COVID-19: Update for March 30, 2020

There have been many developments in the coronavirus pandemic over the past few days.  I’ll try to summarize them in point form, with links to supporting articles.  They range from local, to national, to international politics, health care and geopolitical implications.

1.  US business and politics.

(a)  Food production is becoming affected by the pandemic.  Bloomberg reports:

To be clear, the food from a plant where infection pops up doesn’t pose health concerns because by all accounts Covid-19 isn’t a food-borne illness. Supplies from a farm or a production plant with a confirmed case can still be sent out for distribution.

And it’s important to note that so far there’s been no major interruptions to food supplies. Inventories are still ample, and major bottlenecks have not yet developed in the supply chains, which tend to react quickly to changing situations.

Still, there is a risk to continued production. When a worker gets sick, the employee and every person they’ve come into contact with has to be quarantined. That could mean limited impact in some cases, like at the Sanderson factory, where the infected individual’s work was contained to one small processing table. But the more employee mingling there is, the bigger the threat to production.

This will bear watching.  I hope it will mean that jobs will open up for many of those recently laid off from other companies and industries;  but that will depend on whether they’re conveniently located to take advantage of the openings.

(b)  The importation of foreign workers under special worker visa programs is continuing, and may be accelerated.  This is going to generate more and more bad feeling towards the foreign workers themselves, and the companies that hire them.  If there are so many American workers unemployed, why make it more difficult for them to find work by importing foreigners?  President Trump may have to give special attention to this.

(c)  Certain economic sectors have been much harder hit than others.  The Wall Street Journal reports:

More than 90% of the announced U.S. job cuts tied to the coronavirus were at restaurants and other entertainment and leisure businesses … For many who retain their jobs, tips and commissions have evaporated. Working at home isn’t an option, nor is sick pay … There are more than 34 million people in this pool of the most vulnerable workers, or about a quarter of the private workforce.

The big – and so far unanswerable – question is whether many of these jobs will return in the short to medium term.  Nobody knows as yet, but prospects don’t look good.  The automotive industry is a good example.

As a result of the coronavirus lockdown and beginning on March 6, [a major dealership owner] said that overall U.S. vehicle sales volumes began to significantly decrease, and are currently down 50-70 percent from normal expected March volumes. Additionally, the company said that based on discussions with its OEM partners, this sales decline is consistent with that experienced by other dealers … And like many other companies, they are being forced to take drastic steps to try and shore up their business during this difficult time. Among other things, the company has been forced to furlough 3,000 U.S. operating and staff employees for a 30-day period with an option for a second 30-day period…

The entire US auto industry has been built around a dealership model, with a sales outlet supporting its own service and repair facilities.  If some – perhaps many – dealerships have to close their doors, what will that mean for the manufacturers?  Might this herald a change in the sales model, moving from dealers to a direct consumer relationship, as Tesla is trying to do?  And what will that do to those employed in or by the present system?  How will we get our vehicles serviced in future if there are fewer brand-specific dealers?  Will there be enough independent service facilities to take up the slack?

The news media are also hard hit.  Buzzfeed notes that “The Coronavirus Is A Media Extinction Event“, while the New York Post observes, “$349B stimulus comes too late to save many newspapers“.  Personally, I’m not sure that many US news media are worth saving, given their ever-increasing and more strident bias;  but many still rely on them as their primary source of news and information about day-to-day events.  Local news sources, for sure, are going to be very heavily impacted, because they can’t draw on a regional or national advertising base to keep them afloat.

Let’s not ignore the fact that US news media are being deliberately deceptive and manipulative about the coronavirus pandemic.  Some are presenting information in ways seemingly designed to portray the Trump administration as negatively as possible.  PJ Media had a very eye-opening article about how this is being done, and how facts are being misrepresented and statistics misused.  It’s worth reading, to understand the contempt in which the news media hold you, their consumer.  It should make you very angry.  It certainly does me.  As the Last Refuge opines:

The “Blue Plague” is an intentional effort by various interests to create fear-porn amid the American population by intentionally hyping a mass hysteria about the coronavirus.  In many ways the Blue Plague is exponentially more dangerous than COVID-19 itself.

Yes, it is that dangerous.  When you can’t trust the information you’re being given, how can you make rational, informed decisions?  The New Neo calls it “distortion and fear“.  That’s a pretty accurate description of what the mainstream media are doing, IMHO.

2.  International relations and geopolitics.

China’s economy was the first to feel the impact of this pandemic.  It’s now into what Bloomberg calls the “Second Virus Shockwave“.

As the virus ravages [in Europe] from Spain to Italy, the shutdowns there are cutting off orders to Chinese factories just as they were beginning to get back on their feet. It’s a story playing out across the country.

“It’s a complete, dramatic turnaround,” lamented Gao, estimating sales in April to May will plunge as much as 40% from last year. “Last month, it was our customers who chased after us checking if we could still deliver goods as planned. Now it’s become us chasing after them asking if we should still deliver products as they ordered.”

This emerging pattern poses a grave risk to the chances the world’s second-largest economy can repair the damage from the closures in February to curb the virus … “It is definitely the second shock-wave for the Chinese economy,” said Xing Zhaopeng, an economist at Australia & New Zealand Banking Group. The global spread of the virus “will affect China manufacturing through two channels: disrupted supply chains and declining external demand.”

Mish Shedlock goes so far as to predict, “China has Suffered Permanent Damage. The chinese economic miracle is done. Those who thought China would surpass the US are mistaken.”  I’m not sure I’d go that far, but there are some who think as he does.  I guess we’ll have to wait and see.

Western companies who “bet the farm” on moving their manufacturing to China are now feeling the burn of the economic disruption there.  Adding to their woes are pressures to bring manufacturing back onshore, and reduce national and international dependence on China as a supplier.  The Last Refuge offers its usual piercing analysis of the situation.

The U.S. Chamber of Commerce is the biggest stakeholder of U.S. multinational companies doing business in China. The Trump administration has been warning them for years to put America First in their business plans; and now with the Chinese Pandemic showing just how dangerous it is for critical manufacturing to be made in the U.S.A, chamber President Tom Donohue is pleading to keep the U.S. dependent on China.

. . .

The CoC were the primary architects of Clinton, Bush and Obama trade agreements including the insufferable TPP.   All three previous administrations sub-contracted the writing of trade agreements to Donohue and his corrupt Wall Street corporate cronies.

The CoC is by far the largest lobbying group in Washington DC and they spend tens of millions trying to retain their Chinese investments.

President Trump is issuing “Buy American” orders for efforts to counter the pandemic;  but suppliers who’ve become dependent on China, and who don’t want to invest in local production, are resisting his efforts.  The pharmaceutical industry is a prime example.

White House trade adviser Peter Navarro is hitting back at a group of Big Pharma lobbyists, medical organizations, and free trade groups for opposing President Trump’s proposed ‘Buy American’ executive order reshoring the medical supply chain.

Navarro [said] that Big Pharma’s opposition to the executive order, which would require government agencies to purchase pharmaceutical products made in the US, because it wants to ‘preserve its offshore oligopoly’.

. . .

Navarro continued … ‘Even if Big Pharma’s offshore operations want to send America what we urgently need, the foreign governments of the countries where their supply chains and plants are located are already forbidding the export of critically needed items. Ten of the top 20 countries exporting medicines to the US, including four of the top five, have already imposed some form of restrictions.’

A report from the Associated Press traced major supply shortages of personal protective equipment (PPE) back to China. The Chinese government initially shut down pharmaceutical manufacturers after the coronavirus outbreak, and when those plants reopened, China strictly limited exports to save supplies for its own medical providers.

After what this pandemic has revealed, I certainly wouldn’t trust China to be the sole supplier of anything critical that we might need.

On the other hand, China is doubling down.

Chinese dictator Xi Jinping told fellow G20 leaders in a teleconferenced speech on Thursday that China intends to increase its manufacturing of pharmaceuticals and medical supplies to “keep global financial markets stable.”

Xi demanded that the rest of the world help keep the world’s markets — currently monopolized by the Chinese Communist Party — “stable” amid growing demands that countries reconsider having nearly all their necessary goods sourced from the communist regime.

. . .

Xi’s statement … focused greatly on “cooperation” among member nations to contain the pandemic while emphasizing that China must lead all joint actions.

“We need to better coordinate financial regulation to keep global financial markets stable. We need to jointly keep the global industrial and supply chains stable,” Xi said. “What China will do in this regard is to increase its supply of active pharmaceutical ingredients, daily necessities, and anti-epidemic and other supplies to the international market.”

. . .

To benefit what Xi depicted as charitable actions by China, he demanded that “all G20 members take collective actions” that would benefit the Chinese Communist Party’s economy, such as “cutting tariffs, removing barriers, and facilitating the unfettered flow of trade.”

Xi also proposed a “global network of control and treatment,” also led by him, that would grant China full access to all medical data, presumably also including intellectual property related to the manufacture and development of medical technology.

The way I read Xi’s statement is that China is going to offer more and more pharmaceuticals at rock-bottom prices, to make it unaffordable in economic terms for countries to re-establish their own manufacturing facilities for such products.  Nevertheless, from a national security point of view, such local manufacturing of essential supplies has been revealed as an absolutely critical need.  Therefore, if local industries can’t compete on price with cheap Chinese products flooding the market, governments may have to subsidize them and/or restrict the flow of such imports.  Free trade, long a “sacred cow” of international commerce and industry, is likely to take a knock in the process.

Unfortunately, a growing body of evidence suggests that China not only deliberately suppressed information about the coronavirus pandemic in its early stages, but has continued to lie about its impact on the country.  The latest information suggests that the death toll may be many times higher than officially admitted.

According to official Chinese government data, 50,006 people were infected with the Covid-19 virus in Wuhan with 2,535 dying from the disease.

However, Chinese investigative outlet Caixin reports that … the number of urns on hand at [one] mortuary looks to be more than double Wuhan’s death toll.

Urns are reportedly being distributed at a rate of 500 a day at the mortuary until the Tomb Sweeping Day holiday, which falls on April 4 this year.

Wuhan has seven other mortuaries. If they are all sticking to the same schedule, this adds up to more than 40,000 urns being distributed in the city over the next 10 days.

3.  Impact on US health care system.

The pandemic has led to many articles about how we can improve our own sanitation and hygiene practices.  NewsMax has a helpful list of “The Top 12 Most Dangerous Corona-Spreading Surfaces“.  It’s worth reading.

There’s been a lot of discussion about the impact of the pandemic on hospitals.  I think the best resource for that remains Aesop, who’s an ER nurse and on the front lines of the fight.  He’s in California, but references other states as well in his frequent articles and updates.  Some of his recent posts (all must-reads, IMHO) are:

• Relax
• Field Clinical Report: Nawlins ER
• Today’s Reality Check

You’ll find many more on his blog, Raconteur Report.  Read his archives over the past couple of months to learn more about how this thing has progressed.

There’s a growing concensus, despite official disapproval, that wearing masks is a viable and potentially important method to reduce the infection rate.  Here are some of the articles I’ve found informative:

• Leading COVID-19 expert from South Korea, explains why everyone should be wearing a mask (follow the Twitter link provided there, and watch the video report for yourself – it’s very in-depth).
• Face Masks:  much more than you wanted to know.
• Would everyone wearing face masks help us slow the pandemic?
• Not wearing masks to protect against coronavirus is a ‘big mistake,’ top Chinese scientist says.
• COVID-19: Why we should all wear masks – there is new scientific rationale

After reading those articles, I’ve decided that from now on, I’m going to wear a surgical mask and nitrile gloves when I go to supermarkets and other crowded places.  (I’m pleased to see that supplies of both are now more freely available, at least online – follow the links for more information.)  I think those are worthwhile precautions that may preserve me from infection (and, equally important, help me to avoid infecting others, if I’m carrying the coronavirus without being aware of it).  I recommend the same step to my readers.  (I’m fortunate that I routinely kept surgical masks in my emergency supplies, along with other needs.  When this pandemic erupted and one suddenly couldn’t buy them for love or money, I already had what I needed.  That was a big comfort!  I’ve been able to share some of my supply with friends who needed them.)

That’s all for now.  I’m preparing an in-depth article on how the pandemic is affecting the security and stability of our social structures.  That looks pretty scary to me.  More later.

Peter