Lawrence Summers Goes After 'Greenflation'

Lawrence Summers is probably not getting invited to any Georgetown cocktail parties any time soon. Bill Clinton's former treasury secretary, who chaired the National Economic Council under Barrack Obama, has more recently developed into a thorn in the side of his own party's big spending Progressives, especially those in the Biden administration.

It began quite early on: in March of 2021, just two months after Joe Biden entered the White House, Summers slammed the president's $1.9 trillion Covid relief package as, "the least responsible macroeconomic policy we’ve had in the last 40 years.” While sympathetic to "arguments for providing relief to those hurt by the economic fallout of the pandemic, investing in controlling the virus, and supporting consumer demand," Summers was clearly shocked by the degree to which "the policy discussion has not fully reckoned with the magnitude of what is being debated.”

The U.S. government had already spent a tremendous amount of money on Covid since the virus made its way to our shores from its origins in Wuhan, China. Lockdowns and other pandemic policies had increased unemployment and weighed down economic productivity. Meanwhile government indebtedness was way up. But here was the Biden administration, spending nearly $2 trillion at the stroke of a pen a full year into the pandemic apparently just because Donald Trump got to do it before him. It was utterly irresponsible.

Much to the annoyance of his fellow liberals, Summers continued to prophesy the advent of serious inflation. And to their even greater annoyance— it was clearly a shot at Summers when  Biden claimed "no serious economist" believes "there’s unchecked inflation on the way"—he kept being proved right.

As inflation numbers skyrocketed, Summers pivoted to arguing that the administration and Federal Reserve weren't doing enough to address the real problem. In particular, he worried about the Fed's comparatively small increases in interest rates being too little, too late. He suggested that this might be because the Fed "still believes that inflation is in fact transitory and that it will evaporate as supply chains are restored." For Summers, this line of thinking "never seemed plausible, given accelerating residential and wage inflation and room for acceleration in the costs of health care, airfare and lodging. It seems even less plausible today, with war in Ukraine and Covid lockdowns in Asia."

And he hasn't let up -- in the lead-up to the president's lawless executive order "forgiving" (i.e. using tax dollars to pay off) outstanding student loans, Summers tweeted:

I hope the Administration does not contribute to inflation macro economically by offering unreasonably generous student loan relief or micro economically by encouraging college tuition increases... Student loan debt relief is spending that raises demand and increases inflation. It consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college. It will also tend to be inflationary by raising tuitions.

Drowning in college debt? Uncle Sucker can help!

Now the economist has begun to gesture at one of the key drivers of inflation, namely the significant increase in energy rates due to shortages at the point of consumption. “It’s kind of insane that we have truck and trains carrying oil all over this country, rather than constructing pipelines, which would permit accessing more resources and cheaper, safer transmission,” Summers told the Boston Globe’s Globe Summit earlier this month.

He's right once again. In fact, we at The Pipeline have argued that Biden's cancellation of Keystone XL (particularly if understood as a prefigurement of the administration's overarching anti-resource sector policy) was more or less the administration's "original sin," from which the rest of its economic woes and problems have flowed.

Of course, environmentalism is the contemporary Left's sacred cow, so even a prominent liberal like Summers calling for a course correction is unlikely to bring one about. Still, they can't say they weren't warned. Nor can we.

The Trudeau Economy: Smoke & Mirrors

It was rather surprising, several months ago, when Statistics Canada released their Labour Force Survey for 2021 and it showed record job growth. During a pandemic that saw Canada's federal and provincial governments adopt some of the harshest lockdowns and other restrictions in the western world? How?

Well, a new study by the Frasier Institute goes pretty far towards answering that question. The report, "Comparing Government and Private Sector Job Growth in the Covid-19 Era," found that more than 86 percent of those new jobs were in the public sector. Overall, government employment increased by 9.4 percent. Meanwhile, private sector employment remained essentially flat. “Pretty much all of the net job growth, since the start of the pandemic, has been driven by growth in the government sector,” said the study's co-author, Ben Eisen.

In their write-up on the paper, the National Post further notes that, "adjusted for population growth, the share of workers 15 years old and up employed in the private sector also saw a decline, from 49.3 percent to 48.2 percent."

The government added 366,800 new jobs during the Covid-19 pandemic, the report says, while the private sector was only responsible for adding 56,100.

Now, many government jobs are necessary for the functioning of modern, first-world nations. But, in general, they add no value to a nation's economy. When close to 90 percent of a nation's job growth—366,800 new jobs to 56,100—is in the public sector, that nation's economy is in a dangerously sclerotic state.

So, why has Trudeau gone to war with farmers and the natural-resource and energy sectors, again?

'So Where Are the Deaths?'

In their continuing efforts to destroy President Trump's re-election prospects, the American and international news media have once again turned to their Great Green Hope, Covid-19, to continue wreaking unnecessary havoc with the world's economies and thus take down Orange Man Bad and replace him with the semi-animated hologram of the soon-to-be late Joe Biden, with Kamala Harris or Michelle Obama (or Barack Obama, for that matter) as the power behind the Resolute desk.

Having failed with Russian collusion, Ukrainian impeachment and, latterly, the twin thuggery of Black Lives Matter and Antifa, they're back again with Infection = Death. Problem is, very few are dying of the Wuhan Flu any more, as Heather Mac Donald notes:

The coronavirus doomsayers could not even wait until the fall for the apocalyptic announcements of the dreaded second wave. Because the red states recklessly loosened their lockdowns, we are now told, the US is seeing a dangerous spike in coronavirus cases. ‘EXPERTS SKETCH GLOOMY PICTURE OF VIRUS SPREAD: FAUCI TELLS OF “DISTURBING” WAVE, WITH A VACCINE MONTHS AWAY,’ read the front-page lead headline in the New York Times on Wednesday. ‘VIRUS SPREAD AKIN TO “FOREST FIRE”’ read another front page headline in the Los Angeles Times on Monday, quoting Michael Osterholm, one of the media’s favorite public health experts. Osterholm had told NBC’s Meet the Press: ‘I’m actually of the mind right now — I think this is more like a forest fire. I don’t think that this is going to slow down.’

The ‘this’ is an uptick in daily new cases from 19,002 on June 9 to 38,386 on June 24. The high to date in new daily cases was on April 24 — 39,072. Since April 24, the daily case count started declining, then began rising again after around June 9. What virtually every fear-mongering story on America’s allegedly precarious situation leaves out, however, is the steadily dropping daily death numbers — from a high of 2,693 on April 21 to 808 on June 24. That April high was driven by New York City and its environs; those New York death numbers have declined, but they have not been replaced by deaths in the rest of the country. This should be good news. Instead, it is no news.

Of course it's not news. A rapidly declining death rate is of zero interest to the news divisions, because it doesn't further the narrative that the world is coming to an end (not that we don't deserve it!). They'd rather toss around dubious and misleading statistics such as this Business Insider report:

While about 0.1% of people who got the flu died in the US last year, according to the Centers for Disease Control and Prevention, the coronavirus' death rate is currently about 5.2%, based on the reported totals of cases and deaths. That makes the coronavirus' average death rate 52 times higher than that of the flu.

That figure is certainly incorrect, and by several orders of magnitude. As testing for antibodies increases, the rate will continue to fall, as it's already doing in Britain:

While both the number of people in hospital and the number of hospitalised people dying are falling, deaths are falling at a faster rate. The number of people in hospital with Covid-19 is halving every 29 days, while deaths are halving every 16 days. Prof Carl Heneghan, who carried out the analysis, said the pattern of falling death rates in hospitals was also being seen in other countries, including Italy.

"We should be investigating what's changed," he said. "It's a radically different disease we're looking at if the death rate is 1% rather than 6%".

No kidding. It's a numerator/denominator problem, but in plain English: the more people who've had it (even if asymptomatic, as many were and are), the lower the fatality rate. I know math is hard, but try to keep up:

When calculating the mortality rate, we need:

  1. The number of actual cases. We need to know the number of actual cases (not merely the reported ones, which are typically only a small portion of the actual ones) that have already had an outcome (positive or negative: recovery or death), not the current cases that still have to resolve (the case sample shall contain zero active cases and include only "closed" cases).
  2. The number of actual deaths related to the closed cases examined above.

Considering that a large number of cases are asymptomatic (or present with very mild symptoms) and that testing has not been performed on the entire population, only a fraction of the SARS-CoV-2 infected population is detected, confirmed through a laboratory test, and officially reported as a COVID-19 case. The number of actual cases is therefore estimated to be at several multiples above the number of reported cases. The number of deaths also tends to be underestimated, as some patients are not hospitalized and not tested.

If we base our calculation (deaths / cases) on the number of reported cases (rather than on the actual ones), we will greatly overestimate the fatality rate.

The higher the count, the lower the fatality rate.

This study considered New York City, the epicenter of the pandemic in the United States, and the metro area responsible for most of the American cases and deaths. Keep in mind that the vast majority of deaths have occurred in people over 65 with comorbidities, including obesity -- which may also account for the racial and ethnic disparities: in New York City, the breakdown is White 7 percent, Asian 11.1 percent, multi/none/other 14.4 percent, Black 17.4 percent, Latino/Hispanic 25.4 percent.

Something else of interest:

19.9 percent of the population of New York City had COVID-19 antibodies. With a population of 8,398,748 people in NYC, this percentage would indicate that 1,671,351 people had been infected with SARS-CoV-2 and had recovered as of May 1 in New York City. The number of confirmed cases reported as of May 1 by New York City was 166,883 [source], more than 10 times less.

Therefore:

Mortality Rate (23k / 8.4M = 0.28% CMR to date) and Probability of Dying

As of May 1, 23,430 people are estimated to have died out of a total population of 8,398,748 in New York City. This corresponds to a 0.28% crude mortality rate to date, or 279 deaths per 100,000 population, or 1 death every 358 people.

And yet the hysteria is once again rising. The media is using increased testing and reporting as a scare tactic, especially if the "positive" tests have occurred in a red state such as Texas and Florida; everything is political, including life and death. Forget about "flattening the curve," which was meant to distribute the same number of infections over a longer period of time, so as not to overwhelm the hospitals. Now, nothing but the complete eradication of Covid-19 via a totally safe vaccine will satisfy the Left in its rabid desire to demand that the impossibly perfect always be the moral enemy of the good enough to muddle through.

Ms. Mac Donald concludes:

There are no crises in hospital capacity anywhere in the country. Nursing homes, meat-packing plants, and prisons remain the main sources of new infections. Half the states are seeing cases decline or hold steady. Case counts are affected by more testing; the positive infection rate captured by testing is declining. The current caseload is younger, which is a good thing. The more people who have been infected and who recover, the more herd immunity is created. Meanwhile, daily deaths from heart disease and cancer — about 3,400 a day combined — go ignored in the press.

But the drum beat to halt the still far too tentative reopenings gets louder by the day. It should be resisted. The lockdowns were a mistake the first time around; to reimpose them would be disastrous for any remaining hope of restoring our economy. The damage that has been done to people’s livelihoods and future prosperity will continue to outweigh the damage done by the coronavirus. The only vaccine against poverty and resulting despair is a robust economy.

Get it. Get over it. Get on with it.