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Friday, March 20, 2020

My "net assessment" of the US response to covid19

In the Washington Post, columnist David Ignatius ("Where would the U.S. stand in a post-pandemic assessment?") discusses the "Net Assessment" process created by the Department of Defense to assess the comparative likelihood of the US and the USSR to survive nuclear war.

He opines about a net assessment comparing the response of China and the US to the coronavirus.

Here's my not particularly detailed response:

China has an authoritarian government that withheld information, endangering their citizens. But they did respond, eventually.  And their scientists communicated about the situation and the virus in scientific circles early, giving a leg up to creating tests and more quickly understanding the nature of the disease.

Photo: Rex Features.

Neoliberalism: the emphasis on the market at the expense of government.  Since the era of Thatcher and Reagan, neoliberalism has resulted in the denigration and defunding of government in the US ("Neoliberalism's 'trade not aid' approach to development ignored past lessons: Neoliberal development policy was radical and abstract, but its uncompromising approach proved dangerous in the real world" and ">Neoliberalism – the ideology at the root of all our problems," Guardian). From the first article:
At the heart of the new right project was a particular constellation of ideas and policies known as neoliberalism. Neoliberalism is often used today as shorthand for any idea that is pro-market and anti-government intervention, but it is actually more specific than this. Above all, it is the harnessing of such policies to support the interests of big business, transnational corporations and finance. It seeks not so much a free market, therefore, as a market free for powerful interests.
From the second article:
So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.
Extreme Republican ideology.  With the rise in extreme Republican ideology--dating to Newt Gingrich's Speakership if not before ("How Newt Gingrich Destroyed American Politics," The Atlantic), and the most recent Presidential election, the US has a viciously incompetent federal government that failed to maintain public health monitoring and surveillance systems, and through continued incompetence spreads misinformation through the President, even though somewhat crippled federal agencies are reacting, although local and state agencies are more in the lead because of the vacuum of leadership and competence.

Public health and health care is not an integrated system.  The US has adopted an approach generally and specifically in terms of health care to governance and funding that de-emphasizes the importance of surveillance and stocking slack resources to be able to respond to pandemics in a timely fashion.

I can't remember the article I read, but it made the point that "the US doesn't have a health care system, it has various disconnected marketplaces."

Rural areas have been particularly hard hit ("The Quiet Crisis Of Rural Hospital Closures, Kaiser Health) and because rural Republican states have declined to expand health care access to the poor.

But plenty of urban hospitals have closed ("Hahnemann University Hospital Closure: What Philly Is Losing," Philadelphia Magazine; "St. Vincent Medical Center closes after a century, shocking community," KCRW/NPR)sometimes because they are owned by for profit firms, or because the cost of uncompensated care is high and threatens the financial health of university parents.

These 2019 entries include links to past entries concerning health care matters in the DC area:

-- "Another example of a failure to do public capital planning in DC: Council votes to stop funding United Medical Center
-- "Community health improvement planning"

This has resulted in a continued reduction in the number of available hospital beds and usually a decline in the number of ICU beds as well.  Per capita numbers for the US lag countries with national health systems.

More recent efforts to tie public welfare health coverage and food assistance to employment, making it more difficult for immigrants to get citizenship status if they've received public benefits increase the likelihood of poor health outcomes.  Not to mention the difficulties of applying for benefits--most states haven't adopted best practice computerized systems, and have closed offices where people normally apply, etc.

Difficulty of responding extranormally when circumstances warrant.  Plus the bureaucratic nature of agencies tends to make it difficult to respond in innovative ways let alone with alacrity in extranormal situations (e.g., compare South Korea or Taiwan's response to that of the US, and the testing creation and approval process; cf. the debacle concerning expanding the Seattle Flu Study to test for coronavirus, etc.).

Need for a national health care system.  How the US health care system is set up disincentivizes people to get "wellness" care because of copayments, missed work and loss of income, lack of sick leave, etc.

Ideally, a net assessment would be like Britain's health services assessment during WW2 ("Want, disease, ignorance, squalor and idleness: are Beveridge’s five evils back?," Guardian) because in moving people from cities to the country, they realized that the country was underresourced in terms of health care systems and that people weren't very healthy.

That resulted in the creation of Britain's National Health Service in 1948.

(How health care is delivered in the US needs to be reorganized, in three tranches for normal care: (1) wellness care; (2) management of chronic disease; and (3) catastrophic care; alongside a more robust public health system.)

Globalization and the precariousness of work.  The problem with globalization isn't necessary globalization, that is the economic and social interconnectedness, although this can be simultaneously strengthening and weakening--but because it was paired with the adoption of neoliberal principles and the simultaneous disruption to and elimination of a social safety net.

The loss of the safety net has heightened effects because of the change of the nature of work and the organization of the economy away from large employers, who traditionally provided health insurance (and pensions) in the US system.

Globalization made work more competitive, led to the migration of large scale industry to countries with cheaper labor, putting many people out of work, especially in center cities where manufacturing had been concentrated.

Replacing labor with capital.  Plus alongside globalization you have an increased focus on capital and mechanization, the simultaneous upskilling of jobs while also eliminating or outsourcing jobs whenever possible.

For example, an auto plant probably has 25% or fewer workers than it did 30 years ago.  In Flint, which had a peak GM employment of over 80,000 people (+ the multiplier effect of 3.0 add on jobs at suppliers), today there are fewer than 9,000 GM jobs.

Although some of that is because GM spun off its part manufacturing into separate firms including Delphi--still the overall number of jobs has been reduced by more than 50%).

More recently, IT, telecommunications and software has led to the elimination of jobs (such as in human resources, accounting, etc.).

People out of work, low wages, and limited social safety provisions are vulnerable.  This creates a fragmented society and economy that is economically and socially vulnerable to exogeneous shocks--climate change; financialization; pandemic; etc.

27 comments:

  1. Anonymous10:24 AM

    Few people outside of academia and certain limited segments of media have any idea what "neoliberalism" means or ever uses the term. Even among people who use it (such as my social media contacts who are in academia, or far left of center adherents- usually one in the same...) there doesn't seem to be common meaning, definition, or understanding. Kind of like most berniebros and broads who extol democratic socialism when what they're really talking about is social democracy. Not disagreeing, sh*t is messed up, but neoliberalism just seems like some kind of slur, like "liberal" used to be among conservatives in the 80's and beyond, and now liberal is a slur used by lefties against "centrists" and "moderates"

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  2. Excellent takeaways, and this is certainly an eye-opening moment that shines a terrible light on what's been happening over my lifetime to our society.

    And, yes, neoliberalism is a great frame for thinking about this problem. Very useful for health care, in particular.

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  3. charlie11:40 AM

    I thought this Guardian article was also on point here:

    https://www.theguardian.com/commentisfree/2020/mar/20/coronavirus-has-exposed-a-desperate-need-for-localism


    Not sure if this is going to be a pearl harbor/spunkik/9-11 moment. Pandemics in particular tend to be forgotten. I am sure more Americans will die from the 1968 HK flu than this one and that it absolute terms -- not accounting for a near doubling of the population. And nobody has heard of it.

    I'd agree that a push for a "single payer system" is going to get a huge boost but not sure we're seeing those systems perform any better. As we are seeing in Italy single player isn't helping on this level of overload.

    The UBI concept is the end of neoliberalism -- basically don't worry a bout the state her's some cash. I'd broadly agree I'd rather see $1T spent of stopping this than on trying to pay everyone's wages for a week. I do suspect the UBI will be heavily discredited at the end of this.

    The problem with single payer is you need a huge advocate once you start getting treatment. The problem with our system is you need an advocate just to see a doctor!

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  4. Anon -- I could have used exaltation of the market instead of the term neoliberalism.

    Anyway, this is what I was thinking the other morning... for years businesses have made more money by "cutting expenses" increasingly productivity and replacing labor with capital.

    Think Chainsaw Al Dunlap or Neutron Jack Welch (and basically, Jack Welch set GE on the path for failure).

    They were afforded the ability to do this by the fact that so much had been invested in the companies in the previous decades, and yes there was "fat" that could be eaten.

    The same goes for government. Post war, at least from 1946 through the 1970s, a tremendous amount of money had been invested in government/community response and infrastructure.

    With neoliberalism/Thatcherism/Reaganism you could "afford" to disinvest for a long time because you were "using up the stocks" of previous investment.

    Eventually you get to the point where there is no fat. (cf. the Fords in Toronto/Ontario, or the starving of local governments in the UK)

    And in any case, you're more vulnerable to the least bit extranormal in the political-social-economic system, what the economists call an exogenous shock.

    A pandemic is an exogenous shock. And a severe one because in this case, social distancing means a shutting down of a significant proportion of the economy, which means no income, therefore no money to pay bills including rent or mortgages.

    So even if "most people don't get sick" we need to stay home to increase the likelihood we don't get sick (while many thousands or tens of thousands or hundreds of thousands get sick, some severely and die) and the economy sputters to a halt.

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  5. charlie -- haven't read the Guardian article yet, but was just about to. Of course, the UK situation is a bit different, since the country is so centralized, even funding of local government and transit comes from the top...

    And yes, a good criticism of single payer is that it isn't warding off the virus.

    The point I was making is that the way health care is delivered (and charged for) needs to be changed, so that people aren't disincentivized for getting diagnoses, needing drugs, etc.

    Your point about needing an advocate is very important.

    I guess I don't know how it really works in England. Watching "Doc Martin" isn't probably realistic.

    But in that first tranche, the GPs/internists would be empowered (like it seems that Doc Martin is). Gatekeepers, but empowered, not merely marionettes at the end of the string of upper level decision makers.

    The second tranche, chronic disease management, I didn't mention prevention. So many of the chronic diseases in the US are a function of "bad" choices and behavior (and a food and beverage system that is set up to incentivize overconsumption of food, sugar, alcohol, tobacco, etc.).

    In short, single payer without changing how health care is delivered won't change a whole lot.

    You've already read my series of how DC could re-do United Medical Center.

    The first article and the comments section, where I have added stuff when I come across it, without expanding the base piece, is about that.

    http://urbanplacesandspaces.blogspot.com/2018/04/ordinary-versus-extraordinary-planning.html

    ====
    When I worked for the Center for Science in the Public Interest 30+ years ago, I exhibited at the "Academy of Health Services Marketing", a division of the Am. Marketing Assn. I was appalled that the attendees were focused on marketing to capture a greater proportion of "necessary" hospitalizations, like for heart surgery, rather than on social marketing to improve health behaviors so that such hospitalizations wouldn't ever be needed.

    That's when I learned that health insurance wasn't about ensuring health and wellness, but about how to pay for hospital (and doctor) visits. ... health insurance was created during the Depression as a way to regularize income for hospitals, not unlike how people subscribe to Netflix.

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  6. Speaking of the virus, and Italy, this article by the editor of La Stampa lists three lessons from Italy, the first being the need to take biosecurity seriously.

    https://www.theguardian.com/commentisfree/2020/mar/20/coronavirus-italy-lessons-countries-crisis-information

    Doing that would necessitate having in place the kinds of measures that Taiwan has...

    https://jamanetwork.com/journals/jama/fullarticle/2762689

    And a huge investment in public health infrastructure, instead of the disinvestment it's been experiencing.

    It is said that one of the reasons that the Spanish flu death count wasn't worse was that it occurred in a time when major cities had been investing in creating water and sewage systems and waste collection systems and taking other public sanitation measures.

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  7. Don't know what to think about UBI.

    cf. https://www.nytimes.com/2020/03/14/sunday-review/medicare-for-all-america-racism.html

    I think UBI will be discredited because of it going to the seemingly undeserving poor...

    WRT forgetting the pandemic, I disagree but the only reason why "this time is truly different" is because of mandated social distancing.

    That will firmly keep it in people's minds.

    Like you say, I didn't really remember swine flu. I vaguely remember the fear of a flu epidemic during the Gerald Ford presidency(?) that didn't come to pass, and other similar instances, etc.

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  8. charlie1:06 PM

    RE: forgetting. I'd guess (25% chance) that nobody will remember this, in a moth we'll see it it is big panic and where everyone lost their crap after 3 years of being in Trump's headspace. Medicine and temperature will stop this. Good look trying to get support for quarantines when you need them in October.

    Also, RE: neoliberalism. There are other enormous market-shocks. Our own politicians destroying the american consumer and creating 25% unemployment. Oil price shock and several trillions lost. The ECB losing control and until yesterday looking at breakup of the euro (still possible). The Chinese dumping treasuries, possible end of dollar as reserve currency.

    We can get this virus and survive. I am not sure on the others. Very Serious People were talking of shutting all financial markets down this week and I can't imagine the meltdown. Latest fed action to open dollar swap lines to every other rich country is helping but we're looking at massive economic destruction to ROW.

    Putin was correct that the death of the soviet union and that shock was the largest cause of death in this 20th century. This has the potential to be 5x worse.


    No, I'm not putting it past for the Russians and Chinese to be destroying the entire American postwar way of life. A lot o f hyperpbole but honestly it is that close.

    Remember in the future there is only Taco Bell.

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  9. I remember that movie...

    In one of my feeds now I am getting more articles on oil prices from specialized sites. One article said MBS is a useful idiot for Putin. I don't believe it, but apparently Russia's running costs are much lower than Saudi Arabia's and that Russia can withstand low oil prices for 10 years, but SA only a couple.

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  10. Virus and survival = yes. Virus + oil shock + massive business failure + massive unemployment + massive dollar sell off = Waterworld / Judge Dress / Mad Max except there'd be plenty of oil

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  11. charlie3:18 PM

    There is a lot of talk of saudi and russian oil going negative; i.e they'' have to pay people to take it away.

    Don't want to go into it, but closing an oil well can be difficult and will permanently damage production. We think it cost saudi maybe 5-10 a barbell, russia maybe 2x that. The support level you see if government finances and how long they could last.

    Again what you saw is a a bad moment just get turned into a major financial problem.

    Good book on net assessments that I read earlier this year:

    https://www.amazon.com/Last-Warrior-Marshall-American-Strategy/dp/0465030009

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  12. Will search out the book. I remember at least one review. That Jenkins article good. Will write something up.

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  13. charlie8:28 AM

    https://www.nytimes.com/2020/03/20/opinion/coronavirus-economy-currency.html?action=click&module=Opinion&pgtype=Homepage


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  14. Lack of a real public health system in the US ...

    https://www.theguardian.com/commentisfree/2020/mar/21/medicare-for-all-coronavirus-covid-19-single-payer

    One of the solutions is for a more British like GP system as the first line of treatment in medical care:

    https://www.washingtonpost.com/opinions/2020/03/20/coronavirus-is-upending-society-here-are-ideas-mitigate-its-impact/

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  15. wrt Tooze, again, some of the big global finance stuff I don't understand. But it's interesting, this thing about central banks as a network.

    But I finally came up with a good analogy about the difference between loans and grants.

    Businesses getting loans to get through this, depending on the nature of their business and business model may be permanently encumbered, because they are never going to have enough future revenue and profit to compensate for paying back the loan during a period where they made virtually no revenue.

    The analogy is that it is like private equity buying retail firms and putting big loans, dividends, and management fees on companies which then lack the revenue and cash flow necessary to pay them off and still invest in the stores, leading to a spiral of death.

    =====
    the other thing, although I have written about this a bunch of times already, is the further hit to Brand America and public diplomacy, as the US fails to lead when it comes to covid19:

    https://www.washingtonpost.com/opinions/2020/03/20/us-should-have-led-coronavirus-response-instead-china-stepped-up/

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  16. charlie8:58 AM

    RE: Tooze.

    Well you can now say officially this is worse than 2008.

    We're about the see the death of fractional reserve banking. Fed just announced direct loans to small business.

    Can't wait to see what happens when we have to cut people's credit card limits by 90%.

    RE: Big picture

    Every think tanker in the world is working on a big picture piece; I'm got 4 in the pipeline myself. All of them useselll as we don't know outcomes.

    From the evidence, I'd say you can see how strong nation states are and how weak international bonds are. Very true in the EU where Italy has received zero support. Even more true internationally. Why doesn't Taiwan send masks to the US rather than producing them for daily wear in Taiwan?



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  17. charlie9:06 AM

    RE: Tooze

    death of the Euro and the EU

    https://giftarticle.ft.com/giftarticle/actions/redeem/9227fce4-b2bc-4eb7-87bc-f4c14f64ced8

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  18. wrt:

    From the evidence, I'd say you can see how strong nation states are and how weak international bonds are

    Well, I think when every nation is similarly stressed, they aren't likely to be thinking about helping others.

    And they don't have the capacity, other than Taiwan or South Korea, where _so far_ they've been good at containing the pandemic, so presumably their manufacturing capacity isn't affected, but that could change at any moment.

    It's not much different from the Trump, America First, "We're Full" thinking.

    For the other way to work, you have to have very strong international institutions, and we don't. I mean, look at how the US has underfunded its dues to the UN for decades.

    Or how NAFTA could have been a way to help Mexico strengthen its internal institutions.

    Or how the US/Trump fails to see how US demand for drugs destabilizes Mexico, and other flows between the US and Central America often have deleterious consequences there, and fails to see how investing in the social and political infrastructure in those countries would reduce outmigration etc.

    Or how WHO isn't funded at the level it needs to be. As an institution, it needs to be seen and funded as the equivalent of the World Bank or the IMF.

    I guess the other thing is that at the end of the day, the strongest countries are going to look at international organizations not unlike how most people in the US look at transit, as a social service for people who can't afford to own cars.

    The big countries think they don't have anything to learn or need from other countries.

    And yes, countering that is a big element of the EU. It's really about providing a way for smaller countries to integrate and benefit by joining in not just with other smaller countries, but a few big countries, so they have more heft.

    It's about international social capital. And in bad times, social capital is stressed.

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  19. I guess too the thing about financialization, not keeping retained earnings, buying back stock is that it only works if nothing ever bad happens, that you don't have to have "rainy day" reserves.

    If it's true that the airlines have spent 95% of their profits on buying back stock, then yes, it doesn't seem like they "deserve" extranormal financing.

    OTOH, not providing such funding to Lehman triggered a collapse of the commercial real estate market...

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  20. That FT article is super well written. And disturbing. Basically the issues that came up before were never quite resolved. And now, what's happening is worse. But it's not like Italy or Spain are in the economic position they're in because of "bad management" (well, it is, but so is the US).

    And this time it's so much worse because to ward off catastrophic death, the economy needs to be shut down.

    But to preserve those companies and employees they need to "be given money" but in most instances they won't ever be able to pay it back, because future revenues aren't large enough to cover that debt.

    The one thing I was thinking about Italy is maybe this will be the political-economic shock that will lead to them making hard changes going forward.

    I did see an article about how the Italian right/populist movement isn't resonating much now.

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  21. I guess with big picture stuff, I could see similarly, comparable to making WHO an international organization equal in heft to the IMF and World Bank, the US needs to retool its disaster response, supply chain, and public health institutions similarly.

    Somehow institutions like the CDC, Public Health Service, and FDA need to be better insulated from anti-science b.s.

    At the same time, health care and public health services need to be re-addressed.

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  22. Don't know if this will result in an anti-urban response.

    I've been wondering, but am not articulate enough about it to write something definitive.

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  23. https://foreignpolicy.com/2020/03/20/world-order-after-coroanvirus-pandemic

    I forgot about this one too:

    https://www.theatlantic.com/ideas/archive/2020/03/america-isnt-failing-its-pandemic-testwashington-is/608026/

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  24. https://www.theguardian.com/commentisfree/2020/mar/23/hope-in-the-time-of-coronavirus-lies-in-rebuilding-the-state

    Doesn't say a lot, just that conservative parties increasing payments to the out of work are hypocrites:

    https://www.theguardian.com/commentisfree/2020/mar/26/under-coronavirus-pro-market-ideologies-are-overturned-around-the-world-but-its-too-little-too-late

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  25. https://www.theguardian.com/commentisfree/2020/mar/27/coronavirus-pandemic-americans-health-insurance

    Makes the point that connecting health insurance to employment fails with unemployment during a pandemic.

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  26. https://www.theguardian.com/commentisfree/2020/mar/31/virus-neighbours-covid-19

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  27. Speaking of supply chains

    https://www.newstatesman.com/2020/04/why-crisis-turning-point-history

    "With all its talk of freedom and choice, liberalism was in practice the experiment of dissolving traditional sources of social cohesion and political legitimacy and replacing them with the promise of rising material living standards. This experiment has now run its course. Suppressing the virus necessitates an economic shutdown that can only be temporary, but when the economy restarts, it will be in a world where governments act to curb the global market.

    A situation in which so many of the world’s essential medical supplies originate in China – or any other single country – will not be tolerated. Production in these and other sensitive areas will be re-shored as a matter of national security. "

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