The #REOPEN Case, Explained
By: Bj Campbell
Tags: Covid 19, Politics, Random

I think the great feud about reopening the economies, both within the USA and around the world, is a failure of communication between the two camps. The “Stay At Home” camp’s fear has been well communicated, which is that millions of people are going to die in the USA from Covid-19. The “Reopen” advocates fear has not been laid out as explicitly as it needs to be, and I think they are partly at fault for this failure. I think laying that case out point by point might be instructive to anyone trying to have a meaningful discussion about Covid-19 policy.

Be clear, I do not offer this vision of the future as if I’m sure it will happen. I am not sure. Perhaps nothing in this article will come to pass. But it is most definitely a possibility, and that possibility should be understood by everyone. As you read through this, set your biases aside and imagine the following nested apocalypses happen in the next two years.

Unemployment Apocalypse

I’m in Georgia, the first state to move to phase one reopening, to the consternation of many in the media who predicted Georgians would immediately pour out of their doors for a spit swapping mud wrestling bonanza. That did not happen. As of May 10th 2020, Georgia’s confirmed case rate has plateaued at around 750 new cases per day, and is holding steady there despite an increase in state testing. We have far more actual cases than that because testing is not universal. I know around ten people who have contracted Covid-19, but I know no Georgians who have been tested, and curiously only one who contracted it in the last month. The real infection rate is going down, the testing is going up, and these are combining to produce a flat confirmed case rate graph.

New York’s recent serologic studies show a real infection rate 3.7 times higher than their confirmed case count. If I presume that’s applicable here, and upscale our 750/day infection rate by a factor of 3.7 to estimate a real infection rate, and calculate the time it will take to reach 60% infections, widely cited as a “herd immunity” target, it will take Georgia five years. Our unemployment fund will run out in 24 to 48 weeks. The unemployment fund apocalypse is certain to happen. Herd immunity is not a cure purely because it won’t happen fast enough.

Evidence for why it’s certain to happen is all around me, because of our lack of a spit swapping mud wrestling bonanza. Home Depot has a line in the parking lot with six foot spacing. My barber and my gym are still closed. Three of the four restaurants near me are still curb pickup only, and the fourth one (Longhorn Steakhouse, a Red Tribe favorite) is cleaner than a January walk in clinic. The tables have “disinfected for Covid-19”signs, the staff have masks, the seating is four booths apart, and most of their sales are still take-out. Georgia “reopened,” but people aren’t doing the “reopening” things, out of choice. Government can apparently prohibit people from going to the restaurant, but they can’t force people to go to the restaurant. The fear around the lockdown is permanent, which means the economic damage of the lockdown is permanent. It isn’t three months, or six months, or a year. It’s five years, or it’s forever.

If we continue to carry on like this, people whose careers were in the service sector are permanently screwed. Their lives will be permanently destroyed. And while many of them now are campaigning against reopening, and choosing not to go to work because the unemployment benefits are generous, and are offended that someone might want them to go back to work and risk contracting Covid-19, their lives in five years stand to be about like they are now, except without that unemployment benefit. Ruined. And they’re ruined by the people patting themselves on the back for social distancing and sharing “Stay At Home” memes on Facebook. If we continue like this, the ruination will be a voluntary one, that no government policy can undo.

Walk this apocalypse forward half a year to when the unemployment money runs out. The conservatives are going to say “go get a job!” The liberals are going to say “print more money for unemployment benefits!” And the service workers are going to say “I couldn’t get a job if I wanted to because there are no customers.” The service workers will be right. And everyone will blame everyone else for a problem that we created ourselves, out of our own fear of contracting a disease that kills very few people below retirement age, statistically speaking. We spent two decades transitioning the country to a “service economy” and then yanked the rug out from underneath everyone who bought into that narrative. Possibly permanently.

A study from the 1980s, immortalized in the Big Short movie, claimed that 37,000 people die in the USA per 1% change in unemployment rate. Even presuming that study was true, it is no longer applicable. The number could be higher, because we have 45% more people. It could be lower, because we have better safety nets. But if it’s true, we have a million deaths on our plate already, purely via unemployment.

The government cannot solve this. By some estimates, if the Fed monetizes only half of the three trillion dollars already borrowed by the Treasury for the current bailout, the purchase power of the dollar will drop by 7%. If we do it again, another 7%. If we do it for five years straight, we’re buying cheeseburgers with wheelbarrows full of worthless money, except that there won’t be any cheeseburgers, nor anyone to flip them.

The Food Apocalypse

In future college Econ classes, provided we even have a higher education system, the current destruction of the United States food supply will be the primary study case for supply chain inelasticity. The first chains to break were the cafeterias, where we fed many of our children. We closed schools, which killed demand for some bulk packaged food and individual serving milk. Then we closed restaurants, which sealed the deal on the rest of bulk packaged foods, and killed the fresh produce market. We plowed under a months’ worth of vegetables, because people stopped buying them at restaurants and bought out all the potatoes and pasta at the grocery stores. Nothing can unplow those vegetables, nor dig out the dumped milk. The supply chains to get fresh produce into the hands of the public could not be rebuilt in the appropriate timeframe to prevent the food from rotting.

Phase two of the food apocalypse has been the closure of meat packing plants, due to Covid-19 infections of their staff. There are only four major USDA meat packing facilities in the country, because lobbyists for Big Agriculture used the power of the government to create a cartel, funneling all the supply chains through them.

It’s telling that massive not passive cites the Meat Inspection Act. In fact the big meat-packers were the main lobbyists for the Meat Inspection Act. The large packers had already been regulated for years under an earlier piece of regulatory legislation which applied only to those engaged in the export industry. They had, as a matter of fact, backed that earlier legislation as a way of putting a government seal of approval on U.S. meats and thereby overcoming perceptions in the European export market that it was tainted and unsafe. The problem with the earlier legislation was that it didn’t apply to the little guys, who produced only for the domestic market. The purpose of the 1906 legislation under Roosevelt was to expand the inspection regime to cover the little guys, as well, so as to equalize costs across the industry and increase the competitive advantage of the big guys. In short, the large meat-packers acted through the government to create a state-enforced cartel for determining quality standards; it was exactly the same kind of cartel an industry would have created for itself privately by establishing a code of “voluntary standards,” except that the inability to defect removed the prisoner’s dilemma problem of individual firms undercutting the long-term interests of the cartel for short-term advantage.

An unregulated economy creates monopolies, which become central points of failure. An over-regulated economy opens the window for legally enforced cartels, which create identical central points of failure. And these supply chains are not only inelastic, it is literally illegal to reroute them. You can only buy beef directly from a rancher if you buy the cow, and have it sent to a meat locker. Because it’s your cow, no USDA inspection is required. Unless someone tells the USDA to immediately piss off, the cows will be euthanized, and congress isn’t even in session.

The conservatives will blame the liberals for their continual support of burdensome regulations that caused the central point of failure. The liberals will blame Trump for not waiving away the thing they supported, while simultaneously accusing him of endangering the meat packing workers for making them work. The cattle ranchers will shoot their cows. The only thing that could save us here is if governors issue unilateral edicts that turn a blind eye to black market meat, and mobilize the national guard to arrest USDA enforcement agents.

And this stands to come to a head around the same time that the unemployment funds run out.

Prior to Covid-19, the United States exported 20% of it’s food to other countries which don’t produce enough of their own. This will probably dry up entirely, possibly by government mandate. And then our voluntary choices to “Stay At Home” will contribute to world hunger and the starvation of thousands or millions of children in developing countries. There is nothing that can be done to prevent this. The liberals will blame Trump for starving children, the conservatives will blame the liberals for cratering the domestic food supply, the ranchers will shoot their cows and ask for a bailout made of printed money, and the purchase power of the dollars being printed will continue to fall. This will happen because Americans have voluntarily chosen to shelter in place against a virus that’s very unlikely to kill anyone below retirement age, statistically speaking.

The Higher Education Apocalypse

American universities are going to die in two phases. Currently they’re experiencing a tremendous loss of revenue in the form of meal plans, parking fees, housing fees, and facilities use fees because they’ve changed the nature of their product over the last three decades. They used to be places to dorm poor kids and feed them knowledge and ramen noodles. Now they are resorts built to entice naïve kids to spend their future debt. But the resort function of their institutions is not related to education, and shelter in place rules have exposed their true nature. Phase one of their death, which is happening now, is the closure of those resort functions.

Phase two will be the environmentally forced realization that students could acquire that diploma, which is effectively just a hiring signal for their first job, cheaply by other methods. They’re losing the resort money now, and they’ll begin to lose the tuition money in the fall. Right around the same time the unemployment funds run out, and the meat starts to run out.

The college age generation will feel betrayed. The millennials with quarter million-dollar diplomas and debt will feel cheated. And neither of these groups will be able to get a job, nor even to file for unemployment, because they either never had a job to begin with or because the unemployment funds are gone.

The liberals will blame the conservatives for not printing more money to bail out the colleges, the conservatives will blame the liberals for turning the colleges into liberal indoctrination camps, and the kids will dutifully “Stay At Home” with no future while the university system crumbles under its own weight. They can’t even get a job flipping cheeseburgers because there’s no meat.

The Violence Apocalypse

As dire as these predictions are for the United States, the situation in third world countries will very likely be much worse. Everything listed above relates to the expiration of the United State’s buffer against disaster. Developing countries do not have that buffer. They cannot simply shut their economies down, because a higher ratio of their economies is essential. Africans are revolting against lockdowns now. Their life expectancy is only around 65 anyway because of malaria and malnutrition, and they have few comorbidities. Covid-19 won’t kill them, but malnutrition from the economic collapse will. Their leaders, however, might die from Covid-19 because they are older and fatter, which means the war over lockdowns there will be a very obvious class war. The same can be said for other developing countries in one way or another. Reductions in food production in the first-world bread baskets such as the USA will exacerbate this. The chances that this doesn’t turn violent in multiple developing countries in 2020 are slim, and that violence will be piped straight into our brains in the USA through social media.

The ordinary mathematical baseline for a violent revolution in the United States is 10% over any given 18-year span. Risk analysis professionals estimated this chance at 35% per decade as recently as 2018, due to our political hyper factionalization and the influences of the media. American polling showed an average of 15% support for political terrorism among partisans if their party loses in 2020. None of these estimates included Covid-19. The chance that violence erupts here will be substantial.

And should violence erupt, the liberals will blame the gun owners for owning guns, the conservatives will blame the liberals for not buying guns sooner, and the violence will be propagated by younger people with no jobs and no college and no future and no unemployment benefits and no food and no cheeseburgers to flip even if they could get a job to flip them.

Contact tracing is impossible because we pissed away our chances of it in February. A vaccine is 12 to 18 months away. All these bad things stand to happen before the window opens to escape them.

This is all Bullshit, Right?

Is this likely? I don’t know. I give it perhaps a coin flip chance. Maybe some black swan will swoop in and save us. Maybe we’ll discover some new piece of science that shows the predictions have been wrong. Maybe this has been here a while and the fatality rates are overblown. Maybe a miracle cure erupts from the void, and this all goes away. But it seems to me that we, as a country and a planet, have two feet in the fire to try and cure our planters’ warts, hoping for a rainstorm.

We have lost the stoicism that prior generations had, to accept death as a natural part of life. Nobody just “drops dead” anymore, like they did in the 1980s. Every death is perceived as a medical failure instead of an inevitability. A third of the people dying from Covid-19 are in nursing homes, which are basically waystations for death anyway. You don’t go to those places wondering if you’ll die, but rather what you’ll die of. We are culturally forbidden to point out that many of the Covid-19 deaths were going to happen by other routes in the near future, and it is therefore anathema to correct the death numbers to account for this. We are not allowed to turn the actuaries loose on the problem, because they would become “death panels.” We lack the emotional maturity, as a culture, to accept a very bad situation as very bad, and therefore are committed to rolling dice on possibly making the situation very worse.

In Vietnam, the Viet Cong soldiers would marvel at the Americans who would risk ten lives to save one life. They thought it was stupid, and they took advantage of that in the war. We lost that war. This is a cultural feature of being an American, and this cultural feature may lead to the end of America itself.

And government can’t fix it, because it can’t force people from their homes. It would take a grassroots movement of people who said, “I’m willing to risk dying from Covid-19 to go to the restaurant.” There aren’t enough of these people to save the economy. Or it would take a government propaganda campaign that said, “the restaurants are safe.” Nobody would believe it.

In my view, we are not culturally capable of pulling our feet from the fire, and the dialog I see around #REOPEN in May of 2020 exemplifies this. While I think much of the #REOPEN case is solid, I don’t think it will matter unless it’s voluntarily universally adopted, and I’m certain it won’t be.

Pray for rain.