Plans for California economy to slowly, gradually revive over the next year or more.

It will be months before you can visit one of these places in California. Image courtesy of Adobe Stock.

The California governor has laid out some general plans on how the state eventually will be taken off lockdown. There are four overall phases stretched over the next year or more. Highlights include:

  • Curb side pickup from retail stores will be allowed perhaps in weeks.
  • In-person worship services and getting a haircut will be allowed months from now.
  • Stay-at-home orders will not be lifted for a year or more.

Schools may start early, perhaps even in July. That will be conditioned upon schools having the ability to maintain safe distances between students.

This discussion will be posted on several of my blogs.

The graphic provided by the state describes the four stages:

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The shutdown will be relaxed, one way or another.

Time to use the other side of those signs. Image courtesy of Adobe Stock.

If the politicians don’t start relaxing the lockdown and letting people pay their rapidly accumulating bills, bunches of people are going to take the initiative and do so on their own.

I sense there is a limited time for those in power to start loosening the extreme restrictions or people are going to start ignoring parts of the rules.

At a deeper level, the concern I have is what’s referred to as the “social contract.” Government gets its authority from consent of the governed.

If a large number of people get to the point of concluding the rules in places like California and Virginia are unnecessarily severe and are causing more health, mental, social, and economic damage than they prevent, people will conclude our leaders have broken the contract.

If we get to that point, respect for law and respect for public officials will decline. That is not a good place to go.

 

Next two articles point out a small number of people who have already reached that conclusion:

4/20/20 – Daily Wire – “Social Shredding”: Defiant Residents Grab Shovels, Dirt Bikes After Cali Authorities Dump Tons of Sand In Skateparks For ‘Social Distancing’ – Officials in San Clemente California noticed teenagers were committing the grave sin of skating in the city’s skate park. Well, that is patently unacceptable, so the city dumped 37 tons of sand into the skate park in an effort to shut down the skating. Since the park is at the beach, sand was readily available.

Well, the city officials did not take into consideration the incredible level of creativity present in humans, especially Americans.

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It is time to end the physical, emotional, and financial destruction caused by the lockdown.

With the ongoing shutdown we are getting way out there onto dangerously thin ice. Image courtesy of Adobe Stock.

We are past the point where the damage caused by the lockdown is greater than the damage caused by the coronavirus.  The damage could start compounding.  Here are just a few of the recent articles making this point:

4/22/20 – The Hill – The data is in – stop the panic and end the total isolation – A medical doctor says it is time for our leaders to examine the evidence instead of hypothetical guesses and then carefully let the country start operating again. He cites five factors ignored by people who want to keep the country in ongoing lockdown:

Fact 1: The overwhelming majority of people do not have any significant risk of dying from COVID-19.

Fact 2: Protecting older, at-risk people eliminates hospital overcrowding.

Fact 3: Vital population immunity is prevented by total isolation policies, prolonging the problem.

Fact 4: People are dying because other medical care is not getting done due to hypothetical projections.

Fact 5: We have a clearly defined population at risk who can be protected with targeted measures.

Keep in mind California will probably be on lockdown until August and Virginia may be locked down until a vaccine is in use.

Two severe medical problems are being caused by and will be prolonged by the severe lockdown.

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Good news in some states for people who like to pay their rent and put food on the table. Bad news for California and Virginia.

A deep freezer, used for keeping large volumes of meat and vegetables frozen. That’s where the economies of California and Virginia are going to be stored for a long time. Image (but not commentary) courtesy of Adobe Stock

Many states are starting to open up their economy.

Virginia may be closed down tight for up to 24 more months.

California may not open up until August.

August.

There will be incalculable medical, emotional, and financial damage in California and Virginia from the lockdown. More on that momentarily.

This discussion will be posted on several of my blogs.

Good news

On the bright side, getting most attention for opening are:

  • Texas
  • Georgia

Other states are thawing because they also don’t want to bankrupt everyone, destroy all the hospitals, further tear down overall health levels, and permanently cripple their economy. List includes:

  • Alaska
  • Colorado
  • Minnesota
  • Montana
  • Mississippi
  • Ohio
  • Oklahoma
  • Pennsylvania
  • South Carolina
  • Tennessee

And then there is Virginia and California.

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This shutdown is damaging our health, collapsing the economy, and shredding our freedoms. What will be the tally from ‘avoidable deaths?’

Will the Grim Reaper get more business from the coronavirus or the shutdown?

Every additional day of the shutdown is causing horrible damage. Not only is the economy suffering with record high unemployment, soon-to-be record high bankruptcies and shuttered businesses, but also there is now and will continue to be a decline in overall health. We will see increased mortality from other causes because of the shutdown. The damage to our freedoms is widespread and immeasurable.

Point made by the author of the column linked below puts it this way:

This is not a trade-off between lives and the economy. It’s a trade-off between lives and lives.

In a series of articles over the last week I attempted, in my own feeble way, to describe the wide ranging damage we are watching grow every day.

The question our governors and mayors urgently need to consider is whether we have already passed the point at which there will be more damage (including deaths) from the shutdown than from the coronavirus.

This post will be published on several of my blogs.

Trading off lives for lives

4/17/20 – Colorado Politics – Opinion/It’s time to shift tack – and contain the virus while reopening Colorado’s economy – Author was sounding the alarm on a pending medical disaster well before others realized there was a problem. That danger is now past.

He draws the analogy to a hurricane expected to make landfall at category 5 but deteriorated to a bad thunderstorm the morning it landed. In that analogy the cat 5 which was expected to land on the entire country only hit New York, New Orleans, and Detroit.

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More entries on the list of economic sectors devastated by the shutdown.

Image courtesy of Adobe Stock.

Hat tip to Behind the Black for the legwork identifying additional sectors of the economy that are collapsing. Large segments of the economy I haven’t mentioned before:

  • Home sales
  • Housing construction
  • Apartment rentals
  • Clothing production
  • Flower trade

Damage to these sectors won’t immediately heal the moment state governors decide they will allow the economy to come back to life out of its induced coma.

Home sales

4/21/20 – Fox Business – US home sales plunge 8.5% in March, and it may grow worse – Sales of existing homes dropped 8.5% in March. Article use the word “cratered.”

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More sectors of the economy being destroyed by shutdown of the economy.

Imagine all that frantic hustle and bustle of Denver airport back in 2018 dropping by 95%. Photo by James Ulvog.

I can barely type fast enough to keep up with the adverse impact on the economy or freedom. Can barely keep up with the news about entire sectors of the economy collapsing. Most recent sectors I’ve learned about:  airlines and the entire health care system. Since drafting this post last evening, learned about the destruction in the clean energy industry and saw some stats on the devastation in the restaurant sector.

This post will be printed on several of my blogs.

Airlines

4/20/20 – NewsMax – Big 3 US Airlines May Cut More Than 100,000 Jobs by Fall – At the moment passenger loads are frightening – article says domestic flights are averaging 10 passengers and international flights are averaging 24 people plus crew.

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A reminder of previous government pronouncements before they are pushed down the memory hole.

Image courtesy of Adobe Stock.

We can now see an extensive effort to re-write the story of the shutdown of the economy. Before that is accomplished it is necessary to put a number of factors on the table so they don’t disappear down George Orwell’s 1984 memory hole.

4/13/20 – American Institute for Economic Research – Liberation From Lockdown Now – Article discusses recent explanations and how we got to this point.

We need to remember this uncomfortable information before it is removed from the discussion.

I shall quote one paragraph from the article to keep the information alive before it is erased from the record. The early advice from the experts was:

“For a family sitting around the dinner table tonight,” said Dr. Nancy Messionnier, a spokesperson for the CDC on January 17; “this is not something that they generally need to worry about.”

Let’s not forget the next sentence:

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Magic of the price signal to change production levels.

Fourteen wells on one pad, located on the southeast side of Williston, N.D. Photo by James Ulvog.

The double black swan of COVID-19 pandemic from the demand side and Saudi Arabia flooding the market from the supply side is creating a sales problem and storage problem for the oil industry.

Regulators in Texas are thinking about about ordering a pro-rate reduction in production. In other words, they are considering giving each producer an order on how much to cut.

North Dakota has no such plans.

North Dakota is planning to rely on capitalism to rapidly adjust production.

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Capitalism or fascism? Which economic system will better resolve the supply shortages?

Image courtesy of Adobe Stock.

How do we get enough of the respirators, personal protective equipment, and medicine we need to get through the COVID-19 pandemic?

Fascinating to watch the press conference Saturday 3/21/20 with various federal officials and members of the coronavirus task force.  Most fascinating feature was looking at the various comments and questions/answers from an economics perspective. Thought about Friday’s briefing as well.

Here is the difference in perspective I perceived: do we rely on capitalism or fascism as our model to get things done?

Underlying the comments from all the federal officials is the idea that the private sector can figure out how to provide everything we need.

The common thread underlying a huge portion of the questions from media is the idea that the federal government should tell which specific companies how much of which specific products to produce, specify they price they will charge, and provide the addresses for where to send each pallet of supplies.

In other words, should we use a capitalist model to provide goods we need or should we use the fascist model?

As a thumbnail description, in the fascist economic model the means of production are owned by the private sector but the central planning authority tells companies how much of which product to produce. In contrast, the next step away from freedom is communism, in which the means of production are owned by the government and a central planning agency decides how much of each specific product to produce.

Capitalism?

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Didn’t ever expect I’d personally experience Soviet Union and Venezuelan style grocery stores.

Chaika 3 (on redscale film) – Queue by Jaroslav A. Polak is in the public domain (CC0 1.0). Lines like this outside a grocery store were normative in the Soviet Union.

In the Soviet Union and Venezuela, grocery shopping involved/involves listening for rumors of which store got a shipment overnight, standing in line for hours, looking at lots of empty shelves, and going to the store daily to see if what you need might actually be on the shelf today.

If you have been awake the last seven days, you know that is what grocery shopping looks like in the U.S. today.

The difference between the Evil Empire and the worker’s paradise of Venezuela on one hand and the United States on the other hand is that the supply chain in the U.S. is still stocking the shelves and in a week or two or three will have them filled up.

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The 2010’s: best decade in history.

Image courtesy of Adobe Stock.

Matt Ridley explains the best improvement in living standards for us humans over a single decade is the decade that ends today, 12/31/19.

He explained his point from multiple directions on 12/21/19 in Spectator: We’ve just had the best decade in human history. Seriously.

A few of his points that caught my interest:

The rate of extreme poverty in the world has dropped from 60% when he was born to under 10% in this decade. If you ache to seek less people in dirt eating poverty that is a wonderful thing.

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Yet another consequence of central planning: systemic sexism

Empty store shelves. Image courtesy of Adobe Stock.

Central planning is one of the major features of socialism. A major consequence of central planning is shortages. The widespread shortages are even more severe in the purest variation of central planning: communism.

Chelsea Follett points out The Shocking Sexism of Central Planning in Human Progress back on 12/6/17. She reports on a book How We Survived Communism and Even Laughed which explains that central planners in the Soviet Union placed low priority on many products that women needed.

Oh, Frederick Engels considered housework unmanly, so the burden of no washing machine, dryers, or other time saving devices fell on women. Severe shortages of makeup, hair dye, and even sanitary napkins (yes, you read that right, basic hygiene was not a production priority in the worker’s paradise) made for a harsh life for women.

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What could possibly have caused the increase of income per person over last 200 years?

(Article cross-posted from Outrun Change because a few of the factors necessary for these changes to happen are property rights, economic freedom, and political freedom. In addition, it is capitalism, not socialism or communism that made these changes happen.)

Here is an approximation of annual per capita GDP from 1 AD through 1913:

I’ve long been amazed at the radical growth in per capita wealth over the last 200 years. That means since the Industrial Revolution.

Living in dirt-eating poverty as the normal way of life for essentially every person on the planet changed about 200 years ago, give or take.

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While on a long road trip, what economic system provided the goods and services I needed, when and where I wanted them?

How is it that services are available on the interstate highway system when and where I need them? Image courtesy of Adobe Stock.

I took a road trip from the Los Angeles area to Williston last week. My wife and I drove there with our son and his family.

A few questions came to mind on the trip

Questions

1. What economic system provides a gas station within a few miles of the point that we decided we wanted to fill up the tank?

With four drivers in the car,  we were planning to drive on through the night. We were too tired to do that so we decided to stop for the night.

2. What economic system provides multiple hotels and motels half an hour down the road from where we changed our mind?

3. Furthermore, when we wanted to stop, what economic system provided motels at multiple price points so we could pick the one that fit our price range and taste?

4. Why is it that the motel we choose included a full breakfast for all of us in the price?

5. Why did the motel even have two upgraded lamps on the night stands each with 2 USB charging points and two electrical outlets on the base of each lamp?

Answers

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