American News

How to Kill People to Save an Outmoded Idea of the Economy

What’s more important: sacrificing lives to save a failed economy or saving lives and rethinking the architecture of a needs-based economy?
US economy, US economy coronavirus, coronavirus pandemic, COVID-19 pandemic, COVID-19 news, American news, Donald Trump, US news, global recession, US recession

© Pla2na

March 26, 2020 16:26 EDT

US President Donald Trump will go down in history as the ultimate master of hyperreal politics. No matter how far he deviates from reality, the American public consistently expresses its approval. The further he wanders from rationality, even when the consequences are measurable in the number of deaths, the more he is rewarded. In the midst of what is an ongoing health fiasco partly of his making, his approval rating has never been higher.

The president continues to affirm his resolute leadership as the nation’s latest wartime president. In his latest tweets, he emphasized not only the strength of his will, but also his infallible vision of how the future will unfold. While promising liberation from the enemy by Easter, he also made a bold commitment to the public in a new tweet, all in uppercase: “WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!”

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True to himself and to the deeper trends in US culture, Trump reformulates a complex problem that contains layers of nuance as a simple binary choice. It’s people’s health or the economy. The leader clearly hints at what the answer will be, possibly inspired by his memory of Clintonian sage James Carville’s immortal words: “It’s the economy, stupid.”

In an editorial, The Wall Street Journal has followed suit. Like the president himself, The Journal refuses to be distracted by ethical reflection on questions of life and death. Its editorialist reduces the problem to its barest terms: “No society can safeguard public health for long at the cost of its economic health.”

Making this choice should, of course, depend on defining what they mean by both “public health” and “economic health.” The science behind either of those concepts is far from clear, but with a little reflection we can at least begin to understand the motivations of those who have an opinion. If you believe that the stability of the stock market is the measure of economic health — which people with a stake in the stock market tend to do — the choice becomes easier to make. If, as some people do, you see the stock market as a hyperreal casino with only a tangential relationship with the real economy, the choice becomes slightly more problematic.

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Fortunately, on the question of public health, at least one expert has stepped in to buttress the president’s case. Dr. John Ioannidis laments the lack of “reliable data,” describing the current situation as “a once-in-a-century evidence fiasco.” He responds to the lack of evidence by reducing the issue to a question of probability as he mobilizes a host of (largely speculative) statistics. Profiting from the uncertainty of our current state of knowledge, he reaches the conclusion that while the damage the novel coronavirus — known as COVID-19 — will do may affect millions, the damage to the economy may affect billions. Once again, “It’s the economy, stupid.” Who wouldn’t choose to sacrifice millions rather than billions?

The good doctor appears to savor the expression he has launched: “evidence fiasco.” He repeats it several paragraphs into the article: “This evidence fiasco creates tremendous uncertainty about the risk of dying from Covid-19.” He wants us to believe that the risk is less than we currently think.

Here is today’s 3D definition:

Evidence fiasco:

An elegant sounding synonym of nescience, meaning the lack of knowledge or ignorance, which when it exists can provide a convenient pretext for reasoning based on considerations that have little or no relation to the issue being examined.

Contextual Note

The Wall Street Journal has always been more interested in the state of the economy than the health of the average citizen. Had that not been the case, Wall Street itself wouldn’t be continuing, even in the midst of a global health crisis, to spend countless millions lobbying Congress to defend the interests of some of the most profitable companies on the stock market: the pharmaceuticals. The investment bankers with a stake in the industry wouldn’t, for example, be insisting on the opportunity the crisis has offered them to raise the prices on products that may be needed to combat the COVID-19 pandemic.

If as Trump, Ioannidis, The Wall Street Journal and numerous other Republican politicians insist that the health of the economy should be the priority, they should make the effort to be clearer about what they mean by a healthy economy. They all appear to be supposing that, before the arrival of COVID-19, the economy was a picture of health. President Trump has been proclaiming it for months in the context of his reelection campaign, citing as his primary evidence the record-breaking highs in the stock market and equally record-breaking lows in the figures for unemployment. But those figures represent only superficial indicators and don’t tell the whole story.

For several years, economists and analysts have been warning that since the financial crisis of 2008, we have been living in a growing bubble fed by quantitative easing, tax cuts and the development of a consumer-driven service economy. This is an economy designed to meet the needs and whims of the minority with increasing amounts of disposable cash and the majority with easy access to consumer and other forms of credit.

The money that has fueled the economy came in several forms. Some was earned honestly, but for those who depended on earnings alone, the earnings themselves had to be increasingly leveraged with credit, producing mountains of supposedly manageable debt. As in 2007, the debt seemed manageable so long as employment remained high, even if the value of work moved dangerously close to ensuring bare subsistence. For the most privileged, much of their capacity to spend came from the growing value of their assets.

COVID-19 has exposed the fragility of that economy and is now threatening to break its back. Thankfully, governments have discovered that there are ways out — some better than others — but now that we are fully engaged in the war, the most clairvoyant have understood that there is no path back to the status quo ante bellum.

Historical Note

As in so many crucial debates in the US, especially when it is a question of health, the arguments are developed with no reference to history or to experience acquired outside the US. The story in this election cycle of “Medicare for All” perfectly illustrates the principle. The entire political class, Democrat and Republican alike, objected to single-payer policies proposed by Vermont Senator Bernie Sanders on the grounds that the cost would be prohibitive. The critics refused to take into account the histories of other countries that have managed the cost over many decades.

Earlier this month, Democratic frontrunner Joe Biden notably promised to veto single-payer medical care if he were elected president in November because of the cost. Sanders, who is challenging Biden in the Democratic primaries for the US election, has repeatedly insisted on following Michael Moore’s example in his movie, “Sicko”: exploring the history and experience of what other nations have successfully achieved. American politicians simply don’t want to know about other people’s history.

It is that willful ignorance that allows John Ioannidis to complain of an “evidence fiasco.” COVID-19 has already acquired a history. It has produced some real evidence, even if only a few months old. Dr. Ezekiel J. Emanuel, the vice provost of global initiatives at the University of Pennsylvania, writes in The New York Times that if the US intervenes immediately on the scale that China did, “our death toll could be under 100,000,” and “within three to four months we might be able to begin a return to more normal lives.” He used the evidence of practices in Asia to reach that conclusion.

Ioannidis is worried about the future, expressing it in these terms: “Unpredictable evolutions may ensue, including financial crisis, unrest, civil strife, war, and a meltdown of the social fabric.” Nobody knows what the long term will bring, especially if the recommended policy amounts to simply letting things play out as nature runs its course. Another doctor, Harvard professor of epidemiology Marc Lipsitch countered with this simple truth: “For the short term there is no choice but to use the time we are buying with social distancing to mobilize a massive political, economic, and societal effort to find new ways to cope with this virus.”

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It would now appear that the US is divided into two camps: those who fear the full effects of the coronavirus and those who fear for the preservation of an idea they have in their heads about the US economy and how it functions. Right-wing commentator Glenn Beck takes it even further in his patriotic rant: “Even if we all get sick, I would rather die than kill the country. Because it’s not the economy that’s dying, it’s the country.”

But which economy do they have in mind: the economy that is killing the planet so that the Dow Jones may prosper or a totally feasible alternative economy based on people organizing to meet their “evidence-based” needs? Most European economies have been functioning according to those alternative principles for decades, despite the permanent pressure on them to conform to the US model.

The refusal to recognize any evidence coming from elsewhere, from other people’s histories, is what creates an “evidence fiasco.” It prevents those who claim to worry about saving the consumer economy from understanding that it’s possible to restructure even a capitalist economy along principles correlated with human needs rather than the profit motive.

Settling this question may mean returning to Maslow’s celebrated hierarchy of needs, which starts with physiological and safety and includes, as we move up the scale, belongingness and love before culminating with self-fulfillment. Maslow’s hierarchy has guided generations of marketers selling their products for profit. None of them seem to have noticed that nowhere in his hierarchy is the need to make a profit, the sole motivation that traditional economists recognize as the principle structuring the economy.

Lipsitch insists that we need “a massive political, economic, and societal effort” to defeat the virus. We also need to make the effort of imagining a different economy, now that the contradictions of the current economy have been so starkly exposed. The US government has already decided, in the first two steps of its response, to throw $1.5 trillion and $2 trillion at the coronavirus pandemic. That makes $3.5 trillion in the space of one month and there will be more to come. Multiply $3.5 trillion by 10 and you have the figure Biden claimed the nation could never pay for over 10 years.

We now know that the US economy has the capacity to be creative and that it can even respond to human as well as corporate needs. It’s time to leave behind our inherited evidence fiasco and turn national and international economic policy into an evidence-based art, if not a science.

*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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