Silver Linings II

Last week, I wrote about the silver linings that may arise out of the COVID19 pandemic.  I enumerated our awakening to China as a geopolitical threat, rather than a responsible trading partner, the shift of supply chains away from China, the skepticism with which we must view models that purport to tell us what our climate is going to look like in 100 years, and the possible restructuring of our education system as issues that will likely gain momentum thanks to this little microbe.

But it turns out I have missed a few potential silver linings.

-        National  preparedness.   We were not fully prepared for this pandemic.  Our unpreparedness is a bit surprising because it was widely known that several countries had active bioweapons programs.  Additionally, we have been warned by a number of people that a pandemic was possible and, indeed, likely at some point.  Laurie Garrett’s 1996 book The Coming Plague spelled that out.  We should have had a game plan ready to execute. Yet we seem to have been caught flatfooted, perhaps because we assumed that a pandemic was a Black Swan event.

      

      Obviously, we continue to be under a potential nuclear threat from North Korea, but there are other threats that demand our attention.   The threat from the EMP (electromagnetic pulse), i.e., a single nuclear device detonated high above the U.S. could fry all of our electronics.  One task force estimated that an EMP attack would kill 90% of the population of the United States.  Similarly, a cyberattack on our electrical grid would have similar consequences.  Ted Koppel spun this all out in his 2015 book Lights Out: A Cyberattack, A Nation Unprepared, Surviving the Aftermath. 

      Fortunately, we are beginning to address this vulnerability.  Earlier this year, President Trump signed an executive order regarding the hardening of our power grid.  Work needs to be done but it is at least a step in the right direction.  Follow up needs to be done as well as a review of how vulnerable our internet is.  We need to assume adversaries may launch multiple attacks (i.e. bioweapon plus cyberattack)

-        Tapping Creativity.   With the abrupt shutdown of all face to face businesses, many had to get creative to survive.  Restaurants quickly switched menus and went to curbside only service.  Cultural institutions quickly offered streaming events and exhibits.  Zoom became the preferred platform of “face to face” business meetings overnight.   With supply chains in food disrupted, some college students began to figure out how to get product directly from the farm to consumers.  Many workers figured out how to work remotely pretty quickly.  We will undoubtedly see some very creative ways to conduct business in light of the pandemic and some of these business methods and applications will be useful long after this recedes.

-        Time of re-examination.  One friend of mine reacted to the “shelter in place” order this way, “What’s the hurry to get out….to make 1 more widget?”  In a simplistic way, he drove home a point.  Americans have become a driven, frantic, exhausted people.  Many of us work constantly, with few vacations.  The pandemic was sort of a forced time out, to consider whether the trajectory we are on is the right one, to perhaps read some good books, to plan the next phase of our lives, to evaluate our relationships, to rewrite goals.  Instead of running on the gerbil wheel every day, we have an opportunity to slow it down, to go from playing fast break to a more normal pace, to be able to stop and hear birds, pay attention to the raindrops, to focus on the music on the radio, to take a little time to read deeply.   In some respects, this pause has been a hidden gift.

Sure, this harm caused by COVID19 has been enormous, and I don’t mean to minimize it in any way.  But there have been strands of silver linings.  And it is those things that keep us going.

Silver Linings

I just received a phone call from a friend of mine in the restaurant/deli business, probably the hardest hit of all sectors.  Having a number of friends in this line of work, I can tell you it is not a business I would want to be in under normal circumstances.  The hours are horrific.  It’s hard to get reliable and honest help.  And the tax and regulatory burden is awful.  And now the lockdown threatens to put many out of business.

Ten weeks in and while things look like they are loosening up, it’s hard to be optimistic with 30 million unemployed and many businesses just hanging on.

But on this Memorial Day weekend, I’m going to try to put forward some things to be optimistic about, and some of the positive side effects of COVID19.

China.  As a society, we have been willfully blind to the malevolence of the Chinese Communist Party and its long term designs.   We permitted our manufacturing base to be supplanted by the Chinese.  We assumed that the Chinese government perpetrated the Tiananmen Square massacre miraculously had an epiphany and, while it still evidenced some rough spots in its behavior, it would eventually become more benign.  As several foreign policy scholars have noted, the mask is off now.  The lies and cover up of the outbreak has exposed this regime for what it really is and we have been slapped awake.  We have finally woken up to the fact that many strategic items and pharmaceuticals are manufactured by China and that the regime would not hesitate to hold us hostage.  And in the midst of the pandemic, China continues to assert itself in the South China Sea, has now reneged on its commitment to permit Hong Kong’s autonomy, and is threatening Taiwan.  Better to know this all now.

Supply Chains.  The open belligerence of China will trigger the movement of supply chains, and the benefit of this migration should accrue to us.  As Peter Theil has pointed out, our innovation has occurred mostly in the realm of bits and not of stuff.  Although I think he overstates his case, especially when it comes to energy (think horizontal drilling and fracking), the way to innovate in making stuff is to actually make it.  Bringing much of this back home will allow us to do more of the innovating.

Climate Change.  The COVID19 models that were used to shut down the economy, throw 30 million people out of work and ruin hundreds of thousands of businesses were flawed and many of the “experts” were wrong on a number of counts.   The data inputs were flawed, the death rates were overstated, and hospital have had layoffs.  The temporary treatment centers, like Chicago’s McCormick Place have been shuttered.  One positive development is that the hysteria over climate change and the models predicting where the weather will be in 100 years will be discredited, along with the IPCC (Intergovernmental Panel on Climate Change).  Can you really look at us with a straight face now and tell us that the IPCC will be less biased than WHO?  One positive outcome in all this is that we will likely shrug off the draconian measures that these bodies would impose on us.  We the people, not scientists in the bubble, should decide how we would like to live.

Education.  The positive effects on education will likely come in two layers.  In the K-12 levels, we are learning that for some people, homeschooling is a more viable option, and this will erode the power of union infested, indoctrinating public school system.  This is exactly why the “experts” at Harvard are pushing to bar homeschooling.  In higher education, the financial shakeout is long overdue.  Again, I defer to Peter Theil, who has been talking about the education bubble for a long time and that restructuring is long overdue (https://www.thecollegefix.com/peter-thiel-predicts-reformation-of-higher-education-in-speech-to-student-journalists/).  Universities have gotten fat and happy with foreign students and government subsidized student debt.  Consequently, we now have a layer of administration and disciplines that aren’t disciplines (gender studies) pervading our higher ed system.  Michigan has something like 50 highly paid “diversity officers” doing what exactly, no one knows.  The hit to university budgets will force some tough choices and will wash out some colleges.  Further, we will be less keen on educating Chinese students as our relationship with China gets realigned.  I see a move to more lifelong learning and a migration to community colleges and HBCUs as an alternative to our expensive, bureaucratic university system.  COVID19 will hasten the pop of the education bubble.

Liberty.  I also see a renewed in interest in the genius of the Founders.  Upon the election of Donald Trump, the Left screamed that Trump was a fascist, and compared him to Hitler and Mussolini.  But in the pandemic, Trump has largely deferred to the states in practice.   And in the states, we have seen governors and mayors seizing a little power, and not hesitate to abuse it.  Gretchen Whitmer, Bill De Blasio, Lori Lightfoot, JB Pritzker, Ralph Northam, Andrew Cuomo, among them ran roughshod over the Bill of Rights, while reserving certain privileges for themselves.  Lightfoot got a haircut while others could not.  Whitmer had a graduation party for her kid, while others were barred.  De Blasio went to the park while others were restricted from doing so.  JB Pritzker sent workers from Illinois to work on his home in Wisconsin and sent his family to Florida, violating the stay at home order, causing me to name Pritzker “Maduro Lite,” although there is nothing light about Pritzker.  We now know what our “benevolent leaders” will do with a bit of power.  Sean Penn at a rally, admonished Chicagoans to “trust your leaders” last week.  We learned that if we want to retain our liberty, we should trust none of them and keep a watchful eye on them always.

While we have all suffered greatly under the pandemic, we have learned a number of lessons and if there is good to come out of this, we should make sure that they remain etched in our minds.  For this education has been expensive.

Identity Theft

In the technological age, we all worry about it.  Some notorious actor snatches your social security number and obtains credit in your name, screws up your credit which takes years to remediate. 

But there is a more pernicious kind of identity theft going on, and it is being perpetrated by the radical left.   It is stealthy and gradual, and it is being accelerated by COVID-19.  Our past, present and future selves are being slowly erased so that, if we do not resist, our individuality will inevitably melt away into an amorphous mass, as if you had tossed an ice cube into the ocean.  Let me explain how this is happening and what it means for our basic humanity.

We are planning animals, and as Americans, we are doubly so.  We are an optimistic and forward-looking people.   It is in our nature.  We set goals, priorities, obsessively keep calendars and to-do lists.   We budget and project.  We can suffer through a long, brutal winter if we know that spring will eventually come.  The initial call from government was to stay at home for 30 days to “flatten the curve,” and not overtax our health care system.  In several states (mine included), that has been extended almost indefinitely.  Under the Illinois 4 phase plan, there is no definitive end, and, therefore, our ability to plan has been completely obliterated. 

The second pilfering of our identity comes with wearing a mask.  One of the cultural aspects of Islam that I reject entirely in the West is the wearing of a face covering by women.  In the West, we are a free and open society.  Our facial expressions are an integral part of our identity.  That is exactly why many were calling for face coverings to be outlawed with respect to Antifa.  Now, with COVID19, face coverings are being mandated—again, for an indefinite period of time---even though scientific evidence that face coverings prevent transmission is scant.  The face covering in Islam is highly symbolic, that of  submission, and many Americans are chafing at this requirement.  It turns us into faceless beings, unrecognizable to one another.  The other day, for instance, I was in the grocery store and I thought I recognized a woman but wasn’t sure at all (it turned out not to be who I thought it was) because of her face covering. 

Indefinite lockdown steals our ability to plan—our future identity.   Masks steal our present identity.  And now the rewrite of history is stealing our past identity.

The identity theft of our past is vital to us as Americans.  Because we are a polyglot nation, a melding of different nations and cultures, we are held together by a philosophy and history.  That history gives us a common anchor, a touchstone that we all share no matter where our ancestors came from.  As Bono put it, “America is more than just a country, it’s an idea.”  The creation of America was embodied in our foundational documents: The Declaration of Independence and The Constitution.  Books about our founding carry titles such as “The Glorious Cause,” “Miracle at Philadelphia,” and “Empire of Liberty.” Two of our initial leaders—George Washington and Thomas Jefferson willingly gave up public office and yearned to be private citizens. 

Gradually, the Radical Left has attempted to eradicate our past.  It began with the tearing down of statues of confederate leaders in the South, and continued with the renaming of buildings in higher education that had any connection with slavery.  Yes, slavery was a blight on our history.  The Founders knew it, although it took almost a century to eradicate it. But it was not why the nation was formed.

But now comes the 1619 Project, which attempts to distort and rewrite the history of our Founding, by claiming among other things, that the Revolution was fought to preserve the institution of slavery.  No established scholars of the period were consulted with respect to the 1619 Project, and many, like Gordon Wood, have criticized it harshly as being without merit.  Yet, it won a Pulitzer Prize, which is the legitimization it needs to be taught in our school systems.  Our past is a vital part of our identity and it is being stripped away and rewritten.  And, instead of portraying our Republic as a guardian of liberty and the worth of the individual, it is being recast as a perpetrator of heinous crimes (while simultaneously looking the other way on the crimes of Communist China).

Finally, I must say a word about the Transgender Movement.  This is not to be confused with transgender individuals, because there is separate and apart a movement that has crept into many facets of public life in an attempt to gain intellectual currency.  While transgendered people account for a tiny fraction of the population (.03-.06%), the Transgender Movement has gained an outsized voice and influence in public life. 

The underpinning of the Transgender Movement is that gender is a social construct.  It seeks to blur the distinctions between men and women and attacks gender norms and gender identity.  Most notably, the Transgender Movement has attempted to destroy this aspect of personal identity through restroom conventions separating men’s and women’s facilities, allowing biological boys and men to compete in girls’ and womens’ athletics and access to their locker rooms (currently being litigated), and demanding adherence to their social conventions (preferred pronouns).  It has sought to normalize “gender fluidity” through early indoctrination with “Drag Queen Story Hour” throughout the country in the library systems.

Our gender is an important aspect of our identity, and always has been.  But the Transgender Movement demands that we forsake it.   It demands that the 99.5% of us that are not hazy about our gender identification adhere to their social norms and conventions.  If you do not, you are vilified as “transphobic.”  The Transgender Movement is politically allied with the Radical Left, and has the backing of the ACLU.

Recently, the American Writers Museum featured a presentation by trans activist Jennifer Finney Boylan, but accompanied by comedienne Kathy Griffin.  When I inquired why Kathy Griffin was featured, I received a milquetoast reply about Griffin being a “friend” of Boylan's

My response to their membership renewal request was as follows:

Thank you for your reply, which is disingenuous. We all know why Kathy Griffin has gained some public notoriety and it has nothing whatsoever to do with American Literature.  I have been unable to find a coherent paragraph that she has written. 

It is sad to see a new institution whose programming initially featured the work of Laura Ingalls Wilder, Frederick Douglass, F. Scott Fitzgerald, and Ernest Hemmingway decide to feature Ms. Griffin and slide into political agenda pushing of the most grotesque kind.

I joined AMW as soon as it opened and promoted it among my contacts.

Count me out.

The Transgender Movement (again, separate from transgendered persons) does not seek a seat at the table, but is a rent-seeking organization that wants to run the table and push its interests ahead of everyone else’s.  It is most personified by PA health director Rachel Levine, who moved her mother out of a nursing home just as she issued the order to introduce COVID19 infected seniors in.

I write this so that you will pay attention.  The Radical Left is opportunistic.  It seeks to empower the State by eroding our identity, our uniqueness as individuals and as a country.  It wishes to extend the lockdown to turn our future into chaos.  It seeks to erase and rewrite our past.  It wishes us to be faceless and genderless.

Don’t let them do it.  It is identity theft.

Shattered Shibboleths

It occurred to me that many of the shibboleths that people of my vintage were weaned on turned out to be untrue, at least in part.  Or if they were true, our elders neglected to give us the qualifications that should have accompanied them.  That is why I am now circumspect when I give advice to young people.  Other than very general bits of advice (which aren’t useful anyway).  The world has certainly made many of the truisms we grew up on obsolete and irrelevant and I certainly do not wish to steer a young, smart ambitious kid in the wrong direction.   Some of these “truths” came from the great oracles---Nobel Prize Winners—esteemed professors and wise mentors.  But without qualification, they turned out to have catastrophic consequences if followed blindly.

·        Stocks  - Spurring me to write this was an article in last Sunday’s New York Times Business Sections which showed that some classes of bonds had materially higher returns than stocks.  

“    ''Invest in stocks for the long run” had been the mantra of all of the finance professors and investment professionals for decades.  Next to “diversify your portfolio,” “invest in stocks for the long run” was a sure way to build wealth….until it wasn’t.  Jeff Sommers article last Sunday made a couple of important points.  “Over the past 20 years—which counts as a very long time for me—investments in important kinds of bonds have outperformed the stock market.”  Worse, the S&P 500 suffered horrendous declines during certain stretches   (losses of 49.2% from 3/24/00 to 10/9/02, 56.8% from 10/9/07 to 3/9/09, and 33.9% from 2/19/20 to 3/23/20).  This means a material change in lifestyle in retirement even if you have saved if you timed your retirement incorrectly.   With companies forcing workers into “early retirement” just as those declines hit, it is apparent that “investing in stocks for the long run” can easily become a trap for workers.

·      Residential Real Estate-  Living in Illinois, this is my favorite.  We were given two pieces of advice from nearly everyone upon graduation from college: 1. Start investing in a 401(k) right away, even if it’s not the maximum amount, and 2. As soon as you can scrape up a down payment, borrow as much as lenders will lend you to buy the biggest house you can buy, and then trade up as soon as you can.  The former was probably sound advice over the long haul.  The second was ok for awhile, until it wasn’t.   The real estate crisis of ’07-’08 shattered this shibboleth.  While real estate recovered in many places, Illinois lagged, and the steady increase in real estate taxes, the $10,000 cap on tax deductibility, and demographic changes have made this leveraged investment much less desirable.  In certain areas of Illinois, most notably the farther north and northwest suburbs, sellers are taking tremendous markdowns, as Crain’s real estate reporter Dennis Rodkin notes on a weekly basis (and this was before the COVID19 crisis). “Of America’s largest cities, Chicago is the most vulnerable in the new crisis to a new round of foreclosures and people walking away from their homes,” he notes in a recent tweet.  While the U.S. Constitution prohibits a “taking” of property without compensation, Illinois seems to have developed a work around by taking your equity away a bite at a time.  Owning your own home might still be the American Dream in some locales, in others it is the American Nightmare as local politicians see you as an ATM.

·    Free trade and China- As recently as two summers ago, free market economists such as Deirdre McCloskey were preaching the gospel of free trade, and excoriating Donald Trump for leveling tariffs on Chinese goods.  At lunch with her during the summer of ’18, McCloskey opined on the tariffs, “It’s just stupid.  Just stupid.”  While I am generally in favor of free trade, and I understand that free trade is an iterative process (we don’t have clean hands with respect to barriers and subsidies), our relationship with China has been disastrous, as the regime’s behavior has made clear during the COVID19 crisis.  While it was probably ok for China to manufacture and for us to import tchotchkes, the idea that we would let China strip out our manufacturing base was a horrendous strategic blunder.  We now see that China not only can and is willing to hold us hostage in pharmaceuticals, strategic components, and medical supplies, our governmental profligacy gives the regime sway over our finances.   None of our Western trading partners—Mexico, Canada, Australia or the EU—would hold us hostage.  Further, as the pandemic ravages our economy and our local governments ban religious services, gatherings and use drones and other surveillance methods to ensure compliance, we must ask ourselves whether China has become more like us or have we become more like China during the course of China’s membership in the WTO.

Finally, other long held beliefs are sure to be challenged in the future.

·        Education – This is one near and dear to my heart.  I am grateful for the education I received, but it has become apparent to me that the education bubble was due to burst and the pandemic is likely the needle that pops the balloon.  While college has clearly paid off for many in terms of lifetime earnings, that no longer hold true.  Dubious disciplines like “gender studies” have permeated institutions.  The admissions scandal rocked higher ed, along with disclosures that the head of Harvard’s chemistry department was arrested for nondisclosure of his relationship with China.  Harvard also graced the notorious Jeffrey Epstein with an office after he was arrested the first time. Scandals and lawsuits at Oberlin and Michigan State spotlighted the degree to which these institutions will protect their power structures and have become ideological mills.   Enrollments are expected to drop by 15% and revenues to decrease by $45 billion next year.  Like owning your own home, a college education is not an unqualified pathway to a more prosperous future.  I see community colleges, HBCUs, and online learning making inroads on traditional four-year colleges.

One Twitter posted sarcastically “Congrats to all new graduates with gender studies degrees.  An amazing future awaits you.”

That post succinctly says it all.

·        Be good.  Yes, we all want good behavior.  But a recent study showed that children that score a bit lower on behavioral conformity often turn out to be very successful entrepreneurs.  Many organizations pay lip service to “thinking outside the box” but mostly value conformity and compliance.  Being good has its limits.

We have entered an era in which conventional wisdom has been shattered.  I only give young people limited advice now.  Think for yourself.  Always be skeptical.  Be nimble.

Many of the old rules no longer apply.  Plan accordingly.

Corono-Observations

We’ve completed week 7 of “shelter in place” and it hasn’t been a waste of time.  We’ve actually learned a lot over the past several weeks.  It is in hardship and crisis that people do reveal themselves and some things become more apparent.

·        The city of Wuhan is also where most of the fentanyl is produced.  The same city that gave birth to COVID19 and is killing many of our elderly continues to produce the opioid that is killing our kids.  The response from the Chinese Communist Party makes it clear that it really doesn’t care.

·        We have seen our local leaders contract a disease worse than COVID19-Maduro-itis. Marduro-itis is a disease marked by obsessive control and rule making, that you yourself do not feel obliged to comply with.  New York mayor De Blasio goes to the gym but no one else does.  Chicago mayor Lori Lightfoot gets her hair coiffed because she is “the face of the city.” Virginia governor Ralph Northam goes off to his seaside house, while other Virginians remain under house arrest.  J.B. Pritzker demands shelter in place yet dodges questions whether he is slipping off to his Florida home.  Maduro-itis conveys privileges than the commoners do not have.

·        The Founders were right about a number of issues.  People will abuse their power and we’ve seen the pandemic open the door to a plethora of abuses from Michigan governor Whitmer banning people from buying plant seeds to cops arresting moms at playgrounds and harassing old people on beaches.  We’ve seen protesters arrested in stark violation of their Constitutional freedom of assembly. They were also correct about federalism.  In deciding how to handle the pandemic, different solutions are appropriate for different regions. What works for South Dakota won’t work for New York.  Further, we get to experiment.  We can see how Georgia’s approach to relaxing shelter at home works before we apply it nationwide.  Yes, it all looks a little chaotic, but it is a better approach than a one size fits all approach.

·        In Illinois, state and municipal workers won’t miss a paycheck, and will get scheduled raises, yet private sector workers are being laid off by the hundreds of thousands.  Yet when they return to work, Pritzker will demand that they pay more out of their earnings to pay for the pay and benefits of those that didn’t suffer any economic harm.

·        We have seen Jews and Christians threatened.  New York mayor De Blasio threatened to close some churches permanently and threatened Jews with arrest if they did not comply with social distancing.  Church members were ticketed at one church even though it was a drive-in.  Yet, in a suburb of Minneapolis, a Muslim call to prayer blared over a loudspeaker.

·        After decades of trade with China, and assuming that China would eventually liberalize, we need to begin to ask ourselves if China is beginning to look more like us, or are we beginning to look more like China.  Suspension of civil liberties, surveillance through drones, imploring neighbors to snitch on each other starts to look more like authoritarian Communist practices than the liberal West society that we have taken for granted.

Still, there are reasons to be optimistic.

·        Economist Randy Kroszner and several other commentators have noted that we have pulled together in large part.  There has been an outpouring of people willing to help other people.  The medical profession in particular has been courageous and hardworking.  We are probably a more closely knit society than the media and politics would lead us to believe.  It is important that politicians (especially on the left) and the media profit handsomely by keeping us divided.

·        We are learning the limitations of measurements and models.  The CDC just revised its estimate of deaths by COVID19 downward by nearly 50% from 70,000 to 37,000.  This spotlight on modeling and measurement limitations will have a profound effect on policymakers that are advocating draconian measures to combat climate change.  The logical question that they cannot answer is why we would expect the climate change modelers to do any better.

·        Hopefully, this experience will sober us up to other existential threats, like EMP (electromagnetic pulse).  I believe it has, as President Trump already issued an executive order hardening the electrical grid.

·        Our relationship with China will now be more realistic.  We see the Chinese regime as it is, not as we would like it to be.  The reality is that it has changed little since Tiananmen Square, although the West continued to pretend it didn’t happen.

·        We are adapting.  I am especially impressed with our educational and cultural institutions’ ability to shift to online activities.  It’s not perfect by any means but museums, opera houses, symphonies, zoos and the like were able to pivot quickly to offer programming online.  Remote learning likewise is not perfect, but we are able to continue to educate our youth without too much disruption. 

·        My first gut reaction to the lockdown was, “Gee, if you wanted to control an unruly population, this is a wonderful way to do it.”  I was at first shocked at how meek and compliant we were. But there has now been enough rebellion against arbitrary and silly rules that it gives me hope that the American spirit lives on.