Hi, good to hear from you!

1. I think kneejerk skepticism is the right view to take on any claim by the Chinese Communist Party. However, I think they’ve met the burden of proof in this case to the point where I trust that what they’re telling is about their case numbers is true *enough* for us to generally accept it. My reasoning is that:

(a) the WHO team that went into China skeptically came out believing that they had collected strong evidence of China’s honesty about their numbers, at least as of a few weeks ago;

(b) China is bringing things back online very, very slowly and carefully. Their economy is still moving in slow-motion. That suggests real (and well-founded!) fear on the part of the higher-ups that they could set this thing off again if they move too fast. If covid were in fact still transmitting in large numbers, I think they’d either stay in shutdown and lie about why, or reopen everything recklessly and then just cover up the mass deaths that result.

(c) Their trajectory has, in general terms, followed that of South Korea, Singapore, and Taiwan (aka The Better China), and their strategy has been similar as well, so this is actually what we would expect to see even in the absence of Chinese Communist Party claims affirming it.

Chinese propaganda efforts right now seem to be centered instead on blaming America for COVID-19. In fact, COVID-19 is the fault of the Chinese Communist Party, which covered up the disease throughout the entire period when it could have been contained, acted too late, and caused both mass suffering to the Chinese people and this global pandemic. Blame China. (But not for this.) (See “Blame China,” a recent article in The Atlantic.)

2. The economic calamity we are going into is… well, it’s a calamity. I don’t trust the Wall Street Journal for very much these days (and you shouldn’t, either, but that’s another blog post), but their basic contention that this is going to be very, very, very bad for American workers is pretty hard to dispute — especially when we’re talking about the most marginal American workers, who don’t have savings or cash or paid sick leave to survive a period of disruption like this. I don’t think I have the expertise to put it into $$ terms, but we’re looking at enormous short-term economic destruction, enormous short-term unemployment, a quarterly economic contraction on the order of the Great Recession or even the Great Depression, and it’s unclear how quickly we can bounce back from that. One thing is certain: the longer suppression lasts, the harder it will be to bounce back.

(The one silver lining: because the recession is caused by an artificial short-term policy, not cascading structural collapse, as in the financial crises of 2008 and 1929, there’s reason to believe we could recover much faster than we could in 2008 and 1929.)

But how many people are going to DIE because of the impending recession?

Basically, none. U.S. death rates don’t consistently or significantly rise during recessions: https://data.worldbank.org/indicator/SP.DYN.CDRT.IN?locations=US

Whereas, if you let this virus loose, you could expect to see the death rate to *approximately* double over the course of the next year. On this chart, you’d expect the crude deaths per 1000 to go from 8.5 to about 16 — which you’ll note is far above the top of the chart’s Y-axis.

So we have to weigh the incredible economic toll of this thing against a truly astounding amount of human carnage.

The best thing in the world would be for us to stop all these suppression measures and discover that, hot dog, the coronavirus skeptics were right and it really isn’t as bad as it looks. (This remains a plausible possibility, although not, to my mind, a very large one.) But the WORST thing in the world would be for us to stop all these suppression measures and discover that the coronavirus skeptics were wrong and now 1 out of every 100 Americans is dead, for the first time since the Spanish flu, and we’re rationing ventilators and digging mass graves.

(Also, higher taxes to pay for all this is honestly probably wishful thinking on my part. We all know that Congress is going to just tack this onto the national debt, and our great-grandkids may someday pay it off for us.)

Hope that answers your questions! –James

1. How do you feel about China’s approach to this currently? Are you skeptical the virus is no longer natively communicating in the country.

2. I know you touched on this (I get it wasn’t a post on economics) and you did say some important items about saving millions and the unfortunate byproduct of us inheriting higher taxes from now on…but what I think is going to be an even more acutely felt immediate impact to many more Americans is the massive layoffs and unemployment scenarios starting next week…lots of good reporting is coming out of WSJ on how this will disproportionately affect the lower class. I’d like to hear your thoughts on this…as yes we’ll see the sickness rise but at the same time perhaps the depression/recession will cause more unrest than even the sick will?
If you could unpack the $$ side for your readers…that could be valuable (perhaps another post…)