A Tale of COVID In Four Graphs

Our country's catastrophic failure in containing the pandemic has led to over 100,000 needless deaths.  Four graphs demonstrate the difference between our response and that of Germany, a very similar country with ¼ of the population of the USA.  The wealthiest and most powerful nation on earth is now ridiculed across the world for good reasons.

The primary culprit in our failure is Donald Trump.  His most sacred duty is to provide national leadership in a crisis.  There is absolutely no question that he failed to do that.  Pandemic leadership is twofold: 

1. Delivering a strong message about the gravity of the crisis and vigorously promoting precautionary measures such as mask-wearing, social distancing, and lockdown measures until the virus is at a level where it can be contained.
2. Mobilizing the necessary national resources (FEMA, CDC, military, national guard, newly hired unemployed, etc.) to provide a level of testing, tracking, tracing and quarantining that will keep the virus in check and minimize deaths.  Working in harmony with governors to employ these resources wherever necessary.

Trump acted in the exact opposite way.  He encouraged protests and ridiculed safety measures.  He said multiple times that the virus would ‘disappear’.  He denied any responsibility for the pandemic’s consequences.  He was more concerned about his election than the lives of US citizens.

Here are four graphs that show the magnitude of our failure.  The first two show the daily deaths from the start of the pandemic to today for the USA and Germany.  Note that the average death rate in the USA has stayed nearly 1000 for the entire summer.  Germany’s daily death rate has averaged in the single digits for that period, a ratio of 100 to 1! 

The second two graphs show the positivity rate of testing during the same period.  It is a well established epidemiological fact that testing needs to be done at a high enough rate so that the positivity numbers are less than 2, or better yet, less than one, to identify any outbreaks quickly and be able to employ tracking, tracing and quarantining to quell them.  The positivity rate in the USA has never gone below 4 and is much higher in many states, while the positivity rate in Germany has stayed at or below 1 since the beginning of June.

In the final analysis, the number of deaths since June 1^st, the date by which both countries had enough time to prepare their responses and get the virus under control, tells the whole story.  Germany with one fourth the population, has had 927 deaths in that time.  The USA has had 100,196 deaths, more than 100 times the number that occurred in Germany.

 Germany had a leader who believed in and valued science, who collaborated well with her 16 independent states and provided sound, moral leadership and advice to the people.  Germany has had bars, restaurants, schools and businesses mostly open since mid-May.  They, like every nation, have had protests against lockdowns and disagreements about specific measures.  But the political and medical leadership has generally convinced the German public to follow the rules and they have reaped the rewards.

Germany has contained COVID-19 while keeping their economy in relatively good shape.  The USA has done neither.  Trump must be held accountable.

Common Sense and COVID-19

Politics and science make for poor bedfellows, but unfortunately, they have been sleeping together ever since the start of the pandemic. The data and reporting associated with this disease has been confusing, but there are some basic facts that, in my opinion, make two things very clear: 

1. That COVID-19 is a serious threat to a significant portion of the population, and we should do everything in our power to minimize its impact until a vaccine provides enough immunity to allow us to move toward a more ‘normal’ life.
2. The USA made catastrophic errors in its management of the pandemic, at least partially based on an election year desire to protect the economy, which have cost us many lives and ironically made the economic downturn worse. 

Here are the basic facts that led me to those conclusions:

• The devastating pandemic health crises that occurred in Wuhan, Italy, Spain, France and the New York/New Jersey/Massachusetts area at the outset of the pandemic are clear indications of what havoc and death the contagion can wreak if no measures are taken and the virus is allowed to get out of control.
• The IFR (infection fatality rate) of COVID-19 is still under investigation. It is most likely several times higher than influenza (0.6 compared to 0.1). To achieve herd immunity by infection would kill well over a million people if we were to resume business as usual.
• It is the combination of IFR and reproduction number R0 that makes COVID-19 particularly dangerous. Unlike influenza, which is held partially in check by an annual vaccine, the reproduction number for COVID-19 is highly unstable unless strong measures are taken. COVID-19 reproduction numbers were estimated at well over 2 during the early phases of the outbreak.  A reproduction number of 2 means that one infected person will cause over 65,000 sicknesses after 16 cycles of infection (approx. 90 days). When the contagion rages unchecked, the IFR will be higher because of healthcare overload. 
• Even with social distancing, partial shutdown and partial adherence to wearing face masks, the USA has lost an average of 1,000 lives per day since late May.
• The hospitalizations and long-term effects of COVID-19 appear to be much more severe than influenza. 
• A number of countries have been able to contain the contagion with a combination of high test rates, tracking, tracing and quarantining. These countries have also been able to open up their economies to a great extent. There are many countries who have had daily death rates in the single digits (or no deaths) for several months after taking these actions (Germany, Korea, Italy, China, Japan, Vietnam, New Zealand and many others).
• The USA never had a national plan to combat the pandemic. Trump played down the danger, was convinced the virus would ‘disappear’ once warm weather arrived and encouraged US citizens to flout lockdown and safety measures. Our daily infection counts never got down low enough for us to contain the virus in most states. We have lost over 100,000 lives since June 1st, the time when we should have had the virus under control. Germany has lost 800 in that same period.

The biggest irony is that an aggressive national plan to contain the virus would have allowed us to get back to a much higher level of economic and social interaction by June. Instead, we are mired in a partial shutdown that is still killing large numbers of people. I believe that most of the world’s reputable scientists and epidemiologists would agree with the facts and conclusions that I mention above. Bill Gates, who has spent the last 20 years of his life working on healthcare issues, has come out recently with scathing criticism of our management of the pandemic. 

Only a desperate desire to excuse Trump from condemnation can interpret the facts above as anything but a catastrophic failure. A recent Pew Charitable Trust poll of developed nations found that the reputation of the USA has plummeted in the wake of the pandemic. The reputation of Trump has also decreased, but it was already so low that the difference is not that dramatic. In Germany, where there is a strong memory of a demagogue, only 10% (the skinheads, neo-Nazis and other radical right groups) approve of Trump. 

 Enough said.

Wealth Disparity and the Billionaire Lottery

The disparity in income and wealth in the USA has been increasing steadily for the last 40 years. Today, the top 1% has 33% of the wealth in the country. The top 10% has 70% and the bottom 50% has only 1.5%! 

In 1948 the top 10% had ‘only’ 30-35%, half of what they have today. The depression and the war years, with very large increases in tax rates for the wealthy, had the effect of dramatically reducing the disparity that had built up from the Gilded Age (end of the 19th century) to the Roaring Twenties. The current level of wealth disparity is quite similar to that of 1929. 

High tax rates continued to keep the disparity somewhat in check from the 50’s to the 70’s. During this period the highest tax rate never went under 70% and peaked at 90%! But beginning with Reagan’s presidency, tax rates decreased steadily, going as low as 35% during the Bush presidency. The highest tax rate today is 40.8%, though no wealthy person pays anywhere near that percentage of tax. 

It is a given that the more wealth you have, the faster it grows. Wealthy people have investment opportunities that ordinary mortals cannot access. The top 10% own 84% of the stock market. Also, both the appreciation of the wealth itself and the income generated from it are either not taxed at all or taxed at a lower level than ordinary income. For example, stocks or other investments are not taxed until there is a sale. And capital gains from stock sales are taxed at a much lower rate. Shockingly, wealthy people are also very adept at evading taxes. 

Who are these very wealthy people and how do they get so absurdly wealthy? That is a complex question with a long answer. But let’s look at one group of absurdly wealthy people – software application businesspeople, the so-called tech giants. A software development business requires a very low capital investment compared to a manufacturing business. Also, the number of workers employed in software development is initially very small, and even once the company grows it is a fraction of the people employed in a manufacturing business of equivalent revenue. 

A software or network-based business can provide services for a vast number of people for very little cost in terms of employees and infrastructure. But here is an even more important factor: Because of the ubiquity and infinite reach of the Internet, a single application business can attain monopoly status without even having to really compete. In many situations, and particularly in social media and consumer goods (a la Amazon), people tend to flock to the same application because the people they know are using it. There is a definite herd instinct. 

Facebook didn’t establish a monopoly on social media because it was better or had ingenious software. People came to FB initially because of its cache as the Ivy League place to be. Once a critical mass of college students and alumni were on board, the rest of the US and then the world followed like so many lemmings. Who is going to use another social media site when all one’s friends are on FB? 

The entrepreneurs who create software and network applications are often participating in the equivalent of a lottery. The great majority of them don’t have unique ideas or capabilities. I have seen this firsthand. Any accomplished software developer is perfectly capable of developing most of the existing billion-dollar applications. But if they manage to hit the jackpot with the right timing, market demand, investors, connections and marketing (and of course it doesn’t hurt to have some backers or angel investors who are well-known in the industry to promote your application), then the rocket ship of growth can take off and propel a typically very small cadre of founders, investors and initial workers into stratospheric wealth. 

Unlike the Gilded Age, where monopolies such as railroads, steel, oil and banking were established by thuggery, conniving and political machinations, the modern era monopolies are to a great extent self-generating. The Internet delivers all potential customers to their door, and search engines, along with a combination of human nature and herd instinct, will quickly create a dominant site that dooms competitors to obscurity. 

And the large ‘knowledge’ corporations of today don’t have to exploit their workers and pay Pinkerton agents to break up strikes to amass wealth for themselves and their cronies, because there are damn few workers and the profits and stock valuations pile up without the need for any dirty work! 

Solidifying and preserving those monopolies does take some effort, for example gobbling up trendy new variations on the theme before they can really cause any damage, or using their vast size to undersell everyone else. Bezos, Zuckerberg et al have certainly channeled Carnegie, Rockefeller, Vanderbilt and other robber barons in this regard. 

There is a long history of the gilded class arguing that having massive wealth in the hands of a few is the best way for civilization to progress. I will address this self-serving trope in a future essay. However, the fact that our current wealth disparity and stock market ‘irrational exuberance’ is so similar to conditions just before the Great Depression might make us all pause and reflect on where our society is headed. 

And then there’s COVID-19 and global warming . . .