by Gary Alexander

April 28, 2020

“Adults keep saying ‘We owe it to the young people to give them hope.’ But I don’t want your hope. I don’t want you to be hopeful. I want you to panic. I want you to feel the fear I feel every day. And then I want you to act. I want you to act as you would in a crisis. I want you to act as if our house is on fire. Because it is.”

–Greta Thunberg, 2019 B.C. (Before Coronavirus)

I’ve been promoting – then fighting – Doomsday prophets for the last 55 years. For the first 25 years of my journalistic career, I was one of them, writing about Global Famine, the Population Bomb, the Limits to Growth, our Polluted Planet, the Debt Crisis, the Doomed Dollar, the AIDS crisis, the Coming Crash, Japan’s dominance, Russian nukes, and more. Since 1990, however, I realized how wrong I was, and I have been busily debunking those and other threats for 30 years. Call me a “Recovering Apocaholic.”

As the world has grown richer and arguably safer from the threat of the Four Horsemen of imperialism, war, plague, and famine, we’ve grown more panic-driven. As deaths from all four threats have declined dramatically, the drumbeat of various looming crises have multiplied over 10-fold from 1960 to 2005:

Looming Crisis

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Now, here comes the coronavirus, a very real threat, the Epidemic of a Century – kind of like those Fights of the Century, or Trials of the Century, or Perfect Storms that seem to happen every decade or so. This little bug has crippled the economy due to a threat that is currently killing fewer than annual opioid deaths or accidental poisonings, or the deaths suffered from the regular flu season of 2018. The death toll could have been much higher without social distancing, for sure, but is there a chance we are over-reacting?

Causes of Death

Not counting obesity-related diabetes, or the estimated 480,000 deaths attributable to smoking, half of these 408,000 annual deaths (drugs, alcohol, and suicide) are what Anne Case and Angus Deaton call “Deaths of Despair” and are up sharply: “Deaths of despair among white men and women aged 45 to 54 rose from 30 per 100,000 in 1990 to 92 per 100,000 in 2017”), but the other half of the 408,000 deaths are preventable through greater care – including annual flu shots, which only 37.1% of U.S. adults got before the 2017-18 flu season, a decline of 6.1 points from the previous season, a likely cause of the 2018 surge.

Coronavirus deaths currently fall between suicides (48k) and the 2017-18 flu season (61k). They will likely peak around the number of drug overdoses (70k). With proper care, we can limit virus deaths and keep America working smart. We have little choice. Poverty kills, and total isolation yields total poverty.

Businesses are going bankrupt. Families are without paychecks. Trade is drying up. Hospitals are going bankrupt. Oxford Economics forecasts that 1.5 “non-essential” health-care workers will lose their jobs in April alone – workers who could be tending seriously ill patients with diseases other than COVID-19.

States will soon go bankrupt, since taxes aren’t coming in, needed benefits are rising, and they can’t print money or run deficits. (Texas could go bankrupt over too many months of $10 oil, never mind the virus.)

I’m no doctor, but I am a seasoned observer of the panic of crowds operating in crisis mode. I was duped as a child and young adult (shame on me), but I’ve been repeatedly inoculated against being fooled again.

The Government is Not the Solution – Private Initiative Is

Congress is passing one stimulus package after another, but that money isn’t getting to the people who need it, since the government is not equipped for quick action. Their equipment, quite literally, is trapped in the Information Ice Age. Last week, New Jersey put out a call for Cobol programmers (a language drafted in 1959) to update its unemployment benefits software, which runs on mainframes installed 40 years ago. (The Pentagon’s control of nuclear missiles until recently ran on 8-inch floppy disks from the 1970s). NIH was buying new fax machines until last year. Remember how the Website backfired and got overloaded so easily in 2013? The IRS can probably garnish your wages in a day, but such is their paper backlog that manual tax filers shouldn’t expect their $1,200 relief check until August.

New spending by all levels of government, including the Fed’s QE, is reaching epidemic proportions. As of April 15, according to Phil Gramm, former chairman of the Senate Banking Committee, and Michael Solon, partner of U.S. Policy Metrics, “New spending commitments already equal almost twice the gross domestic product loss incurred in the 2008 recession, and 20% more than all private wages and salaries paid in the last quarter of 2019. Yet only a sliver of the money has reached the intended beneficiaries.”

In the average postwar year (1945 to 2019), Gramm and Solon wrote, the federal government borrowed 2.1% of GDP each year. This year, the federal government will borrow 20.6% of GDP – 10 times the average. “That is more than all private investment expenditures in 2019.” We need to ask if we want the federal government to decide which businesses are to survive and which businesses are to fail this year.

In Europe, Sweden is the outlier, choosing to live a fairly normal life, keeping the economy going. Their death rate is higher than other Scandinavian nations but far lower than most European nations (see chart).

Daily Confirmed Deaths

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

We need our 50 states to be laboratories as well. The bulk of America is not as densely populated as New York City. We can let sparsely populated Midwestern states remain relatively free to work smartly, with social distancing, wearing protective masks, and sanitizing surfaces, but basically going back to work. Let the brave business owners and workers find solutions and show us the way. America is made up of such brave pioneers. We can’t afford to stay locked up for six to 18 months until perfect solutions are obvious.

The rest of the world has started working. Why don’t we? They even played ball after flu struck in 1918:

Players With Mask

The Roaring 20s followed the last major flu epidemic. How about America stand up and Roar again?

All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.

Also In This Issue

Global Mail by Ivan Martchev
It’s Often Darkest Before the Dawn

Sector Spotlight by Jason Bodner
What’s Next: Bounce or Bust?

View Full Archive
Read Past Issues Here

About The Author

Gary Alexander

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

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