Be fearful when others are greedy and greedy when others are fearful.Warren Buffett
For 240 years it’s been a terrible mistake to bet against America, and now is no time to start.Also Warren Buffett
Every sudden market decline brings out the doom-and-gloom crowd. (In fact, they usually will surface for much smaller dips than the current one.) Even before there were a million armchair political scientists in this country, there were the people who got off to the idea of financial Armageddon. Now those two groups overlap.
And, boy, does this stuff bring out the fools. Exhibit A is Paul Krugman. Krugman predicted that the market would crash if Trump were elected president, that we would go into a global recession that was worse than the financial crisis. Of course, much to Krugman’s professional humiliation, the exact opposite of that happened. America’s stock market rose so much under Trump that even a decline as large as the 2008 crash would still leave investors deep in positive territory. And America’s economy managed to flourish despite global headwinds.
Now Krugman is all over Twitter celebrating a bloody week in the markets. There are financial markets conspiracy theorists living in their parents’ basements who are less creepy than Krugman. He has such acute Trump Derangement Syndrome that nothing would give him greater pleasure than seeing people lose their jobs, lose their health insurance, not be able to feed their kids, just so long as maybe voters might hold that against Trump. And Krugman is such a fantastic economist, you know, that he’s now defending a socialist candidate who loves dictatorships so much that he honeymooned in the USSR. The Democratic Party, ladies and gentlemen!
I like to use people like this as an example of bad citizens for our young daughter. People who genuinely do not want what’s best for their country, but have political identities quite like teenage gangbangers have gang affiliations. There’s no logic to the way they think; there’s only hate and destruction for its own sake. They attack merely so they can feel like their feelings are relevant to outsiders.
But the panic over the coronavirus this week is a spectacular display of ignorance and misinformation in general. In a way, it’s a sad commentary on our media environment, which has been incapable for years of covering natural disasters honestly or intelligently.
I was complaining about this only a few months ago when we were trying to decide whether or not to evacuate for Hurricane Dorian. The media was so full of disaster porn during that period, breathlessly hyping scenarios that included all of Miami being wiped out. This in turn got social media going, and the sheer volume of dishonest and downright stupid coverage of the storm crowded out any voices who actually knew what they were talking about. There were thousands of little Krugmans publicly hoping the storm would drown Palm Beach – a city with millions of people – because Trump. If your world depended on knowing what was going on, you were pretty screwed. I knew several people who had become so tired of the politicking online and on television that they didn’t even know a hurricane was coming because they consumed zero news. I’m honestly not sure if they were worse off for not caring. It rolled through here as a tropical storm.
Here we are, back in the position of Hurricane Dorian wiping out Miami, with the coronavirus. If you turn on the news, the coronavirus is nothing short of The Walking Dead.
There are good reasons why this virus is hitting places like China and Iran particularly hard. There are aspects of daily life in these countries and the relationship of the people to the government that no American could even begin to appreciate. These are not countries with governments that give a flying fuck about their people. They do not care whether their citizens live or die, so long as the “right” message about power prevails. They are basically the kind of country you’d have if a personality like Paul Krugman became a dictator.
China refused international help with the virus. President Trump offered to send folks from the CDC over to assist in managing the epidemic and was turned down. The Chinese Communist Party wanted to control every aspect of the response and they did not want western countries criticizing their logistics.
The Chinese government pulled doctors and medical staff from the provinces to take care of people in their urban centers of power. Decisions like this is why the death toll is so high in China but not high at all in other countries. If America got ideologically possessed socialists in government and centralized control over health care, we’d probably see similar behavior. Considering that the IRS, the FBI, and other federal agencies have now been used to settle petty political scores, it really doesn’t defy imagination that health care could be rationed according to party loyalty here too. But thankfully, we do not have such a system now.
Contrary to what politicians and some in the media have been suggesting, the US response to this epidemic has not been slow. These same people criticized Trump over a month ago when he closed the US to people from affected countries. It was the “Muslim ban” smear all over again. With that executive order – which ultimately prevailed in a Supreme Court challenge – Trump enacted serious hurdles to entry from specific countries that have serious issues with terrorism. He didn’t ban all 1.8 billion Muslims in the world from entering the country. But depending on what news you consume, you might not be able to tell the difference. So, too, for a while, the people locked in a perpetual toddler’s game of opposite day with the president even portrayed barring entry from areas experiencing an epidemic as racist and xenophobic. It’s all they have anymore.
The states in the US where the coronavirus is popping up so far are states that boast about how little they care about border security and immigration. They also don’t care about the living conditions on their streets. This isn’t rocket science, folks. We are talking about the same places that brought the bubonic plague and measles back. These state and local governments didn’t only become a problem with the introduction of the coronavirus into the mix. We’ve been trying to contain their local insanities for a while now.
Part of the shock of the numbers of infected people coming out of China is the fact that the Chinese Communist Party has been manipulating official data. Combine that with the government’s brutal management of who has access to medical treatment and who is being quarantined and left to die, and you have something that legitimately sounds hellish and nightmarish. This is not how epidemics are treated in the US. But even in the context of the total number of people in China (1.4 billion), the number of people who have died from the illness is not earth-shattering. It’s a personal tragedy and a lesson on human rights for the entire world, but it’s not Armageddon.
There should be a continuum of concern in public policy circles about events, not some binary nothing-burger / we are all going to die approach. And I think that does exist among the adults in the room, just not in the traditional and social media.
Another issue to put into perspective is the development of a vaccine. The spread of the virus may naturally end with the change in seasons, as viruses from this family have done through many cycles now. But technology has improved to such a degree that scientists are producing vaccines a lot faster than they could only a few years ago.
The media made fun of Trump for suggesting that an American company had already produced a vaccine, and they called it fake news, just another lie from the president, on the air. But they are the ones pushing fake news: Massachusetts-based drugmaker Moderna has shipped its coronavirus vaccine to the CDC for testing. If they are successful – and there’s no reason to believe they will not be – then they will have cut the time needed to develop a vaccine in half.
This is the difference between living in the US, under a democratic government, in a capitalist society that rewards talent and intelligence, and living in China or Iran. A high quality of life is not an accident.
Things Democrats have claimed would be Armageddon, people will die:
- A tax reform package that doubled the standard deduction and increased the child tax credit
- Withdrawing from the Paris climate accord
- Amending or replacing Obamacare (would kill 36,000 people a year, according to Bernie Sanders)
- Net neutrality
- Gorsuch on the Supreme Court
- Kavanaugh on the Supreme Court
Apart from spending millions of taxpayer dollars on bogus investigations, ripping out their hair is all they do. Pelosi is so committed to the “people will die” pattern of un-reasoning that she’s even taken to calling Mitch McConnell “the grim reaper.” These are not people you should be taking portfolio management advice from. Betting against America is their raison d’être.
Alas, every market puke of the Trump era has been quickly reversed because there is a logic to a strong economy and their is no logic to politically-driven hysteria. Some large companies have seen their market valuation cut by a quarter. Does anyone seriously believe that their value has changed that much since last week? It hasn’t, as a matter of fact.
With the financial crisis of 2008, there was a very good reason for the market implosion. It was discovered that our entire financial system (save a handful of firms) had balance sheets full of toxic assets (that, thanks to rating agencies, which inexplicably still exist, were given top-grade ratings). That is a real reason to take a chainsaw to their valuations. The CDC telling Americans to wash their hands more often is not.
The one silver lining to all of this is that we have now seen how important it is to move US manufacturing operations back from overseas. To some extent, this is not simply and economic concern, but a matter of national security. Companies like Apple are the exception, not the rule, however. Half of Apple’s production efforts are located in China, where the company can operate factories and wage-slave housing that is closer to concentration camps than a manufacturing operation. On top of that, a significant fraction of Apple’s demand is from China. That is an example of a company whose valuation should maybe implode with this event. But not the entire marketplace.