Ten Obvious (?) Lessons We May Have Failed to Learn from the Pandemic

 Ten Obvious (?) Lessons We May Have Failed to Learn from the Pandemic

 1)     To be able to spend lots of money in such emergencies, we need surpluses in other years. 

2)     Lacking such surpluses, tax increases are necessary to repay pandemic spending.

3)     In an emergency, it is critical to cooperate with attempted solutions.

4)     We’re “in it” together, hence should work together even beyond pandemic issues.

5)     Trust in science is important but shouldn’t be distorted into demanding blind, unquestioning trust in orthodoxy and government. 

6)     Jobs are important and employers take more risks than most people realized. 

7)     Unions are important; balance of power must be our goal.

8)     The pharmaceutical industry came through for us magnificently.

9)     Avoiding evictions is important during a pandemic but confiscating property rights is damaging.

10)  The world is inter-dependent.  An “America First” plan may not be optimal.

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1)     To be able to spend lots of money in such emergencies, we need surpluses in other years. 

It seems clear that the spending was very helpful even if not optimal.  But continually spending money you don’t have is destructive.

2)     Lacking such surpluses, tax increases are necessary to repay pandemic spending.

a)      a) Huge tax increases are proposed, but with $0 allocated to reducing the deficit!  Our politicians show disrespect for us by saying programs cost nothing if we pay for them.  If taxes are raised and spent, we worsen our financial situation because we’ve removed a potential source for future debt reduction.  Simple analogy, if you loan $10,000 to someone who has an asset worth $100,000, you might feel you have good collateral.  What is that collateral worth if your debtor spends that $100,000 on a trip around the world?

 b) Sadly, these programs are NOT paid for.  The government resorts to accounting chicanery to plunge us further into debt while hiding the results.  Such accounting is illegal in private enterprise and should be illegal, rather than condoned, for government.  Consider:

i)       The government has multiple Ponzi schemes, including many so-called “social insurance” programs which are hugely under-funded even using “cliff funding”.  Cliff funding anticipates that after 75 years, no one will receive benefits.  People born today would contribute all their lives, but there would be no money to pay their benefits.

ii)      The government does the equivalent of check-kiting, e. g. using Medicare cuts to support the Affordable Care Act, then using the same cuts to claim Medicare is now better funded.

iii)    It uses Medicare cuts to “fund” other programs, planning to reinstate the Medicare cuts later.

iv)    The government institutes programs intended to be permanent but pretends they will be canceled after a few years.  In doing so, it sometimes determines the price tag for [3] years of benefits and funds it with a revenue stream over the next 10 years, claiming that it is fully-funded.

v)      The government creates programs with back-ended benefits, then counts the income in the next 10 years without setting up reserves to cover benefits to be paid beyond 10 years.

vi)    Etc.

c)     c) We should reduce the burden we’re placing on future generations.  The dependency ratio is increasing because of extended human longevity; the large retiring Baby Boomer segment; and our ability to keep babies alive with conditions that hamper their productivity and, in the past, would have resulted in juvenile death.  We’re relying on younger generations to take care of their elders, be the engine of our economy, parent/mentor their children and bear the burden of the huge debt we have keep increasing.

d)    d) We should be honest regarding tax cuts.  I did not support the Trump tax cut (I’m a high-tax guy) but I was pleased that it did not favor the rich so much. 

i)       For example, they were very creative in avoiding tax breaks for small professional organizations like my business. 

ii)      President Obama and Hillary Clinton had both voiced the need for reduced corporate taxes. 

iii)    In some ways, Trump’s tax cuts benefited everybody: increasing the value of retirement funds, raising wages and lowering prices.  I’m not saying that the middle class got more tax cuts than the wealthy (it is hard to cut taxes without reducing them for those who pay the most), I’m simply saying that the criticism has been substantially inaccurate, unnecessarily tearing our country apart.

3)     In an emergency, it is critical to cooperate with attempted solutions.

     I  a) If a previous blog, I expressed my disgust at President Trump’s unwillingness to wear a mask.

   I   b) I’ve also been disgusted that security personnel have been accosted for enforcing mass mandates, that school systems wasted resources litigating against cities that limited attendance at high school football games, etc.

)        c) We should avoid intentional misinformation and should be more careful about spreading potentially false information we receive.

H   d) How can you prove a technique doesn’t work if you don’t try it?  Even if you disagree, you should cooperate to be courteous to others and develop data which may support your position.

4)     We’re “in it” together, hence should work together even beyond pandemic issues. 

       a) With difficulty, we managed to hold a secure election with relatively large turnout.  We should not undermine the process by supporting false accusations.

  O b) On all issues, we should respect each other’s opinions and consider them carefully.  “Cancel culture” is un-American and intolerant.

   T c) The most affluent members of our society pay an overwhelming percentage of our country’s taxes, a much higher percentage than most people would guess due to inaccurate vitriol.  We should acknowledge their contributions even if we tell them we need more, rather than stoking class warfare.  To be fair, tax analysis should also recognize:

i)       We have a lot of hidden taxes, which are ignored in most analyses.  For example, wealthier people pay more for college and more for nursing home care because of subsidies to less-affluent people.  I’m not criticizing the practice; I’m criticizing ignoring these contributions.

ii)      We should consider who benefits from the tax.  If we levy a $1 tax on each individual and give it to the most impoverished, many critics would complain that the tax exacerbated economic disparities because it is regressive.  But if they consider the resulting income redistribution, it clearly would reduce economic disparity. 

iii)    The rich make huge donations to charities which benefit society.  Several tax reforms squeeze non-profits.  Some politicians have a hidden agenda to replace non-profits with government-run programs or at least government-funded programs, mimicking Europe.

5)     Trust in science is important but shouldn’t be distorted into demanding blind, unquestioning trust in orthodoxy and government. 

 We can cooperate with attempted solutions, while expressing disagreement if appropriate.  Science is about data, replication, refinement, and exploring alternative theories and interpretations.  Science did not initially know many things relative to the pandemic, for example:

   T a) The relative value of forward tracing vs. backward tracing

  T b) The ability to find clusters through waste streams

   T c) The efficacy of (various types of) masks in various settings

   T d) The degree of separation that was important (six feet?)

  H e) How ventilation contributed to transmission

 W f) hat drugs are helpful

  T g) The source of COVID-19

Sa  Sadly, debate on the above issues was inappropriately discouraged.

6)     Jobs are important and employers take more risks than most people realized. 

Yet elements of our society and political system have leveraged the pandemic to accelerate their anti-business agenda.

    I a) It was clever to use pandemic payments to try to force businesses to pay higher wages. But is it a good idea to push additional vulnerable businesses into bankruptcy by increasing their costs or making it hard to find staff under the current conditions?  (There also are questions as to whether it is an appropriate tactic, but I’m not addressing that issue here.)

   I b) Is it a good idea to encourage citizens to back out of the labor pool and stay out of the labor pool?

 D c) Despite being a staunch opponent of Trump for 40 years, I acknowledge that he increased employment to levels I thought would be impossible in today’s world of automation and international trade.  He particularly increased minority employment and the income level of poorer segments of our population.  Do we really want to blindly reverse all his policies for ideological reasons?

  S d) See the union and pharmaceutical sections below.

W e) We appropriately decry food deserts and blighted areas with few businesses to supply goods and jobs.  Yet we condone destruction of property and, in California, shop-lifting.  Not only does that make business untenable, it also trains people to exhibit destructive behavior. I’ve always supported peaceful respectful protest (including NFL players “taking a knee”), but not destruction.

7)     Unions are important; balance of power must be our goal.

  D a) During the pandemic, more people awakened to the negative side of teachers’ unions.  Our greatest systemic racism is our public schools’ failure in lower-economic communities.  Yet teachers’ unions staunchly resist proven solutions such as public charter schools.  They also resisted opening schools in the pandemic and have protected incompetent teachers.

M b) More people became concerned that police unions have protected officers who have consistently misbehaved.

 Ik c) In the past, unions and credentialing requirements impeded minority and lower-economic class membership.  We should applaud the degree to which such bias has been removed, but there is more work to do, particularly relative to credential requirements.  Softening some credentialing requirements would improve equality and help stimulate post-pandemic recovery.

  D d) Despite growing awareness that unions, like all organizations, have advantages and disadvantages, many politicians promote legislation to end the private ballot in union elections and tilt the pendulum overwhelmingly in favor of unions vs. business.

     I e) I recently saw a presentation about the positive impact of unionization of long-term care workers in the state of Washington.  I am not anti-union, just seeking the elusive proper principles and balance.

     I f) In the fast food industry, low-paid workers are required to be available for overtime even if not called.  Such disruption of their ability to get a second job seems wrong to me.  A union might help resolve that issue.

8)     The pharmaceutical industry came through for us magnificently.

    I a) It developed anti-COVID-19 vaccines in record time and also developed a pill to reduce hospitalization and deaths of people with mild or moderate COVID-19.

   T b) The industry facilitated broad international distribution.

  Y c) Yet, some politicians want to “kill the golden goose” by confiscating its property rights.

 A d) As a side note, it clearly makes sense for Medicare to negotiate lower prices from the pharmaceutical industry.  However, matching its lowest charge does not make sense because the pharmaceutical industry has donated medications to third-world countries for free.  Historically, the pharmaceutical industry has recovered its investment and necessary return on capital from sales in the USA.  Hence, when courting foreign accounts in the face of competing drugs, pharmaceutical companies have used marginal pricing, resulting in lower prices.  Our government should not anticipate matching those low marginal prices as those prices will have to rise if the USA is going to contribute less to the industry’s capital investment and return.

9)     Avoiding evictions is important during a pandemic but confiscating property rights is damaging.

   I a) If we want to pay people’s rent, we can do so.  During the pandemic, that made sense.

  C b) Confiscating property rights is scary.  Many property-owners are not receiving rental income they deserve, and which may be critical to them.  Example: A lady’s sister was unable to move in to provide end-of-life care because the tenant wouldn’t move out when her lease was over. 

W c) What will be the future impact on housing?

i)       Fewer units built because people will be less interested in becoming landlords.

ii)      Rental units converted to condos.

iii)    Higher security deposits.

iv)    Higher cleaning fees.

v)      Higher rents.

vi)    Fewer upgrades.

vii)   Less maintenance in general.

After fumbling the ball, will government blame private enterprise for such problems?

10)  The world is co-dependent.  An “America First” plan may not best be optimal.

  C a) Clearly there are strategic industries for which an “America First” plan makes sense.

  B b) But international trade has contributed to tremendous reduction in world poverty.  We should take pride in having contributed to improvement in foreign living standards.

   I c) It has also contributed to lower prices for goods and services.

W d) We say we want to help people be more economically successful in their home countries, so they won’t feel a need to emigrate to the USA.   “America First” undermines that goal.

H e)  How do an “America First” plan and goals for economic recovery square with an “America Last” program relative to energy?  Does it make sense to suppress energy development in the USA then ask other countries to increase their production of those same energy sources or sources more harmful to the environment?