A journal of our life in paradise
We turned a fake health care Armageddon into a very real economic Armageddon.
We’ve also wrecked a bunch of hospitals by depriving them of revenue from “elective” procedures in the meantime. They are either going to pass that loss on to consumers (raise hospital costs, raise the cost of health insurance) or they are going to downsize operations materially.
Good job, Team Panic.
Now that they know they can strip you of your civil rights and destroy your means to earn a living over pneumonia, the bar for manufactured destruction is low. It’s been buried underground, really.
Some of the most delusional people (from an economic perspective) that I have spoken to lately are people who (1) work for government agencies, or (2) are retired government employees who rely on pension income to pay their bills.
As someone who spent over a decade working as a government economist and structuring public bond deals, I can tell you this is going to be a financial event for state and local governments unlike anything anyone alive has ever seen. It will be about ten times worse than the Great Financial Crisis of 2008 (and even more if you live in places like California, Washington state, Illinois, New York, New Jersey, Connecticut, or Kentucky), which prompted thousands of layoffs in the public sector. But many in the public sector don’t know that yet.
The Federal Reserve has included state and local governments in their commercial paper program, which allows them to borrow short-term to fund operations. But that’s not a grant program – it’s a lending facility. It’s not even intended to protect state and local governments. It’s intended to protect the large financial institutions that buy their short-term debt so they do not book those losses in the middle of this event and create a financial contagion.
The federal government has never had and likely never will have any desire to fully backstop the finances of 50 states, some of which represent economies larger than most countries. The financial burden would be unthinkable. We’d truly become a Venezuela or Argentina.
One of the biggest differences between the federal government and state governments is that state and local governments actually have to balance their budgets. They don’t have a blank check to fund their bureaucracies forever, and bureaucrats definitely do not have safe jobs after a financial crisis.
The federal government can borrow in the bond market to finance a deficit (within practical limits, as we are seeing now) and it can even outright print money (within practical limits, at some point your currency has to mean something).
State governments do not have that luxury. The only things they borrow money for are long-term capital projects like infrastructure and short-term borrowing to smooth cash flows only until they receive tax revenues from residents and businesses. Their constitutions require them to balance their budget every year. Local governments rely on property taxes, and I think it is safe to say the real estate bubble is over.
Some states have historically done things that are tantamount to deficit financing if you think about them philosophically. One big example that comes to mind is giving their pension beneficiaries IOUs on required contributions to the pension fund. But they are limited in their ability to do that, since many pensions now are already dramatically underfunded thanks to decades of diverting money from pension contributions to pork spending. This is on top of major losses in the financial markets that pensions will report in June. Stuff like this has already left a number of states with considerable structural budget gaps, even before coronavirus.
Some states are a month into forgoing tax revenues indirectly, by shutting down the means that businesses use to generate taxable profits and that residents contribute via taxes on their personal spending. There will be a paperwork-driven delay in when that hits the books, but it will hit at some point this year. And it will be the ugliest financial reality states have encountered since WW2.
They’ll probably see 30% or more declines in the revenues they collect within a year by my reckoning. Since public education, Medicaid, and public pension funding are the largest expenditures in state budgets, there will be mandatory cuts to all of those things. States can totally and utterly wipe out spending from categories other than those three and they still will not balance their budgets after this. This event is going to take out classroom spending and health care benefits.
State and local government workers will be laid off for this, but it will probably come after the private sector has gone back to work and states get around to tallying up the carnage.
Even a strong recovery after the shutdowns end will not mitigate the effect. This shutdown is destroying firms. You can say that “people will just go back to doing what they were doing” after a couple months, but that is not how economics works. It takes capital to start and operate a business, and the government has arbitrarily nuked that capital. Employees can’t go back to work at companies that went bust. That should be an obvious point, but it somehow isn’t to policymakers.
The other component of this is that alongside a spectacular decline in government revenues there will also be a spectacular uptick in demand for government services. Since we are talking about a large part of the workforce being put out of service and applying for unemployment and other benefits, you are looking at billions of dollars in new demand for services. That is going to conflict with core government services (like public education) for funding.
You can think of this as the analog to destroying capital in the private sector. Money spent on new demands for services is money that won’t be available to pay a school teacher or purchase textbooks.
This means that core government services are being hit from both sides. Even states in the best financial position (meaning they have robust rainy day funds) are not going to be exempt from this reality. They are going to blow through that money in no time. The states with little to no reserves are beyond fucked. The cost will go right to budgeted priorities.
This is only now starting to dawn on policymakers. It was always a stupid policy decision, but seem people need to be slapped upside the face with the consequences before they understand what they have done.
Here are new cases in Florida, with dramatically increased coronavirus testing. Every single one of these cases happened before DeSantis enacted the shutdown a couple days ago. Meaning there were not significant new cases and a decline in new cases BEFORE the shutdown. The shutdown is completely unnecessary.
Open the economy back up and stop listening to charlatans already. “Exponential” growth is not happening, I am not sure how much more evidence policymakers need that these people have been full of shit all along, though it was clear to anyone who understands elementary school math and took a look at their models instead of relying on vapid journos to describe them hysterically.
We find a place for what we lose. Although we know that after such a loss the acute stage of mourning will subside, we also know that we will remain inconsolable and will never find a substitute. No matter what may fill the gap, even if it be filled completely, it nevertheless remains something else.
Sigmund Freud, letter to his friend Binswanger upon the death of his son
We took a long (well, six miles anyway) walk along the Intracoastal Waterway yesterday, just to get out of the house. Last week, our mayor closed down the hiking and biking trails in our town – of which there are 135 miles that we used every single day before this whole bullshit coronavirus panic. Since we have a trail that runs behind our property and is usually heavily populated, we were shocked by the total absence of traffic after the mayor’s order. It became almost a form of entertainment to see what kinds of people defied it (spoiler: most of them were not young). But the governor issued a blanket safer-at-home mandate that exempted exercise and superseded the mayor’s order, so people are back to getting their Vitamin D and keeping their mental health intact again. I never realized how important this aspect of living was until this past week, both to individuals and to the health of an entire community. People who stay at home all the time quite seriously go insane.
On our way back home, we ran into a neighbor that we have not seen in a long time. He is a retired Army chaplain, and has been commuting back and forth between Florida and some Midwestern state that I forget. We got to chatting with him (he and his wife seem to share our opinions on the nonsensical nature of the lockdown) and learned that in his golden years he has decided to get a PhD in theology. He has been traveling to fulfill the requirements of that.
This was obviously very interesting to us, as we have two generations of theologians in the family. He’s about to defend his dissertation via teleconference, which I suggested is probably better than doing it in person. My own defense for my Master’s turned into an epic bitch-fest among the professors gathered, so I think distance can only improve this ritual. Of course, this might not be the case for everyone. You know I lobbed some bombs.
So I asked him what his dissertation was on, and he explained that it was on the problem of “moral injury” of veterans returning from war. This is something an Army chaplain has a lot of real-world experience with. I had never heard this term, despite spending entirely too many years reading philosophy, so I was intrigued.
Moral injury refers to an injury to an individual’s moral conscience and values resulting from an act of perceived moral transgression, which produces profound emotional guilt and shame, and in some cases also a sense of betrayal, anger and profound “moral disorientation.”
The concept of moral injury emphasizes the psychological, social, cultural, and spiritual aspects of trauma. Distinct from psychopathology, moral injury is a normal human response to an abnormal traumatic event. According to the U.S. Department of Veterans Affairs, the concept is used in literature with regard to the mental health of military veterans who have witnessed or perpetrated an act in combat that transgressed their deeply held moral beliefs and expectations.
I highly recommend following that link and reading about the evolution of this concept, not just in the military but in medicine. It occurred to me that there is probably some cohort in epidemiology now that are looking at tens of millions of people losing their jobs over pneumonia and experiencing some form of moral injury. As this is a contributor to long-term mental illness, that’s not a subtle detail to overlook in a specific industry, especially one that demands high-stakes decision-making all the time.
I found this entire conversation about moral injury very interesting, as my father was drafted to Vietnam and even to this day – fifty years later – struggles with PTSD and what I now understand to call moral injury. Acute trauma really does physically re-wire your brain through some unknown mechanism. It brings about a different, higher level of consciousness akin to taking drugs. There’s a sense of otherness that follows you around for the rest of your life like a dog.
I also feel like many of the problems that exist with children these days are a form of moral injury. They are being raised in a social environment that often demands fealty to abusive, increasingly absurd worldviews – the teacher who demands you shame a classmate for thoughtcrimes, social media mobs, etc. – that have broken their sense of moral order and burden them with negative emotions like guilt that they are not generally capable of working through independently because they lack experience and context.
It made me think a lot about how situations that could potentially involve moral injury tend to be disproportionately leveled on younger generations. A society that wonders why high-schoolers could ever want to mow down their classmates has no problem sending teenagers and young adults to wars on the other side of the world. Even in your early 20s, your brain is still physically developing on a large scale. Of course combat ruins that natural process. But so does the loss of functional institutions, solidarity within communities, and all of the other things that on a daily basis would be guiding young people toward a life well-lived. A society that pushes thousands of small acts of cruelty creates a lot of moral injury on a cumulative basis.
Even in your hobbies, has there not always been some secret attraction which the others are curiously ignorant of–something, not to be identified with, but always on the verge of breaking through, the smell of cut wood in the workshop or the clap-clap of water against the boat’s side? Are not all lifelong friendships born at the moment when at last you meet another human being who has some inkling (but faint and uncertain even in the best) of that something which you were born desiring, and which, beneath the flux of other desires and in all the momentary silences between the louder passions, night and day, year by year, from childhood to old age, you are looking for, watching for, listening for?
C. S. Lewis, The Problem of Pain
Do you suppose, that part of the constant delight of Heaven, will be the ability to be truly thankful for every thing, no matter how minuscule? Even in this life there are an enormous number of very pleasant things that happen to us throughout the day, that we accept as being nothing out of the common way, and thus do not regard: not realizing that the very fact of their being so ‘common’ is in itself a blessing of the very highest magnitude!
Meredith Allady, Letters to Julia
Grown-ups never understand anything by themselves, and it is tiresome for children to be always and forever explaining things to them.
Antoine de Saint-Exupéry, The Little Prince
It’s never too late to have a happy childhood.
Tom Robbins, Still Life with Woodpecker
One of the most amusing things about our eight-year-old daughter is the extent to which she is a covert collector. She is the sort of kid that will make you regret not checking pockets before throwing dirty clothes into the washing machine. You never know what’s going to be in there, and sometimes it’s not inanimate.
As I wrote last year in Raising a Young Naturalist in the Deep South, our daughter spends substantially all of her free time outside. (I try to as well, but kids have more free time.) Even though we bought her a giant bearded dragon, she catches lizards and other reptiles on a daily basis. I have to remind her to turn them loose at night. On hikes, she is the first to spot armadillos from the slightest tickle of movement in the ferns or owls by the near-silent swoosh of their wings.
She commits entire volumes of nature guides to memory and can tell you more than you ever wanted to know about snakes in particular. She can tell you how fast a mamba can slither and that coral snakes and cobras are biologically related.
She’ll spend an hour sitting in the grass watching a golden orb spider build a web. Regular animal visitors have names, like Acorn, the squirrel, or Othello, the enormous black racer snake who lives in my garden. And no matter how much I scold her, she is always barefoot and usually muddy. Many days, I feel like I have given birth to Kya from Where the Crawdads Sing.
The real problem is that, for each of her adventures, she wants to bring home some sort of souvenir. Oftentimes, many souvenirs. Feathers, sea shells, pine cones, rocks, leaves from bizarre plants (to identify later in said nature guides), a spectacularly thick square of moss that just felt so delicious underfoot. One time she even brought home the complete skull of some poor animal, probably discarded from some bird of prey, which is now sitting on top of the piano. She also brought me a baby bird that had fallen out of its nest (named Maximilian).
I take walks to think through things. She takes walks to look around. She notices more out of the corner of her little eye than I see in an entire trip.
Collecting has been a habit from when she was very tiny. I almost think it is an innate trait in some people. I have it too, except for me it is books and art. As a preschooler, I bought her a beautiful pink music box that plays Für Elise (as that is her name, it was supposed to be a personal gift). I stuffed it with plastic children’s jewelry for her to dress up like a little lady. Yeah, that never happened. When I was cleaning her room later, I discovered she had chucked the jewelry and filled the music box up with the bright blue shells of robin’s eggs. That’s closer to her idea of treasure.
A lot of people complain about being forced to spend a great deal of time around little kids during this pandemic, but I genuinely love it. I have received so many messages from friends this week asking me how it is that I manage to homeschool full-time while getting anything else done, how it doesn’t drive me completely mad. I think I would have to say that the key to enjoying being around kids is to approach their antics with a sort of radical openness rather than scorn.
One of the best parts of parenthood is being able to see the world through the eyes of a child again. You start to notice things in your environment you stopped noticing a long time ago. Your native curiosity resurfaces. I have learned so much simply by pausing what I am doing and Googling whatever random question our daughter has about why something works the way it does. I realize that for many other parents the thousand inane questions children ask are annoying. But magic happens when you stop being arbitrarily perturbed and start trying to answer them. When you start treating curiosity as if it is something important and worthy of becoming a daily priority. That’s one of the big things you need to do to model being a lifelong learner for a child.
But it’s a posture that will enrich your own life too.
I have a habit of walking outside late at night to let the dog out and listen to the ocean. Sometimes this is an almost religious experience, like when the full Moon or a storm out at sea brings loud, violent waves to the shore and floods the Intracoastal Waterway. It’s like listening to Beethoven’s 9th Symphony, with an unrelenting cascade of percussion amplified by the cool night air.
My favorite thing these days is to look for the animals that have taken to sleeping on our front porch. There’s this bird who likes to tuck up into the corner of one of the pillars every night. She showed up one evening after a line of violent thunderstorms passed through the area, and now I guess our porch is her home. I put out a birdhouse that a previous avian tenant used to build a nest in last year (the nest is still in the birdhouse, in fact). Perhaps the new bird will find it comfortable.
There is also a pair of lizards that have taken to returning every night to sleep on this one rogue branch of the mandevilla I have climbing a trellis around the porch entrance. They’ve been showing up for over a month now. I had no idea that reptiles could be so loyal. The branch looks ridiculous sticking out from the rest of the plant, but I don’t want to slip it back into the trellis because then where would the lizards sleep? (They are kind of difficult to get a picture of at night.)
Much like how Saint John Henry Newman praised knowledge for knowledge’s sake, I think you need prolonged exposure to the ways of a child to value observation for observation’s sake. Adults are in such a hurry all the time, with their minds not present all the time. A kid will train you how to sit down and wait for something small but interesting to happen.
Teach us to care and not to care
Teach us to sit still
T.S. Eliot, Ash Wednesday
It is getting very difficult to live in a city where there is such a large population of elderly freaking out about the coronavirus, especially when it’s not even a serious problem in our not-heavily-populated county. I try to be a compassionate person, but it’s becoming a real challenge these days being surrounded by so many selfish individuals. If we ever leave this place – an otherwise beautiful beach town with plenty of outdoor spaces that our family loves – my number one criterion in choosing a new place is going to be the median age of residents. Sorry, not sorry.
It has been clear from the beginning of this episode that senior citizens were the largest subset of hoarders, based on what remains on the shelves by the afternoon in grocery stores. (And based on the fact that they are pretty much the only demographic that still consumes corporate news.) No one is hoarding tampons, baby diapers, kids’ snacks, avocados, or organic food options. In fact, the elderly hoarders drawing down their 401(k)’s with this behavior are effectively creating a food desert for low-income families. As if putting them out of work wasn’t bad enough.
They are supposed to be the most vulnerable population, but they are out hitting the stores every day to buy cart loads of groceries to add to their wall of canned goods and toilet paper in the garage, or whatever it is that they have going on at home. They’ve even bought out the deep freezes at Lowe’s and Home Depot so they can hoard fresh food. They are literally buying out fully stocked big-box grocery stores every single day. And I am sure once this is all over, they are going to dump it all out by the curb on trash day.
The scale of waste these antisocial actors have accomplished is breathtaking. We are nearly a month into this behavior, which has become compulsive and deeply mentally ill.
It’s a chore even to drive past the grocery store in the morning hours, as greedy seniors are blocking lanes and cutting people off to be the first in line every single day. I like to look at the Sheriff’s Department’s commander reports in the morning (it’s my form of local news, with the added bonus of being politically bias-free) and the road rage incidents are off the charts.
Now the local stores have implemented “senior shopping hours,” which would be a great idea if the hoarders weren’t all senior citizens. Instead, they are basically allowing the hoarders a privileged status to go ahead of normal shoppers. It exacerbates stores’ problems instead of curing them (unintended consequences, yay). Yet they have to do it for PR reasons, because if they don’t they clearly want people to die.
But I think I have seen peak selfishness today. On the baby aisle, diapers are still in robust supply. But the senior hoarders have totally wiped out the baby wipes. What are young parents supposed to do about that? You can’t wipe a newborn with a paper towel – you will give the baby legitimately serious health problems and put it in physical pain. But they don’t care, apparently. They are going to get what’s theirs and screw everybody else, even the babies.
