After the Stimulus: Shut Up Bevis

The best case scenario is that Trump is right. Blood testing for COVID will come quickly and show many have immunity and can return to work - ending mass(k) panic and making getting sick an act of patriotism for all workers.

Second best is for Federal Reserve to forgive all asset backed securities on consumer debt and to mark mortgages to market, giving them back to original owners or their heirs or selling them at low interest loans to current renters. Raise income tax rates and offer tax pre-payment bonds and tax free sales to ESOP/COOPs to avoid taxes. No pitchfork solution (Least likely)

The planned scenario, social distancing and stimulus without inflation will work. (Unlikely).

Hyperinflation. The question then is how to  respond?
1. Pay off all debts, especially mortgages
2. Radicalize workers
3. Don't buy Crypto or Metals. They will be worthless when money is, will fail or be seized by government.
4. Don't hoard. Hoarders will be arrested if lucky, killed at worst.
5. Buy seeds and buy or make indoor growing equipment for food and herb to use and give away to make friends
6. If rich, sell pitchforks and buy running shoes. You will need the latter to outrun the former.
7. If rich, buy supplies to give away and make friends. If you do so the masses will let you keep sucking air.
8. For all, practice love. Accept love. Start by not hoarding toilet paper. Purchases will likely be limited, but don't go store hopping as a means of hoarding because many of us can't. My stash will run out by Saturday. So will yours.
9. Don't vote for Trump or Pence (even if COVID goes away magically). No-brainer.

Stimulus Number 3 and the Cornholio Virus

The deal is done. Last week, it sounded like a good thing. Indeed, increasing the Child Tax Credit, eventually putting a floor on the EITC and opening the door on a higher minimum wage by opening Pandora's Box on a higher weekly unemployment benefit are all things I have been supporting for a long time. The question is whether this is that time.

Sadly, this Administration does nothing without an ulterior motive. That the point person in negotiating both the second and third bailouts is all you need to know. His motives are not exactly pure.

One of the main components of household spending is housing. Mnuchin made his bones as the notorious "Foreclosure King," scooping up properties lost in the Great Recession and through the Reverse Mortgage Scam. These schemes targeted seniors who did not really know that they were giving away their legacies while racking up huge fees. They were the ultimate legacy of the 1986 tax reform, which turned homes into ATMs.

The Clinton and Bush tax cuts on capital gains, compounded by the Tax and Job Cuts Act, gave speculators a huge tax advantage for dealing rather than working, as well as huge incentives, through low marginal tax rates, to hold wages down (blaming this on health insurance premiums), while getting huge bonuses for doing so. Mnuchin helped negotiate the last bit, while not filling vacancies in the Office of Tax Policy. They usually have the role of honest broker. Not this time.

What had been single-family homes were now rentals, which usually put maintenance responsibilities onto the owners. To capitalize on his holdings, Mnuchin and his cronies leveraged the mortgages into AAA mortgage backed securities. Tell me if you have heard this song before.

Along comes our super bug. Suddenly, social distancing becomes the norm. People are played off and added to the unemployment roles. No wonder Trump became a COVID denier. His reputation as a demented fool gave him the perfect cover to downplay the crisis, hoping people would keep working.

When governors started heeding the advice of his medical disaster team, other options were required. In rides Secretary Steve on a white horse to work a deal, actually two deals, to assure that renters can keep paying. Meanwhile, as a backup plan, the Federal Reserve starts buying bonds. Wait until they look inside.

The bailouts are now passed. All seems right with the universe. Industry even got a piece of the action, while small businesses do too, both through loans and because most are really employees without benefits or automatic tax withholding.

The bailout provided even small businesses that were lax in paying self-employment taxes that would have made them eligible for unemployment compensation. They can keep servicing their debts.

The bailout pays for itself on paper Industrial loans will be paid back. Unemployment premiums go up. Tax benefits are paid back as an advance on 2020 tax refunds, but if you get money back, like the poor.

Families can do little else with the money. Money is not really the ephemeral thing that the Federal Reserve can create with a keystroke or the federal government can manufacture with a tax cut.

Money is a demand for the labor of others. Goods are simply past labor, from extraction to distribution. Future labor is debt. Current labor is what is available now. The bailout pays the latter, while the supply of goods and services is diminishing day by day. Shortages are beginning to occur.

On Amazon, you can buy toilet paper from Europe and Japan now to be delivered in May, although for a higher premium you can get expedited delivery in mid-April. We now have a futures market for it. This is not an April Fool's Joke.

Unless you can find a source, we are all Cornholio, or rather, you are. My six rolls arrive as early as Monday. It is probably the best $29 I have ever spent. It is worth, per sheet, more than any dollar being deposited in the bailout. I am not threatening you. This is now our lives. Welcome to Venezuela.

Trump is not so stupid. At Wharton, he studied economics. The main topic in that era was fighting inflation. Reagan, not Volker, killed inflation by giving the wealthy a tax bonus by lowering marginal rates. He knows what hyper-inflation looks like. Happy Easter.

A Cultural Theory of COVID-19

Ever since Mary Douglass wrote Purity and Danger, we have had the perfect tool to analyze how society functions both day to day and in crisis. Her collaboration with Aaron Wildavsky, Risk and Culture, deepened this understanding. In doctoral school in the late 1980s, I took Aaron's seminar when he was a visiting professor at American University. During that time, he gave a series of lectures which became The Rise of Radical Egalitarianism. The Grid/Group Cultural Theory is, in the view of many, the field theory which puts all of social science in perspective. It lays bare the assumptions of each, from the libertarian bias of economics to the egalitarianism of sociology. This essay shows how the theory can be used to put the current pandemic in perspective.

First, a bit on the theory. Grid/Group Theory posits four basic ways of life based on social organization/prescription (rules) and social cohesion (group membership). The four ways of life are hierarchy (more rules/high group), egalitarianism (few rules/high group), individualism/libertarianism (few rules/low group) and fatalism/despotism/authoritarianism (more rules/low group).
Just by laying out the theory, you can likely see where the actors in our current national drama fall.

The medical establishment, from Dr. Anthony Fauci on down, are the hierarchs. They rely on their expertise and their social networking to provide us with an answer. In time of crisis, we rely on such people to organize a response, including organizing us.

Their core social belief is that if we do what they recommend, we will get through this. Their power is a consistent message. Everyone in the medical caste falls in line. They are self-protective. Members of the caste are the most important, so they must be protected with adequate masks, even those younger members who could easily manage their own symptoms and work through them. The older members cannot allow this, as they must save face. Prior experience with other epidemics, especially Ebola, provide the rationale for this protection, even if it is not appropriate to this pandemic.

In more traditional societies, rules were given a religious context. In modern society, morality has been replaced by health. Thus, today’s sinners are those who fail to keep the prescribed social distance. Their behavior is cast in moral terms. Young people who do not seem to get very sick (although capers may be more at risk) are told to fall in line for the health of the more vulnerable aged in their lives and the lives of others.

Egalitarians share the commitment to protect the elderly and themselves. They get upset (I have seen it) at the thought that some people are already immune and are no longer practicing social distancing. If they suffer, so must everyone else.

They object when testing is reserved for the medical caste and the wealthy, who seem to have no trouble being tested. Their chief demand is that those displaced by the crisis be made whole. Their saying so draws opposition from the authoritarian and libertarian believers who resist such accommodation because the egalitarianism demand it. The egalitarians respond by opposing subsidies to established industries, as this would help perpetuate inequality and control by institutions. They hope that improved distributive justice now will set precedent, which their opposing ways of life fear.

The Authoritarians fear economic justice because, in their view, work and social obedience can be better compelled from the hungry. Even libertarians buy into this belief because there are no other social norms to compel work from lesser beings. The libertarians are motivated by money and prestige. They agree with subsidies to the extent they are necessary for workers to pay their rent and credit card bills. These payments have largely been securitized and the libertarian elites hold the property and the securities. If more egalitarian knew the details, this pandemic will legitimize more strident calls for reform, even revolution.

Libertarians put their skills to good use in a crisis. They respond to unworkable rules with necessary work around, such as reusing masks and repurposing hotels as hospitals.

Libertarians think outside the box in ways the medical establishment may not accept. Libertarians propose solutions like more people getting sick to provide herd immunity. They come up with new diagnostic methods that outpace established routines. Kinsa's interactive thermometers provide maps of where the flu and Covid are likely to be, yet the medical establishment ignores them. Such creativity mutes calls for more testing and challenges expert authority.

More realistic assessments also mess with the established plan. One would think that by now, someone would have compared death rates in Milan to histories of cardiac illness. If those who died have no such history, it may explain why so many of the elderly are dying there. This type of analysis delegitimizes the plan. So would the examination of whether the pneumonia vaccine prevents Covid morbidity among the elderly. If mass vaccination works, no mass mobilization is required.

Young libertarians simply ignore social distancing. Parties continue. Spring break will not be stopped. Neither was Mardi Gras. For now, social rebellion is limited. If it turns out that the pandemic is more Swine Flu than Ebola, the consensus around the plan will evaporate.

For now, the population is fatalistic in their obedience to the plan. They truly fear the future. It is easy to do. Their acquiescence allows authoritarians (like Trump) license and has other leaders step into authoritarian behavior. The hierarchs cooperate with such nonsense (such as crediting the President for any progress) because it aids the mission.

Hierarchs will go along to get along, although their memoirs about Trump will likely be written with pens dipped in acid.
Authoritarians also draw egalitarian into action, even if it is only commentary. The media, with the exception of Fox, seems mesmerized by Trump's incompetence. The logical thing would be to simply ignore him in their coverage. While this risks a response from the despot, it also provides a morality play to fill dead air. It will continue until people stop watching, the libertarians who own the media and buy the ads will continue to talk about an old fool who should simply be pitied and ignored. Instead, he is our tragi-comic hero. Every story needs one.

COVID-19 or ETFs? Which virus is worse?

A few weeks ago, I had a cold and helped my ex move her stuff out of her apartment on a cold weekend. Day one: managing the load coming in (stacking boxes). Day 2: unloading boxes on cold morning into the sidewalk while waiting for other friends and getting them to and then into the apartment while the others took the truck back to load furniture. At the end of each day, I hit a wall on what could be done.

On day 2,  Sunday, I went for lunch then to Rockville Library to work on graphics for the new edition of my book in the national debt. Used public computers, as I do frequently. So do a lot if people. I likely got sick from these and infected others. Big vector but my immune system is likely better for doing so.

Monday the 2nd, stayed home with aching muscles and a cold with chest congestion. Stayed home on Tuesday too. I take hydroxyzine for asthma, so symptoms are under control. Wednesday to Friday, working on blogging and comments to Hill on tax policy (Fiscalequity.blogspot.com). Saturday, Pho. Stay in Sunday. Out on Monday., went to library, came home.

Next day (this past Tuesday), was going out in afternoon, but hit a wall. No energy, congestion still there (not a big deal). I have not been out since. No energy to do so. 

Cold symptoms are mostly gone. Told followers on FB that I am in self-quarentine and they went nuts with panic in their health, wondering if I have been tested. I have not been. I am pretty sure from symptoms and having heard how people who have had virus say it feels like when interviewed that I have or had it.

 Probably not contagious anymore. I was hardly feeling sick when I was. A very contagious disease is one that spreads before symptoms. The morality play of social distancing has no impact in behavior. Everyone has likely been exposed.

Blaming the crazy old man (Trump) for not reacting is simply piling on. He was probably correct. For this illness, most will be fine. The major inconvenience is how you feel in the recovery stage when respiratory symptoms are almost gone and the body is concentrating in making antibodies. 

I have no interest in going anywhere and spreading this illness, if I even am contagious. There are probably millions with the same story. 

Most people will not need respirators. Those who do would get pneumonia from any cold or flu. You can only die once if old and frail.

The media fueled panic is not really justified. Nor is piling on the idiot at 1600. This is Swine Flu 2020. 

All of the stock market losses are price deflation. The market is entirely monopoly money, not inflation in plant and equipment. It us savings, not investment. 

Tax cuts merely fuel savings by the lucky rich, profiteer scammers in (see bitcoin) and people with retirement accounts who should have had PAYGO pensions. It is amazing how people equate saving with the kind of investment defined as an element of economic growth. These are totally different.

Aside from Bitcoin, the hot savings instrument (the ones being advertised as 10 times savings accounts) are Exchange Traded Funds loaded with oil futures and heavily leveraged single family rental mortgage backed securities. When lots of people cannot pay because we have closed down the economy, all this monopoly money will go up in smoke.

I wonder how many people who sold this week were taking out the trash.

COVID may be the least of our problems this year. I wonder if some in the market were waiting for an opportunity to get out. This is not the time to buy.

Super Tuesday

A few takeaways. Biden owes his victories tonight to two groups.

Black voters turned out go him after Clyburn's endorsement and a solid debate performance (and a horrendous performance by Bloomberg). The anti-billionaire sanity check made it Biden's race to lose and he won it.

The second group that gave it to Biden was the never Trumpers in open primary states. The Republican Party has doomed itself and not removing Trump has sealed their fate. Unless they quickly put Pence in the big chair, their ship will sink. Joe needs to quickly form plans for Pence as an opponent, just in case.

Sanders has built a coalition for a future in which the Republican Party no longer exists. He will not be the one to lead it to victory, but it will eventually win. Indeed, the movement will enlarge from social democracy to the defeat of capitalism.

Social democracy and the movement as it exists today has to have the rich to play off in the same way that reactionaries depend on society making progress so that they can resist it. The debate must be enlarged and Sanders cannot do so. His only promise is free stuff. That is not the revolution we need.

Whatever happens this year will solve the short term insanity of Trump. Both Biden and Sanders are too old to bring about much more than that. For now, however, that is enough.