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In Florida pressure to reopen beaches, vacation rentals, arcades, and restaurants is coming from the tourist industry. Nationally, oil interests are lobbying hard as the price of US crude has hit negative amounts. How can oil be sold for a negative price? Because there is no room to store it. Traders locked into delivery contracts are finding it cheaper to pay someone to take the oil than to try to secure a place to store the oil. You see, distribution works through oil contracts made in the past for future delivery. These contracts were made prior to the economic shutdown that has greatly reduced demand for oil. Apparently, it is cheaper to pay someone to take the oil than to break the contracts.
There is no doubt of the economic disruption resulting from the effort to reduce the infection rate with close-downs. The question is whether a premature reopening will undo the work so far to control the infection rate and require another shutdown. Already the reported practice in New York is not to treat anyone 80 years old or over. Will a second wave reduce the non-treated age to 70, a third to 60?
Sweden is the only country that avoided a shutdown. So far Sweden's death rate on a per capita basis is higher than Denmark's, although not hugely higher. The Swedes are apparently more cooperative with prevention measures and require less control in order to exercise good judgment. The question is whether Swedes are gaining "herd immunity" that will in the end produce a lower death rate as countries in lock-down experience a second wave of virus when they come out of lock-down.
The question of herd immunity remains open as there are many known instances of reinfection and a recent report from Japan that the virus mutates more rapidly than believed and that some forms of the virus are more deadly than others.
People take hard positions on both sides of the lock-down/no lock-down issue even though there is no hard evidence on either side. We just don't know. And the virus has been unfortunately politicized in many ways. A policy determined by political partisanship is unlikely to be a good policy.
Worried that a "devastating" second wave of infections could hit America this summer if states reopen too soon, governors who have been leading the effort to combat the pandemic labeled as "delusional" and "absolutely false" claims by Vice President Mike Pence that enough testing was available to prevent such a disaster. Despite the risks, President Donald Trump, his allies and some far-right groups have demanded states lift restrictions aimed at slowing the spread of Covid-19. Medical experts warn that a flood of Americans leaving their homes without proper testing and tracing in place will trigger a new outbreak, inundating hospitals and likely causing tens of thousands of additional deaths. In response to anti-shutdown demonstrators in Denver, medical professionals staged a silent counter-protest, resulting in this widely viewed video. Will the blond in sunglasses give herself death?
The One Thing About Which Fauci Is Probably Correct
Keep in mind that Trump has a political interest in reopening the economy as he faces an election. The Democrats have a stake in keeping it closed, reasoning that people with no jobs and people losing their businesses will vote against Trump, as will people deprived of their sports and entertainment venues. It is not clear whether the election should be postponed for a more normal time. Will people expose themselves to crowds in order to vote? Will it be possible to vote from home? Will the outcome merely be an outcome of which side's propaganda was most believed? In such a case, what is the value of the election?
Divisions in the US are so great that it is almost impossible for a policy that serves a common interest to emerge.
Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His books, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available (more...)