Category Archives: Blogs

After AlphaGo There Is No Stopping AI

Artificial Intelligence, in one form or another, is everywhere. We invite it into our homes and feed it on social media. Businesses that have the resources to automate, will. Every sector of the economy utilizes AI in some form.

It is nearly impossible to find an industry that is not looking to AI for improvements. AI is potentially playing a role in semiconductors, industrial applications, military and defense and everything in-between. Manufacturers hope AI will make developing products and innovation easier. Globalspace, September 6, 2019

Advances in AI

Meanwhile, AI keeps advancing in what it can do. An interesting way to observe AI’s recent trajectory is to recall the times when AI competed against human champions and won.

* IBM’s Deep Blue defeated chess grandmaster Garry Kasparov in 1997.

Chess kept Deep Blue in the realm of what computers are good at, using statistics and probabilities to determine strategy. (Popular Science, 12/26/12)

* IBM’s Watson defeated two Jeopardy! champions, Ken Jennings and Brad Rutter, in 2011.

Jeopardy! … pushed Watson into an unfamiliar world of human language and unstructured data. (Popular Science, 12/26/12)

* DeepMind’s AlphaGo program defeated go world champion Lee Sedol in 2016.

When compared with Deep Blue or with Watson, AlphaGo’s underlying algorithms are potentially more general-purpose… (Wikipedia, AlphaGo vs. Lee Sedol)

Ultimate Goal With Unknown Results

Real artificial intelligence is general-purpose. It is artificial general intelligence. AGI has the potential to perform any task that a human being can perform, not just a specialized task such as playing board games. It can teach itself by manipulating massive amounts of data. It can act based upon its own knowledge.

Here is a description of Google’s machine learning tool AutoML-Zero, published in Google AI Blog July 9, 2020:

In our case, a population is initialized with empty programs. It then evolves in repeating cycles to produce better and better learning algorithms. At each cycle, two (or more) random models compete and the most accurate model gets to be a parent. The parent clones itself to produce a child, which gets mutated. That is, the child’s code is modified in a random way, which could mean, for example, arbitrarily inserting, removing or modifying a line in the code. The mutated algorithm is then evaluated on image classification tasks.

When asked why he wanted to climb Mount Everest, George Leigh Mallory responded, “Because it’s there.” Once a goal is envisioned, there is no stopping those who will pursue its attainment, regardless of unknown collateral results. The envisioned goal in AI technology is to spread AI everywhere in ever-advanced forms.

On December 2, 2014, BBC News made headlines with remarks by theoretical physicist Stephen Hawkins and response by Cleverbot creator Rollo Carpenter.

The development of full artificial intelligence could spell the end of the human race … It would take off on its own, and re-design itself at an ever increasing rate… Humans, who are limited by slow biological evolution, couldn’t compete, and would be superseded. Hawkins

I believe we will remain in charge of the technology for a decently long time and the potential of it to solve many of the world problems will be realized.… We cannot quite know what will happen if a machine exceeds our own intelligence, so we can’t know if we’ll be infinitely helped by it, or ignored by it and sidelined, or conceivably destroyed by it. Carpenter

Recommended Segment of PBS FRONTLINE

In the Age of AI aired on FRONTLINE’s Season 2019, Episode 5, November 5. The program serves as a good overview of what AI is, what it is used for today, what effect is has had in economies, what it has done to privacy and liberty, and where it looks like AI is going.

The program’s framework is the U.S. AlphaGo’s victory over China’s go player Ke Jie, which ignited China’s quest for AI supremacy.

Here are some good take-aways offered by In the Age of AI:

There are three important developments that changed the world – the steam engine, electricity and AI — “everything else is too small.”

In the U.S. automation amplified by AI has sadly caused a lot of white and blue collar workers to lose their jobs. However, developments in technology have always done that. Former elevator operators, telephone operators, and secretaries can attest to that.

AI’s most prominent role has been in personal data gathering. Both private and public sectors depend on some form of AI’s ability to collect massive amounts of data and use it to indicate individuals’ preferences, habits, routines, etc.

China’s advances in AI have been astounding. China sees benefit in having become a surveillance state where people’s routines are in a vast database that can be used to quickly process loans or quickly scoop disruptors for purposes of re-education. The regime’s Belt and Road Initiative invests in and builds infrastructure all over the world. Included in the developments, are China’s ubiquitous surveillance cameras.

AI is the ultimate tool of wealth creation. The push for advancing AI results in aid to capital and neglect of labor, causing inequality to grow. It used to be that wages rose with productivity, but with the advent of automation, especially that augmented by AI, productivity and wages decoupled. It won’t be long before there is real clamor for distribution of wealth created by capital.

You and AI

Whether you embrace or fear artificial intelligence, AI is here to stay. In the short run you will benefit from augmented diagnostic techniques or harmed by loss of a job. In the long run your place in the universe – to your advantage or not — might be determined by a machine.

(Featured picture: Ke Jie playing AlphaGo, NPR, Google A.I. Clinches Series Against Humanity’s Last, Best Hope To Win At Go, May 25, 2017)

Question Authority No Longer

Were he alive today, 1960s counterculture icon Timothy Leary would be appalled. Leary is mostly remembered for his efforts to decriminalize psychedelic drugs. However, his principal objective was to encourage people to think for themselves, question authority, and accept the chaos that comes with “a state of vulnerable open-mindedness.”

Throughout human history, as our species has faced the frightening, terrorizing fact that we do not know who we are, or where we are going in this ocean of chaos, it has been the authorities — the political, the religious, the educational authorities — who attempted to comfort us by giving us order, rules, regulations, informing — forming in our minds — their view of reality. To think for yourself you must question authority and learn how to put yourself in a state of vulnerable open-mindedness, chaotic, confused vulnerability to inform yourself. A Notable Quote by Timothy Leary.

Today’s Battle Cry is “Obey Authority”

Instead, we crave for the comfort of authority. We want protection from vulnerability. Those standing at the ready to provide comfort and protection abound. They hold up the equivalent of the Little Red Book that tells us what to think, what to say, and what to do. They use words in ways they were not meant to be used. Science is no longer observation, inquiry and experiment, but is now absolute. They use “science” as a psychological bludgeon.

Dr. Anthony Fauci, Director of the U.S. National Institute of Allergy and Infectious Diseases, said the following in response to criticism regarding his COVID-19 guidelines:

I believe for the most part you can trust respected medical authorities … I believe I’m one of them, so I think you can trust me. But I would stick with respected medical authorities who have a track record of telling the truth, who have a track record of giving information and policy and recommendations based on scientific evidence and good data. The Guardian, July 15, 2020

One needs to question Dr. Fauci’s awareness of how drastically scientific knowledge can change. The theory of a stationary earth around which the sun revolved was once scientific truth.

What Might Timothy Leary Question Were He Alive Today?

Why is the media so focused on reporting numbers infected with COVID-19, especially when famous people are among those numbers, and not much reporting on numbers recovered?

Are COVID tests accurate? Celebrities Elon Musk and Erykah Badu recently received on the same day both positive and negative diagnosis, according to media reports.

Have U.S. state and city leaders struck a reasonable balance between lockdowns and future health in the absence of routine in-person exams, workers’ threatened livelihoods, children’s lack of proper education, deterioration of mental well being?

Even if people are willing to question, what would be a venue for those questions? The Internet is today’s soapbox. But…

…[T]he UN Secretary- General launched the United Nations Communications Response initiative to combat the spread of mis- and disinformation in April 2020. ..The Resolution also calls on international organizations to address mis- and disinformation in the digital sphere, work to prevent harmful cyber activities undermining the health response and support the provision of science-based data to the public. WHO, Managing the COVID-19 Infodemic

Social media companies have committed to regulate content in light of the pandemic.
Eliminating misinformation can help social media users gather and disseminate accurate information, helping them stay safe and reduce risk to others … A more ambitious role for social media platforms would be to boost efforts by public health authorities by, for example, upranking links to recommendations from recognised health authorities, and downranking ads for essential limited medical supplies, such as face masks, to prevent hoarding.
Building Trust While Influencing Online COVID-19 Content in the Social Media World, The Lancet, April 21, 2020.

Questioning or Obeying is a Personal Choice

Indeed, COVID-19 is a real pandemic. The current estimated COVID-19 death rate of 2.16% is not to be flippantly dismissed. However, the principal question here is whether shutting down discourse that conflicts with official WHO and CDC guidelines is beneficial.

Timothy Leary was certainly not the first to encourage questioning. Greek philosopher Socrates, for example, regarded questioning essential to critical thinking.

The art of Socratic questioning is intimately connected with critical thinking because the art of questioning is important to excellence of thought. Socrates argued for the necessity of probing individual knowledge, and acknowledging what one may not know or understand. Wikipedia, Socratic Questioning.

It is the prerogative of each individual to choose questioning and vulnerability or obedience and protection. Today, it seems the majority have chosen to “stay safe.”

Recommended: The Barrington Declaration

None of us wants to see our Grannies succumb to COVID-19, or G-d forbid, any of our children. However, our precautions need to be balanced against the “irreparable damage” lockdowns and other extreme measures are causing.

“Irreparable damage” is the correct description to what lockdowns are doing to mental health and physical well being as a result of isolation and postponement of routine treatment.

It’s like kicking the can of illness and mortality down the road.

“Irreparable damage” is the description The Great Barrington Declaration uses. The Just Vote No Blog recommends consideration of the thoughts expressed on the Barrington Declaration website. The Declaration was signed by numerous health practitioners from around the world on October 4, 2020, in the town of Great Barrington, Massachusetts. The Declaration simply recommends: focus on protecting the most vulnerable and let the rest resume their normal lives.

Here is an excerpt:

As infectious disease epidemiologists and public health scientists we have grave concerns about the damaging physical and mental health impacts of the prevailing COVID-19 policies, and recommend an approach we call Focused Protection.
Coming from both the left and right, and around the world, we have devoted our careers to protecting people. Current lockdown policies are producing devastating effects on short and long-term public health. The results (to name a few) include lower childhood vaccination rates, worsening cardiovascular disease outcomes, fewer cancer screenings and deteriorating mental health – leading to greater excess mortality in years to come, with the working class and younger members of society carrying the heaviest burden. Keeping students out of school is a grave injustice.

Keeping these measures in place until a vaccine is available will cause irreparable damage, with the underprivileged disproportionately harmed.

The Barrington Declaration mostly addresses the destructive effects of lockdowns on health. We also need to keep in mind the devastation lockdowns have wrought upon our individual liberties and our economic prosperity.

As an aside, perhaps predictably, the town of Great Barrington, Massachusetts, has declared its objection to the Declaration’s title.

Pandemics in Pictures

It is said that a picture is worth a thousand words.  These days we have thousands of words — often contradictory — about The Pandemic.  A few pictures might help. Pictured above is Jimi Hendrix at the Woodstock Music Festival August 1969.  The Hong Kong Flu 1968 – 1969 raged on as life went on.

Unprecedented Pandemic?

The Coronavirus Disease 2019, commonly known as COVID-19, was first noted December 2019.  As of September 2, 2020, estimates indicate 25.7 million inflections and 857,000 deaths worldwide.  The virus responsible for COVID-19 is SARS-CoV-2 (severe acute respiratory syndrome-coronavirus-2), the newest in a large family of coronaviruses. 

COVID-19 is indeed a pandemic. Pandemics, regardless of severity, spread quickly worldwide, as opposed to epidemics which are more local (think Ebola). But is COVID-19 “unprecedented?”

Here is a picture of some of the worst worldwide influenza pandemics. The Asian Flu lasted about one year (February 1957 to around March 1958), and killed 1.5 to 2 million people. The Hong Kong Flu also lasted around one year, and killed 1 million people.

The next picture includes characteristics like how fast a virus spreads and severity of symptoms. COVID-19 spreads easier than other similar viruses, but proportion with mild illness is high.

Or Unprecedented Overreaction With Devastating Results?

Past pandemics did not see the widespread lockdown we are experiencing with COVID-19. Therefore, past pandemics did not see the unprecedented economic meltdown we are experiencing today. Measured by GDP, the 2008 U.S. Great Recession pales in comparison. Here is a picture from Tradingeconomics.com

As of August 2020, numerous U.S. companies filed for bankruptcy protection amid lockdowns, including big brands such as Brooks Brothers, Cirque du Soleil, and Neiman Marcus. How many Mom & Pop stores that tend to hire lower-income folks have closed is hard to say.

Woodstock Anyone?

An event that characterized the 1960s was the Woodstock Music Festival. An audience of about 400,000 gathered on a dairy farm in New York state August 15-18, 1969, to watch music notables of the time like Joan Baez, Janis Joplin, and Jimi Hendrix.

Although “fact checkers” like Reuters went out of their way to explain why it is “misleading” to say Woodstock took place in the middle of the Hong Kong Flu pandemic — the event was between waves of the flu — the fact remains that Woodstock was in 1969, and the Hong Kong Flu pandemic was in 1968-1969.

Life is Making Choices

The 1960s were the days of fighting the establishment. Those were the days when young people demanded withdrawal of troops from Vietnam and troops were withdrawn. They were the days when women burned their bras in public, and rights were won. Individualism — otherwise known as “do your own thing” — reigned. In retrospect, Woodstock belonged in 1969.

Today we tow the line. We wear masks. We make our children wear masks. We are OK with going without medical checkups and teeth cleanings. We are OK with lockdowns that put our employers out of business and our families on public assistance. We do not fight back as the establishment dooms our children to sub-par education.

Life means choices.

BLM Protests and “The Moynihan Report”

Moynihan

March of 1965, Assistant Labor Secretary Daniel Patrick Moynihan printed and distributed a report he wrote titled The Negro Family:  The Case for National Action. The report made him famous. However, Moynihan forever remained embittered that what became “The Moynihan Report” was never fully understood or acted upon.

Amid today’s massive Black Lives Matter demonstrations, filled with demands for redress of past and present injustices against Black people, it might be useful to revisit The Moynihan Report. The Report’s suggested remedy will sound outdated to today’s readers, possibly because society chose to take the path Moynihan warned against.

The Moynihan Report is a well-written, well documented treatise meant to counter what Moynihan saw as the misguided policies of President Lyndon Johnson’s War on Poverty. The report presents statistical data and interprets the data with care. It is a shot across the bow: continue ignoring the potent positive role of the traditional American family and suffer the consequences.

Indeed, for anyone paying attention, the centerpiece of Johnson’s Great Society, the War on Poverty, amounted to nothing more than war on poor families.

As an aside it should be noted that Pat Moynihan spoke of dysfunctional families and poverty from personal experience. Although he enjoyed an exceptional career as counselor to Presidents, ambassador to India and the United Nations, and U.S. Senator from New York, his parents were of modest means. Ta-Nehisi Coates, in his excellent article The Black Family in the Age of Mass Incarceration, goes as far as to say that Moynihan “was the product of a broken home and a pathological family… A cultured civil servant not to the manor born…”

War on families: a legacy of slavery

The Moynihan Report notes that while slavery existed in many parts of the world, slavery in America was especially onerous. Under law and custom, slaves were chattel, not entitled to education, religious practice, manumission, and most importantly a family of their own. Such conditions rendered slaves dependent on their masters, unable even to purchase their freedom or find solace in family attachments. Moynihan felt that neither emancipation nor government-granted civil rights could erase this awful legacy.

Emancipation granted freedom, but segregation ensured inadequate education and scant opportunities for advancement. Legislation granted civil rights – those rights government chooses to grant — but did nothing to fully acknowledge that all people are endowed from birth with the unalienable rights of personal liberty and personal responsibility.

Moynihan believed that devoid of a deep sense of personal liberty and personal responsibility, many Black people failed to form strong families or focus on personal advancement.

The bifurcation of American Blacks

In all communities there are those who succeed despite soul-shattering challenges. Moynihan saw a bifurcation between a rising Black middle class and an increasingly disadvantaged Black “lower class.”

There is considerable evidence that the Negro community is in fact dividing between a stable middle class group that is steadily growing stronger and more successful, and an increasingly disorganized and disadvantaged lower class group. There are indications, for example, that the middle class Negro family puts a higher premium on family stability and the conserving of family resources than does the white middle class family.

Moynihan’s concern in his Report is with the “disadvantaged lower class” Blacks. His focus is not on poor whites, Latinos or other persons of color.

Moynihan’s remedy

His remedy for the intractable poverty and chaos Moynihan perceived was to build strong patriarchal family units, in which fathers were the primary breadwinners and mothers the primary caretakers of offspring.

The role of the family in shaping character and ability is so pervasive as to be easily overlooked. The family is the basic social unit of American life; it is the basic socializing unit. By and large, adult conduct in society is learned as a child.

A fundamental insight of psychoanalytic theory, for example, is that the child learns a way of looking at life in his early years through which all later experience is viewed and which profoundly shapes his adult conduct.

The remedy society chose

While Moynihan persistently advocated for strong family units, administrations during his time in office helped the devastation of Black families with policies that fostered dependence on public assistance, absentee fathers, and incarceration. No need for fathers to stick around when moms and children will be cared for via numerous public assistance programs. No need to worry about poor education and work opportunities when there are plenty of prisons to isolate those who turn to crime as a last resort.

And plenty of prisons we have, as noted in the Prison Policy Initiative.

For four decades, the U.S. has been engaged in a globally unprecedented experiment to make every part of its criminal justice system more expansive and more punitive. As a result, incarceration has become the nation’s default response to crime. States of Incarceration: The Global Context 2018.  June 1918.

Such response results in absent fathers or mothers, unemployment due to conviction records, and broken families. The U.S. Bureau of Prisons estimates the current prison population is 38% Black. The U.S. Black population is around 13%. The U.S. “default response to crime” does disproportionate harm to Black families.

After the Great Society troubles remain

As Daniel Patrick Moynihan predicted 55 years ago, government-granted civil rights and public assistance programs focusing on individuals rather than families would do little to improve the lot of the poor and Black. Malevolent efforts such as the war on drugs and mass incarceration further destroy economic and social mobility for the poor and Black.

Intermittently, there are uprisings prompted by particularly egregious events perpetrated against Black people. Today, protests rage throughout the U.S. and the world in response to the May 25th killing by police of George Floyd. Floyd was unarmed, the arrest that led to his killing was for an alleged non-violent incident (suspicion of purchasing cigarettes with a forged $20 bill), and the manner of his killing was barbaric (police’s knee pressing on his neck for 8 minutes and 46 seconds). George Floyd, a Black man, was one of the latest victims at the hand of police.

Protesters today and in the past demand police accountability, even police “defunding.” They demand “social justice” and “equity.” But challenges remain, even as politicians expand the traditional largess in the model of Johnson’s Great Society.

The Moynihan Report, old fashioned and outdated as it sounds, might be worth revisiting.

COBOL: Ancient But Still Issuing Your Unemployment Checks

IBM 360

In spite being 60 years old, the COBOL programming language underpins finance and administrative systems used by businesses and government agencies. COBOL (Common Business Oriented Language) has done its job just fine since it was first used in 1960, so efforts to replace it with modern languages like Python or Java have been half hearted.

Problem is COBOL-experienced programmers are now largely retired, and few younger software engineers are interested in learning COBOL or offered COBOL courses in college.

This situation presents a problem for states trying to deal with the sudden massive surge in unemployment claims due to the coronavirus lockdown and the increase in unemployment amounts mandated by the CARES Act.  Systems based on COBOL don’t have enough people to service them.

This Bloomberg article describes the immediate problem well.

The Covid-19 pandemic has exposed aging, inflexible computer systems at the heart of the U.S. economy — and a shortage of experts to fix the problem. This is slowing the government’s effort to get billions of dollars in stimulus checks to millions of newly unemployed citizens.

The $2.2 trillion CARES Act passed in late March includes a $600 weekly increase in unemployment benefits. That money won’t reach anyone until state agencies update technology systems to reflect the law and handle the flood of new applications.

But the COBOL problem has been waiting for a solution for while. Newer languages could step up to the plate and replace COBOL entirely, but nobody seems to want to undertake the risks or the substantial costs of switching.

So, COBOL remains. Businesses and government scramble for patches when a Y2K or a COVID-19 incident occurs.

Pictured above:  the IBM System/360 Model 50.  In late 1962, IBM announced that COBOL would be their primary development language.  COBOL is machine independent, so mainframe manufacturers readily adopted the language.

Stimulus Plans – Peace For Our Time

CARES allocations

Senate Version of CARES Act that passed the House on March 27, 2020.  Diagram from NPR Special Series: “What’s Inside The Senate’s $2 Trillion Coronavirus Aid Package.”

In difficult times people tend to want immediate solutions, regardless of how those solutions will affect their own future or the future of their descendants.

England’s Prime Minister Neville Chamberlain became the poster child for such actions when on September 30, 1938 he delivered to a jubilant crowd the news that there would be “peace for our time.”

Today the U.S. faces the challenge of a pandemic that is causing not only sickness and death, but also economic havoc. In response to a looming economic disaster, the Administration, Congress, Treasury, and the Federal Reserve all responded forcefully.

Forceful responses, often done hastily under pressure from a fearful public and eager special interests, are never free of consequences.

The Fed’s Response

Between March 17 and March 23, the Federal Reserve significantly increased its power and monetary risk by implementing its plan to provide funds and guarantees to private non-banking entities. This response shifts the burden of default from private investors to the American taxpayer – taxation without representation at its worse. The Just Vote No Blog summarized the Fed’s response in Once Again the Fed Wants to Save Us.

Congressional Response

Close on the heels of the Federal Reserve’s actions, Congress passed three major emergency spending packages, which President Trump signed into law:

* The $8.3 billion Coronavirus Preparedness and Response Supplemental Appropriations Act, signed into law March 6, 2020. The bill provides $6.7 billion in emergency funding to federal agencies responding to the coronavirus pandemic, and $1.6 billion to aid international response.

* The Families First Coronavirus Response Act, signed into law March 18, 2020. The bill includes provisions for paid sick leave, insurance coverage of coronavirus testing, nutrition assistance, and unemployment benefits. Funding available for the program is currently $3 billion. The federal Joint Committee on Taxation estimates that outlays for the next 12 months will be around $97.4 billion.

* The $2 trillion CARES Act (Coronavirus Aid, Relief, and Economic Security Act), signed into law March 27, 2020. CARES estimated allocations are: $560 billion to individuals. $500 billion to big corporations. $377 billion to small businesses. $339.8 billion to state and local governments. $153.5 billion to public health. $26 billion to food programs. $43.7 billion to education and “other.”

“Phase 4,” an “infrastructure” bill is being considered. There is not yet an agreement as to what “infrastructure” might entail.

Future Consequences

The three emergency packages now signed into law, plus the anticipated infrastructure bill, represent huge increases in federal spending. Necessary by most accounts to revive an economy suffering from the devastation wrought be the coronavirus, but not free of future consequences.

As of April 6, 2020, the U.S. national debt stood at $23.9 trillion, the largest in the world for a single sovereign country. CARES and the other rescue packages will add to that already enormous debt. Our leaders under advice of post-Keynesian economists choose to dismiss threats of default or hardships imposed on future generations.

Government grows with spending, and government growth is a concern to many. With growth comes overreach and a moving away from the Republic’s legacy of limited government as spelled out in the Constitution. Our leaders, as well as the public, increasingly demand from government whatever it takes to fix a challenge, often without regard to Constitutional protections over individual rights and private property.

Representative Thomas Massie Speaks Up

A popular recent piece of news was Thomas Massie (R-KY) and his request for a roll call vote to approve the CARES Act in the House of Representatives. The narrative was how dare Massie stand in the way of passage of a piece of legislation designed to save us all from total economic collapse!

Thomas Massie dared because it was important to him that the Republic not die of a thousand cuts inflicted by the “let’s do what it takes” crowd. So, he announced before the vote was to take place that he would mount the challenge of a roll call vote and quorum. That prompted legislators to do their job and ensure a quorum in the passage of CARES, as the Constitution requires. As expected, though, legislators present refused a roll call vote.

The Just Vote No Blog recommends you watch Nick Gillespie’s interview with Representative Thomas Massie. The Representative from Kentucky deep dives into questions leaders and the media gloss over, like what is the extent to government’s role in this pandemic, where is the criteria for lockdowns, is the corporate bailout a transfer for wealth from workers to stockholders, why is so much money going into economic relief instead of into efforts to find a vaccine, test every American, produce ventilators.

Once Again the Fed Wants to Save Us

Fed Eagle

On March 23, 2020, the U.S. central bank, the Federal Reserve, announced extensive new measures to support the U.S. economy as the coronavirus continues to ravage small businesses and the livelihood of workers.

Fed Chairman Jerome Powell not only revived the tools used in the 2008-2009 financial crisis but implemented new ones.

In 2008-2009 then Federal Reserve Chairman Ben Bernanke was charged with saving the U.S. economy from the sub-prime massacre. He did that in part by resurrecting Section 13(3) of the Federal Reserve Act, which allowed him to implement key non-conventional tools to provide liquidity directly to borrowers and investors in critical credit markets: Commercial Paper Funding Facility (CPFF), Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), Money Market Investor Funding Facility (MMIFF), and the Term Asset-Backed Securities Loan Facility (TALF).

In 2020, Fed Chairman Jerome Powell was charged with a similar task. Here is what Reuters said on the matter back on March 18,

Pressure is growing in Washington for the U.S. Federal Reserve to use its emergency powers to lend directly to businesses hurt by the coronavirus, according to four people with knowledge of the discussions.

The U.S. Treasury, senior bankers, the U.S. Chamber of Commerce, and some senior senators want the central bank to make broader use of its powers under Section 13(3) of the Federal Reserve Act to provide credit directly to businesses under “unusual and exigent” circumstances, the sources said.

Thus, the Fed established two new programs to accomplish its bidding: The Primary Market Corporate Credit Facility (PMCCF) facilitates lending to small and medium-sized business. The Secondary Market Corporate Credit Facility (SMCCF) provides liquidity for outstanding corporate bonds.

Despite enthusiasm from some quarters for an aggressive Federal Reserve response, there is apprehension.

The Cato Institute points to a constitutional issue. The U.S. was built on the principle of “no taxation without representation.” The people’s representatives in the U.S. House hold the nation’s purse strings. When the Federal Reserve (over which theoretically neither taxpayers nor Congress have any authority) provides credit with little or no recourse, taxpayers are the ones to absorb defaults without having had any say so in the matter.

In a March 27 Bloomberg Opinion piece Jim Bianco (President and founder of Bianco Research) expressed his concerns. Although the 2020 response is similar to that of 2008-2009, the 2020 programs are larger in scale. Blurring of fiscal policy (carried out by the Treasury under the direction of Congress) and monetary policy (carried out by the Federal Reserve under the direction of nobody) endangers the important separation of these two entities. Special purpose vehicles (SPVs) underlying the Fed’s 2020 rescue programs could be abused, resulting in serious distortions in capital markets.  Bianco says,

In effect, the Fed is giving the Treasury access to its printing press. This means that, in the extreme, the administration would be free to use its control, not the Fed’s control, of these SPVs to instruct the Fed to print more money so it could buy securities and hand out loans in an effort to ramp financial markets higher going into the election.

Given the fact that once government programs are put in place they remain into eternity, the American people might find itself stuck with subsequent administrations that could abuse SPVs not only to ensure re-election but also to centralize control of the economy, artificially invigorate stocks, and reward favored industries.

Bill Gates in 2015: “We Are Not Prepared”

Bill Gates TED Talk

Five years ago Microsoft founder Bill Gates hoped that the Ebola epidemic of 2013 would be the wake-up call that triggered mobilization towards preparedness. In his April 2015 TED Talk Gates said,

If anything kills over 10 million people in the next few decades, it’s most likely to be a highly infectious virus rather than a war. Not missiles, but microbes.

Such prediction becomes credible when we compare efforts at preparing for war vs. efforts at preparing to fighting epidemics.

… we’ve invested a huge amount in nuclear deterrents. But we’ve actually invested very little in a system to stop an epidemic. We’re not ready for the next epidemic.

Preparedness for war entails reserves that can be called into action, mobile units that can be deployed where conflicts arise, and on-going assessments of logistics. Such preparedness does not exist in public health systems.

An effective public health system needs not only trained and flexible boots on the ground, but also coordinated scientific and technological support, as Bill Gates suggested.

But in fact, we can build a really good response system. We have the benefits of all the science and technology that we talk about here. We’ve got cell phones to get information from the public and get information out to them. We have satellite maps where we can see where people are and where they’re moving. We have advances in biology that should dramatically change the turnaround time to look at a pathogen and be able to make drugs and vaccines that fit for that pathogen. So we can have tools, but those tools need to be put into an overall global health system.

In his 2015 talk Bill Gates was speaking from the world’s experience with the Ebola epidemic that started in 2013. Ebola was contained by 2016. Except for isolated cases elsewhere, the Ebola epidemic mostly affected populations in West Africa.

Even more difficult to contain without effective public health systems in place are pandemics, which unlike epidemics spread rapidly globally. Epidemiologists estimated deaths from two recent pandemics: the 1968 Hong Kong Flu caused one million deaths worldwide and 100,000 in the U.S., and the 2009 Swine Flu 575,400 deaths worldwide and 12,469 in the U.S.

Today we are suffering through COVID-19, not a strain of influenza, but a coronavirus in the same family as SARS (Severe Acute Respiratory Syndrome, first emerged in 2002, deaths worldwide 813, fatality rate 9.5%), and MERS (Middle East Respiratory Syndrome, first emerged in 2012, deaths 858, fatality rate 34%).

Preparedness for COVID-19 is minimal in most countries. In the U.S. there is scarcity of tests and protective gear, insufficient hospital beds, inadequate logistics for keeping grocery shelves stocked, no plan to quickly move school aged children from crowded brick and mortar facilities to small groups or on-line instruction. We are left with lockdowns that will result in massive economic and social disruptions.

Effective public health structures that defend populations against disease cost money. However, such public structures are not built by government throwing money at schemes like Medicare for everyone or universal health care. They are built by intelligent research and development, flexible logistics for people and equipment, absence of excessive red tape, and ample market competition that brings costs down.

Also, the costs of effective health structures must be compared to economic upheavals incurred by lockdowns and absences from work as we are seeing with COVID-19.  As Bill Gates said,

I don’t have an exact budget for what this would cost, but I’m quite sure it’s very modest compared to the potential harm.

Today we are seeing the harm brought about by unpreparedness.   Hopefully after COVID-19 is past, we will see determination towards preparedness.

The Keystone Kops Response to Crises

The Keystone Kops

There is nothing humorous about anyone getting sick or dying. Therefore, it is imperative that we all forcefully call attention to societal failings that place people at risk. At present people around the world are dealing in one way or another with the spread of the new virus COVID-19. As is often the case, it takes an emergency such as COVID-19 to reveal how prepared or woefully unprepared our social institutions are in containing major risks. Such revelations go beyond basic preparedness, but point to structural failings that arise from greed, corruption, or just plain lack of common sense and civil discipline.

Popular culture has a symbol for instances where a great deal of uncoordinated and unproductive activity takes place without appreciable positive results: The Keystone Kops.

The name has since been used to criticize any group for its mistakes, particularly if the mistakes happened after a great deal of energy and activity, or for a lack of coordination among the members. For example, in criticizing the Department of Homeland Security’s response to Hurricane Katrina, Senator Joseph Lieberman claimed that emergency workers under DHS chief Michael Chertoff “ran around like Keystone Kops, uncertain about what they were supposed to do or uncertain how to do it.”  Wikipedia

Disciplined Responses

Reports have surfaced comparing the “best” responses to COVID-19 (relatively rapid effective containment) against the “worst” (undisciplined efforts that fail at rapid containment).

Wired published an article illustrating “best” responses. Countries that are exhibiting effective responses are Singapore, Hong Kong, Taiwan, South Korea and Japan. They learned from SARS and H1N1, and used that knowledge to build and maintain permanent public health infrastructures that can be activated in emergencies.

Singapore, Hong Kong, Taiwan, and South Korea all share the characteristic of using their experiences with prior outbreaks to build a system—and then sustaining it. None of them had to deal with the fear of being a first-mover, of being the first city or country to institute seemingly severe countermeasures. Their countermeasures were already in place, waiting to be reactivated.

In other words, these countries were able to leap into action with effective weapons against COVID-19. Again from the Wired article:

Here’s how those Asian countries are doing it: According to a new article in The Lancet, Hong Kong, Japan, and Singapore all developed their own tests for Covid-19 as soon as the genetic sequences for the virus were published, and ramped up production of the materials necessary for those tests. (That’s a sharp contrast with the US, which still doesn’t have enough tests for nationwide use, and may actually be running out of the materials necessary to make them.) Each country instituted controls over immigration (a controversial move that the WHO recommended against, but that they did anyway). They rejiggered their national financial systems to make sure people didn’t have to pay for tests or treatment. (Easier in places where most health care is already nationalized, to be sure—and in some more progressive American states like California, Washington, and New York. In fact, New York Governor Andrew Cuomo even ordered paid sick leave for quarantined people and free hand sanitizer.)

Keystone Kops Type of Responses

The article in Wired gives a good picture of effective responses to pandemics (by the way, “pandemics” do not denote severity of an infectious disease, but the disease’s ability to spread globally). However, the last sentence in the paragraph above merits examination.

The “more progressive American states like California, Washington, and New York” excel in Keystone Kops type of activity, in addition to lacking any semblance of effective public health infrastructures.
California, for example, spends countless millions on its ever growing homeless-drug industry. Streets in major cities like Los Angles and San Francisco are home to thousands of drug addicts and mentally disturbed individuals. Diseases like typhus and leprosy have been detected among this vast unsheltered population. Response? Governor Gavin Newsom declared on Sunday March 15 that private hotel and motel rooms will be used as necessary to house homeless individuals at risk of contracting COVID-19.

Additionally, the Governor wants all individuals 65 and older not to leave their home. Good luck, seniors, obtaining your food, water and medicines. Not that the rest of the California population is doing all that well obtaining supplies given that many grocery shelves are empty.

The homeless are not the only “invisible” inhabitants in the U.S. Undocumented immigrants welcomed in sanctuary cities and states might not be too anxious to be identified. They, along with other working poor, might not have the luxury or “working from home” like their “professional” brethren.

Indeed, as the article in Wired says “Don’t tread on me” Americans are not as willing as residents of Singapore or South Korea to abide by a highly disciplined lifestyle when necessary. So our Keystone Kops leadership have no means of containing pandemics other than invading private property to house those at risk, closing schools but ordering libraries and recreational facilities to take in children of parents who need to keep on working to survive (let that sink in), and urging people to stay home.