Underestimating China

As America was hit by one popped “bubble” after another, we were frequently told that the Chinese bubble would burst any day now.

It still hasn’t burst.

Then we were told that the trade war would hurt China more than the US. The opposite appears to have been the case:

Trump’s Tariffs Were Supposed to Ding China, But the U.S. Economy Is Getting Hit 2.5x Harder

Then we were told that the coronavirus epidemic would hit China much harder than the US.  Just the opposite is likely to be true; it will hit the US harder than China.  China is like one of those cockroaches that are hard to kill.

Some of my commenters are so anti-China that they use any argument they can muster to convince themselves that there cannot possibly be any good news out of China.  They tell me the data is all faked, even though international medical experts say that it’s broadly correct (and least in terms of the downward trajectory of new cases), albeit missing some new cases and mischaracterizing some deaths.

Some of this is innumeracy, an inability sort sort the wheat from the chaff in data.  China probably had at least 300,000 cases, not 81,000.  But the trend is still downward.  Others seem to have a wildly conspiratorial worldview; perhaps even satellite data showing traffic getting back to normal is being faked.  Stories of coronavirus hospitals being closed down are fake.  Ditto for stories of employees returning to work.  Some of it is motivated reasoning, because the Chinese leadership is evil (one of the few points on which we agree), they’d like to believe that the Chinese situation is much worse than reported.  

Sorry to disappoint you, but the recent coronavirus data out of China is promising, and at least roughly correct.  That doesn’t mean there won’t be new outbreaks, I expect there will,  But I also believe the new outbreaks will be controlled more effectively than Wuhan, which was criminally mishandled by government authorities. Of course criminal negligence by government authorities is not exactly in short supply in the world today.

The China example also doesn’t mean we need to shut down the entire economy.  Japan seems to be doing well (so far) with its economy still up and running.  But will that last?  They did shut down their school system, which seems wise to me, but not their workplaces.  We still have a lot to learn about what sort of changes are required to keep R0 below 1.0.

We need to study the democratic East Asian countries closely, to find out what works and what doesn’t work.  It’s still too soon to know.



44 Responses to “Underestimating China”

  1. Gravatar of Ray Lopez Ray Lopez
    22. March 2020 at 13:33

    SARS-CoV-2 almost certainly man-made from the Wuhan bioweapons lab, see the below. Put that in your pipe and smoke it, Panda huggers.

    The below post, all factual, got me banned at one site. Hope I don’t slip into the memory hole at this site.- RL

    https://www.youtube.com/watch?v=G0VJLYRhPHg (start at 4:00 min mark to save time)

    Gen Li 3 weeks ago @Sebastian K Have you read the genetic analysis in the NEJM? I have. The report makes this theory [in the YouTube video] have a great deal of credence. The ACE2 receptor coronavirus matches the pre-pub announcements of the Wuhan lab. They were rushing research for a big conference [hence they messed up and accidentally let slip the Covid-19 virus out of haste to meet their deadlines–RL]

  2. Gravatar of David Tomlin David Tomlin
    22. March 2020 at 14:09

    Testing. Testing works.

    Those countries have use more focused, hence less pervasive, isolation measures because they were testing.

  3. Gravatar of David Tomlin David Tomlin
    22. March 2020 at 14:13

    I am confident that “the China bubble hasn’t burst” will continue to be true until it isn’t.

  4. Gravatar of dtoh dtoh
    22. March 2020 at 14:35

    David Tomlin,

    Japan has done minimal testing. It has one of the best outcomes. How do you explain that.

  5. Gravatar of dtoh dtoh
    22. March 2020 at 14:45

    Maybe others have a different opinion, but I don’t think it’s an issue with capability or results. If anything it’s probably the opposite. A lot of people are overestimating China. The issue is that the CCP is evil and does (or will do) bad things to the Chinese people and their neighbors.

    As a result, many people feel that we should act to curtail that power and/or encourage more acceptable behavior.

    Personally, I suspect the Chinese data is pretty accurate now (unlike at the start of the outbreak.) What is not accurate is the fact that they haven’t reported about dragging family members out of their homes in the middle of the night and locking them up in makeshift “hospitals”.

    The issue is not the “ends”…it’s the the means

  6. Gravatar of ssumner ssumner
    22. March 2020 at 14:51

    Ray, Man-made? LOL, you are also a conspiracy nut? It’s not man-made.

    David, I’ve been talking about the testing fiasco for a while now. The experts say testing is the key, and that sounds right to me.

    dtoh, I don’t recall you arguing the China data is fake. The post was aimed at other people. People who live in an epistemic bubble, blinded by ideology. My comment section is full of them.

  7. Gravatar of John Arthur John Arthur
    22. March 2020 at 15:09

    You were right about corona and I was very wrong, I underestimated the spread of Coronavirus in America, though I did predict China had around 300k cases based off their death rate.However, my view that Corona growth would be much slower than the median estimate seems to be correct for every state not NY.

    I think however my views on China’s socioeconomic trajectory are fairly accurate, I estimate that China will slow down to US growth before the end of this decade, and that America’s economy will begin to slowly catch up to China’s larger GDP, and will remain very competitive with China, though likely will not overtake them.

    US is already adding more in per-capita GDP than China at constant dollars over the last 4 years, so I think that what I am predicting will very soon come to pass.

    Still, given China’s overwhelmingly demographic advantage over the US, with 4.5x the population, 5x the workforce, and a higher test-scoring population, it is amazing that there is even a rat race between the two countries. The US and Chinese relationship should be like Germany and the Czech Republic, completely one sided.

  8. Gravatar of Ray Lopez Ray Lopez
    22. March 2020 at 15:09

    @ssumner – yes Covid-19 (SARS-CoV-2) could well be man made. Actually it was first made in the University of North Carolina at Chapel Hill, in 2015!
    Key sentence from the paper: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4797993/ (2015): “Therefore, to examine emergence potential of circulating CoVs, we built a chimeric virus that encodes a novel, zoonotic spike protein in the context of a viable CoV backbone”.

    Translation of the above: a team comprising two Chinese researchers who now work in Wuhan (a biotech hotspot like South San Francisco) in 2015 took a horseshoe bat SARS virus that does not infect humans, and modified it so it infected humans; this technique is called a ‘chimeric virus’. The US government was so outraged at this team they cut off their funding. It’s in the YouTube video link above. It’s 100% fact. These two Chinese researchers are now believed to be working for the Chinese military on bioweapons (speculative). It’s also speculated (by me) that the 2020 version of the 2015 chimeric virus was more sophisticated so it looks more ‘natural’, which fooled this Western team into calling it natural: https://scitechdaily.com/no-evidence-covid-19-coronavirus-was-genetically-engineered-in-a-lab-epidemic-has-a-natural-origin/ (note the polemic tone of this paper, very odd, very unscientific IMO).

    The above got me banned from one site, so you’re pretty liberal (-tarian) if this post stands. Bye.

  9. Gravatar of John Arthur John Arthur
    22. March 2020 at 15:33

    Also one interesting note,
    The Japanese numbers are very interesting, did anyone do any random testing to see if the number of cases are actually as low as they claim? I feel like at least one local government did this kind of experiment, but I can’t find any data on the internet.

  10. Gravatar of Michael Rulle Michael Rulle
    22. March 2020 at 15:46

    A.Fauci was on the Networks today. The most concerning issue he raised was that the Virus may be already mutating, explaining why a higher percentage of younger people are being hospitalized. The Atlantic is getting hard to read. They are a couple of steps away from treating the Virus like some pro Trump demon. Reading their latest essay was more scary than what Fauci said.

    You mentioned before that outside Hubei cases were often characterized as pneumonia and their real numbers are higher. Where did you get the 300k number from? No one I have seen has mentioned that. I think one of your commenters mentioned Italy’s count is higher because they have different criteria

    Rather than more clarity, we seem to get more confusion. Today Cuomo was on Television saying that NY was going to be like today for “4,6, or 9” months. I could not believe it. He also believes NY may naturally have more cases because of more international travel in and out.

    The only positive thing I have seen is we are just now reaching the point in time (because we have had the Virus for less time— or it seems) where it should start to “bend”. Japan, older than Italy, Korea and China all began to bend about the same time. to each other. Europe and US have larger number of cases but less people than those 3 countries. It’s supposed to start bending. There were less cases on the 22nd, by half, but it’s easily conflated by uneven testing. It was obvious futures would be limit down—-but I had gained some hope yesterday,but not today.

    It’s getting scary to me. We really appear like it’s going to be worse here than Asia. Ex China it’s still a straight line up in log terms. The failed Congressional bill if passed feels like putting out a house on fire with a glass of water.

    I really think if we are going to treat this like “war” we need to act like it. I am starting to truly believe the only way out is to go back to work and accept the consequences. Still have maybe a few weeks to make that call. The 1957 flu in today’s percentage terms would imply about 225k deaths in US. At this stage of the game, I think that would be a big win.

  11. Gravatar of Christian List Christian List
    22. March 2020 at 15:49

    I think we are on the same page here: China has an evil regime. They tried to hush up the virus at first, but then they finally got their act together, I assume only when there weren’t many other ways left.

    And then they have achieved something remarkable in a short time. They accomplished containment, maybe even eradication, two things many did not think were possible.

    I don’t believe in conspiracy theories either. There’s no reason to believe the virus was deliberately released by the Chinese. There’s simply no reasonable motivation.

    But SARS was a very serious disease in China few years ago, so it must be assumed that the Chinese were researching SARS. Western nations would have done something similar. Within the framework of this research there may have been an accident and an unintentional release. That’s entirely possible

    With Ray’s paper on NCBI, I find it frightening that the researchers have apparently formed chimeras. That they would go so far, I would have never imagined. Why in the world would they create chimeras? This is a story straight out of a science-fiction horror movie.

  12. Gravatar of Benjamin Cole Benjamin Cole
    22. March 2020 at 16:21

    China is ascendant. I wish more economists would study the People’s Bank of China. As near as I can determine, the People’s Bank of China will buy bad debts from their banking system, leaving the banking-system sound. In theory, this should create moral hazard but perhaps in practice it does not, and it certainly has the advantage of not choking the commercial banking system just when you need it. China, like every place else, is below inflation targets.

    I wonder if in 20 years it will become obvious that China’s state-managed economy is superior to the US approach. That does not mean the US can adopt a China approach, we have different peoples in a different culture.

    I detest Beijing’s repression of of all human rights. Global multinationals have become mouthpieces for Beijing, one of the more putrid surrenders in history. I guess it is poor form in US media today to call COVID-19 the “China virus” or to note that it appears to have originated in Wuhan.

    As I said, China is ascendant.

  13. Gravatar of Benjamin Cole Benjamin Cole
    22. March 2020 at 16:48

    “Financing programs for businesses hit by the coronavirus could amount to $4 trillion, Mnuchin says”

    The Federal Reserve and Treasury are working on financing programs that could be worth $4 trillion, Treasury Secretary Steven Mnuchin said Sunday.


    Already, we are talking $4 trillion?

    Sometimes in life and public policy you have to take the least-bad option. I suspect at this point the least-bad option is that we all go back to work.

  14. Gravatar of David Tomlin David Tomlin
    22. March 2020 at 17:01

    Here’s an article on Japan. It considers possibility that limited testing conceals how bad things are, and cultural factors that may have limited transmission.

  15. Gravatar of David Tomlin David Tomlin
    22. March 2020 at 17:03

    @John Arthur

    There was an Italian town where everyone got tested. Could that be what you are thinking of?

  16. Gravatar of Willy2 Willy2
    22. March 2020 at 17:09

    – Oh, yes, China is in a credit bubble. See the work of one Steve Keen.


    – But one S. Sumner think that all financial markets are VERY efficient. I agree and that includes those things called “Bubbles”. Bubbles are VERY One only has to indentify those bubbles. Like the housing bubble in Japan (1980s), the US (1995 – 2005), Australia (2000s & 2010s), South Korea (2010s), etc.
    – There is one thing that have these bubbles in common: they are all “Credit/Debt bubbles”.

  17. Gravatar of John Arthur John Arthur
    22. March 2020 at 17:19

    Thanks, I didn’t know about that Italian town. It was really cool to learn about.
    But, I was looking for a result sheet of random testing in Japan. I don’t actually know if it exists, but it would confirm if the numbers in Japan are accurate or not. I would think maybe someone has done this in Japan.

  18. Gravatar of Steve Steve
    22. March 2020 at 17:35

    Three weeks ago, I posted this:

    Singapore and China are poor examples. Singapore has performed extremely rigorous case by case tracking and contact isolation. China implemented a military lockdown. The USA is following Iran’s example and will have Iran’s outcome.


  19. Gravatar of dtoh dtoh
    22. March 2020 at 17:46

    David Tomlin,

    Certainly the amount of testing influences the numbers the confirmed cases. But, with a fixed testing regime you should still be seeing an acceleration of new cases. But in fact, Japan is increasing testing and seeing a deceleration of new cases.

    Testing does have some impact on transmission. (If you know for certain you have the disease, you’re going to be more careful.) By far though, the most important thing is good hygiene and physical distancing. IMHO the debate about testing has been a distraction and diluted what should have been the focus on hygiene and distancing.

  20. Gravatar of dtoh dtoh
    22. March 2020 at 18:01

    John Arthur,

    I’ve been watching the Japan numbers pretty carefully. Based on a) their test regime, b) the growth rate of new cases, and c) the number of fatalities; I would guess that actual cases in Japan are probably 5x to 10x the number of confirmed cases.

    That said, if you look at the fatality rate for Diamond Princess cases (1%) and the fact that it was a very old population on the ship, it’s seems that Japanese medical outcomes might be much better than elsewhere, in which case the number of actual cases could be in the range of 3x to 5x the number of confirmed cases.

  21. Gravatar of Benjamin Cole Benjamin Cole
    22. March 2020 at 18:08

    Okay, so Mnuchin wants $4 trillion to handle certain financial and economic outcomes of shutting down the economy to fight a virus that primarily afflicts the elderly with co-morbidities.

    We are talking $4 trillion, and I sense we are in the first inning of economic costs of the shut-down policy.

    For those of you schooled in monetary policy and macroeconomics: So what means $4 trillion in additional government outlays, I assume financed by a combination of borrowing and money-printing (within a one- or two-year period)?

    How about $8 trillion?

    $12 trillion? (I think this number is possible).

    So…who is in denial?

  22. Gravatar of Benjamin Cole Benjamin Cole
    22. March 2020 at 18:35

    Note to Ray Lopez and Scott Sumner: A “conspiracy theory” is an explanation of events not extolled by officials, or embraced by the bulk of media.

    So, it is not a conspiracy theory to say Russians are interfering with US elections. I have never seen any evidence of this.

    Yes, the Communist Party of China maintains a weapons-grade virology lab in Wuhan, one of only two in the country. There is no free press in China, or free speech. The “news” organizations exist to extend the viewpoints of the Communist Party of China, by Beijing ukase. President Xi says so.

    In such circumstances, no one knows the truth. Perhaps a virus was inadvertently released from the Wuhan lab. It is a new-ish lab, and perhaps people are unfamiliar with proper procedures. A vent gets left open when it should be closed…a security guard is exposed…goes home to family, shops in the market…

  23. Gravatar of dtoh dtoh
    22. March 2020 at 18:40

    @Benjamin Cole

    My best guess 10% of GDP in 2020… $2 trillion. Food, beverage, hospitality and travel are going to get hit hard, but manufacturing, tech, services, health care has not cut back that much.

  24. Gravatar of DF DF
    22. March 2020 at 18:54

    Let’s enumerate the Chinese coronavirus missteps, shall we?

    1. Even allow SARS, the government allows wild animals to be sold in wet markets.

    2. They knew of the novel virus Wuhan for 7 weeks, while suppressing information, arresting doctors who spoke out and destroying evidence.

    3. They influenced the WHO to spread misinformation about human-to-human transmission, advise against travel restrictions for Chinese nationals in January and February (as they impose their own currently), and to exclude Taiwan from WHO participation.

    4. Their Foreign Ministry officials continue to peddle conspiracies about the US spreading the virus in Wuhan. https://twitter.com/zlj517/status/1241723635964039168

    5. They revel in the misfortune of others caused by their virus. https://forums.huaren.us/showtopic.aspx?topicid=2523031 Translation: “Warmly congratulating America on its pandemic situation. Wishing the Japs a nice and long plague.”

  25. Gravatar of P Burgos P Burgos
    22. March 2020 at 19:01

    Genuine question; what, in very concrete terms, do people mean by saying “China bubble”?

    When I look around, I see folks in China and the government investing in things that are useful and will make life in China better and make the Chinese economy more productive. They are building lots of apartments and condos in their wealthiest metropolitan areas. They are spending money to try and make a high school education universally available, and to increase the number of students who go to college. They are building lots of new subway lines and stops in major cities. When you look out the train windows between cities, you still see people farmers working with their hoes on small plots, but you also see lots of greenhouses and some farm equipment, and I am sure that you will see more of those things in the future.

    So I am not sure in what sense there is a bubble. Investment in China seems to be in things that are genuinely useful and in short supply. China really does need more houses in its urban areas. Its cities are increasingly large and sprawling, so subways are really useful in opening up green fields for development and efficiently moving people around. I am a bit skeptical that increasing educational attainment in China is going to pay off as much, but I have read many other people claim that having a highly educated workforce is a huge boost to a nation’s economy.

    China’s economy should be quite a bit more productive in ten years.

  26. Gravatar of Mark Mark
    22. March 2020 at 19:12

    One thing that frustrates me about the coronavirus discourse is how many of the same people who insist China could not have controlled the coronavirus will also argue that China should be held responsible for not controlling the coronavirus.

    Which brings me to DF:

    1) Diseases can be caused by domesticated animals too (swine flu, avian flu from chickens, etc.). Does that mean we should all go vegetarian? Or is there evidence that exotic animals pose that much higher risk than domesticated ones? We also don’t have complete evidence that this disease even came from a food market. It could’ve just been a wild animal.

    2) What seven weeks? Give dates. As far as I’m aware, the first reports of this disease came at the very end of December and Wuhan was closed on January 23rd. That’s three and a half weeks. And from the end of December to January 23rd, they sequenced the genome and shared the information with the WHO, so it wasn’t like they were doing nothing. Notably, virtually no other countries shut down three and a half weeks after their first cases either, so I don’t think it’s reasonable to expect China to have acted faster.

    3) How do you know China influenced the WHO to advise against travel restrictions? The WHO has advised against travel restriction in many prior pandemics because the scientific evidence shows that they are generally ineffective once countries have domestic spread. And the experience of this disease bears it out: Canada, which did not ban travel from China until mid-March, is doing much better than the US, which banned travel from China right away. Also, China has not imposed travel restrictions on any country. It’s requiring quarantine for inbound travelers, but that is very different from banning travelers altogether because it does not prevent people whose reasons for traveling are important enough to last a 14-day quarantine from traveling.

    4) This is in response to US leaders blaming China and spreading theories that this virus was from a Chinese lab. If US leaders didn’t try to blame China and instead treated this as a common threat to people the same way that ebola wasn’t blamed on the DRC, swine flu wasn’t blamed on Mexico, etc. I doubt Chinese leaders would have responded in this way.

    5) You’re now blaming China for random people on online forums? What do you think the most jingoistic American Internet comments are like? Moreover, many US *leaders* such as Wilbur Ross have gloated about the pandemic, stating that it would bring jobs back to the US. No Chinese leader that I am aware of has gloated about the spread of this disease in other countries.

  27. Gravatar of Student Student
    22. March 2020 at 19:24

    1.) Why does it matter if it escaped from a lab or jumped species naturally? What difference does it make?

    2.) I am doubtful we are going to be able to do what it takes to beat this things. Why would I expect that a society that murders 1 million of their own children every year for monetary gain would be willing to sacrifice for their parents and grant parents? To many people really only care about themselves… and it shows.

  28. Gravatar of Phil H Phil H
    22. March 2020 at 19:25

    A little real-time update from China: Travel restrictions are easing and we’re getting back to normal. Xiamen, which was virus-free, is now not virus-free. We had a family taken away by a biohazard team from our previously safe (I think!) apartment complex just yesterday.

    The second wave is coming, and I’m not sure how ready we are to cope with it.

  29. Gravatar of DF DF
    22. March 2020 at 19:30


    Regulations and enforcement matter more than you seem understand in order to prevent diseases jumping from animals fo human. SARS came from Chinese people eating civets, and this virus seems to have jumped from Chinese bats, pangolins or both. Please don’t tell me these are “just like chicken” since they are rare and only consumed by mainly rich people who believe the animal meat is imbued with magical properties. Being rare delicacies, thr government could easily crack down on them but chooses not to.

    And this was not the only major pandemic to sweep through China in 2019. African Swine Flu was also a disaster made in China. Let’s face it, the country has a problem and a track record in animal-borne diseases.

  30. Gravatar of Student Student
    22. March 2020 at 19:31

    DF, we allow people to murder their own children, our leaders withhold information from people so they can dump their stock, etc. I’d like to think we are “better” people but I don’t think we are. Perhaps I am being to pessimistic again tonight… but these are pessimistic times.

  31. Gravatar of Mark Mark
    22. March 2020 at 19:42

    Student, I think 1 is relevant because it goes to whether anyone could have stopped this but didn’t. If this virus escaped from a lab, then there is more of a case for blaming and correcting negative human procedures, but if it came from a wild animal, then it looks like an act of God.

    On 2, I’ve actually been pleasantly surprised about people in my city coming together. I have little to no trust in the federal government to help things, but individual people and private organizations have stepped up a lot in terms of staying home, helping local businesses through a tough spot, not normalizing discrimination against Asians, and creating virtual community. We’re not going to achieve Wuhan-levels of social distancing, but hopefully what we’re doing will be enough because we got started when there are only a few confirmed cases while Wuhan already had hundreds when it was locked down. I’ve lost a lot in this pandemic (both financially and in terms of family) yet I am not too upset at the pandemic because there is a sense of shared sacrifice. I am pretty upset at the federal response though; I imagine anyone who just lost a third of their wealth in the stock market would be infuriated at learning that senators were selling stock while telling everyone else things were fine!

  32. Gravatar of Nate Nate
    22. March 2020 at 19:55

    Take Japan’s success with a grain of salt. They’ve done extremely minimal testing (about 20k tests to date, see https://covid19japan.com/ ) so I don’t think the government here in Japan is taking it very seriously or has any idea how bad it really is. The government seems to have their head in the sand about it to save face and avoid cancelling the olympics.

    The one anecdotal counterpoint is that according to a nurse friend, the hospitals here aren’t overwhelmed or evens eeing many cases, so even if it is worse than the government is acknowledging at least it isn’t so bad the hospitals are struggling.

  33. Gravatar of Benjamin Cole Benjamin Cole
    22. March 2020 at 20:44

    dtoh: Whatever you think about the Trump Administration, Treasury Secy Mnuchin seems like a sensible, smart guy, hardly a radical of any sort.

    Mnuchin is asking for $4 trillion in bailout money. Already. I guess borrowed or printed.No one knows.

    I hope he is a “going in big and early” in hopes this will be a one-time shot. It is double the output lost in GDP in 2020, by your estimate. Maybe Mnuchin is pushing a giant debt-bondage program. however.

    I sense we are in the first inning, or first quarter of this economic calamity, depending on the sports analogy you prefer.

    So…where are all the inflation-hysterics? Gone with the libertarians (who are putting on the jodhpurs of the statist-martinets?)

  34. Gravatar of Benjamin Cole Benjamin Cole
    22. March 2020 at 20:58

    1.) Why does it matter if it escaped from a lab or jumped species naturally? What difference does it make?–Student.

    If the COVID-19 virus was artificially created, and escaped from the Wuhan lab, that is a matter of global public interest. I would like a true and accurate accounting of what happened, in that case. It matters a great deal.

    At the least, perhaps safety precautions at virology labs are inadequate, as exposed by what happened at Wuhan. Perhaps, like Chernobyl, we need to think about human error. Perhaps we need to design virology labs, even with human malice in mind. A demented employee decides to circumvent safety procedures?

  35. Gravatar of dtoh dtoh
    22. March 2020 at 21:16

    Me too. I don’t know where the $4billion is coming from.

  36. Gravatar of Benjamin Cole Benjamin Cole
    22. March 2020 at 21:41

    Fear-mongers, this is how you do it. From Stuart Staniford, a Cornell prof.

    “It will not be possible to get relevant quantities of PPE, ventilators and extra hospital capacity into New York this fast. Most people will not get much if any medical attention. Stats elsewhere suggest 15-20% of people with this disease need hospitalization, and they will not get it. About a third to half of those will die to judge by the experience in Hubei and Italy. So that suggests we’ll see 1m to 2m fatal cases in the New York area next month. New York will become the global icon of the disease (taking over from Italy, which in turn had taken over from China).

    As this unfolds, terrified people will stream out of New York City to anywhere else they can get to. They will bring the virus with them. Even under normal conditions, New York is a very highly connected city. The right thing to do will be for authorities not to let people leave, but instead to close down the roads, airports, etc out of the NYC area to all but HGV and emergency vehicle traffic. ”



    Well, if true, I will correct my statements that the elderly with co-morbidities are the most at risk. I would say most at risk are NY real estate investors.

  37. Gravatar of Steve Steve
    22. March 2020 at 21:45

    It’s impossible to know exactly where the Covid-19, a.k.a. the Wuhan CCP Virus, came from. It could be from a wet market. It also could be an entirely natural bat virus, that crossed to humans in a laboratory.

    It’s unsettling that we can’t truly know, but the intellectually honest thing is to admit that. Which also carries troubling natsec implications.

  38. Gravatar of Ray Lopez Ray Lopez
    23. March 2020 at 01:43

    @ everybody, good thread. Thanks Christian List for the acknowledgment. I agree with DF, who seems to be Chinese and knows China 10x better than any of the rest of us. See DF’s excellent post: even if you think China did not accidentally release Covid-19 virus (and the more I think about it, I do think it was an accidental release) the mainland Chinese were negligent in handling the crisis. That said, China’s actual response, as Sumner says, is far superior to the USA’s. The USA is seeing–e.g. in NY state–a doubling of cases every 24 hours. At this point unless the USA intermediately goes into a China/PH/GR total lockdown (in GR more than 2 people in a car are banned, and you need permission to visit a food store, same in PH), or, unless the USA miraculously somehow ramps up testing so every single person who should be tested is tested (South Korea model), then to use a US Southern expression, “It’s all over but the shouting” (and finger pointing of blame).

    In fact, I fear I might lose some elderly and immune compromised relations as I type this. They are in the DC area but notice how close to the tornado that is NY they are. Sadly I fear it’s only a matter of time. Ironically I am in the middle of bringing my PH girl into the USA (after pulling a lot of strings using high-ranking politicians too, which in a saner society should not have been necessary) when the crisis hit and now GR, PH are in total lockdown and the Manila embassy for the US is closed.

    The only ‘silver lining’ is Trump should lose the election, though there’s a chance that, as economist Tyler Cowen has said at MR, Trump’s crisis leadership, such as it is, may embolden some clueless Americans into ‘rallying around the flag’ and voting yet again for him. Thank God for term limits I guess.

  39. Gravatar of Christian List Christian List
    23. March 2020 at 02:19

    Can somebody please check on Ray in person? I’m really worried that the old Ray was murdered and replaced by a partly rational new Ray who finally understood the gravity of the corona situation.

    China’s actual response, as Sumner says, is far superior to the USA’s. The USA is seeing–e.g. in NY state–a doubling of cases every 24 hours. At this point unless the USA intermediately goes into a China/PH/GR total lockdown


    what happened to the Benjamin Cole “strategy”??? Are you finally getting cold feet? Just let a few million people in the US get infected, the survivors might get herd immunity, or maybe not. It’s the infamous Johnson-Rutte gamble, but hey who doesn’t like to gamble in a situation like that???

    I think countries like UK, US, Brazil will be very interesting in the next weeks. These countries currently scare me the most.

    Also Spain, France, Germany have not yet reached the peak.

    And countries like the Netherlands and Sweden have also reacted very late, Rutte was crazy like Johnson. I have also heard that in parts of Sweden the beer garden season has been preponed in order to distract people from corona. That’s a really smart idea.

  40. Gravatar of Michael Rulle Michael Rulle
    23. March 2020 at 05:11

    Scott has called me an idiot, twice!, in the same response. I won’t argue. But look at this essay.

    He fights phantoms who say China’s “bubble” will burst. What bubble? It’s economy?. It won’t burst, but it will gradually deflate——that’s controversial?

    He quotes an essay from Fortune Magazine from October 2019 “proving” China has outperformed US in the trade deals—-by 2.5 times in October! What does that Even mean?

    Then he lectures readers on not believing China’s numbers. I basically believe the Virus numbers in Wuhan——but what is with the innumeracy jab, linking it to not knowing China “really” has 300k cases, not 81k——!. They must be either lying or they are stupid. But that number was first floated back in early February. No one acknowledges it. How is that “innumeracy”? That is not even an dictionary example of “innumeracy”. If 300k is true, that is lying. So, why wouldn’t people, be suspicious about what they say? Again, I believe the Wuhan numbers—-too much like Japan and Korea.

    I agree it is still to soon to know what the US growth path will be as we have this enormous problem determining the denominator due to not enough tests, nor seemingly any explicit stated plan to begin random testing in the near future.

    The bid ask on “when we can get back to normal” is at the lowest, Fauci’s several weeks (5-7?) and Cuomo’s 6 months. Getting back to normal may mean letting the disease roam more free. Cure versus disease—-which is worse?

    I understand this is Scott’s bad site—-including much of what he says.

    But even though he can be an obnoxious jackass, I really do think he has added great value and has influenced, directly or indirectly, the Fed and economists generally, in real life. In the not so long run, Prof Sumner will get his props——for our sake sooner will be better than later.

  41. Gravatar of Ray Lopez Ray Lopez
    23. March 2020 at 11:04

    @C. List – herd immunity is the de facto US strategy. Yes I got cold feet when I read perhaps survivors of Covid-19 may not have immunity after all, and, it also causes long-term health problems with survivors. Catch you on another thread…

    @M. Ruelle – Sumner is not a jackass, in fact, he’s pretty mild compared to some bloggers. Most bloggers would have blocked or banned both you and I. And, unlike you, I don’t believe in strong money non-neutrality but I still read this site.

  42. Gravatar of ssumner ssumner
    23. March 2020 at 11:29

    Michael, The Chinese don’t even include asymptomatic cases. My guesstimate was 100 times the death total.

    dtoh, I agree, the low death rate in Japan suggests only a modest number of cases–no exponential growth . . . so far, it might change.

    DF, Agreed, but you could easily construct a list like that for the US. Officials peddling conspiracy theories about Chinese labs. Chinese people being beaten up in America. US officials putting out one lie after another regarding our fight against the disease. China’s government is worse, but we are pretty bad.

    And even when we found out about the problem we twiddled our thumbs for 6 weeks. so how can the delay in reporting from China have hurt us?

    Michael, Lots of pundits haven’t been predicting the China bubble would burst? Okay, whatever you say.

  43. Gravatar of DF DF
    23. March 2020 at 15:57

    Professor Sumner, you wrote

    “And even when we found out about the problem we twiddled our thumbs for 6 weeks. so how can the delay in reporting from China have hurt us?”

    It is not the delay in reporting that’s important, it’s inaction. There is evidence to suggest they knew of the disease in 2019. Early cases matter a lot more than later ones, and the ones in Wuhan mattered the most. The Chinese handled COVID19 worse than SARS, and the outcome has been much worse.

  44. Gravatar of Michael Rulle Michael Rulle
    23. March 2020 at 17:57


    I said Scott can be (not is—big difference) a jackass. I can be an idiot—but I am not an idiot. Same idea. But I have no problem if he calls me that because it makes me think more carefully. I would be shocked if he cared what I called him! This is his bad site after all! Kidding aside, he is remarkably persuasive and confident in his opinion. That’s hard to do. And its obvious he has had an enormous impact on Fed thinking and action. I have followed the Fed closely for 20 years—but Never heard anyone think like him. It took me a year to believe he was not stuck in circular reasoning. In fact, I have discovered that is still a common critique of Market Monetarism. I NEVER argue with him on monetary policy anymore, once I got past circular reasoning . I argue with him on other stuff, like future of China, Trump, efficient markets, climate science, etc where it is obvious he knows no more than the average guy who had read a few books—-like me.

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