calculation of how much discretionary income they had– to spend.
pgl, <blockquoteLuboš Motl studied string theory and was an assistant professor at Harvard for only three years. Only a total dimwit would call this person an expert with respect to this issue. Come on Bruce – your sources are generally BS bordering on dishonesty but this one was beyond the pale.
Why would you take that position when you fully support the 97% of scientist (most of whom are not climate scientists) claims about climate change?
Motl was looking at the issue from a pragmatic point of view, not an ethical one. He cited the “worst case” scenario and then pointed out the unlikely possibility of that occurring… even if we took the approach that India might be taking. His points were mathematical, not medical. But you know that.
And as I provided a link to potential vaccine (OMG there might be medical technology to assist us?!!) https://www.dailywire.com/news/bds-this-israel-makes-exciting-breakthrough-in-race-for-coronavirus-vaccine
So, quit counting your coins and look at the broader picture.
I wanna say that this comment is made very seriously and asking earnest questions (no humor is intended). Mr Lubos Motl’s comments appear to me to be very, shall we say “fruitcake-y” in nature. He strikes me as a type of unbalanced Glen Beck type (one wonders if he cries when making posts like Beck often cried on his show). I would be very interested in knowing Mr Motl’s mental health history, or if anyone has attempted to diagnose his condition. Again, not trying to be funny here. Is he taking pills or if he is prescribed them and chooses not to consume them???
I don’t understand why so much of this post is focused on the economic impact of a China slowdown. While the bulk of the infections have occurred there, that won’t necessarily be the case for long. I don’t think that investors are reacting to the economic damage that has been done so far. Rather they are projecting its exponential growth into a forecast of potential future economic impact.
Prior to Covid-19 we were already in the midst of a recession in the producer side of the economy, or at the very least a global slowdown. Growth has been maintained by a robust consumer, particularly in the US. What would be the effect of wide spread stringent public health measures on US consumer activity? For me, the question about who is most vulnerable comes down to:
1. Who is best equipped to weather a drop in global consumer demand?
2. Who has the public health resources to mitigate the disease while minimizing the impact of the necessary measures on the local economy? Or alternatively, what countries can absorb the loss of life in stride from more minimal public health interventions?
While I do know that the U.S. public health infrastructure is perhaps the best in the world, I don’t have any strong insight into how these questions will play out economically.
Regardless, I don’t think the current shock has much if anything to do with trade policy. It would be moderately hard to make the case that the current shock would have played out any different with a status quo trade relationship with China. If anything the trade spat might have been beneficial in kicking businesses to work on robustifying their supply chains to external shocks.
A lot of American companies (airlines, Starbucks, Apple, Boeing) are reporting that their sales to China will fall off significantly. You think that might impact both their bottom lines as well as hiring.
Am I reading the Yahoo/Finance chart for the DOW correctly? A drop in value of over 12.2% since Feb. 20! To quote Trump – that’s yuuuge!
We have a new Whistleblower!
“The Trump administration sent a team of government officials to receive patients from the epicenter of the coronavirus epidemic without adequate protection, a whistleblower reportedly alleged in a complaint. The unnamed whistleblower – reportedly a high-ranking female official in the Department of Health and Human Services – alleged in the complaint to the Office of Special Counsel that Trump administration officials retaliated against her after she raised concerns about the lack of protection.”
Some MAGA hat wearing Trumpsters ignored the treason noted by that Whistleblower last year as they likely do not even know what Ukraine even is. But I bet when they catch CoronaVirus, this stuff will matter. Oh right – Trump is going to blame the Chinese for his incompetence. Or better – he will blame Nancy Pelosi as she represents San Francisco which has a thriving Chinatown!
Other than showing how ignorant the MAGA administration is, which we already knew they were ignorant. This strikes me as a non-story.
“Keep calm, and carry on”.
COVID 19- panic gate is another Russia gate for the “loyal” opposition.
How do you get treason from making Vindman and Hill nervous about slowing military aid to right wing, local militias in Ukraine? Or you could tell us who is “fighting” Russian aggression in Donetz for the US? All those leaks and no one asked about “the Ukraine national army”? If it exists.
Tell us about the Ukraine military and what they do with the few hundred million a year we so urgently send them (2017 NDAA requires someone assure the money don’t go to corrupt units however that is defined). Did Ukraine national military exist before or after the Euromaidan coup?
You are a Putin minnie me! Your defense of Trump’s treason was even dumber than one of those fast talking Doug Collins rants.
“Another Russia gate”? Are you out of your mind completely? Probably the worst post you have ever made anywhere, ilsm. This could not be more irrelvant, even if you were right in all your whining about supposed neo-fascists fighting glorious Russians in Donbas.
ilsm is indeed out of mind but this nonsense has been going on for a long time. You are right that his comment was beyond stupid but the worst from him? Hardly.
Ukraine is to US as Dulcinea is to Cervantes’ Quixote. Azov Battalion and so forth down on the Donetz are what?
I now see that pgl threw in a mention of Ukraine that opened the door for you to charge in.
As it is, Azov battalion was important in 2014, retaking Mariupol from the Russian-backed forces, but basically irrelevant since. They are less than 1% of the Ukrainian military and currently folded into the 30th Mechanized Brigade. They are a big nothing now, especially with Zelensky cracking down more generally on neo-fascist elements.
OECD growth was looking pretty weak even before the coronavirus problem blew-up.
Growth of real gross domestic product (GDP) in the OECD area slowed to 0.2% in the fourth quarter of 2019, compared with 0.4% in the previous quarter, according to provisional estimates. Among the Major Seven economies with data available for the fourth quarter of 2019, only the United States saw GDP increase (up 0.5%, unchanged from the previous quarter).
GDP contracted sharply in Japan (by minus 1.6%, following October’s increase in consumption tax) and also contracted in Italy (by minus 0.3%) and France (by minus 0.1%).
GDP growth slowed to zero in the United Kingdom and Germany (following growth of 0.5% and 0.2% respectively in the previous quarter) and also slowed in the euro area and in the European Union (to 0.1%, from 0.3% in the previous quarter).
Coronavirus blowup? See the opening rant ala:
February 27, 2020 at 6:19 pm
This is all fake news according to Putin’s minnie. BTW – skip the rest of his rant as it is STOOOOOPID!
Facts? The gibberish we routinely get from our favorite Russian bot do not qualify as facts. Oh wait – the KellyAnneConway “alternative facts”. Got it!
Your arcane concepts of “treason” and “patriotism” are yours to keep, but you are quite mistaken to link those words to MAGA hats..
My Spidey Sense is telling me that Menzie might appreciate this link more than he appreciates my Youtube links:
Or maybe Menzie likes rocking out to Mastodon tracks?? How am I supposed to know??
This is interesting. An Israeli company is claiming they will have a vaccine against Covid19 based on four years of work they have already done on treating coronaviruses. Obviously, this has to be borne out before we can say, “Ho hum, next crisis,” but it is not an unexpected development. So much hysteria regarding “crises” presumes that we are simply creatures of the wild who can’t adapt or overcome using 21st century technology.
I have a Jewish friend living in Long Island where I think he is going insane. Yea – he posted to a discussion noting Israel is making this claim, which only tells me that my old friend has truly lost it.
“After 4 years of multi-disciplinary research funded by Israel’s Ministry of Science and Technology in cooperation with Israel’s Ministry of Agriculture, MIGAL has achieved a scientific breakthrough that will lead to the rapid creation of a vaccine against Coronavirus.”
This is on par with passing Phase II clinical trials. Now Brucie I realize that biopharma terms are WAY above your very limited intelligence but bear with me as I have done consulting for some of these multinationals (the finance is something you will never get but never mind). Phase III trials should be done on American patients now even if it may be time consuming and quite expensive. But I guess you have not been watching the piss poor efforts of the Trump Administration. They have not even gotten test quits out. How on earth would any one expect the morons like Mike Pence and Lawrence Kudlow to get on board with funding phase III trials?
Let’s assume that such a vaccine can be found and tested within the next few months. Will governments freely provide the vaccine to all 7.6 billion of Earth’s population?
That would be a grand idea but who pays for the production costs? OK, I get production costs are usually very low but I bet the Israeli government wants to extract a yuuuge return for its R&D cost. And if Jared is put in charge – that is what they will get.
Treating the afflicted is another tactic in handling the COVID 19 crisis (or any mutation of a virus);
The link to the candidate drug:
Krugman rips Trump on this issue:
Cargo movement slows at ports of Long Beach, L.A. amid ‘coronavirus chaos’
The Port of Long Beach is seeing its lowest labor levels in years as fallout from the coronavirus hits the global supply chain. The virus was first detected in Wuhan, China in December and has since spread across the globe, infecting more than 80,000 people. China has now cancelled dozens shipments to the ports of Long Beach and Los Angeles in an effort to contain the disease.
Port of Long Beach Deputy Executive Director Noel Hacegaba on Wednesday said the lower cargo numbers have led to an overall slowdown at the port. If the problem continues, it could have a major impact on the economy, he said. “Our labor levels have not been this slow in about four or five years,” he said.
Cargo numbers typically drop in February as Chinese businesses close for the Lunar New Year, but imports have now been hit hard with the coronavirus fallout, he said. The country this month cancelled 53 planned sailings to Long Beach, up from its typical number of about 30 cancellations for February. Rail and truck activity in the port is down about 25% percent, with many workers having little work to do, he said.
The market nosedive provides Trump with a wonderful new tweeting opportunity.
January 4, 2018, Trump: “Dow just crashes through 25,000. Congrats!”
July 14, 2018, Trump: “The Stock Market hit 25,000 yesterday. It is all happening!”
January 30, 2019, Trump: “Dow just broke 25,000. Tremendous news!”
February 28, 2020: The DOW dips to 24,600 and finishes just above 25,000 — again. You can expect a new tweet any time now.
Trump has the memory of a goldfish.
joseph I think you should apologize to goldfish.
I don’t know if the data is sourced properly. But just looking at it, it “feels” correct. There are lots of things fascinating when you look at data presented this way. One of the more fascinating things is to watch Iran and Italy on the left, slowly make their way “up” (or “down”??) the pack like a horse in a derby race.
https://www.youtube.com/watch?v=t_SphtcxPIo (It’s a statistics presentation, no untasteful content)
As a former inhabitant of Liaoning (with people who at at least at one time I could call my friends, and still feel that way towards some of them, even if I have lost contact), I was glad to see their numbers were low enough not to be included, although I suspect this is due to geographic proximity to Hubei relative to other provinces, rather than any better province policy or province health infrastructure. Frankly I think the Chinese government learned ALMOST nothing from SARS. Even though there were a plethora of lessons at that time to be harvested. Which is disappointing because I know the Chinese to be an exceptionally clever people. What causes the cognitive disconnect on this, I can posit theories (which would probably come across as very insulting to ethnic Chinese), but I really have no idea. Maybe this very severe “learning the hard way” will give them some better policy measures. Maybe America will be up for some humble pie as well with the COVID-19, which might be good for us as well.
When I checked this at 4:35 am EST, the US and Australia were both at 15 cases – tied for 10th place. I bet some jerk in the White House right now is cheering that we move further up in this listing. MAGA!
What they are most likely quietly cheering right now is that it’s in California, which leaves them an “out” to blame it on the state level government. We can imagine this celebration might be “short lived”.
Copy/pasted from “The Guardian” which they in part took from Reuters, maybe 35 minutes ago, roughly:
” Health officials in the US have identified four “presumptive” coronavirus cases believed to have been infected within the country, in a turning point in efforts to contain Covid-19 there, Reuters is reporting.
Three new cases of apparent community transmission, plus the one identified earlier this week in California, are a sign the virus is now spreading within at least four separate locations up and down the US west coast.
They span nearly 900 miles, from California’s Silicon Valley region to the Puget Sound near Seattle.
The agency reported a U.S. Centre for Disease Control and Prevention (CDC) statement on Friday citing three new diagnoses – one each in California, Oregon and Washington state.
If confirmed by the CDC, together with a previous case of unknown origin announced on Wednesday in California, that would bring to four the number of diagnosed individuals in the United States with no history of travel to a country where the virus is circulating and no close contact with a person known to be infected.
The three latest patients were diagnosed based on results obtained in their respective states from CDC-supplied test kits and are considered “presumptive positive” cases pending CDC confirmatory testing, the U.S. agency said.
A fourth presumptive positive was also announced in Washington state on Friday, but that one is “likely travel-related,” the CDC said.”
“The Guardian” has a “live blog” which updates as best it can the current COVID-19 situation. I think they are a reliable source for info, and pretty current:
A woman in Washington State died from coronavirus. And yet Trump called this entire discussion a Democratic hoax. Oh wait – he is about to make an announcement any moment now. Time to document his latest lies!
February 28, 2020 at 3:36 pm
was followed by more Pollyanna babbling – none of which is worth even one word in rebuttal. Why? Because our little Pollyanna completely missed the point that this Czech “scientist” he put forth as some sort of expertise is a doctor of philiosophy not a medical doctor. Yes one should always check the resumes of Bruce Hall’s supposed right wing experts either because Bruce is too stupid to do this for himself or maybe Bruce Hall does not mind serially misleading people.
So Bruce Hall’s latest defense of putting forth Luboš Motl as some sort of expert medical doctor even though his degree is in string theory goes like this:
“Motl was looking at the issue from a pragmatic point of view, not an ethical one.”
So it is pragmatic for India to deny weak citizens access to the hospital? Let them just deny certainly is not an ethical position. But Uncle Moses may have put it best:
Moses HerzogFebruary 28, 2020 at 5:07 pm
“Mr Lubos Motl’s comments appear to me to be very, shall we say “fruitcake-y” in nature. He strikes me as a type of unbalanced Glen Beck type (one wonders if he cries when making posts like Beck often cried on his show). I would be very interested in knowing Mr Motl’s mental health history, or if anyone has attempted to diagnose his condition.”
I cannot answer his question but I did decide to read a few of his other long winded rants aka blog posts. One was a condemnation of those liberals in Germany for letting some old chick become Miss Germany 2020. The winner was 35 years old. Oh my! And the worst part of this for Lubos was that the judges were women. After all – we need perverts like Harvey Weinstein, Jeffrey Epstein, and Donald Trump serving as judges and after the show trying to do a bunch of 18 year old hotties!
Menzie, here is an interesting article about the economics and logistics of treating national epidemics from a physician’s viewpoint.
If this doctor is correct, we are using a 19th century model for the supply of healthcare professionals in a 21st century environment. As an aside, I had no idea that Medicare was involved in residency programs for doctors which seems an odd way to fund and administer a program affecting all of our population. While the operational end of healthcare may be adapting to the 21st century, it appears that the bureaucratic end is complacent and perhaps even an obstruction.
Bruce Hall I’m sorry, but “kevinmd” was being extraordinarily disingenuous. The main reason we have a shortage of doctors is because the AMA goes out of its way to ensure we have a shortage. That’s been true forever. “kevinmd” mentioned residency requirements, but he forgot to tell you that it’s because the AMA insists that only doctors who did their residency in the US can be doctors in the US. Apparently doctors who did their residency in Britain or France or Germany or Canada aren’t qualified to practice in the US. The main difference between US doctors and doctors in other OECD countries is that US doctors make roughly twice what other doctors make even though there is no difference in competence or skill. Economists have a term for this: “monopoly rents.”
I agree that the physician shortage is partially due to AMA certification requirements, but that could be streamlined. The issue that Dr. Leaf was addressing was the interstate barriers that prevent certified physicians in one area of the U.S. from moving quickly to other areas that needed doctors.
So, while in agreement with your comment, I’ll stick by my conclusion that “While the operational end of healthcare may be adapting to the 21st century, it appears that the bureaucratic end is complacent and perhaps even an obstruction.”
“I had no idea that Medicare was involved in residency programs for doctors which seems an odd way to fund and administer a program affecting all of our population.”
bruce, the va is also part of the residency program. as an aside, there is a significant cost in training residents. they are not practicing doctors yet, they are being trained. somebody also needs to pay those who do the training as well. just where did you think the funding came from such training?
“the interstate barriers that prevent certified physicians in one area of the U.S. from moving quickly to other areas that needed doctors.”
states are responsible for the qualifications of their workers, not the federal government. same reason we have 50 different state drivers licenses, rather than one federal license. bruce, you seem to be one of the few conservatives who are against states rights!
bruce, you seem to be one of the few conservatives who are against states rights!
I believe the obstruction of interstate commerce is in play with regard to intra-U.S. medical certification. But since the states have a right to determine the certification of various professionals operating within their borders, one can only say that the only reason this can/should be ignored is in the case of a national emergency… even if it means that some people will have to wait for healthcare as is often the case in Canada, that has a national system, under normal circumstance.
If we reach a national emergency due to Covid 19, then perhaps some temporary lifting of the certification requirements from one state to another can be implemented. Are we there yet? No, but we could be, who knows? It all depends on how vocal the State of New York objects to letting Alabama and Mississippi doctors practice without re-certification.
“I believe the obstruction of interstate commerce is in play with regard to intra-U.S. medical certification. ”
i assume bruce that you would permit doctors to cross the border and conduct whatever medical procedures they deemed appropriate for a given medical case, right? or would you permit doctors to cross borders but restrict what they could do across the border. legislators and bureaucrats should have final say on medical decisions, rather than doctors?
“even if it means that some people will have to wait for healthcare as is often the case in Canada, that has a national system, under normal circumstance.”
my wife recently was scheduled for a procedure, and the wait time was 2 months. we had to cancel at the last minute. rescheduled. guess what? still have a wait time of 2 months. waiting is not a perk owned only by those in canada, bruce.
Bruce Hall What do you think bureaucrats do? Do you think they just sit around all day dreaming up ways to make life harder for everyone? Bureaucrats craft regulations that execute laws. If you have a beef with the various laws that inhibit the movement of doctors, then take it up with the state legislators who make those laws. And state legislators make those laws because the AMA and Big Pharma and the big (especially “for profit”) hospitals want to create shortages. Shortages generate economic rents. For example, if you want to build a new hospital you first have to get permission from the nearby competing hospitals. Guess why there’s a shortage of hospitals in rural areas. If you want to move towards national solutions to doctor and hospital shortages, then you need to first get rid of that antiquated relic of our Constitution called the states. Hamilton thought that the “commerce clause” would effectively neuter the states. He was wrong. If you don’t want to get rid of the states outright, then get rid of SCOTUS justices who blather on about “originalism” and “federalism”.
What do you think bureaucrats do? Do you think they just sit around all day dreaming up ways to make life harder for everyone?
… good intentions.
“I agree that the physician shortage is partially due to AMA certification requirements, but that could be streamlined.”
Milton Friedman advocated the elimination of AMA certification some 58 years ago. If we had done this then, we would have more doctors now. But if you think streamlining requirements will solve the doctor shortage in time for this coronavirus issue you are indeed the dumbest person ever.
in order to increase the number of physicians, you need to increase the number of people permitted to perform residence training. this costs money. something many on the right hate to spend. we have more people who want to be a practicing physician (and have completed a medical degree) than we have residency openings. we have many people from outside the us who have appropriate medical education, but are not accepted into the limited number of residency openings. there is your bottleneck. residency is a training program, and costs money to implement. the government covers much of that cost. it can be expanded.
We indeed have a national shortage of doctors. So Bruce “no relationship to Robert” Hall in his infinite “wisdom” proposes more interstate mobility of doctors which of course will increase the national supply by zero.
What would increase national supply quickly. Something that liberal Dean Baker and conservative Greg Mankiw agree on. Allowing the immigration of well trained foreign doctors. Greg recently blogged the average salaries of US doctors versus doctors in Europe with the latter receiving less than half as much as our doctors. Free mobility of workers is a good idea except to mental midgets like Bruce’s BOY – Donald J. Trump!
I thought this was one of the more “positive” type stories you could get out of this:
Fruitcake is as fruitcake does:
For those of you not paying attention to the Tweet timestamp, Mr. Fruitcake posted that after I called his comments “fruitcake-y”.
I would say this reinforces my contention that I’m very perceptive about people, but based on Fruitcake Motl’s prior comments, I think anyone could have drawn that out. Query: Which is a better nickname– “Fruitcake Motl” or “Loco Lubos”?? Please feel free to post your vote with a comment reply.
Recalling his expertise is not in medicine but in string theory, maybe a tag that indicates his warped brain is made up of strings might be choice #3. But in the meantime put me down for Loco Lubos!
What makes Loco Lubos happy? From his twitter:
‘Congratulations to us, we finally joined the world with 3 Covid-19 cases in Czechia. One female American student in Prague who was in Milan, one male Czech skier in Prague who returned from Northern Italy; and a man in Ústí *1952 who went to a conference in Udine.’
This fruitcake is cheering on the coronavirus crisis. Go figure!
I actually want to give Loco Lubos the benefit of the doubt and say it’s a kind of dry humor. But he doesn’t make it very easy to decipher where the hell he’s coming from. I think he’s probably an intelligent person, but emotionally and socially mixed up. I often sympathize with this “type” person, but again when using the death of thousands of humans as some kind of humor point or as a tool to spew out Democrat party conspiracy theories, Motl really leaves no room for sympathy. He then becomes a Stephen Miller type, just a loathsome human being.
It reminds me of the old David Lee Roth comment about Eddie Van Halen (paraphrasing here) ‘Eddie Van Halen with a guitar is a virtuoso musical mastermind. Take the guitar away and you’re left with a rotten human being”.
This is Bruce Hall’s alleged expert on medicine. Fruitcake is too nice of a term for this babbling a$$hole.
WOW, the more one digs, the more one finds some “interesting” things on Mr. Motl. At least one of these links has some crude language Menzie, I am not trying to “sneak” anything by you here, so this is a “heads up”. I know “the V word” is used at least once. There is an F-bomb in the Narkive link. But I think it is exculpatory in telling us the type of person Lubos Motl is:
https://www.scottaaronson.com/blog/?p=221. <<—-"V word" mentioned for those easily triggered by experiencing near everyday life
Well, maybe “AEI”, Heritage Foundation, Hoover Institute, or Cato Institute are looking for a nutjob to publish some things and Mr. Motl can find employment at any of those highly esteemed right-wing think tanks. Don’t they want to “defend” Lubos Motl’s “First Amendment rights”?? I hope they hire Fruitcake Motl sometime soon ‘cuz the hiring of Motl at any of those places gets my vote on entertainment value alone.
Moses, I looked at one of your links which was a bit of a diatribe:
Just what are you defending?
@ Bruce Hall
I’m gonna make a big stretch here, and say it wasn’t Mr. Fruitcake Motl’s comments about Sarfatti that got him in hot water. Which the very comment you quoted at least hints at what actually got Motl in trouble. I am glad you took the time to read the links I gave though. The disclosure that you have read the links I gave is near to being on par with finding out donald trump reads Martin L. Weitzman while waiting in the McDonald’s drive-thru. I’m getting this sense of parental-like pride I haven’t felt since I got two of my female students a private school job teaching English on the same day over in China. You’ve made my day Bruce.
So Brucie admits that Lubos Motl is a string theorist not an expert in medicine. Good to know that Brucie finally admitted his original praise of this crackpot was as dishonest as his standard comment here.
“one of your links which was a bit of a diatribe”.
Hey Brucie boy – I checked out the blog of Loco Lubos and all of them are best described as diatribes. The man is off the wall bonkers and has ZERO experience in medicine.
YOU were the one who introduced this fraud parading him as an expert in medicine. Then again – you day job is lying so HEY!
“Lubos was, in reality, fired last week or so from Harvard Physics Department (outwardly he “resigned” – but no one willingly resigns from
Harvard in mid-year obviously) for precisely this kind of unprofessional public activity. Too much blogging and calling people bad names and too little research. Not wise for a young man without tenure.”
When the ever dishonest Bruce Hall suggested that this fruitcake was part of Harvard medicine, I noted he did string theory and was at Harvard for only 3 years. Now we know why!
Your 3rd link is a must read. I love this tag:
Even better than Loco Lubos!
My wife went to Lowes to buy a new washing machine and they could not make a sale because of “supply disruption.”
Most macro models don’t even have supply chains built in ….oops.
That’s a pain. But thanks to the Trump tariffs, domestically made washing machines are only twice as expensive.
But hey – Apple says Foxconn is back in business assembling iPhones. Can you imagine if the kids could not immediately upgrade their phones to the latest version costing a mere $1000!