Texas Hedge

Billy Mack is a detective down in Texas
You know he knows just exactly what the facts is
--Steve Miller Band

Previously we examined Florida data showing the changing relationship between CV19 counts and measures of severity. Higher case counts have not translated into more hospitalization or deaths.

In another 'hot spot' state, Texas, hospitalizations associated with CV19 have reportedly increased, particularly in some municipalities such as Houston. This graphic is telling:

The blue and red lines represent hospital and ICU beds occupied by COVID patients. They have been increasing. The green line represents the total state hospital bed census. No change.

These data reinforce prior observations, some from Texas, suggesting people being hospitalized WITH the virus rather than FOR it.

Alex Berenson adds some interesting observations from a Texas hospital exec:

Final screenshot. pic.twitter.com/E5cAMJOjwl

— Alex Berenson (@AlexBerenson) June 30, 2020

The exec suggests that during the month of June, his chain of hospitals has tested more than 2000 people with a 20% positive rate (was ~5% previously). The vast majority exhibit mild to very mild symptoms. Average age of infection is mid-30s. He notes that CV19 patients are very different now compared to previously. When testing resources were tight, most of these people would not have met the criteria for receiving a test.

What has been motivating these people to get tested? The exec estimates that about half are employer driven. People are returning to work with a sneeze or a cough, and the employer sends them home and tells them to get tested. The other half merely want to know.

Many ICU beds are being filled with patients that put off going to the hospital out of fear earlier and they are now really sick. Many of these are testing positive once admitted for something else.

He also suggests many discharge planners are being pressured to indicate CV19 as the primary diagnosis. The pay is better and many hospitals are in difficult financial positions.

The exec closes by suggesting that all of this is generally good news. More people testing positive with milder symptoms implies a lower death rate than the 'headline' reports.

Political Infection

"This trial has shown that under the stress of a national crisis, men--even able and extraordinary men--can delude themselves into the commission of crimes and atrocities so vast and heinous as to stagger the imagination."
--Judge Dan Haywood (Judgment at Nuremberg)

Nobel laureate Michael Levitt of Stanford discusses the near total abdication of science during the pandemic.

On the "same as bad flu" - with a population fatality rate approx 0.04 to 0.05% (or ~500 in a million people) over the season - it is actually pretty much the de facto impact of a bad flu.
Argument against is: "the lockdown magicks kept it low" - but this is not evidence-based... pic.twitter.com/Z5Q0eO81lA

— Ivor Cummins (@FatEmperor) June 29, 2020

"In many places, the politics has infected the science--certainly in the USA."

Quite possibly, it will be this phenomenon--the political infection not the biological one--that will be the primary focus of forthcoming analysis for years to come.

CDC Serology Survey

Shake my fist
Knock on wood
I got it bad
And I got it good
--Robert Palmer

It does appear that the CDC is conducting a CV19 antibody survey at select locations in the US. Although it reports 10 locations with samples to be collected every four weeks, results reported so far are only from six sites and the data appear to be from samples taken 2-3 months ago.

From the data they do have, seroprevalence in the April period appeared to average 3-4%--more than 10x the infection rate inferred from reported positive cases at that time. These results are in-line with other scattered antibody studies conducted during that time window.

Infection rates have certainly increased since then. Applying the 10x rule to the current 'official' CV19 cumulative case count of about 2.5 million implies that 25 million people in the US have been infected. Using a total US population of about 330 million, that implies a 7.6% prevalence.

Would not be surprised if current antibody studies indicate at least that prevalence.

Viral Seasonality

What's your name?
Who's your daddy?
Is he rich like me?
Has he taken
Any time
To show you what you need to live?
--The Zombies

Nicely done anlysis linking patterns of infection in Italy vs Peru/Brazil to general differences observed by a researcher many yrs ago.

Does Lockdown give a great bang for the buck? Or is #coronavirus seasonal by nature, with its own dynamics?

Find out in 2 minutes flat... 😉#HopeSimpson #Covid19 pic.twitter.com/zPbybjAkEO

— Ivor Cummins (@FatEmperor) June 24, 2020

Temperate northern hemisphere regions show the familiar bimodal pattern (high in early and late periods of year but low in middle months) while tropical southern hemisphere regions have more of a bell shaped pattern with a peak period lower than the northern hemisphere peak.

Superimposing those distribution patterns over the death/million curves of Italy and Peru/Brazil show a pretty compelling match.

Also note, as presenter does, similarity between Peru and Brazil. Peru did hard lockdown back in March. Brazil didn't. No significant difference in the mortality curves.

Florida Again

When it's all mixed up
Better break it down
In the world of secrets
In the world of sound
--Tears for Fears

Another follow-up using current Florida data (source).

Amazing charts here showing positive tests (cases), hospitalizations, and deaths in Florida. The link between the three has broken down completely. Positive tests are up 5x since early June but hospital admissions and deaths are no higher than mid-May... https://t.co/IRc4U7SWLq pic.twitter.com/Hh2KstQjbp

— Alex Berenson (@AlexBerenson) June 26, 2020

Let's break it down. Case counts up big:

Hospitalizations have NOT increased.

Deaths either.

Thus far, higher case counts, driven presumably by younger people testing positive, have not effected severity in the state of Florida. Which gets us back to why the relationships may be changing.

Unfortunately, doubt you'll see this simple analysis in the mainstream media.

Age Distributions

Pete 'Maverick' Mitchell: Actually, I came in here to keep you from making a mistake with that older guy.
Charlotte 'Charlie' Blackwood: Really? So I can go on to making a bigger one with a young guy like yourself?
--Top Gun

Following up on yesterday's missive, the state of Florida provides some of the best data on CV19 demographics. The below histograms show age distributions for cases, hospitalizations, and deaths in the state of Florida.

Good data here on why age of infected matters so much. Those infected now are far younger & have far greater outcomes than the elderly. https://t.co/PCxumjmXyl

— Clay Travis (@ClayTravis) June 26, 2020

The shift in age with severity is apparent.

Note, however, that these data are cumulative since the onset of CV19. In their current form, theAgy don't provide a sense of how demographics may have changed recently. If, as we discussed yesterday, age of hospitalization has shifted lower along with the recent trend of lower aged infections, we need to parse the data in a different way.

For example, two histograms that divide data before and after, say, the first week in June would help us see whether the demographics of hospitalizations (and other indicators) have changed recently.

Younger Hospitalizations?

They're seeing through the promises
And all the lies they dare to tell
Is it heaven or hell?
They know very well
--Journey

Mainstream media hyperventilating over new highs in CV19 case counts...

...even though positive tests are largely a function of total test counts (which are hitting daily records as well). And, although death counts continue trending down and are off 90% from peak highs...

...the media is now fixating on hospitalizations. which have ticked up:

The reasoning mind should recognize one disconnect right away. Because hospitalizations are not a lagging indicator relative to positive cases, why are hospitalizations up only 5-10% from their recent lows while counts are up about 100%?

But why are hospitalizations up at all? This is a fair question since the average age of a person found to be actively infected with CV19 has fallen considerably over the past few weeks. Since younger people are far less likely to be seriously impaired by CV19 infection, we shouldn't expect positive cases among these people to translate into hospital stays.

Of course, lacking aggregate hospital census data, we don't know the age demographics associated with upticks in admission. It is possible that the demographic hasn't changed. Even though more young people are testing positive for the virus, it may still be that it is primarily older people being admitted for virus treatment.

However, some medical personnel are suggesting that the data are being influenced by people who are returning to hospitals in larger numbers for routine care--including elective surgeries that were postponed during the height of the pandemic. All hospital patients are now being tested for CV19 as standard procedure.

I’m a Texas physician. We’re seeing patients for routine care that just happen to be Covid+. They come to the ER for kidney stones, appendicitis, etc. and get dx with Covid on admission. This makes the Covid situation look worse than it really is.

— Jeff Stone (@JeffStone9) June 24, 2020

Some of them inevitably test positive. And since many of these patients are younger, this helps explain the phenomenon among young people. Many young people are not testing positive for CV19 and then hospitalized. Instead, they are hospitalized for other conditions and THEN testing positive for the virus.

Perspective from a hospital exec who has emailed before and whose chain includes several Sunbelt facilities. He is highly confident overall (though note that his hospitals are seeing shorter lengths of stay, which cuts a little against the longer censuses). pic.twitter.com/VE6BIFKJyQ

— Alex Berenson (@AlexBerenson) June 24, 2020

Stated differently, it may be that the uptick in CV19 hospitalization is due to people being admitted for something other than the virus--and not needing treatment for the virus.

btw, there is also some evidence of double counting among hospital patients as well:

From someone in Arizona (I have confirmed his identity). Obviously, cases are really rising, but there seems to be at least some double-counting going on. pic.twitter.com/NpUJnv3tt5

— Alex Berenson (@AlexBerenson) June 25, 2020

In any event, the resumption of more normal traffic flow to hospitals coupled with the standard protocol of testing all hospital patients for the virus helps explain a possible relationship between CV19 infection and hospitalizations among younger people.

Changing Relationships

There's no sense in pretending
Your eyes give you away
Something inside you is feeling like I do
We said all there is to say
--Tom Petty & The Heartbreakers

Mainstream media has been busy hyping increased CV19 case counts in several so-called 'hot spot' states, yet hospitalizations and deaths have not commensurately moved higher.

Sure, case counts are likely going higher in large part due to more CV19 testing happening on a daily basis. But why the breakdown in relationship between cases and deaths (or hospitalizations for that matter)?

One possibility is that there has been a change in the demographics of infection. For example, Florida's governor has noted that, whereas the average age associated with CV19 infection was mid-60s a few weeks back, today the average age is below 40. This points to the likelihood that there are more younger people now being tested. It also seems likely that increased mobility among the young as states reopen introduces more chances for infection. Since young people are far less likely to be seriously impaired by CV19 infection, that could explain the declining relationship between case counts and deaths.

Another possibility is that the virus itself is losing strength. One way to think about it is that, early in the progression of transmissible disease, pathogens target the most vulnerable first in a survival-of-the-fittest evolutionary pattern. As the 'easy prey' are eliminated, then locating attractive hosts becomes increasingly difficult. The most virile versions of the pathogen may go into the ground with victims.

Immunity could also increase. Resistance builds among those who have been infected and have since recovered. Natural immunity could also build. Virus infections are notoriously seasonal. The 'flu season' generally ends in spring as people get outside more and collect sunshine Vitamin D that strengthens their immune systems.

It is also possible that the virus itself might mutate into weaker forms as well.

We're likely seeing a combination of both. Younger demographics of case counts and declining virility are lowering health risks of CV19. This is changing relationships between case counts and outcomes.

When will the media catch onto this is? We can be sure that it will be far after the fact.

Splintering Myths

"You're here because you know something. What you know you can't explain, but you can feel it. You've felt it you entire life, that there's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad."
--Morpheus (The Matrix)

Several times in my adult life I have encountered situations where my accumulating life experiences were telling me something different than what I had been taught in school to be 'true.' I have since come to understand, as suggested by institution theory, that myths often become truth thru institutional processes such as education.

For purveyors of myths, schools become channels for myth transfer.

My sense is that many social responses that we are witnessing today have been driven by transfer of myths to vulnerable young minds who accepted them as truth.

I'm hopeful that many will feel Morpheus's splinter--that something that they thought was true does not jibe with reality--and then resolve to reverse the process.

Splinter those myths.

Signaling Compliance

"It's easy to transfer out of a group, Jesse. It's pretty hard for a man to transfer out of his obligation. But then, every man has to play it the way he sees it."
--General Frank Savage (Twelve O'Clock High)

We've discussed masks as a mechanism for virtue signaling. It seems increasingly clear that, for those who value liberty in particular, some people are viewing masks as a signal of compliance or allegiance to authority.

“Nonconformity is the highest evolutionary attainment of social animals.” -Aldo Leopold

If you know something is wrong, DO NOT DO IT. The fact that “your crowd” does it is no excuse. https://t.co/oWkzTxqk5Y

— Stacey Rudin (@stacey_rudin) June 22, 2020

Moreover, those individuals are wondering, as indicated above, why they must be forced to wear masks if others can choose to wear masks and maintain distance from others using their own volition.

Why not let each individual decide?

CHAZ

When the truth is found to be lies
And all the joy within you dies
--Jefferson Airplane

A noteworthy phenomenon in the recent round of protests and riots is the attempt to construct so called 'autonomous zones' in many cities. Thus far, only one has been able to stick, that being CHAZ (Capitol Hill Autonomous Zone) in Seattle. After city officials closed a downtown police station in early June, rioters rushed to commandeer a six block neighborhood in the area.

While mainstream media spins it as a spontaneous, peaceful protest, CHAZ is neither. It is being managed by several leftist groups and it is gaining socialist sponsorship. The camp itself was founded on principles of theft and is managed by strong-armed discretionary force.

In 1967 tens of thousands gathered in Haight-Ashbury for the Summer of Love. Fifty three years later tens of thousands are gathering up the coast to spend portions of their summer in anarchy.

Legitimacy

This city's mad in the head
And sick in the soul
All the stars flew away
A long time ago
Oh, isn't that nice
Like Miami Vice
--Flesh For Lulu

A central tenet of institution theory is that compliance with institutional rules (a.k.a. isomorphism) bestows legitimacy on the compliant. In this context, legitimacy is social recognition and acceptance, sort of a like permission slip to go about your business and function in society.

If you've been using a purely economic framework to make sense of the crazy behavior that we've seen recently, then you're probably scratching your head. But if you realize that sometime behavior is sometimes motivated by cravings for legitimacy, then things seem to fall more into place.

If the rules reward crazy behavior with legitimacy, then you'll generally get more crazy behavior.

Elephant Room

Why don't you tell me what's going on?
Why don't you tell me who's on the phone?
Why don't you ask him what's going wrong?
Why don't you ask him who's the latest on his throne?
--Fleetwood Mac

Alex Berenson sees the elephant in the room. Although there have been a few scattered seroprevalence antibody studies, there is still no national program to estimate prevalence and incidence in the general population.

Three months into the #Covid lockdowns, and the United States still has no national randomized antibody survey. The UK and Spain do. Some states do. But not our public health authorities. It’s almost as if they don’t want to know the true prevalence or death rate of #SARSCoV2.

— Alex Berenson (@AlexBerenson) June 19, 2020

Because of the essential information that such a program offers to policymakers, one would expect such that national antibody surveys would be standard protocol in any large scale disease mitigation program.

Lack of such a program this far into a pandemic leads the reasoning mind to conclude one of two things about the people running these agencies. Either they are incompetent, or, as Berenson suggests above, they have no interest in revealing the true impact of the disease.

My money has been on conclusion number two for some time.

Fluidity vs Rigidity

Keep me movin'
Over fifty
Keep me groovin'
Just a hippie gypsy
--The Who

A couple months back oil supply and demand were so out of balance that crude futures actually traded in negative territory as swamped producers, lacking available storage capacity, paid buyers to take product off their hands. As humans are prone to do, some people began projecting the consequences of that static situation into the future.

But markets are dynamic. Buyers and sellers adjust to changing environments. Facing declining demand, producers have been cutting back production...dramatically. Consequently, crude prices have recovered considerably.

This is the strength of markets over central planning. It is not that mistakes aren't made. Yes, planners make mistakes, but so do market participants. The real strength of markets is that markets act quickly to correct mistakes. They have tremendous adaptive capacity.

Planners, on the other hand, tend to persist with failing courses of action.

Markets are mobile and fluid. Planners are static and rigid.

New Progressive Era?

"The only time you come out of the ground is when you smell a profit."
--Big Joe (Kelly's Heroes)

A professor wonders whether the 2020s might usher in a new progressive (a.k.a. socialist) era. The possibility certainly cannot be ruled out. State power has been shooting higher at the expense of social power.

Meanwhile, people are fearful. Under conditions of threat, people are likely to restrict information processing channels and centralize decision-making authority.

Stated differently, when frightened people tend to ignore creative solutions to problems that require voluntary cooperation and, instead, favor single-minded remedies enforced by strong armed agents.

That, my friends, is a situation ripe for progressivism. And statists can smell it.

Immunity

David Dunn: Audrey, do you remember me ever getting sick? In the three years we've lived in this house? In the old apartment? Before Joseph was born? Before we ever got married?
Audrey Dunn: I...I can't remember.
David Dunn: Don't you think that's kind of weird--not remembering one cold or fever or sore throat? What do you think it means?
Audrey Dunn: Um...I think it means I'm probably too tired to remember.
--Unbreakable

Seroprevalence studies have indicated that the fraction of people who have been infected by COVID-19 is many times higher than the infection rate approximated by active testing programs. These studies also find that more than half of those with positive antibody tests were asymptomatic.

Why do so many people who contract the virus show no symptoms? Moreover, why do many other people who are in the presence of the virus not contract it at all. Pure luck? Social distancing measures? Strong immunity systems?

This paper suggests that a significant fraction of people (maybe 50%+) may have some immunity to COVID-19 because of previous exposure to other coronaviruses. That would explain a lot of what we see.

As an aside, the paper's 20 co-authors has to be close to a record.

Paranoia's Second Wave

Paranoia strikes deep
Into your life it will creep
It starts when you're always afraid
Step out of line
The man come and take you away
--Buffalo Springfield

Now that the protest/riot news stream is beginning to dry up, Ron Paul observes that the media is pivoting once again to toward a new narrative of fear: a second wave of the coronavirus.

As he notes, claims of a new viral wave have little basis in evidence. The same forecasters whose initial predictions were off by factors of 10 or more are back at it. Early reopen states are committing suicide. We need to set up makeshift hospitals inside football stadiums. The health care system will be swamped by September.

More evidence of a phenomenon that looks more like a weird group psychosis than lucid conclusions based on science and evidence.

As Ron Paul concludes, "There is something else going on here and it is in no way related to public health."

Social Media and Social Control

"Why don't you pass the time by playing a little solitaire?"
--Dr Yen Lo (The Manchurian Candidate)

After the recent months' events, there can be little doubt about the reinforcing effect that social networking has on social control initiatives. If you reprint a behavior that you want people to follow on Facebook, Twitter, et al and others do the same, then that behavior quickly becomes the norm.

Who needs sophisticated methods of mind control when you have the echo chambers of social media?

Division and Democracy

We are passengers in time lost in motion
Locked together day and night by trick of light
I must take another journey
We must meet with other names
--The Fixx

Almost daily the news splashes claims that we've never been this divided as a country. Truly? Several turbulent periods in our nation's past (e.g., American Revolution, Civil War, Reconstruction, Great Depression, 1960s) suggest some pretty good historical comps.

On the other hand, I'm reminded of Herbert's conjectures in the late 1800s. As democracy and discretionary power grow, factions consolidate into two opposition parties. Each election cycle escalates the battle over the strong arm of government.

Because there is more to gain and more to lose for both sides, why should we expect anything other than increased political division?

Bureaucratic Error

Don't turn around
Der Kommisar's in town
You're in his eye, and you'll know why
The more you live. the faster you will die
--After the Fire

Devastating expose of the complete public health system meltdown in New York. Focus is on hospitals and their interaction with city, state, and federal agencies. Story would have read even worse if nursing homes were included.

Mind numbing amount of finger pointing and CYA turf protecting denials. Also the constantly shifting 'guidelines' given by presumed 'authorities' on the situation.

This is textbook bureaucratic error--error that multiplies and rigidifies in times of crisis.

Those looking for cases against central planning can find a damning example right here.

Public Property and Liberty Lost

I don't know where to start
Or where to stop
My luck's like a button
I can't stop pushing it
--General Public

If you're a socialist, then how do you advance your agenda in a society that values private property rights but also tolerates some public ownership? Simple. Gradually push for more public ownership in order to gain more control and authority over people's lives.

The possibilities of this strategy have been well demonstrated over the past months. A primary justification for the coronavirus lockdowns was that we needed to 'flatten the curve' so that hospital capacity would not be overwhelmed. Trends toward 'socialized medicine' have increasingly framed hospitals as utilities that must be managed as open access public goods rather than as private enterprises subject to natural laws of supply and demand.

Consequently, rather than a dynamic system where hospital managers would work in creating more supply (e.g., flexible capacity) in the face of a spike in forecast demand and having the pricing system ration scarcity, socialist planners were able to convince citizens that everyday behavior had to be forcibly restricted to preserve a static institution incapable of dynamic response.

And people have largely bought into it.

The more property placed in public sphere, the greater the loss of liberty.

Wave of Cash

We'll all be planning that route
We're gonna take real soon
We're waxing down our surfboards
We can't wait for June
--Beach Boys

Comparison of Fed's current round of monetization (a.k.a. 'quantitative easing' or 'QE') compared to previous versions.

Within the span of a few weeks, the Fed has added more balance sheet assets than any previous QE program did in its entirety. And those programs lasted 1-2 years each.

The upshot is that 2 trillion dollars created out of thin air by the Fed have recently been released into the financial system. We've seen what this manufactured money has done to asset prices such as stocks.

What do you suppose happens when this wave of freshly minted cash splashes its way onto the shores of goods and services markets?

Defunding Police

Poets, priests, and politicians
Have words to thank for their positions
Words that scream for your submission
And no one's jamming their transmission
--The Police

Cascading from the protests and riots over the past two weeks have been leftist calls to 'defund the police.'

Police provide security services. There are also private firms that offer such services. If public funding channels were in fact shut off, then demand would shift to the market, where individuals and groups interested in purchasing more security would begin contracting with private firms to do so.

Privatizing security offers some advantages over publicly funded police. For example, police brutality, similar to the instance that sparked the current round of riots, would probably be reduced because 'bad cops' would have no unions or other institutional shields to hide behind.

It is doubtful, however, that this is what progressives have in mind with their 'defund the police' chant. In fact, it is difficult to follow their logic at all. Because leftist doctrine is entirely authoritarian, it is difficult to see how any of their policies could possibly be implemented without a state-sponsored groups of strong armed agents to enforce their rules.

Consider the recent lockdowns. How far would state governors be able to get if their draconian orders where not enforced by police? In some instances, of course, we saw local police refuse to enforce the orders which weakened the legitimacy of the lockdown.

How long would lockdowns last if there was no threat of sanction by police?

Leftists need police to do their bidding. Without strong armed agents, authoritarians get nowhere.

Market Cap Per Employee

Sometimes I never leave
But sometimes I would
Sometimes I stay too long
Sometimes I would
--The Motels

Not necessarily a reflection of employee productivity but an interesting list nonetheless.

Market Cap per Employee...
Visa: $22 million
Netflix: $21 mil.
Facebook: $14 mil.
Apple: $10 mil.
Microsoft: $10 mil.
Google: $8 mil.
Exxon: $3 mil.
J&J: $2.9 mil.
Verizon: $1.8 mil.
Amazon: $1.6 mil.
JP Morgan: $1.3 mil.
Berkshire: $1.2 mil.
Disney: $1.0 mil.
Walmart: $156k

— Charlie Bilello (@charliebilello) June 8, 2020

Enterprise value per employee would result in even larger numbers, and some different names on the list.

position in JNJ, XOM, VZ

Case Counts

I read the news today, oh boy
Four thousand holes in Blackburn, Lancashire
And though the holes were rather small
They had to count them all
Know they know how many holes it takes to fill the Albert Hall
--The Beatles

One of the most manipulative approaches currently employed by mainstream media to drum up fear of coronavirus is focusing headlines on total positive case counts. They must focus on this because the metrics that really matter, such as daily deaths and hospitalizations. are declining.

The media also know that case counts are likely to rise with increasing number of tests--and daily test for the virus have been increasing for some time. The more tests run, the greater number of tests indicated as positive.

For example, in the US...

On April 3, there were 111,250 tests given & 31,896 positive results (24.1% pos).

On June 3, there were 457,112 tests given & 20,046 positive results (4.4% pos).

So, the # tests went up over 4x but # of new cases went down 37%.

— Charlie Bilello (@charliebilello) June 6, 2020

An honest media would focus on the ratio of daily positive tests to daily total tests, which over time becomes a proxy for the prevailing infection rate. That ratio has been declining for some time and currently rests at about 5%.

A more honest approach yet would be breaking down the infections by age group, since we know that the virus poses little threat to younger people. Stated differently, how many of the total infections appear to really matter?

But doing so would ease the fear narrative--something that the media can't afford to do.

Back in the High Life

And we'll dance and drink with one hand free
And have the world so easily
And oh we'll be a sight to see
--Steve Winwood

On the back of yesterday's eye-popping job report, the NASDAQ Composite Index hit an all time high.

The action finds many bears howling. I get it, believe me. Many seemingly insurmountable issues lie ahead.

However, I don't think the Lockdown Depression is what brings the house down. Further, stocks may not be a good indicator of real economic angst when markets begin to forecast the end game. If the future involves Big Inflation, stock prices may go higher, perhaps much higher, to adjust for depreciating currencies and the supply of dollars in the system.

Gas Left in Tank

Who's gonna tell you when
It's too late?
Who's gonna tell you things
Aren't so great?
--The Cars

Surprise jobs report this am indicating that employment actually grew in May. Markets up big on the news.

Today's #jobs #s shocker spike. Growth in jobs ⬆️ 2.5mm jobs in May. Hospitality/leisure jobs ⬆️ 1.29m construction ⬆️ 464-k goods producing ⬆️ 669-k @POTUS news conference on jobs today @ 10am et @MorningsMaria @FoxBusiness join us now

— Maria Bartiromo (@MariaBartiromo) June 5, 2020

As we have discussed frequently on these pages, there are many reasons to doubt the accuracy of government statistics related to jobs. These numbers are easily manipulated.

However, I must admit that a faster-than-expected recovery from the Lockdown Depression would not completely surprise me.

Yes, the fraction of people suddenly out of work resembles Great Depression levels. And GDP has likely contracted by double digit percentages on an annualized basis over the past 2-3 months.

Unlike the Great Depression, though, the Lockdown Depression has not been driven by natural forces. Buyers and sellers did not voluntarily decide to dial back production and trade due to unmanageable leverage or collective risk aversion.

Instead, commerce was forced to the sidelines.

Even if there are structural issues likely to impair economic progress down the road, there may still be gas left in the tank to permit further travel before breakdown.

Therefore, it seems reasonable to consider the possibility that once lockdown force is removed from the system, production and trade fire back up and get back on the road for at least a while.

After all, if some gas remains, economic drivers will be prone to use it.

Standing Armies and Riots

"The Army is a broadsword, not a scalpel. Trust me, senator, you do not want the Army in an American city."
--General William Devereaux (The Siege)

President Trump has threatened to send in US military troops where states refuse to take measures to appropriately defend the lives and property of their residents from rioters. Constitutionally, the president has no leg to stand on.

Article 4, Section 4 states that the federal government "shall guarantee to every state in this Union a Republican form of Government"(i.e., the 'Guarantee Clause'). Further, the federal government shall protect each of [the states] against Invasion," but clearly this 'Invasion Clause' is aimed at penetration from external enemies.

The article also states that the federal government shall protect each state from "domestic Violence," but only upon the request of the state legislature or the governor if the legislature cannot be convened. This 'Protection Clause' is clearly aimed at addressing internal uprisings that are presumed to be each state's primary responsibility to handle.

Stated differently, states must request the assistance of US troops to quell internal violence. The president cannot unilaterally deploy them.

An obvious question to our founding ancestors is this. If life and property are among the inalienable rights endowed to each person, and it is the responsibility of a just government to protect those rights, then shouldn't the federal government proactively intervene when states refuse to take appropriate protective measures?

The founders would likely say 'no.' If the federal government is permitted to forcibly intervene in state affairs whenever it deems that a 'crisis' exists, then the authority to deploy unilaterally 'standing armies' ultimately leads to discretionary rule, and the usurpation of that other inalienable right granted to all: liberty.

How, then, are people to protect themselves against threats to life and property if state and local government refuse to adequately do so. The founders answered this with the Second Amendment. Individuals are justified to arm themselves to defend their lives and property against aggression by others when government agents can't, or won't, be there to do so.

Riot Maker

"I'm a ticking time bomb and I'm read to explode. Let's solve my problem."
--Henry Wayne (Exit Wounds)

After a black man was allegedly killed by a white cop while under arrest on the streets of Minneapolis last week, protests broke out across the US. Many of these protests subsequently morphed into riots, with likely hundreds of million$ of property damage and theft--particularly in large urban cities across the country.

Many are comparing the violence to the riots of 1968 following the deaths of Martin Luther King and Robert Kennedy.

It is straightforward to connect the extremity of this reaction to the COVID lockdowns. Ryan McMaken suggests three ways that the lockdowns paved the way for the riots.

COVID lockdowns (1) threw millions out of work, (2) increased police harassment of peaceful people, (3) cut people off from key institutions that reduce social conflict. This made a volatile situation far worse. | @ryanmcmakenhttps://t.co/7OJhQq8uwz

— Mises Institute (@mises) June 3, 2020

Lockdowns created large scale unemployment almost overnight. Economic hardship fosters desperation, frustration, and often criminal behavior. If you have less, then you are prone to be envious of others who have more. As rioting looters have demonstrated over the past week, you will also be more likely to take what isn't yours.

By confining people to their homes, lockdowns also destroyed social institutions such as churches, coffee shops, and beauty parlors that researchers have long found serve as 'safety valves' for people to blow off steam. Absent these mechanisms for defusing social tension and problems, many people likely found protests and riots as viable outlets for cutting loose.

Finally, enforcement of lockdown rules in most jurisdictions fell primarily on state and local police. When working, leaving home, or engaging in trade is deemed a criminal act by authorities, enforcement of those rules by police takes on the look of harassment. Police become bad guys and subject to close scrutiny by people seeking to preserve their liberty.

Would we have seen protests following the Minneapolis incident regardless of our locked down state? For sure. But the scale and associated degree of violence?

Likely not.

Imagine the Opposite

Tell me why
Everything turned around
--Fleetwood Mac

Imagine the opposite of the current arrangement. Instead of a GOP president that alienates the left and a chief public health advisor with demonstrated leftist tendencies, we had a Democrat president that alienates the right with a chief public health advisor with demonstrated rightist tendencies.

Suppose that the rightist chief public health advisor advanced the same public health 'guidelines' that leftist one has advanced, masks and all.

Would state governors, local mayors, and the public at large follow those guidelines similar to how they are following them now?

I have my doubts.

Be Free

No more running down the wrong road
Dancing to a different drum
Can't you see what's going on
Deep inside your heart?
--Michael McDonald

Over the past couple of months, countless conversations, messages, etc have ended with the words 'be well' or 'be safe.' Not once have I heard these words: 'be free.'

Staying free is the primary challenge in a world of authoritarian rule. Trading freedom for a modicum of temporary security is a deal with the devil.

Be free.