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Thank God that there’s a great deal of ruin in a nation

In a post I wrote right before the election, I made this prediction about what would happen if Biden won:

Are we facing a bad interregnum, as during 1932-33? Perhaps, especially if Trump becomes bitter and blames the American people, much as Hitler blamed the Germans for letting him down.

And now we see this:

Trump strips US Fed of emergency credit powers in latest scorched-earth move . . .

“The most obvious interpretation is that the Trump administration is seeking to debilitate the economic recovery as much as possible on the way out of the door,” said David Wilcox, the Fed’s former chief economist, now at the Peterson Institute.

Fortunately, the Fed has other tools, and thus it’s not at all clear that Trump will succeed in destroying the US economy out of spite. But you can’t accuse him of not trying!

HT: XVO

Update: It just occurred to me that this is sort of good news, as it clearly indicates that Trump understands that he has lost.

About that Italian study

My recent post on the Italian study of early Covid spread was criticized for highlighting the interpretation of the Daily Mail, a disreputable paper.

Here’s Business Insider:

The new coronavirus was circulating in Italy since September 2019, a study by the National Cancer Institute (INT) of the Italian city of Milan shows, signaling that COVID-19 might have spread beyond China earlier than previously thought.

Actually, the study doesn’t show that Covid “spread beyond China”; it provides evidence that Covid existed outside of China well before the first known case in China. Word choice matters.

Now the media (and China’s government) is waking up to the startling implications of this study, if true:

If those findings are correct, scientists said it could change the history of the origin of pandemic, raising questions about when and where the virus first emerged.

The novel coronavirus was first identified in the central Chinese city of Wuhan in December. Italy’s first COVID-19 patient was detected on Feb. 21 in a small town near Milan, in the northern region of Lombardy.

The Chinese government said on Tuesday it believed the study showed that tracing the origin of the virus was an ongoing process that may involve many countries.

I can see why the Chinese government would wish to suggest that no one knows where the virus came from. My own view is that it doesn’t much matter where it started, but many Westerners blame China for the pandemic, mostly because the first known cases occurred there.

The Italian researchers seem reluctant to conclude that the pandemic began in Italy, instead they point the finger at China:

But the Italian researchers said that’s not necessarily their conclusion.

“These findings simply document that the epidemic in China was not detected in time,” Giovanni Apolone, scientific director of National Cancer Institute (INT) and a co-author of the study, told a news conference in Milan.

“These finding simply document”? Really? This study does not provide any evidence for the virus being in China last September, it merely shows that it was in Italy at that time.

In my earlier post, I expressed doubt as to whether the Italian claims were true. I still believe that the virus originated in China. Many scientists now seem to be skeptical of the study:

The study has also sparked doubts among some Western scientists who called for further tests.

Much of the scepticism was focused on the so-called specificity of the antibody tests, that, if not perfect, might reveal the presence of antibodies to other diseases.

PS. And can we please count the votes? Georgia’s already counted their votes twice. What is the problem?


Ross Douthat on Trumpism

I wish I could write sentences like this:

For the center, the revelations of 2016 were about policy failures that had been mostly invisible until Trump came along — above all, the way that center-left and center-right visions of post-Cold War “openness,” to free trade or low-skilled immigration or ever-greater-integration with the People’s Republic of China, simultaneously failed to achieve their geopolitical goals and hollowed out communities across the American heartland, creating a deadly, demagogy-ready vacuum where work and church and family used to be.

While I tip my hat to Douthat’s skill as a writer, I have nagging doubts about the content of his message. Let’s start from the rhetorical flourish that ends the sentence:

creating a deadly, demagogy-ready vacuum where work and church and family used to be

Yes, you could argue that there’s been a sort of decline in these three areas. But is this actually what fueled the recent demagoguery? Consider:

1. In the US, evangelical Christians are generally regarded as the most fervently religious of 21st century Protestants, and yet they voted overwhelmingly in favor of Trump. So where’s the evidence that a decline in “church” is fueling demagoguery?

2. I suspect that people with jobs are more likely to vote for Trump than those without jobs, but I can’t prove that. Nonetheless, I’ll call the “work” claim half correct, as those who lost industrial jobs and had to take lower paying jobs were probably sympathetic to Trump.

3. Polls suggest that married people (i.e. “families”) are much more likely to vote for Trump than are single people.

So while Douthat writes in a very persuasive style, I’d say he’s mostly wrong in his diagnosis of the roots of demagoguery.

What about his claim that “free trade” was an important factor? I use scare quotes as Trump was lying when he said America adopted free trade and our trading partners did not. Our trade policies featured many barriers, pretty typical for a developed country (and China’s barriers were not unusual for a middle income country.) It’s also not clear why other high wage countries with equally free trade, such as Germany, were not hurt by globalization. Might the problem lie elsewhere?

But let’s say Douthat is right and free trade is a major problem. What’s his solution? I continued reading, looking for suggestions as to what we should be doing differently. Presumably if free trade is the problem, then less free trade is the solution. But Douthat doesn’t go there, and I think the reasons are pretty obvious. Trump tried an alternative to globalization and failed miserably. Just as free trade economists predicted, Trump’s economic policies made the trade deficit even bigger. Good intentions are not enough—you need to understand economics. Peter Navarro does not.

I suspect that Douthat understood this point, which is why when he gets to his policy recommendations he looks elsewhere:

Of course, all the lost opportunities I’m describing owe a great deal to Trump’s own presidential conduct. Had he governed as he campaigned, had he dropped into Washington trying to cut infrastructure deals with purple-state senators instead of letting Paul Ryan run domestic policy for the first two years, it might have forced real policy adaptation on both parties. 

In American politics, talking about building infrastructure is about as meaningful as talking about “ending waste, fraud and abuse in government”—it’s an empty cliche that I’ve been hearing for almost my entire adult life. We need to “rebuild” our “crumbling” infrastructure. Wake me up when that happens.

Talking about infrastructure is a way for a politician to sound serious, non-ideological and centrist, in contrast to the ideologues at either extreme, of which Douthat is pretty dismissive:

After so much failure and derangement, there are worse things than a reset. But it’s still the case that too many of the figures, Republican and Democrat, who are poised to be restored to their prior positions on the chessboard resemble the restored Bourbons after Napoleon, having “learned nothing and forgotten nothing” across the last four years. Which suggests that what we’ve lost above all in the Trump years is the chance not to repeat the experience soon enough.

Actually, there is no “third way” in economic policy. Douthat dreams of a non-left wing economic policy that is pro-worker and rejects free market ideology. But where is this model? Sure, you can boost the child tax credit and build a few bridges and airport terminals, but neither Democrats nor Republicans are strongly opposed to those initiatives. That’s not a meaningful third way. Neither side of the spectrum will abandon globalization, nor should they.

(You may argue that the GOP is opposed to spending money on infrastructure, but my impression is that places like Texas build more infrastructure than California.)

Ross Douthat really is one of our finest pundits, but his strength is not in proposing new economic policy regimes, rather his forte lies in describing the zeitgeist of our society. Douthat writes as beautifully as Mencken, but with a sensibility that is 180 degrees removed from the cynical infidel that wrote for the Smart Set.

I’m with Mencken.

Pure, 100%, unadulterated, anti-Chinese bigotry

The media is full of anti-Chinese bigotry, but rarely in as pure a form as this classic Daily Mail headline:

Further evidence emerges that China hid coronavirus truth from the world as study says Covid was circulating in Italy in September 2019

And the story itself is even worse.

So let me get this straight. We know that Covid-19 originated in China. How do we know? Because the Chinese “patient zero” got sick on November 17, 2019. That was the very first known case of Covid-19 in the entire world. So that’s how we know the virus originated in China; the earliest known cases were in China.

According to the Daily Mail, we now know that there were a bunch of Covid-19 cases in Italy in September 2019. I’m not sure that’s true, but let’s say it is. Which of these four is the most plausible implication:

a. The disease started in Italy and then spread to China.

b. The Italian government knew about these cases in September 2019, but covered them up.

c. The Chinese government covered up the fact that Covid-19 was circulating in China well before September 2019, and decided to take no action to slow the spread because . . . because . . . because . . . well because they welcomed having a disastrous pandemic and didn’t want to take any action to prevent Wuhan from being devastated in January. But once Wuhan was hit hard in January, they did take very aggressive actions to prevent the spread to other parts of China.

d. Borat is to blame.

So the Daily Mail thinks answer C is the most plausible.

Me? I’m not even convinced the story is true. But if it is true then we really have no idea where the virus came from. It could have come from Kazakhstan for all I know. Or China. Or Italy. Or the Congo.

If the story is true, then there are lots of other things we know to be true that no longer make any sense, such as that there were almost no deaths in China until January. And if you don’t trust Chinese data, look at Melbourne, or some other similar example. The caseloads grow exponentially. So if the Italian story is true then this suggests that the people who had Covid-19 in September 2019 had a different form of the virus, either less fatal or less contagious. Perhaps the virus mutated. Who knows?

Again, I don’t believe or disbelieve the story. I’d like a second opinion from someone less biased than the Daily Mail.

This post is not about Covid; it’s about bigotry. The Italian story provides zero evidence of a Chinese cover-up.

Not an election post

A number of newspapers in the Tribune syndicate have printed my new piece on Biden’s path forward. In the article, I mess with progressives by quoting Keynes:

“(The) NRA, which is essentially reform and probably impedes recovery, has been put across too hastily, in the false guise of being part of the technique of recovery.” . . .

Of course, many progressives will not be pleased with my suggestion to prioritize recovery over reform. But as Keynes pointed out in his 1933 letter, a strong economy is the best way to create the political capital required to pursue a reform agenda:

“It will be through raising high the prestige of your administration by success in short-range recovery that you will have the driving force to accomplish long-range reform.”

David Beckworth has a set of tweets discussing the Fed’s new average inflation targeting policy. Richard Clarida points out that it’s basically Bernanke’s temporary PLT, which starts from the date when you first hit the zero bound. This is essentially what I said right from the beginning. So either the Fed succeeds in getting inflation to average 2% or we have zero rates for ever, as in Japan. I’d guess that they achieve 2% (on average) by 2030.

David also points to a Jim Bullard speech that says AIT is sort of like NGDPLT:

PS. Did I ever show you my license plate? 🙂 🙂 🙂