Tag Archives: Covid-19 consequences

Things Going By, by James Howard Kunstler

Think smaller as the present way of life fails. From James Howard Kunstler at kunstler.com:

If this (first?) summer of Covid-19 has revealed anything about the current version of civilization, it’s the profound exhaustion of a culture reduced to going through the motions of its once-vital activities. A lot of things that we hope will come back are probably gone forever in the form we knew them, though they will eventually return in another configuration, reduced in scale, but perhaps finer in quality.

I miss baseball horribly, and its sad, half-assed attempt to present a rump season with no live bodies in the seats only amplifies the loss. But then, I haven’t gone to a stadium in twenty years, and I certainly won’t pay a hundred bucks or more to sit in Fenway Park. I used to go to night games there all the time when I was a starving bohemian writing for the Boston hippie newspapers back in 1972. You could get a decent field-level seat behind first base for five bucks. When I was a kid in Manhattan in 1960, a bleacher seat in the old Yankee Stadium was a quarter (plus 30 cents round-trip on the IRT subway).

They weren’t writing $100-million-plus player contracts until fairly recently, either, and of course that’s been a symptom of pro sports’ slide into fatal decadence. If baseball does try to stage a full season in 2021 or 2022, they will not be selling many hundred-dollar seats to an economically demolished middle-class. The teams will be functionally bankrupt by then and if they survive restructuring, there won’t be many million-dollar players. Maybe none. Carl Furillo, the veteran right-fielder for the 1955 World Series champion Brooklyn Dodgers, used to work construction in the off-season. He was on the crew that built New York’s Verrazano Narrows Bridge. Imagine Mike Trout hanging sheet-rock (if sheet-rock even exists as a product a few years from now).

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It’s Now Virtually Impossible To Get A Bank Loan As Lending Standards Soar, by Tyler Durden

And now a report from a sector that’s received relatively little coverage during the 24/7 coronavirus coverage: business and the economy. From Tyler Durden at zerohedge.com:

One quarter ago we pointed out something concerning: shortly after JPMorgan reported that its loan loss provision surged five fold to over $8.2 billion for the first quarter, the biggest quarterly increase since the financial crisis, in preparation for the biggest wave of commercial loan defaults since the financial crisis (a number which in the latest quarter surged to $10.5 billion along with all other banks’ loan loss provisions)…

… the bank hinted that things are about to get much worse when it first halted all non-Paycheck Protection Program based loan issuance for the foreseeable future (i.e., all non-government guaranteed loans) because as we said “the only reason why JPMorgan would “temporarily suspend” all non-government backstopped loans such as PPP, is if the bank expects a default tsunami to hit coupled with a full-blown depression that wipes out the value of any and all assets pledged to collateralize the loans.”

Shortly after, the bank also said it would raise its mortgage standards, stating that customers applying for a new mortgage will need a credit score of at least 700, and will be required to make a down payment equal to 20% of the home’s value, a dramatic tightening since the typical minimum requirement for a conventional mortgage is a 620 FICO score and as little as 5% down. Reuters echoed our gloomy take, stating that “the change highlights how banks are quickly shifting gears to respond to the darkening U.S. economic outlook and stress in the housing market, after measures to contain the virus put 16 million people out of work and plunged the country into recession.”

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Politics, Not Science, Keeping Schools Closed, by Yinon Weiss

The schools are being kept closed for all sorts of reasons that have nothing to do with health. From Yinon Weiss at realclearpolitics.com:

Politicians speak about following the science to set COVID-19 policy, but their decisions are more about political objectives than they are about medical efficacy. Why else did California Gov. Gavin Newsom shut down retail businesses in March when the state had under 300 cases per day but allow them to be open in July when the state clocked in at over 10,000 cases per day?

Why else would Kentucky Gov. Andy Beshear allow liquor stores to stay open but close down churches? Why did Michigan Gov. Gretchen Whitmer insist that buying lottery tickets remain legal but made it illegal to buy garden supplies? And how did New York Gov. Andrew Cuomo use “science” to prohibit outdoor funerals but allow outdoor protests?

But as badly as our lockdowns have damaged local businesses, a potentially even bigger problem is created by the physical closure of schools. One of the most important functions of a civil society is to protect and educate its children, and the cancellation of in-person education stands to become one of the most detrimental acts of collateral damage during this pandemic.

California currently expects its 5-year-olds to complete kindergarten exclusively through online distance learning. For this dubious undertaking, the politicians are given passionate political cover. The Los Angeles Teachers Union maintains that “the only people guaranteed to benefit from the premature reopening of schools amidst a rapidly accelerating pandemic are billionaires and the politicians they’ve purchased” — as if billionaires typically send their kids to L.A. public schools. The wealthy will send their children to in-person private schools or hire additional tutors, while most American families will suffer from a widening education gap that could set their kids back years. Worst of all, none of this is medically substantiated.

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Sham Bailout Statistics Shroud Shutdown Tyranny, by James Bovard

Sure you can trust the official numbers. If you can’t trust governments and quasi-governmental bodies, who can you trust? From James Bovard at aier.com:

congress cracked

Last month, I wrote a piece here condemning the Trump administration for refusing to disclose the beneficiaries of bailouts authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The following day, the Trump administration reversed course and promised to reveal Paycheck Protection Program (PPP) loan recipients.

On July 2, Trump proclaimed that PPP is “saving and supporting the jobs of tens of millions of American workers” and the program “has been a tremendous success, levels that nobody has ever seen before.” Treasury Secretary Steven Mnuchin boasted last month that PPP is “supporting an estimated 50 million jobs.”

We don’t need to worry because benevolent, damn-near-omniscient saviors will rescue the economy from the shutdown ravages that frightened and demagogic politicians have inflicted, right?

But the Trump team’s data is farcically inaccurate. Last month, the Small Business Administration, which administers the PPP, told the Associated Press that it was “too consumed by the urgent effort of helping small businesses through the economic downturn to provide” data on where the loans went. But the SBA has now specified how many jobs were retained for each PPP loan. While Congress slumbers, the Washington Post speedily crunched the numbers.

PPP loans – a.k.a. “Magic Beans” – are so effective that they saved more jobs than the total number of employees in at least 15 industries. Landscape architecture firms “retained 114,000 jobs — more than three times the number of people who worked in that sector in 2019,” the Post reported. The SBA also claimed that the PPP loans “preserved tens of thousands more jobs than are known to exist in other industry sectors,” including specialty food stores, cattle ranching, performing arts companies, corn and wheat farming, and fishing.

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War on Poverty, or Just War on the Poor? By Claudio Grass

Covid-19 lockdowns are decimating the poor. From Claudio Grass at lewrockwell.com:

As the dust is now begging to settle, both from the heights of the COVID panic and from the riots that shook the western world, we are starting to get an idea about where we stand after this unprecedented and tumultuous time. We are able to begin taking stock of the damage that was inflicted by the lockdowns and to evaluate the governmental efforts to help those affected and to provide support to the economy. More interestingly, we are finally in a position to see clearly who amongst us paid the highest price, who suffered the most and whose livelihood was taken away.

This picture is especially clear in the US, where the numbers speak for themselves. One look at the unemployment figures as seen in the chart below is enough to demonstrate the extent of the damage of the economic shutdown. However, a more detailed examination of the data reveals a lot more. It shows the sharp inequality in those lost jobs. Low- and minimum wage employees, seasonal, part-time and low-skill workers, were fired from their jobs at an astoundingly higher rate than their white-collar and better-paid peers. It makes sense, of course. Not only could these jobs be performed from home more easily, but these employees were also largely less replaceable. Being by and large more educated, more experienced and more skilled, there were seen as more “essential”, to use the government’s own terminology. Of course, all jobs are essential for those who need them to survive, but then again that argument never managed to gain any traction when bureaucrats were deciding who gets to keep their job and whose source of income is simply surplus to requirements.

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“Lockdown 2.0”: This New Wave Of Lockdowns Will Ensure The U.S. Remains In An Economic Depression Through The 2020 Election, by Michael Snyder

The long-term effects of the first round of lockdowns haven’t really kicked in and we’re on the second round in some places. From Michael Snyder at theeconomiccollapseblog.com:

Another wave of lockdowns has begun, and that is really bad news for the U.S. economy.  The first wave of lockdowns resulted in the permanent closing of more than 100,000 U.S. businesses, colossal lines at food banks around the nation, and the loss of tens of millions of jobs.  Needless to say, this new wave of lockdowns will make things even worse, and some are speculating that this is precisely what Democrats want.  If the U.S. economy continues to fall apart as we approach the election in November, the thinking is that this will make President Trump look bad and will make it more likely that people will cast votes for Democrats.  But there is also the possibility that this could backfire in a huge way for the left.  If millions of Americans start to identify the Democrats as “the party of the lockdowns”, that could actually greatly help President Trump in November.

At this point, the battle lines are becoming quite clear.  President Trump and other top Republicans are strongly against more lockdowns, but Democratic politicians in many areas of the country are starting to institute them anyway.  In fact, we just learned that all schools in Los Angeles, San Diego, Atlanta and Nashville will be closed at the beginning of the new school year…

Resisting pressure from President Donald Trump, three of the nation’s largest school districts said Monday that they will begin the new school year with all students learning from home.

Schools in Los Angeles, San Diego and Atlanta will begin entirely online, officials said Monday. Schools in Nashville plan to do the same, at least through Labor Day.

Other major cities are expected to follow suit.  Of course considering the quality of the education in most of our public schools, most of those kids won’t exactly be missing too much.

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Safety First is a Bad Ideology, by Diana W. Thomas

At what point do the costs of preventing or ameliorating a risk outweigh the benefits of doing so, and does it matter if someone else is bearing the costs? From Diana W. Thomas at aier.org:

bubble wrap

When you walk out of your house, or enter the public street, you are on shared ground, a community space. During the pandemic of 2020, community spaces that are private venues, like Disney, have closed down just as often as community spaces that are public venues, like schools and playgrounds.

Public and private distinctions do not make a difference. Risk is the key factor to understanding why common spaces are closed and likely to remain so, at least in the way we were used to. In what is called the asymmetric loss function, a decision maker’s cost of a mistake in one direction is many times greater than the cost of error in the other direction.

Individuals with asymmetric loss functions are extremely risk averse when it comes to potential losses. Individuals often employ asymmetric loss functions in everyday life. For most people being 30 minutes early for a flight, for example, is much less costly than being 30 minutes late.

But, because people are different, individuals decide for themselves how late they can arrive and risk missing a flight. Things get trickier when decisions regarding risk tolerance are made for common spaces and groups, because one size doesn’t always fit all. Weighing downside risks too heavily can be socially costly, because some valuable private activities are prohibited.

Historically and across cultures, individual risk-taking is associated with growth and prosperity while minimizing risk and emphasizing potential social losses is not. In the last several decades, public tolerance of risk has shifted towards lower socially acceptable levels of risk-taking and in the long run, these changes may leave us all worse off.

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Major Tax Increases are About to Slam America as Cities and States Want You to Pay for Covid Fallout, by Isaac Davis

Cities and states have locked down economies and allowed rioters to destroy businesses, and now they want their taxpayers to pick up the tab. They can’t squeeze blood from stones, though. From Isaac Davis at wakingtimes.com:

Just prior to the global Coronavirus outbreak, serious signs of an emerging financial crisis began to emerge. As people were beginning to realize that yet another central bank engineered ‘bust’ was coming down on us, we were thrown into lockdown, shuttering millions of businesses and sending millions of people to the unemployment line.

Now, a few months later, we are starting to realize just how deep the economic fallout will be, and Americans are scrambling to adjust their lifestyles to a totally new world order. At the top of the food chain, though, is government. City, county, state and federal.

In the midst of such a bizarre and frightful socioeconomic crisis, the tax man is hurting too. Tax revenues at all levels of government have plummeted like never before, and the pain is especially acute for city budgets who’ve seen sales tax revenue nosedive. While the American citizenry is seeing a drastic drop in income, so is Uncle Sam and all of his bureaucratic agencies.

Take a look at some of the numbers.

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Dispatch from the Front, by Rod Peet, Jr.

One man’s lonely stand on principle. From Rod Peet Jr. at lewrockwell.com:

“The enemy of my enemy is my friend.”

I thought my employer was my friend. I was approaching retirement without a job and it appeared I would be in dire straits during that final phase of life. Then I was given my latest job. It wasn’t an act of friendship, per se. More an act of capitalism. We both benefited. I made close acquaintances there. It felt like an act of friendship to me. Retirement was going to be OK.

Then the corona virus struck. It appeared to be a more aggressive form of the flu but the flu nonetheless. Precautions should be taken. Wash hands, isolate the sick, protect the elderly. Fine. Common sense response.

Then everyone’s enemy, the government, struck. Governments across the country began to engage in criminal activity (see U.S. Constitution, Amendment 1; Texas Constitution, Bill of Rights, Sections 6, 19, 27, 28, 29; Title 18, U.S.C., Section 242).

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Strange Days, by the Zman

It’s impossible to get your bearings in the current confusion and chaos. From the Zman at theburningplatform.com:

Way back in the time before corona, it was conventional wisdom that shutting down the economy would have dire consequences for the economy. Whether you were on the panic side or the skepticism side, you were sure that locking down the economy was going to be bad for the economy. The stock market losing a third of its value in a week seemed to confirm it. No matter the truth of the virus, the consequences was going to be an unprecedented economic depression.

Here we are four months on and the world does not look like anyone imagined it when this all started. The promised bodies in the streets never materialized. The virus has thus far been a sever flu season hyped up by mass media. The promised depression has not made an appearance. The streets are still mostly empty during the work day and many businesses are still closed. Those that are open have all sorts of restrictions and they seem to have fewer customers.

What we don’t have is people out banging their pots and pans demanding the government do something about the economy. A lifetime ago a handful of white people showed up at state capitols demanding the end of the lock downs, but that soon gave way to swarms of blacks and Antifa promising to burn the cities. Otherwise, the productive portion of society seems to have gone back to sleep. Those working from home, work from home and those not working stay home.

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