Understanding Our Pandemic – Economy Predicament

The world’s number one problem today is that the world’s population is too large for its resource base. Some people have called this situation overshoot. The world economy is ripe for a major change, such as the current pandemic, to bring the situation into balance. The change doesn’t necessarily come from the coronavirus itself. Instead, it is likely to come from the whole chain reaction that has been started by the coronavirus and the response of governments around the world to the coronavirus.

Let me explain more about what is happening.

[1] The world economy is reaching Limits to Growth, as described in the book with a similar title.

One way of seeing the predicament we are in is the modeling of resource consumption and population growth described in the 1972 book, The Limits to Growth, by Donella Meadows et al. Its base scenario seems to suggest that the world will reach limits about now. Chart 1 shows the base forecast from that book, together with a line I added giving my impression of where the economy really was in 2019, relative to resource availability.

Figure 1. Base scenario from 1972 Limits to Growth, printed using today’s graphics by Charles Hall and John Day in “Revisiting Limits to Growth After Peak Oil,” with dotted line added corresponding to where the world economy seems to be in 2019.

In 2019, the world economy seemed to be very close to starting a downhill trajectory. Now, it appears to me that we have reached the turning point and are on our way down. The pandemic is the catalyst for this change to a downward trend. It certainly is not the whole cause of the change. If the underlying dynamics had not been in place, the impact of the virus would likely have been much less.

The 1972 model leaves out two important parts of the economy that probably make the downhill trajectory steeper than shown in Figure 1. First, the model leaves out debt and, in fact, the whole financial system. After the 2008 crisis, many people strongly suspected that the financial system would play an important role as we reach the limits of a finite world because debt defaults are likely to disturb the worldwide financial system.

The model also leaves out humans’ continual battle with pathogens. The problem with pathogens becomes greater as world population becomes denser, facilitating transmission. The problem also becomes greater as a larger share of the population becomes more susceptible, either because they are elderly or because they have underlying health conditions that have been hidden by an increasingly complex and expensive medical system.

As a result, we cannot really believe the part of Figure 1 that is after 2020. The future downslopes of population, industrial production per capita, and food per capita all seem likely to be steeper than shown on the chart because both the debt and pathogen problems are likely to increase the speed at which the economy declines.

[2] It is far more than the population that has overshot limits.

The issue isn’t simply that there are too many people relative to resources. The world seems to have

  • Too many shopping malls and stores
  • Too many businesses of all kinds, with many not very profitable for their owners
  • Governments with too extensive programs, which taxpayers cannot really afford
  • Too much debt
  • An unaffordable amount of pension promises
  • Too low interest rates
  • Too many people with low wages or no wages at all
  • Too expensive a healthcare system
  • Too expensive an educational system

The world economy needs to shrink back in many ways at once, simultaneously, to manage within its resource limits. It is not clear how much of an economy (or multiple smaller economies) will be left after this shrinkage occurs.

[3] The economy is in many ways like the human body. In physics terms, both are dissipative structures. They are both self-organizing systems powered by energy (food for humans; a mixture of energy products including oil, coal, natural gas, burned biomass and electricity for the economy).

The human body will try to fix minor problems. For example, if someone’s hand is cut, blood will tend to clot to prevent too much blood loss, and skin will tend to grow to substitute for the missing skin. Similarly, if businesses in an area disappear because of a tornado, the prior owners will either tend to rebuild them or new businesses will tend to come in to replace them, as long as adequate resources are available.

In both systems, there is a point beyond which problems cannot be fixed, however. We know that many people die in car accidents if injuries are too serious, for example. Similarly, the world economy may “collapse” if conditions deviate too far from what is necessary for economic growth to continue. In fact, at this point, the world economy may be so close to the edge with respect to resources, particularly energy resources, that even a minor pandemic could push the world economy into a permanent cycle of contraction.

[4] World governments are in a poor position to fix the current resource and pandemic crisis.

In our networked economy, too low a resource base relative to population manifests itself in a strange way: It appears as an affordability crisis that leads to very low prices for oil. It also appears as terribly low prices for many other commodities, including copper, lithium, coal and even wholesale electricity. These low prices occur because too large a share of the population cannot afford finished goods, such as cars and homes, made with these commodities. Recent shutdowns have suddenly increased the number of people with low income or no income, pushing commodity prices even lower.

If resources were more plentiful and very inexpensive to produce, as they were 50 or 70 years ago, wages of workers could be much higher, relative to the cost of resources. Factory workers would be able to afford to buy vehicles, for example, and thus help keep the demand for automobiles up. If we look more deeply into this, we find that energy resources of many kinds (fossil fuel energy, nuclear energy, burned biomass and other renewable energy) must be extraordinarily cheap and abundant to keep the system growing. Without “surplus energy” from many sources, which grows with population, the whole system tends to collapse.

World governments cannot print resources. What they can print is debt. Debt can be viewed as a promise of future goods and services, whether or not it is reasonable to believe that these future goods and services will actually materialize, given resource constraints.

We are finding that using shutdowns to solve COVID-19 problems causes a huge amount of economic damage. The cost of mitigating this damage seems to be unreasonably high. For example, in the United States, antibody studies suggest that roughly 5% of the population has been infected with COVID-19. The total number of deaths associated with this 5% infection level is perhaps 100,000, assuming that reported deaths to date (about 80,000) need to be increased somewhat, to match the approximately 5% of the population that has, knowingly or unknowingly, already experienced the infection.

If we estimate that the mean number of years of life lost is 13 years per person, then the total years of life lost would be about 1,300,000. If we estimate that the US treasury needed to borrow $3 trillion dollars to mitigate this damage, the cost per year of life lost is $3 trillion divided by 1.3 million, or $2.3 million per year of life lost. This amount is utterly absurd.

This approach is clearly not something the United States can scale up, as the share of the population affected by COVID-19 relentlessly rises from 5% to something like 70% or 80%, in the absence of a vaccine. We have no choice but to use a different approach.

[5] COVID-19 would have the least impact on the world economy if people could pay little attention to the pandemic and just “let it run.” Of course, even without mitigation attempts, COVID-19 might bring the world economy down, given the distressed level of today’s economy and the shutdowns experienced to date.

Shutting down an economy has a huge adverse impact on that economy because quite a few workers who are in good health are no longer able to make goods and services. As a result, they have no wages, so their “demand” goes way down. If the economy was already having an affordability crisis for goods made with commodities, shutting down the economy tends to greatly add to the affordability crisis. Prices of commodities tend to fall even lower than they were before the crisis.

Back in 1957-1958, the Asian pandemic, which also started in China, hit the world. The number of deaths was up in the range of the current pandemic, relative to population. The estimated worldwide death rate was 0.67%.  This is not too dissimilar from a death rate of 0.61% for COVID-19, which can be calculated using my estimate above (100,000 deaths relative to 5% of the US population of 33o million).

Virtually nothing was shut down in the US for the 1957-58 pandemic. When doctors or nurses became sick themselves, wards were simply closed. Would-be patients were told to stay at home and take aspirin, unless a severe case developed. With this approach, the US still faced a short recession, but the economy was soon growing again. Populations seemed to reach herd immunity quite quickly.

If the world could somehow have adopted a similar approach this time, there still would have been some adverse impact on the economy. A small percentage of the population would have died. Some businesses might have needed to be closed for a short time when too many workers were out sick. But the huge burden of job loss by a substantial share of the economy could have been avoided. The economy would have had at least a small chance of rebounding quickly.

[6] The virus that causes COVID-19 looks a great deal like a laboratory cross between SARS and HIV, making the likelihood of a quick vaccine low.

In fact, Professor Luc Montagnier, co-discoverer of the AIDS virus and winner of a Nobel Prize in Medicine, claims that the new coronavirus is the result of an attempt to manufacture a vaccine against the AIDS virus. He believes that the accidental release of this virus is what is causing today’s pandemic.

If COVID-19 were simply another influenza virus, similar to many we have seen, then getting a vaccine that would work passably well would be a relatively easy exercise. At least one of the vaccine trials that have been started could be reasonably expected to work, and a solution would not be far away.

Unfortunately, SARS and HIV are fairly different from influenza viruses. We have never found a vaccine for either one. If a person has had SARS once, and is later exposed to a slightly mutated version of SARS, the symptoms of the second infection seem to be worse than the first. This characteristic interferes with finding a suitable vaccine. We don’t know whether the virus causing COVID-19 will have a similar characteristic.

We know that scientists from a number of countries have been working on so-called “gain of function” experiments with viruses. These very risky experiments are aimed at making viruses either more virulent, or more transmissible, or both. In fact, experiments were going on in Wuhan, in two different laboratories, with viruses that seem to be not too different from the virus causing COVID-19.

We don’t know for certain whether there was an accident that caused the release of one of these gain of function viruses in Wuhan. We do know, however, that China has been doing a lot of cover-up activity to deter others from finding out what actually happened in Wuhan.

We also know that Dr. Fauci, a well-known COVID-19 advisor, had his hand in this Chinese research activity. Fauci’s organization, the National Institute for Allergy and Infectious Diseases, provided partial funding for the gain of function experiments on bat coronaviruses in Wuhan. While the intent of the experiments seems to have been for the good of mankind, it would seem that Dr. Fauci’s judgment erred in the direction of allowing too much risk for the world’s population.

[7] We are probably kidding ourselves about ever being able to contain the virus that causes COVID-19. 

We are gradually learning that the virus causing COVID-19 is easily spread, even by people who do not show any symptoms of the disease. The virus can spread long distances through the air. Tests to see if people are ill tend to produce a lot of false negatives; because of this, it is close to impossible to know whether a particular person has the illness or not.

China is finding that it cannot really contain the virus that causes COVID-19. A recent South China Morning Post article indicates that roughly 14 million people are to be tested in the Wuhan area in the next ten days to try to control a new outbreak of the virus.

It is becoming clear, as well, that even within China, the lockdowns have had a very negative impact on the economy. The Wall Street Journal reports, China Economic Data Indicate V-Shaped Recovery Is Unlikely. Supply chains were broken; wholesale commodity prices (excluding food) have tended to fall. Joblessness is increasingly a problem.

[8] If we look at deaths per million by country, it is difficult to see that lockdowns are very helpful in reducing the spread of disease. Masks seem to be more beneficial.

If we compare death rates for mask-wearing East Asian countries to death rates elsewhere, we see that death rates in mask-wearing East Asian countries are dramatically lower.

Figure 2. Death rates per million population of selected countries with long-term exposure to the virus causing COVID-19, based on Johns Hopkins death data as of May 11, 2020.

Looking at the chart, a person almost wonders whether lockdowns are a response to requests from citizens to “do something” in response to an already evident surge in cases. The countries known for their severe lockdowns are at the top of the chart, not the bottom.

In fact, a preprint academic paper by Thomas Meunier is titled, “Full lockdown policies in Western Europe countries have no evident impacts on the COVID-19 epidemic.” The abstract says, “Comparing the trajectory of the epidemic before and after the lockdown, we find no evidence of any discontinuity in the growth rate, doubling time, or reproduction number trends.  .  . We also show that neighboring countries applying less restrictive social distancing measures (as opposed to police-enforced home containment) experience a very similar time evolution of the epidemic.”

It appears to me that lockdowns have been popular with governments around the world for a whole host of reasons that have little to do with the spread of COVID-19:

  • Lockdowns give an excuse for closing borders to visitors and goods from outside. This was a direction in which many countries were already headed, in an attempt to raise the wages of local workers.
  • Lockdowns can be used to hide the fact that factories need to be closed because of breaks in supply lines elsewhere in the world.
  • Many countries have been faced with governmental protests because of low wages compared to the prices of basic services. Lockdowns tend to keep protesters inside.
  • Lockdowns give the appearance of protecting the elderly. Since there are many elderly voters, politicians need to court these voters.

[9] A person wonders whether Dr. Fauci and members of the World Health Organization are influenced by the wishes of vaccine and big pharmaceutical companies.

The recommendation to try to “flatten the curve” is, in part, an attempt to give vaccine and pharmaceutical makers more time to work on their products. Is this really the best recommendation? Perhaps I am being overly suspicious, but we recently have been dealing with an opioid epidemic which was encouraged by manufacturers of Oxycontin and other opioids. We don’t need another similar experience, this time sponsored by vaccine and other pharmaceutical makers.

The temptation of researchers is to choose solutions that would be best from the point of their own business interests. If a researcher gets much of his funding from vaccine and big pharmaceutical interests, the temptation will be to “push” solutions that are beneficial to these interests. In some cases, researchers are able to patent approaches, even when the research is paid for by governmental grants. In this case they can directly benefit from a new vaccine or drug.

When potential solutions are discussed by Dr. Fauci and the World Health Organization, no one brings up improving people’s immunity so that they can better fight off the novel coronavirus. Few bring up masks. Instead, we keep being warned about “opening up too soon.” In a way, this sounds like, “Please leave us lots of customers who might be willing to pay a high price for our vaccine.”

[10] One way the combination of (a) the activity of the virus and (b) our responses to the virus may play out is as a slow-motion, controlled demolition of the world economy. 

I think of what we are experiencing as being somewhat similar to a toggle bolt going around and around, moving down a screw. As the toggle bolt moves around, I picture it as being similar to the virus and our responses to the viruses hitting different parts of the world economy.

Figure 3. Image of how the author sees COVID-19 as being able to hit the economy multiple times, in multiple ways, as its impact keeps impacting different parts of the world.

If we look back, the virus and reactions to the virus first hit China. China’s recovery is moving slowly, in part because of reduced demand from outside of China now that the virus is hitting other parts of the world. In fact, additional layoffs occurred after Chinese shutdowns ended, because it then became clear that some employers needed to permanently scale back operations to meet the new lower demand for their product.

Commodity prices, including oil prices, are now depressed because of low demand around the world. These low prices can be expected to gradually lead to closures of wells and mines extracting these commodities. Processing centers will also close, making these commodities less available even if demand temporarily rises.

As one country is hit by illnesses and/or shutdowns, we can expect supply lines for manufacturing around the world to be disrupted. This will lead to yet more business closures, some of them permanent. Debt defaults tend to happen as businesses close and layoffs occur.

With all of the layoffs, governments will find that their tax collections are lower. The resulting governmental funding issues can be expected to lead to new rounds of layoffs.

Natural disasters such as hurricanes, tornadoes, floods, earthquakes and forest fires can be expected to continue to happen. Social distancing requirements, inadequate tax revenue and broken supply lines will make mitigation of all of these disasters more difficult. Electrical lines that fall down may stay down permanently; bridges that are damaged may never be repaired.

Initially, rich countries can be expected to try to help as many laid-off workers as possible with loans and temporary stipends. But, after a few months, even with this approach, many individual citizens and businesses will likely not be able to pay their rent. Default rates on home mortgages and auto loans can be expected to rise for a similar reason.

We can expect to see round after round of business failures and layoffs of employees. Financial systems will become more and more stressed. Pensions are likely to default. Death rates will rise, in part from epidemics of various kinds and in part from growing problems with starvation. In fact, in some poor countries, lower-income citizens are already having difficulty being able to afford adequate food. Eventually we can expect collapsing governments (similar to the collapse of the central government of the Soviet Union) and overthrown governments.

Longer-term, after this demolition ends, there may be some surviving pieces of economies. These new economies will be much smaller and less dependent upon each other, however. Currencies are likely to be less interchangeable. The remaining people will need to learn to make do with many fewer goods than are available today. It will be a very different world.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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3,868 Responses to Understanding Our Pandemic – Economy Predicament

  1. From Zerohedge: Tracking recovery: What real-time data says about the state of the global economy

    Lots of nice charts in this article.
    This chart shows how much traffic is down, relative to 2019, for two different dates. The blue bar has more recent data than the tan bar, so shows the effect of the more recent opening up. German cities closest to 2019. Wuhan is still at 24% of the 2019 level. Mumbai is at 7% of the 2019 level!

    This chart shows the power consumption of Hubei province (the province that Wuhan is in). It power consumption is still far behind the level of prior years.

    This chart shows changes in US consumers spending over time. There were already some changes showing at March 15, the earliest date shown.

    • Harry McGibbs says:

      Wow. Patient with a very weak pulse there.

    • Dennis L. says:

      Looking at the chart:
      1. We are eating out less, eating fewer batter fried wings – that is a positive.
      2. We are drinking less in bars, MAD will be pleased – positive.
      3. Commercial sports are down – personal choice, a football team winning the Super Bowl may or may not change one’s life, it can be a fun experience.
      4. Wholesale clubs, etc. up, people are being more frugal – personal positive.
      5. Tourist attractions? It depends, Bach was said to have spent his life within 30 miles of home, he had a pretty rich life it would seem, I wasn’t there, not that old.
      6. Grocery stores, we are cooking at home – could be a social and health positive.
      7. Wine sales up – antioxidants are always a positive.
      8. Home supply, we are fixing up our homes – a positive.
      9. Airlines down, we are polluting much less – a positive and we can collect more information on climate change – we might not like the conclusions, who knows?
      10. Lodging down, fewer bed bugs, Venice will be saved from too many tourists. Having been there, got my experience – a positive, your mileage may vary.

      No sarcasm, but a bit of irony, these sound like points that Greta would not find disagreeable. She does nag, but she was more prescient than most of us, she even sailed the ocean blue in 2019 – where is Robert to help the poetry? These may not be great for GDP, but there are a great many positive social outcomes in that list. Maybe man is smarter than yeast?

      Dennis L.

      • I have no idea about Bach never having gone 30 miles from home.
        What I do know is that he would not have become famous if his music had only been heard 30 miles from his home.

        we sustain our current way of life by making buying and selling stuff to each other

        such activity requires energy consumption and ‘movement’

        the more ‘stuff’ we desire, the more energy we consume, and our ‘normality’ is to consume as much as possible as fast as possible by burning as much energy as possible

        how else are you going to get that payrise and pay off your mortgage?

        • Dennis L. says:

          Groan, I seem to have gotten another one wrong if this is correct.

          “In 1705, 20-year-old Bach walked 280 miles—that’s right, walked—from the city of Arnstadt to Lübeck in northern Germany to hear a concert by the influential organist and composer Dieterich Buxtehude. He stuck around for four months to study with the musician [PDF]. Bach hoped to succeed Buxtehude as the organist of Lübeck’s St. Mary’s Church, but marriage to one of Buxtehude’s daughters was a prerequisite to taking over the job. Bach declined, and walked back home.”
          https://www.mentalfloss.com/article/546875/facts-about-johann-sebastian-bach

          Thanks for questioning, it is a factoid I have had in my head for years, it was incorrect.

          Dennis L.

          • Xabier says:

            That walk to see a fine musician was perhaps an indicator of the potential greatness of Bach himself. A sense of veneration for excellence and great determination.

            • Xabier says:

              And of course he was behaving, although a musician, like the craftsmen of the German-speaking, world who traditionally left their home towns to wander and perfect their knowledge of their craft.

              The system for giving them free food and simple lodging at municipal expense persisted , I believe, until the 1930’s, when it helped at times the young British traveller and writer Paddy Leigh Fermor in his travels to Istanbul.

      • Fast Eddy says:

        Not so sure about that — but definitely more delusional if they support what you just posted….

        It all does seem so wonderful… so peaceful and quiet…. so long at the CBs are able to conjure up enough cash to keep paying people to do nothing… hey – if this is BAU Lite thing is sustainable then why in the hell did we not do this 100 years ago?

        • Tim Groves says:

          I think the sun of BAU has just set and we are now at the beginning of that beautiful but brief twilight period when the sky turns from blue to red, or orange, or purple, and then the lights go out completely.

          A friend in London told me that one day last week she walked around Piccadilly Circus and found it a surreal experience with all the signboards flashing and hardly another soul to witness it, and then she heard a nightingale singing in Berkeley Square, a sound not normally noticeable over the roar of the traffic.

          • JMS says:

            For most of us, this will be the last summer of peace, of relative tranquility. Every day now is worth a small fortune.
            When will the cracks in the IC building start to be seen by everyone? September? December? How long will it be possible to deceive the masses with the promise of a return to pre-covid times? IOW when will the stampede begin? It’s not that this detail matters in terms of future survival (since that’s canceled by the spent fuel ponds), but i believe between the social collapse and the blackout it may take some time, maybe months or even years in some places, and I would like to watch the big show ever till the grand finale (fireworks of radiation), after all, it is not all millennia that we have the opportunity to witness the collapse of the greatest civilization of all time. it would definitely be a pity not to stay until the vey end.
            My mind is to defend the fort as long as I can, and have an easy way to say goodbye to life when I have to. But like all human beings, I am very interested in celebrating the winter solstice of 2021, and if it depends on me, I will be there with the wife, the dog, the cats and the chickens.

          • psile says:

            Sounds like a scene from an old movie:

          • Xabier says:

            Ah yes, a beautiful twilight, before the night-things start to stir…..

    • Fast Eddy says:

      BAU Lite…. the calm before the Storm

  2. Ron Swensom says:

    Gail

    > If COVID-19 were simply another influenza virus…

    Ah, that’s a clue. It actually is a virus. Humanity (though obviously not all individuals) survived _all_ viruses without vaccines until 1796 (Jenner, Smallpox). Viruses have a predictable course of action — they deplete ascorbate (vitamin C) and accelerate to acute scurvy, more precisely acute hypoascorbemia. So while we wait for a vaccine we can do what Dr Fred Klenner did in 1948 to cure polio in 2 days and Dr Bob Cathcart did for almost 40 years with a wide variety of viruses — megadoses of Vitamin C, intravenously or orally, depending on severity of the virus.

    • Maybe both Vitamin C and Vitamin D, since Vitamin seems to reduce the severity of the illness if you get it.

      • Tim Groves says:

        I think Ron is on the ball with megadoses of Vitamin C, and Gail is too with Vitamin D.

        I don’t know how much Vitamin D is too much, but conventional medical opinion for the past thirty years is that people should avoid the sun as if they were Christopher Lee, which together with the fact that most people work inside most days of the week has helped lower Vitamin D levels all over the industrialized world to levels where most of us have far from adequate amounts of this vitamin.

        As for Vitamin C, you really can’t have too much of the stuff. You can swallow dozens of Vit C capsules as if they were M&Ms, and they will do you less harm than eating dozens of M&Ms.

        For those who are vitamin junkies who are aching to try a new one, I would like to draw your attention to Niacin (Vitamin B3/Nicotinic Acid). Provided you can put up with the flush, you may find it does you a power of good. It’s absolutely great for the skin and for lifting depression and slowing down heart disease and preventing or reversing everything from diabetes to old-timer’s disease.

        But of course, it goes without saying, you should never never take niacin at high doses without your doctor’s supervision. And you should also be very very careful in assessing health and medical information posted on the internet.

        Intriguingly, there is an article in Nature that suggests benefits for treating severe COVID-19 patients with Niacin.

        Lung damage is a major hurdle to recovery in those severe patients. Through producing various growth factors, MSCs may help repair of the damaged lung tissue. It is important to mention that various studies have shown that in animal models with bleomycin-induced lung injury, vitamin B3 (niacin or nicotinamide) is highly effective in preventing lung tissue damage. It might be a wise approach to supply this food supplement to the COVID-19 patients.

        https://www.nature.com/articles/s41418-020-0530-3

        • Matthew Krajcik says:

          “As for Vitamin C, you really can’t have too much of the stuff. You can swallow dozens of Vit C capsules as if they were M&Ms, and they will do you less harm than eating dozens of M&Ms.”

          This is definitely incorrect. If you take too much Vitamin C, you get diarrhea. I suppose you can compensate by also taking an opiate, like Imodium.

    • Matthew Krajcik says:

      Do you think humanity could survive if everyone had HIV/AIDS and there was no modern medicine?

      • Lidia17 says:

        Yes. All you have to do is get to reproductive age. I read that the HIV transmission rate at birth is 25%.

      • Tim Groves says:

        HIV/AIDS is a social construct, constructed by Big Pharma to scare people and open up yet another new market in mendacious medication and dodgy drugs.

        Sad to see the book below is now out of print.

        We know that to err is human, but the HIV/AIDS hypothesis is one hell of a mistake. I say this rather strongly as a warning. Duesberg has been saying it for a long time. Read this book. –Kary B. Mullis, Nobel Prize in Chemistry, 1993

  3. Dennis L. says:

    Jason,
    First, no arguments, observations.

    That experience for many/most students has morphed into a life long drudgery of debt servitude and associated depression, it works poorly.

    Recent political exposes seem to indicate that young women upon reflection find “free love” which was what orgies were called in the sixties is not that great an experience. A 25% rate of genital herpes is not a good experience – it looks like raw hamburger, I saw it clinically while a resident in a large county hospital. Do you personally want it, do you want your grandchildren to pass through a birth canal infected by it and have it from birth? That 25% chance is higher than COV19 and there is no cure. Social distancing does not always have to be 10 feet, sometimes 10 inches is more than enough. Herpes is used as an example and a metaphor.

    My observation of the past school year was students working hard, gaining skills, behaving very well, good teachers all at a cc. What I experienced after the shut down was different, but it worked. What each person puts into the toolbox of learning will carry them through life, it is impossible to know everything that will be needed, but much will be needed. Cov19 may have accelerated a change to a different educational process, given the size of student debt that could imply significant social change. Which way?

    I am an optimist, giving up is not an option. MIT is wonderful, but what about the rest? How do young people get a start in life? Many here seem to think this is the end. What do we tell our children? There is no hope?

    Most here recognize there will be change, the curves in “Limits to Growth” show well what happens up to the limits, they curves are useless thereafter. Bragging, I sat next to Meadows at a DC meeting, he specifically told me what happens after peak is a question mark. We are looking for paths forward, somewhere there are a few. What do we have to lose?

    Dennis L.

    • Jason says:

      The future is what happens when you are sitting around making plans and projections. I know it is hypocritical of me to say that while spending time on the internet, filtering noise from signal, and trying to get a view of the near future, but the point is we should all worry less about future events and focus more on the present and our daily interactions. Unfortunately, this lock down, arguably a good idea, has taken away a lot of people’s freedom of living, and forced a lot of sitting around worrying time. Still, if we are going to try to analyze the future, let’s do it as precisely, and logically as possible, using data, theories, analysis, and honesty. If you are going to throw around statistics, like 25% of all students have genital herpes, or life for most graduates is drudgery and depression, well if they are not opinions you pulled from your imagination, let us look where you got them from so we can judge for ourselves the state of mind and the bodily health of the average young adult walking around out there. Harry does a great job posting sources that support the decline of global civilization, maybe you could do the same for the new green economy we are morphing into, it would add some interesting balance.

      • Dennis L. says:

        Jason,
        Researched your concerns, will settle for one reference.

        CDC, genital herpes.
        https://www.cdc.gov/std/herpes/stats.htm

        Won’t bore you with the rest. It is out there.

        Dennis L.

        • Tim Groves says:

          Dennis, anyone suffering from genital herpes or cold sores would be well advised to consider taking Lysine, an amino acid, around 1,000mg a day, together with a dash of zinc, either as a prophylactic or a remedy. It isn’t a cure in that it doesn’t get rid of the virus, but it usually prevents or shortens outbreaks of the disease.

    • Artleads says:

      Back to puritanism, small, local, self-sufficient communities, no travel but for very selective tourism while we can, 80% less industrial production plus somehow safeguarding a reliable supply chain for it, really good online education while it’s possible, building with trash…

      • Dennis L. says:

        There are no longer sufficient natural resources, it is a different economy. Like all of you, looking for some rough directions. I am with FE, gardens are a great deal of work, have a fenced area on my farm, it is going to weeds, takes too much time.

        Wouldn’t be here if I liked what I am seeing, can’t change a thing, can only adapt. Hated losing face to face calculus last school year, adapted, made it work, smiled went forward. It is not possible for me to read some literature without fluency in higher math, so back to school, plan, solution. We either adapt or give up, I don’t know how. I am old now, some things will be left undone, bummer.

        I appreciate all of your comments, especially those directed towards me, it is a pretty sharp group.

        Dennis L.

        • Artleads says:

          “There are no longer sufficient natural resources”

          To do what?

          I, too, due largely to OFW, find myself doing and advocating for less. Hubris is dangerous, but I’ll risk it just this time: I’m usually very far of those around me in understanding how to adapt to increasingly scarce resources. bEING OLD AND ENERGY DEPLETED MATCHES THE OUTWARD DEPLETIONS. This is a time for old people (and women and children) to be front and center. It’s more of a time for the weak, using commonsense, than for brawn.

    • Fast Eddy says:

      The big question is… if you knew she had herpes … would you still…

  4. CTG says:

    Last night, my family and I went to rather pricey restaurant. It was full (with social distancing at 50% capacity), to our surprise. This restaurant, pre-COVID19 was not full, probably at 40-50% (full capacity is 100%).They can survive but the revenue and profit will be lower and it is unlikely that they will expand, do capital expenditure or splurge on the profits. They may not be in a “just for survival mode”. Don’t spend anything extra. Yes, patrons are suppose to take temperature and record down but it is hard to enforce as people may not want to write down their real numbers.

    Normal restaurants which cater for “more of middle class”, many of them are not opened to dine in. Possibly that it is just to troublesome to follow the procedure and they are barely making any profits (i.e. they are doing it on volume pre-COVID19).

    I think the disparity on income is really showing up here in my country where the pricier restaurants are doing “quite ok” and the general Joe Sixpack type are not doing well or even closing down.

    We went to largest shopping malls in my place (>2m sqft leaseable area). Many outlet are boarded up. Temperature checks required. As it is a holiday here, pre-CVOID19, this place would be packed to the gills but now it is probably 10% of what it is. There are many stores boarded up. Those that are opened are mostly empty. Some probably making it past the day in profits and most are not. They are likely to hope that there is “pent up demand” but that did not materialize. The merchandise are all on large discounts (deflation at work), yet the number of people who are shopping is just a handle (i.e. they carry shopping bags or their mechandise). I think most are curious how it looks like. I think that will be my last trip to the mall for at least the next few months. Just would like to compare a few weeks/months later (if nothing big happens in the mean time – looking at your FE).

    Some one commented in Zerohedge that the true test comes in June where those business who hold out in the lockdown, hopes that they can make it or weather it until the re-opening. Only to find that the re-opening is not what it seems to be and decide to call it quits. So, the show did not started in April/May. That is just setting the baseline or the preview. The firework starts now.

    Imagine if China decides to take a very tough stand in HK and the Western countries decides to “retaliate” (does not make sense right?). Then all hell can break loose.

    As FE puts it, all these are just the “distractions” The real circus for the public when bread may be running low very soon.

    It is really a toss up between “very incompetent politicians” or “God is really having fun playing this game”

    • We went to a Mexican restaurant that was a little more expensive than the one we usually go to last night. There were three Mariachi singers who serenaded us, even as we sat outdoors. There were a lot of cars parked by the restaurant. I didn’t really get to see how full the inside was. We took the last available outside table.

      We quickly discovered the beer menu was much more limited than what the printed menu indicated. We were handed the regular food menu, and they seemed to be prepared to fix anything on it. I ordered a salad (lettuce, avocado, tomato, corn, black beans, pumpkin seeds and feta cheese). After I got home, I developed a stomach ache, and everything I ate came back up again. I was fine, after the food was gone from my stomach.

      Is it really possible to get food poisoning from a salad? I could see that if a restaurant is trying to do more than it really can do, it might use food that has sat out too long, perhaps over a period of days. I called the restaurant today and mentioned the incident to the manager. What food does a person order to prevent this issue? I doubt the local inspectors are working overtime right now.

      • doomphd says:

        Gail, if the lettuce is not handled properly, there is a lot of surface area for microbes. When visiting Central and South America, especially places like Guatemala, you need to avoid leafy salads (uncooked anything is dangerous) and all fresh milk products. Best to try their cremated fried chicken and refried beans, grilled steaks OK at medium. Raw fish in coconut juice and lime is a local favorite but always a chance to get sick.

      • Rodster says:

        “Is it really possible to get food poisoning from a salad?”

        Yes, especially lettuce if it isn’t handled properly and so much for the “it takes at least 12 hours to get food poisoning”. It can happen within a couple of hours.

        • Tim Groves says:

          Yes. It depends on how many germs are initially present and how fast they are multiplying. Generally it’s said that the number of bacteria can double every 20 minutes under ideal conditions, or increase eightfold within an hour. But if somebody didn’t wash their hands after going to the loo and then handled the lettuce, they could contaminate the leaves with millions of e-coli bacteria to get things off to a roaring start.

    • Fast Eddy says:

      To compensate for the spacing issues…. why don’t restaurants just lease new premises that are double what they have?

      • Matthew Krajcik says:

        In a city near me, in the evening they are just shutting down the street in the downtown to cars and letting the restaurants put their tables in the middle of the road.

  5. Marco Bruciati says:

    We Italians are children of the Romans we have always built in stone and bricks our houses must last for centuries everyone ventured into investment in property the police policemen professor of gymnastics all bought and speculation building, because they thought that these were all earned in this field, however now after 2008. The real estate market has completely failed and now even worse and everyone is left with many, many, many unsold properties and you can’t even rent tourists. This is the real drama in Italy now.

    • No. The Italians as we know it are descendants of the Lombards and other Germanic tribes.

      • doomphd says:

        them what happened to the Romans? did the line eventually die out?

          • psile says:

            Same goes for us Greeks…from theory three in the article:

            ... most modern Greeks actually have ancestors of a variety of ethnicities, some of whom they would prefer to distance themselves from. This is apparently an extremely touchy subject in that part of the world: modern Greeks unquestionably prefer to identify themselves as descendants of the people that produced the Age of Pericles, etc. Suffice it to say, however, that, after several hundred years of Turkish domination, not to mention numerous incursions by Slavic peoples and other invaders, the modern Greek gene pool is probably as diverse as that of the British (for example), though there are no doubt still traces of “ancient” Greek ancestry in the population.

            Before 1750 there was no concept of being “Greek” in the modern sense. The term was a pejorative as it was seen to be linked with the pagan Hellenic past. The overwhelming majority of the Greek-speaking people were subjects of the Ottoman Empire and were part of the Rum Millet (Roman nation), which encompassed all Orthodox Christians of the Porte (except the Armenians), with the Archbishop in Constantinople as ethnarch. They had called themselves Romaioi (Romans) since before the Byzantine Empire was even a thing in Western scholarship.

            Indeed it was the West that primarily rehabilitated the idea of Greece, or Hellas, and was instrumental in the creation of a modern Greece with its spiritual roots in the Classical period, rather than in the Near Eastern (Byzantine) Orthodox tradition, influenced heavily by four centuries of Ottoman rule. This had more to do with the West needed a foundation myth, and ancient Greece was seen as the locus. For most Greeks, we’ve never been able to adequately reconcile the two. Modern Greece is a Western mistress, but an Eastern bride.


            Mythical scene from the Greek War of Independence. The blessing of the flag by Bishop Germanos at Saint Lavra, March 25, 1821

            • Xabier says:

              Some of the faces of today most similar to those in Ancient Greek art are to be see in Southern Italy, parts of which were heavily settled by the Greek colonists.

              And the folk dances and music are a living remnant of Greek traditions, too.

            • psile says:

              In southern Italy? Magna Graecia. Of course. Naturally, there’d be some gentic legacy. Still, there were many waves of immigrants from Greece and Albania for centuries. People were fleeing the turmoil that had been erupting in the Balkans since at least the 6th century AD, when the Slavs first descended on the peninsula, and transplanted their culture there.

              Later too, when the Turks arrived. In between there was regular warfare between the Byzantine Empire, Venice, the Franks, the Genoese etc. for control of the Adriatic and Aegean seas. The Arabs took many into slavery, plus plague and starvation were a constant threat. The whole area was a shambles for centuries, right down to the present day. It is no wonder it was considered the powderkeg of Europe.

            • Matthew Krajcik says:

              I think your timeline is incorrect, the Thracians under Lysimachas – Alexander the Great’s bodyguard – were proto-Slavs. Other groups, like the Ungari (Hungarians) Bulgari and Romani did come much later. And then the Cumans.

            • psile says:

              The Thracians were not Slavs. They were an ancient people who spoke an Indo-European language of which we know little about. It’s most well known son was Spartacus. The Slavs originated in the Pripet Marshes, in Belarus, far to the north, and didn’t arrive in the Balkans until the 6th century AD. They were probably gone from the scene by the 4th century AD.

              As for the Magyars (Hungarians), Bulgarians and Cumans these were Finno-Ugric or Turkic steppe peoples that dwelt in the steppes around the Caspian Sea, before the migrated into Europe proper. The Magyars having the most impact, imposing their culture in the Carpathian Basin to this day. Whereas the the Turkic Bulgarians were assimilated by the local Slav population they ruled over, leaving only their name.

    • Duncan Idaho says:

      This is the real drama in Italy now
      Lots of drama in the last 2000 years.

      The survivors (if any) will look upon this with less importance.

    • I am afraid all of the flights and tours were cancelled. If people wanted to go to Italy, they cannot. A conference that I was supposed to speak at in October in Vicenza, Italy, will now be handled over ZOOM, so no one needs to travel. This is terrible for the economy of Italy.

  6. Dennis L. says:

    CTG,
    Laughing quietly at your last sentence/paragraph, perhaps both, God sent incompetent politicians so we wouldn’t be bored.

    Regarding the June test, only have recent direct experience with education about which I have bored this audience to death. It will change, being the optimist it will change for the better but not without bruising some along the way. You are still in business, I was in business, my metaphor during my business years was like a convoy during WWII, expect to take hits, maybe even a torpedo, avoid taking one in the engine room.

    Dining out: personally belong to a private club in the cities, glass of wine before a fireplace in the library, dinner at a table by the window overlooking St. Paul, lovely, social distancing not an issue before, shouldn’t be one after. Walk to a very nice local pub, different game, close. Hopefully, both survive.

    Dennis L.

  7. Dennis L. says:

    More on my current obsession, education, higher education.

    Article on Wolf’s website regarding student housing. Again I personally watched a very nice 8? story apt building go up across from my office, I had a corner office with a large window, couldn’t understand where all the students would come from to fill it, how they would afford rent.

    Well, it seems in England there is a shortage of students. Furthermore the financing was first obtained by the developers who took their cut and then sold the units to REITs which are now, surprise, failing.

    https://wolfstreet.com/2020/05/24/student-housing-one-of-the-most-hypes-asset-classes-runs-out-of-students/

    If the changes in education are real and accelerating, we should see more of this. It has implications for tax revenues used to employ police to help with student social growth at local bars. La Crosse even provided a “Vomit Comet” to take students from the university grounds to the bars – very thoughtful and of course good for sales tax revenue as well as ER revenue from alcohol toxicity. It is easier to understand things which one personally experiences, education seems to be a huge change even for software Zoom has zoomed. Any one “zoom in” on that stock?

    Education is the next big change, it takes very little change in marginal revenue to greatly affect the viability of an organization. Climbing walls are “sunk” expenses, perhaps administrative expenses might also be sunk but in a different manner.

    Dennis L.

    • I read in the paper today that some overseas elementary schools are planning on a program in which the students each go half time, so the classrooms are half as full. I presume that they are given more homework.

      I can’t imagine that this appreciably reduces the risk of catching COVID-19. At the same time, the parents are still left with needing part time child care, if they can find it, so that they can work. The buses would presumably be half as full as well, assuming the same number of bus drivers and buses are used.

    • Fast Eddy says:

      When there is no future why pursue education – unless it’s a pursuit of knowledge for the sake of knowledge …. it’s not as if anyone needs to prepare to compete for jobs…

      • Perhaps sustenance farming and telling tomorrow’s weather from the clouds. Maybe a little about sundials. Nothing high-tech.

        • Fast Eddy says:

          Or … how to kill with a knife? How to butcher a human body? How to plan and executive an effective ambush on a farm….

  8. avocado says:

    Here public servants had a pension system much better than the ordinary people. It was draining public recourses put politicians did nothing because it was related to their own pensions, and because public servant unions are very strong. But covid changed it. Authorities had loosened a bit lockdown for one week, but reversed without a surge in cases. A pure show of force from the government. So they terminated the pensions extra benefits and no one could go on the streets to protest. After that, they unlocked again

    The only good use of covid 1984 I’ve seen so far

    • avocado says:

      I mean all state’s employee’s pensions (policemen, teachers, doctors), so it’s big money. Now they’re leveled with the private sector, we wished for it for 30 years and it took a week of extrahard lockdown to make it real. My money will go to those most in need, not that bad. Politician’s pensions are also affected, but these guys had been on power for the last 20 years, and they completely destroyed their oponents at the last election. So key players are not planning to retire. They had to prosecute half a dozen shoppers that protested, but perhpas they managed to square the budget and even get a couple of extra votes

      Hope they will continue to loosen the knot

    • I know that generous pensions for public employees are very common in the US. These pensions made it easier to hire workers at wages below what the private sector was paying.

      • avocado says:

        Now you know a way to get rid of these pensions 😉

      • Stevie says:

        Except that for about 30 years public sector wages have matched if not exceeded private sector thanks to decades of wage suppression in the private sector. But I suspect the general public is still unaware of this as the old myth still prevails. Yet generous public pensions continued to be enhanced despite deterioration of private compensation vs public.

        • Fast Eddy says:

          Queenstown Lakes chief executive Mike Theelen’s pay increased to $356k

          https://www.stuff.co.nz/otago/115792561/queenstown-lakes-chief-executive-mike-theelens-pay-increased-to-356k

          That’s a hell of a lot of dosh in NZ — particularly when you are not running a business with all the pressures of a business to turn a profit and reward the shareholders…

          End of the day the taxpayer pays your salary regardless of what you do…

          I also understand this clown gets paid bonuses… bonuses for what???? Releasing land for more development?

          For that level of salary you need to be in a high pressure job…. I hardly think Mike’s job is high pressure.

          I wonder about kickbacks from local connected property developers…. I have heard it’s an old boys club.

  9. Ed says:

    It would be fascinating to run TLG model from today’s date with services and industrial output set at half and food set at 0.9 and see what it shows.

    • Dennis L. says:

      Some years ago, sitting next to Meadows I asked two questions, this was one of them and he indicated that the model was running pretty much true to the original. It seems that the Club of Rome group did an update, as I recall the results were the same and no I am not chasing that one down. ( It may have been a group in the Netherlands).

      The second question was what comes after peaks, my recollection is the model does not have anything to say after the peaks, it probably becomes a Liebigs minimum issue but that is a dumb answer as I really don’t know what I am talking about, it is a guess.

      Cleaning out my office I came across a paper, “SCARCITY: Humanities Final chapter?” by Christopher O,. Clugston. Basically it tracks 89 non renewable mineral resources, it seems well done, but I have no way to verify. I appears to have been written in 2008 so there has been enough time to verify some of the projections should you so desire. The short fall probabilities are for 2030, almost ten years from now, “What? Me worry?”

      Dennis L.

      • The things that Chris Clugston did years ago (in my Oil Drum days) looked at the increased cost of extraction of a number of minerals, over a period of years. These years included the big run-up in oil prices. Of course, pretty much every mineral had a much higher cost of extraction because of the higher oil prices. Oil is used in extraction of all minerals. Also, when “demand” (affordability) rises, it rises for pretty much all commodities at once. So not only did costs rise, but the amount that people were willing to pay for these minerals rose. These things are true, whether or not a mineral is scarce.

        Of course, as oil prices fall, and as demand in general falls, this whole approach to determining scarcity falls apart. It seems like that at one point he was saying that aluminum is scarce, when it is the third most abundant element in the earth’s crust.

  10. Marco Bruciati says:

    Do you know Miley Cyrus’ wrecking ball? Likewise the oil price is doing this. on the one hand there is the price too high on the one hand the price too low on the one hand the negative price that destroyed the oil industry, now a high price is coming back which will destroy the economy. then the demand will collapse. and then the ball will hit the oil industry again due to the low oil prices again. A few more shots will suffice. #triangle of Doom thanks Alexis

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