Arresting National Decline

Desolation, from Thomas Cole's The Course of Empire series

-by Haydar Khan

I do not believe that civilizations have to die because civilization is not an organism. It is a product of wills.
-Arnold J. Toynbee

What causes national and civilizational decline? Can such decline be reversed? Is the U.S, which currently exhibits multiples signs of national senescence, ranging from its failed response to the Covid–19 pandemic to a longer-running pandemic of prescription drug overdoses to infrastructure decay, truly an exception to this seemingly inevitable force of historical decline? Does the U.S. face a real-world version of Galadriel’s test in J.R.R. Tolkien’s Lord of the Rings saga? Galadriel, an elf-like queen who is offered and resists the One Ring, a magical device that corrupts and eventually destroys any wielder, states: “I pass the test... I will diminish, and pass into the West and remain Galadriel.” What is our American “One Ring”? It is the myth of American Exceptionalism to all forms of decline.

The phenomenon of national and civilizational decline has been examined by historians and intellectuals for centuries. The most prominent account of decline comes from English historian Edward Gibbon’s The History of the Decline and Fall of the Roman Empire. This six-volume series, published from 1776-1789, largely attributed Roman decay to a decline in civic virtue and the influence of a rising Christianity. Oswald Spengler, the German historian and philosopher active in the early decades of the last century, studied the life cycle of human societies and offered his thoughts in his two-volume The Decline of the West, published in 1918 and 1923. In Spengler’s view, there were two phases in human societies: a Culture phase, characterized by creativity and growth, and a decline phase of stifling practicality in lieu of creativity, which Spengler called the Civilization phase. Arnold Toynbee, the noted British historian, devoted immense penmanship to the life cycles of human civilizations. A Study of History is a twelve-volume work written over three decades (1934–1961). In this vast endeavor, Toynbee developed a model to explain the beginnings and ends of civilizations. For Toynbee, growth is led by a creative minority and decline is caused by the inability of the creative minority, to continue innovating. Philosopher Henri Bergson, we may note, had earlier explored the same themes in Creative Evolution and The Two Sources of Morality and Religion, his final two books.

Gibbon, Spengler, and Toynbee provide descriptions of decline and explanations for it, but none of these men offer specific prescriptions for halting decline. (Only Bergson makes such an attempt.) In our time, however, there are two thinkers given to systematic design who have compelling, technically accomplished, and somewhat overlapping explanations as to the root nature of our twenty-first century decline. At the same time, each has proposed solutions that are, for the most part, in stark contrast to each other. These contemporary American thinkers are Professor James K. Galbraith, the progressive economist, and Peter Thiel, the venture capitalist and entrepreneur.

Professor Galbraith’s explanation of U.S. decline is nothing if not comprehensive. He finds the root cause in the economic sphere, generated by a set of interlinking factors. Galbraith accompanies his exploration of the economics of decline with a short set of measured, New Deal-style, risk-averse prescriptions for reversing it. All this is laid out in The End of Normal, a work focused primarily on the U.S. case.

Peter Thiel’s focus is on U.S. and (more broadly) Western decline. He, too, offers an economic explanation for America’s condition. Reflecting his background as a venture capitalist, Thiel’s thesis is rooted primarily in technological stagnation. But his proposal for reversing America’s decline transcends the economic and technological spheres to incorporate cultural and psychological considerations. This is a strength. It is a common error to treat economics as divorced from cultural, historical, and psychological considerations. It is Thiel’s move beyond economics that, I contend, will earn his solutions acceptance in lieu of Galbraith’s. What is the specific advantage that Thiel’s movement has? It lies in his resort to the scapegoat mechanism of Thiel’s intellectual mentor, the late Réne Girard.

Let us explore the analyses and proposals of Galbraith and Thiel, two formidable theorists in the Toynbee tradition, and consider carefully the insights of Réne Girard, the French social critic, historian, and philosopher, who professed at Stanford for many years before his death in 2015.

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James Galbraith is a public intellectual with numerous articles and books to his credit on an impressive variety of topics. His investigations range from income inequality and financial corruption to militarism. Galbraith has argued in the past, most notably in The Predator State (2008) that the U.S. government has been captured by oligarchs and has been repurposed from serving the public good to enriching said oligarchs. Assailing wealthy, powerful elites and fighting for the public purpose is a tradition that Galbraith inherits from his father, the late John Kenneth Galbraith, a prominent economist and Rooseveltian New Dealer. In this context, it may surprise those familiar with Galbraith père et fils that six years ago the younger man published The End of Normal, a pessimistic book about America’s poor growth prospects.





In Normal, Galbraith argues that there are four fundamental and interacting components to the economic decline of the U.S. The first is a choke-chain effect on economic growth, when demand for natural resources (primarily hydrocarbons) exceeds available supply. The Covid–19 crisis has altered this imbalance, but only temporarily, not structurally. As is well-known, the U.S. emerged from World War II an undamaged industrial colossus relative to a devastated Western Europe and an exhausted Soviet Union. It was awash in its abundant oil resources and able to secure access to foreign resources by way of, among other things, the efforts of U.S. intelligence services. These factors allowed America to embark on a path of stable economic growth that endured until the first oil shock of the 1970s. But the scale and efficiency the U.S achieved due to these circumstances came with a tradeoff: The increase in economic size meant a larger proportion of total production costs would be fixed: expenses, such as infrastructure and pensions, that are inelastic because they are not dependent on the level of goods or services produced.

These fixed costs skyrocketed with the first oil shock and brought stable economic growth in the U.S. to a very abrupt halt. The two oil shocks thus induced a period of economic uncertainty due to the decline of cheap, steady oil supplies. This was structural, as against situational disruption, which is what the spread of Covid–19 faces us with today. Increased financialization and speculation characterized the economic system that evolved to cope with this reduction in opportunity for “honest profit.” Here we find the choke-chain effect: The shift toward finance capital inflated the price of scarce resources, so slamming the lid on future growth.

This transformation of the U.S. economy into a financialized/speculative mode is Galbraith’s second factor to explain U.S. economic decline. Here he considers the “financial casino” induced by the unstable nature of commodity prices and de- regulation. This, he argues, has resulted in chicanery not only in the commodities markets but also in the information-technology sector. Out of this came the dot.com crash in 2000 and subsequently the collapse of the once-stable U.S mortgage market, which led to the great financial crisis of 2008. As Galbraith excellently puts it: “Fraud is a response, in short, to the failure of lenders to adjust to a decline in real possibilities.”

The third of Galbraith’s decline factors is the changing nature of warfare. This leaves the once-preeminent U.S. military incapable of projecting power in a transformed geopolitical environment and securing dependable access to cheap resources (linking into the aforementioned factor of rising resource costs).

Galbraith goes on to identify other shifts that render the U.S. military unable to conduct war effectively: the increasingly urban nature of conflict zones, the evolution of asymmetric technologies (drones, explosives), an ever-present media and readily available internet access to facilitate rapid reporting that reveals the carnage of war, short tours of duty that are insufficient in establishing stable long- term occupations, the decline in duration of military occupations, and the immense cost of training and maintaining soldiers.

Galbraith’s fourth and final factor is the rate of “creative destruction” in the digital technology sphere. This is destroying more jobs than it is creating, he argues. The growth-dampening effect of this “digital storm” is two-pronged, as Galbraith explains: “First, the price of the equipment required to make the new digital products—measured per unit of output-- falls rapidly over time, reducing the value of business investment in the GDP. Second, the products themselves replace marketable output.”

What to do about these four impediments to economic growth? This is Galbraith’s question, and his replies are as follows: reduce military spending, decentralize banking, regulate and reduce the size of influential financial institutions, strengthen existing public-insurance programs, temporarily lower age requirements for Social Security, increase the minimum wage, and increase estate and gift taxes to reduce dynastic wealth and encourage philanthropy. The purpose of these modest proposals is to achieve a sustainable, slow-growth economic model. Galbraith’s proposals to combat decline are at their core redistributionist in the New Deal tradition, but they are rather tame next to the New Deal Keynesians of the 20 th century. The reason for this intellectual caution? Galbraith states his case clearly: “The institutional, infrastructure, resource basis, and psychological foundations for a Keynesian revival no longer exist.”

From the vantage point of 2020, Galbraith’s case seems amply supported by evidence. Barak Obama, instead of ushering in a New Deal 2.0 in response to the 2008 financial crisis, bailed out Wall Street, failed to punish speculators, delivered only moderate economic stimulus, and pushed for lobbyist-friendly medical reform legislation that failed to correct the many defects of the U.S. health-care system. When Democratic Socialist Bernie Sanders ended his second presidential bid on April 8, it marked another failure to bring a program of fundamental reforms-- a program intended at its core to reverse the trend toward decline-- into the White House. The Covid–19 crisis, despite its severity and urgency, does not appear to be prompting any new efforts in this direction.

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Peter Thiel made his initial fortune by co-founding (and then selling) the electronic-payments service PayPal. Since that time, Thiel has created various other enterprises, ranging from venture-capital firms such as Founders Fund to a data-analysis firm named Palantir. In addition to his success as a venture capitalist, Thiel is member of the steering committee of the Bilderberg meetings, an annual conference where European and American elites discuss how to maintain and promote free-market capitalism. He was a supporter of Donald Trump’s presidential campaign, a highlight of which was Thiel’s delivery of a pro–Trump speech at the Republican National Convention in July 2016. In that speech, Thiel explained Trump’s rise as a response to national decline resulting from the damaging consequences of free trade, out-of-control militarism, increasingly expensive health care, rising student loan debt, and stagnant wages. Galbraith, of course, shares many of these concerns.





Thiel’s explanation for our national decline has been delivered, with much more detail, in various other formats over recent years. An essay Thiel wrote for the National Review (2011) elaborates his declinist viewpoint. In The End of the Future, Thiel argues that technological and scientific progress, the basis for economic growth, have stalled out. The lack of innovation in energy, agricultural, medicine, and science in general, he contends, have cut into standards of living that can no longer be attenuated by accumulation of consumer debt and cheap goods from free-trade partners, particularly China. Even gains in the digital tech sector, where Thiel made his initial fortune, are explained as having stalled out and now amount to illusory productivity.

So far, Galbraith and Thiel seem to be traversing similar paths, especially as regards the impediments to growth of rising resource costs and increased digitization. However, Thiel diverges from the progressive Galbraith and speculates that the decline in technological innovation has been concealed by battles over identity politics. It is here Thiel begins to bring questions of culture and psychology into his inquiry. As he puts it: “Today’s aged hippies no longer understand that there is a difference between the election of a black president and the creation of cheap solar energy; in their minds, the movement towards greater civil rights parallels general progress everywhere.” Thiel has recently fleshed out his proposal for dealing with this decline in a speech delivered at the first National Conservativism Conference in July 2019. In “The Star Trek Computer Is Not Enough,” he retraces the ground covered in his earlier National Review essay while also exploring new themes. He assails Silicon Valley for its lack of innovation and its too-close-for-comfort relationship with China, while also attacking China for its unfair trade practices.

Later in the speech, Thiel also delivers a jeremiad against higher education for handing out overrated, grade-inflated educations and saddling students with debt that cannot be discharged in bankruptcy. He claims that, as mentioned in the National Review piece, the American left ignores national decline by obsessing over identity politics, while the right is in a state of denial about national decline as it insists that the U.S. is “exceptional” and immune to such decay. This is Thiel’s argument for registering a psychological component in any effort to achieve the national solidarity necessary to channel government resources into reversing decline. Indeed, Thiel, who is known for his adherence to libertarian philosophy, acknowledges that government in the past was capable of achieving amazing feats, such the Manhattan Project and the Interstate Highway System. Its shambolic response to the Covid–19 pandemic stands as tragic testimony to the lapse of “can- do” America.

What, then, is this psychological factor that can reverse our national decline, so overcoming the hurdles on right and left? This is Thiel’s question. His reply appears to be the use of Girard’s famous scapegoat mechanism to break a societal bottleneck.

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Réne Girard was a French polymath who made intellectual contributions to a wide variety of fields, ranging from philosophy to anthropology. He is best known for his theories of mimetic desire and the scapegoat mechanism. Mimetic desire is the theory that mimicry (imitation) is fundamental for human society. It is necessary to acquire skills, as in an apprenticeship, but left unchecked, unrestricted mimesis causes us to covet what others have. This Girard calls mimetic desire. Desire of this kind can escalate and lead to conflict and violence. In essence, a contradictory conflict of societal messaging (mimicry is necessary and mimicry is dangerous), results in what fellow polymath Gregory Bateson called a double bind.

Girard’s solution to nullifying this double bind is his other well-known intellectual contribution: the just-mentioned scapegoating mechanism. According to Girard, society nullifies the Batesonian double bind by committing what is called a Logical Types error (a member of a group taken to represent the entire group) and assigning blame to an innocent victim called a scapegoat. Consequently, if the scapegoat is sacrificed, the potential for violence can be discharged and societal cohesion maintained. A good example of scapegoat theory is Christianity itself. Jesus represents a vessel of sorts, taking upon himself the sins of mankind and extinguishing them upon his death on the cross.

Peter Thiel has acknowledged Girard’s impact on his life and way of thinking (here and here) and even spoke at a memorial service for Girard after he died.

Although Thiel does not acknowledge doing so, it appears he has taken Girard’s insights and applied them to the political realm. In effect if not by conscious design, he has selected as collaborative scapegoats Google, the politically correct “left,” and China. It appears that Thiel, and fellow travelers such as Missouri Senator Josh Hawley, want to rally the fractious American people (as FDR did in is time) by focusing their anger on enemies, foreign and domestic, to generate unity and get the populace to consent to great technological innovations underwritten by the government while being distracted from the true sources of our inability to progress technologically and economically. If the culprits above are scapegoats in the Girardian sense, to what degree is the blame laid upon them false, and what true culprit is Thiel distracting from?

As Galbraith pointed out in The End of Normal, the era of solid economic growth from the end of World War II to the oil shock of the 1970’s has been over for quite a while. What we in the U.S. experience now is a consequence of the end of that solid growth era: a country ruled by corporate elites who have captured the machinery of government to enrich themselves at the expense on non-elites. This is what Galbraith calls the predator state. These predatory oligarchs and their rule of the country are what Thiel, a billionaire, seems to want to distract from while simultaneously drumming up anger against his coalition of scapegoats to make possible great technical and scientific projects underwritten by the government. What about Thiel’s scapegoats?

Thiel has made the accusation that Google is committing treason by working for the Chinese government on AI research, spurning working with the U.S. government, and should be investigated by the FBI and the CIA. It appears, however, that Thiel, as a libertarian, has ideological opposition to AI and is ideologically and personally given to cryptocurrencies, Bitcoin in particular. As Thiel said in an interview with LinkedIn founder Reid Hoffman: “Crypto is decentralizing, AI is centralizing. Or, if you want to frame it more ideologically, crypto is libertarian and AI is communist." There is a further irony, in that Thiel’s company Palantir, is utilized by various U.S. government agencies for data collection and surveillance, a seeming contradiction for an ideological libertarian.

What of the PC left and its obsession with identity politics? There may be a kernel of truth to Thiel’s accusation that the American left’s obsession with identity politics conceals the lack of material progress in the U.S. since the end of the era of solid growth. Intellectuals on the left, such as the American literary theorist Walter Benn Michaels and political scientist Adolph Reed, have long criticized leftist obsessions with identity politics as a neoliberal weapon to distract from issues of class and economic inequality. Thiel has taken this issue, grounded in reality, and intertwined it with his dislike of his ideological enemies, Google and China. As he stated in an interview with conservative TV personality Tucker Carlson: “There’s probably a broad base of Google employees that are ideologically super left wing, sort of woke, and think that China’s better than the U.S. or that the U.S. is worse than China.”

We arrive at the dominant scapegoat in Thiel’s playbook: China. Like Thiel’s accusation against the left, his scapegoating of China has kernels of truth in it. There were warnings about the dangers of free-trade agreements such as GATT in the early 1990’s. Sir James Goldsmith, financier and politician, cautioned about the dangers in his books The Trap and The Response. In particular, Goldsmith was concerned about the negative effects of labor arbitrage on the fabric of Western societies and even had a prescient warning about China’s ability to provide Western corporations with a massive reservoir of cheap labor and run large trade surpluses: “China is determined to recapture its preeminence in Asia and to make itself so strong that it will never again be subjected to perceived slights or indignities from the West. If it keeps itself together, it will become a great world superpower, geopolitically, militarily and economically.” Goldsmith published this thought in 1995. Fast forward to 2020: China is by some measures the world’s largest economy, the world’s leading manufacturing economy, and largest exporter of goods. It has ambitious plans (Made in China 2025) to move beyond dominance in manufacturing cheap goods and dominate high-tech industries such as robotics, artificial intelligence, and biotechnology.

So it appears Thiel’s focus on China is not without merit. But he seems to want take a highly competitive rival and convert it into an enemy of the U.S., as evidenced his numerous speeches and interviews about China. Adversary and competitor are two different things. There is a bit of blame deflection here, as it was U.S. corporations and their owners who chose (and were not forced) to engage in free trade with China, taking advantage of its massive army of cheap labor and nonexistent safety standards for profit-- and thus abetting China’s growth into a formidable economic powerhouse.

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If we are to accept Galbraith or Thiel in their respective explanations for decline and their propositions for reversal, then the U.S. has two paths before it: a moderate approach using New Deal Lite economic mechanisms to achieve a slow yet growing economy, or a bold, risk-taking approach to governance that relies on the primordial scapegoating mechanism described by Réne Girard.

The major issue with Galbraith’s progressive approach is that the solidarity needed to achieve even the slow-growth approach he advocates is notoriously absent. This is the missing psychological factor that Galbraith acknowledged was necessary for another full-blown New Deal and is a critical limiting factor in this weaker case as well. Indeed, it was only the threat of the rising fascist tide that united the citizenry and enabled FDR to ramp spending to levels that ended the Great Depression in America, not the New Deal. The looming threat of environmental devastation from climate change would seem to have the necessary properties needed to unify the populace but the abstract nature of such a collective action problem (“the enemy is us”) seemingly puts such an approach out of reach.

The current divide between the American left and right appears to be an unbridgeable, ever-widening gap, making bipartisan electoral support for Galbraithian reform measures extremely unlikely. Indeed, even among what passes for the left in the U.S. is caught up in internecine battles over class issues (evinced by Bernie Sanders populism) versus culture and identity issues. The consequences of this battle were on full display in the results of the 2020 Super Tuesday elections. Bernie Sanders, standard bearer of a class focused American progressivism, was trounced by corporatist Democrat Joseph Biden, who dominated him among African–American voters and female voters. This autumn’s election, however it is fought amid the Covid–19 crisis, could well deliver Biden to the White House. Unfortunately, Biden is far less likely to attempt Galbraithian reforms than Sanders, as Biden is a defender of the Obama status quo. Indeed, as this essay is being finalized, an Obama alumnus, former Secretary of the Treasury, Lawrence Summers, is apparently advising Biden on his post-Covid-19 economic revival plan. Therefore, due to partisan divisions and lack of a unifying threat, it seems that the Galbraithian approach is doomed to fail.

It appears that Thiel notes this weakness in collective psychology and goes on to exploit the left’s fractious state. In brilliant, Aikido-like fashion, he converts it into a domestic scapegoat (part of what his ally Hawley calls the “cosmopolitans”) to unite the right and political moderates-- and distract, essential to note, from the corporate oligarchy. In addition to taking advantage of the left’s division by employing the scapegoat mechanism, Thiel targets China, bundled together with the ineffective left and technical rival Google, as a replacement for the old Cold War scapegoat, the defunct Soviet Union. The Soviet threat, however formidable or otherwise, induced a level of domestic political cooperation and national unity that allowed for great endeavors such as the aforementioned Interstate Highway Program, so this method has a proven track record.

One flaw in Thiel’s approach is that, as Galbraith points out, the material conditions that allowed for ambitious, Manhattan Project-level investments are no longer present. What government programs might have to be sacrificed to achieve such endeavors? Thiel himself states in the aforementioned “The End of the Future” essay: I am not aware of a single political leader in the U.S., either Democrat or Republican, who would cut health-care spending in order to free up money for biotechnology research-- or, more generally, who would make serious cuts to the welfare state in order to free up serious money for major engineering projects. This connects to another potential flaw in Thiel’s scheme: Will the psychological advantage of Thiel’s strategy be sustainable if, say, what remains of the social safety net is sacrificed for such purposes? Why not reroute spending from a wasteful (and ineffective, as argued by Galbraith) military to bolster industrial R&D ambitions. Perhaps Thiel ironically needs to reject another sacred tenet of free-market orthodoxy, fear of national debts and deficits. Thiel has already demonstrated his capacity to reject herd thinking, as he has rejected the aversion to government supported industrial policy. This would allow preservation of the social safety net while simultaneously embarking on an expansion of what economists call the Production Possibilities Frontier. However, an embrace of a heterodox school of thought like Modern Monetary Theory (MMT) may be beyond the pale, even for Thiel. In addition to backlash from shredding the social safety net, what civil liberties might be sacrificed in the name of waging a new Cold War against China? Right now (March 2020), the U.S. and much of the world is under threat of the virus Covid–19, which seemingly originated in China. Senator Hawley has used this as a springboard to drum up support for an investigation into a coverup by China and, along with others, has even implied that China owes the U.S. and the world reparations for the virus. At the same time, many countries (Israel, China, UK) are implementing harsh measures to quash the virus. Will the protections of the U.S. Constitution be shredded to stop the growth of the viral infections and simultaneously be weaponized to quell dissent against a war with China?

Does Thiel nurse mimetic desire for what China-- with its social cohesion, manufacturing capacity, and ability to plan-- is able to accomplish and the U.S. cannot any longer? The connections Thiel makes between economics and other factors are astute, as are the connections that Galbraith makes. But as they stand, neither position is likely to make headway by itself. There are numerous reasons for this, as I have suggested. It begins to look as though the way out of our national impasse lies in a system beyond that of the purely Schumpetarian approach of Thiel and the purely Rooseveltian approach of Galbraith, a synthesis that takes the best of both positions and provides a way forward for the U.S.

A special thanks to P.L., J.G., and I.W. for their feedback and assistance.

So Un-Trumpian That Fauci Hasn't Been Fired Yet

This is quintessentially Trumpian: "falsely asserting how quickly automakers including GM, Ford and Tesla can manufacture ventilators to help fill an acute U.S. shortage of the medical equipment for coronavirus patients. Ford and GM have yet to start production, and it would take them months, if not longer, to begin production, if it’s even possible." And so was this: "Our country wasn't built to be shut down."

I keep hearing people moaning that Anthony Fauci, the director of National Institute of Allergy and Infectious Diseases, is the kind of guy we need leading the U.S. response to the pandemic now, not the clownish, self-serving Trumpanzee. You might want to read Jon Cohen's interview with Fauci at Science magazine, which appears to explain why Trump seems to have side-lined Fauci yesterday. Cohen introduced him as "the scientific voice of reason about how to respond to the new coronavirus." Although Kushner-in-law, has tried inserting himself into the decision-making process, Fauci chairs the White House Coronavirus Task Force. The first question Coehn asked him was how he is. He averred that he is neither infected nor fired. He said that Pence tries to keep the crowds down at the meetings and that when more than 10 people show up, he tells them to go to another room. Trump-- not so much. "The situation on stage [for the press briefings] is a bit more problematic," said Fauci. "I keep saying, is there any way we can get a virtual press conference. Thus far, no. But when you're dealing with the White House, sometimes you have to say things one, two, three, four times, and then it happens. So I'm going to keep pushing."

Q: What about the travel restrictions? President Trump keeps saying that the travel ban for China, which began 2 February, had a big impact [on slowing the spread of the virus to the United States] and that he wishes China would have told us 3 to 4 months earlier and that they were “very secretive.” [China did not immediately reveal the discovery of a new coronavirus in late December 2019, but by 10 January, Chinese researchers made the sequence of the virus public.] It just doesn't comport with facts.

A:  I know, but what do you want me to do? I mean, seriously Jon, let’s get real, what do you want me to do?

Q: Most everyone thinks that you’re doing a remarkable job, but you're standing there as the representative of truth and facts but things are being said that aren't true and aren't factual.

A: The way it happened is that after he made that statement [suggesting China could have revealed the discovery of a new coronavirus 3 to 4 months earlier], I told the appropriate people, it doesn't comport,  because 2 or 3 months earlier would have been September. The next time they sit down with him and talk about what he’s going to say, they will say, by the way, Mr. President, be careful about this and don't say that. But I can't jump in front of the microphone and push him down. OK, he said it. Let's try and get it corrected for the next time.

Q: You have not said China virus. [Trump frequently calls the cause of the spreading illness known as coronavirus disease 2019 (COVID-19) a “China virus” or a “Chinese virus.”]

A: Ever.

Q: And you never will, will you?

A: No.

Q: I'm curious about some things that aren't happening on a national scale. One is, why are shelter in place orders happening state by state? Why are we doing this sequentially? Is that a mistake?

A: No, I don't think we could say it's a mistake or not a mistake. There is a discussion and a delicate balance about what’s the overall impact of shutting everything down completely for an indefinite period of time. So there's a compromise. If you knock down the economy completely and disrupt infrastructure, you may be causing health issues, unintended consequences, for people who need to be able to get to places and can't. You do the best you can. I've emphasized very emphatically at every press conference that everybody in the country, at a minimum, should be following the fundamental guidelines. Elderly, stay out of society in self-isolation. Don't go to work if you don't have to. Yada, yada, yada. No bars, no restaurants, no nothing. Only essential services. When you get a place like New York or Washington or California, you have got to ratchet it up. But it is felt-- and it isn't me only speaking, it’s a bunch of people who make the decisions-- that if you lock down everything now, you're going to crash the whole society. So, you do what you can do, as best as you can. Do as much physical separation as you can and ratchet it up at the places you know are at highest risk.

Q:  But I heard a guy say, if you think you're doing too much, you're probably doing the right amount.

A: That’s me.

Q: I know it's you. The “15 Days to Slow the Spread” campaign doesn't mention religious gatherings. I know Pence mentioned them yesterday. But why aren’t they on the 15 days recommendations? All these other places are mentioned.

A: It was implied in no crowds of more than 10 people. But you’re right, crowds in church are important and every time I get a chance to say it, I mention it. I can't really criticize them strongly for that at all. When you say less than 10, it makes common sense that it involves the church. I say it publicly and even the vice president has said it publicly.

...Q: At Friday’s press conference, you put your hands over your face when President Trump referred to the “deep State Department,” [a popular conspiracy theory]. It’s even become an internet meme. Have you been criticized for what you did?

A: No comment.

Q: We've seen creative ideas about how to respond in other countries that we aren’t adopting. China uses thermometers at supermarkets before letting people in. Should we be considering that?

A: Yes, of course. I think the logistics of that have to be worked out. That was discussed. All these things are discussed. Not all of them are implemented. This is something that should be considered. I will bring it up at the next task force meeting and see whether there’s some sort of a logistical, bureaucratic reason why it can't be done. The rationale for doing it is at least worth serious consideration.

Q:  Big picture: We've had all this pandemic preparedness. Why did this fail? What went wrong?

A: I think we'll have to wait until it is over and we look back before we can answer that. It's almost like the fog of war. After the war is over, you then look back and say, 'Wow, this plan, as great as it was, didn't quite work once they started throwing hand grenades at us.' It really is similar to that. Obviously, testing [for the new coronavirus] is one clear issue that needs to be relooked at. Why were we not able to mobilize on a broader scale? But I don't think we can do that right now. I think it's premature. We really need to look forward.

The following day Allyson Chiu, wroting for the Washington Post, reported that Fauci "has been charged with a herculean task: trying to keep President Trump’s public statements about the novel virus rooted in fact." Her read of the interview is that "Fauci's frustration is showing... On more than one occasion, Fauci, described by the Washington Post’s Ellen McCarthy and Ben Terris as 'the grandfatherly captain of the corona­virus crisis,' has found himself in the uncomfortable position of having to publicly contradict the president-- a risky action that could conceivably jeopardize the scientist’s job... Most recently, Fauci has sought to temper Trump’s comments touting an old anti-malarial drug as a potential treatment for covid-19. At a news conference Friday, one day after Trump called the medicine a possible 'game-changer,' Fauci said the only evidence of the drug’s promise so far has been 'anecdotal,' adding, 'So you really can’t make any definitive statement about it.' In an appearance on Face the Nation Sunday, Fauci downplayed the disagreement, telling CBS’s Margaret Brennan that 'there isn’t, fundamentally, a difference' between his view and Trump’s on fighting the virus. 'I was taking a purely medical, scientific standpoint and the president was trying to bring hope to the people,' he said."

False hope, though, is all Trump offers.

The Q&A with Science magazine came on the heels of two other illuminating interviews Fauci did that came out over the weekend, prompting some to worry that he might endangering his position.

“Fauci’s going to get fired,” tweeted journalist Joe Nocera. “He’s been way too honest in interviews this weekend.”

But, in a recent interview with The Atlantic published Sunday, Fauci said he didn’t anticipate losing his position.

“I don’t think they’re going to try to silence me. I think that would be foolish on their part,” he said. “I think, in some respects, they welcome my voice out there telling the truth. I’m going to keep doing it. And no matter what happens to me, I’m going to keep doing it.”

Polly Cleveland is an Adjunct Senior Research Scholar at Columbia University's School of International and Public Affairs and she's trying to figure out how to cope with the other aspect of the pandemic-- the economic one. Or rather, she's trying to figure out how the government should. In an e-mail today she noted that "As the Great Depression worsened, the new President Franklin D. Roosevelt greatly expanded the powers of an agency created by outgoing President Herbert Hoover: the Reconstruction Finance Corporation. Under its dynamic leader, Houston businessman Jesse Jones, the RFC first made loans to prevent banks and businesses from collapsing during the Depression, and then organized and funded production of military suppplies for World War II. In the 1989-1995 period, Congress created a similar agency, The Resolution Trust Corporation, to deal with failed savings and loan banks. Historian Michael Lind and economist James Galbraith propose that Congress should immediately create a federal Health Finance Corporation to address the Coronavirus crisis:

The first wave of Covid-19 costs is upon us. Public funds are now required to pay for the production of protective suits, masks, and testing kits; additional hospital beds, supplies, respirators, oxygen tanks, and intensive care units; the hiring and training of additional health care workers and the funding of emergency research and development. The $8.3 billion in emergency funding passed by Congress and signed by the president last week is the necessary first installment.

A second wave of costs will follow. It will be much larger and, for many, it will be lethal in a different way. The pandemic will bring a collapse of air travel and threats of bankruptcy to many businesses, large and small, whose customers will avoid crowds. Services of all kinds-- including retail stores and restaurants-- will be hard hit. Workers in those sectors will lose pay and in many cases their jobs. Debtors and taxpayers will have trouble making payments, especially if major cities go on lock-down, as all of Italy did on Wednesday, shuttering all stores except supermarkets and pharmacies.

The length and depth of this meltdown may depend on the course of the epidemic over the summer. Not every consequence can be foreseen. The situation is moving fast, and there is an immediate need for a federal agency to manage resource allocation and the financing of the response.

To meet this need, Congress should create a time-limited government corporation, a Health Finance Corporation. It should be modeled on the Reconstruction Finance Corporation, created during the Depression and used to support the New Deal and the World War II mobilization.

The Health Finance Corporation should be a wholly-owned government corporation, similar to the Commodity Credit Corporation, the Export-Import Bank, and the Pension Benefit Guaranty Corporation. Temporary and subject to recharter by Congress after a few years, it would resemble the Resolution Trust Corporation, which dealt with failed savings and loan institutions between 1989 and 1995.

As a government corporation, the Health Finance Corporation would have greater flexibility than a Cabinet department or independent agency. The CEO and board would be appointed by the president and confirmed by the Senate, and should include medical experts, engineers and logisticians, key cabinet officers, as well as designees of the Senate and House leaders from both parties.

The Health Finance Corporation would require full financial powers and the necessary flexibility to meet the unexpected needs of the coronavirus pandemic. Like the Commodity Credit Corporation and the Small Business Administration, it should be empowered to make loans, loan guarantees, and grants. It should have the power to provide emergency funding to the Centers for Disease Control, the National Institutes of Health, the Department of Homeland Security, and the Department of Defense as well as state and local governments, health insurance companies, medical firms, and nonprofits and service organizations. The Health Finance Corporation should also be authorized to buy equity in firms whose survival or rapid expansion is needed to combat the pandemic and stabilize core economic activities, such as utilities and other basic services.

The Health Finance Corporation would be an efficient one-stop shop for financial resources in this crisis. It could fund clinics, factories, emergency field hospitals, quarantine centers, civilian supply-- whatever is needed to get the nation through the crisis. It could pay for emergency R&D by the NIH, universities, and private drug laboratories. It could make grants to existing hospitals to buy beds and add staff. It could rescue critical medical goods suppliers. It could do all of this rapidly, with public oversight but a minimum of red tape.

Unlike a conventional federal agency, the Health Finance Corporation could raise funds by mobilizing private capital. As a wholly-owned government corporation, it would have no shares. But it could issue bonds, backed by the full faith and credit of the US government. With the entire Treasury yield curve under 1 percent, there is no financial constraint. Indeed, private investors are clamoring for safe government bonds. There is no need for new taxes right now.

The Reconstruction Finance Corporation is the most important precedent for a new Health Finance Corporation. Created in 1932 by President Hoover to stabilize the banking sector, the Reconstruction Finance Corporation was expanded under President Roosevelt to provide loans to state governments and aid farmers, homeowners, and exporters. Run by a legendary Texas business leader, Jesse Jones, it created special-purpose subsidiaries during World War II, including the Defense Plant Corporation, which built factories for explosives, ammunition, and other materiel. Before its final disbanding in 1957, it financed civil defense hospitals thought necessary during the Cold War.

From the Great Depression to the savings and loan crisis, government corporations have been created to mobilize public and private capital in national emergencies. Congress and the Trump administration should act to meet the pressing needs of the country and counter the economic effects of the Covid-19 crisis by creating, empowering, and providing capital for a Health Finance Corporation immediately.

The Dow almost hit 18,000 yesterday, despite-- or because of-- the panic from the Fed. Today it opened with a bull trap-- a fake rally. McConnell keeps trying to pass an inadequate goodies-for-corporations-laden stimulus package but he's starting to realize that with so many of his members in quarantine, he's going to have to work with the Democrats, and give up-- at least partially-- his plans to screw working families some more... the GOP go-to position for any national emergency. The Miami Herald editorial, Coronavirus is killing us in Florida, Gov. DeSantis. Act like you give a damn on Sunday, was aimed only at one Republican-- Florida Governor Ron DeSantis-- but it could just as well been aimed to conservatism and the Republican Party in general:

There is no operator’s manual for handling the most singular health threat in this country in more than a century. But if there were, we would urge Gov. Gavin Newsom, of California, Gov. Andrew Cuomo, of New York, or Gov. Ned Lamont of Connecticut to share it with Florida’s governor-- quickly. These other state leaders have taken decisive actions, not necessarily popular, but deemed necessary, nonetheless, to slow the virus’ spread. Newsom ordered the 40 million state residents, with some exceptions, to stay home. Cuomo, Lamont and others have issued similar directives.

Unfortunately, DeSantis, who despite trying to appear large and in charge in front the microphone and TV cameras delivering coronavirus updates, has been a timid leader in the face of the growing scourge-- and growing number of deaths-- from the disease in his state. By Saturday, the number of confirmed cases had exceeded 700. At least two more people had died bring the state total to at least 12. The governor announced that he was thinking about isolation shelters for people with confirmed COVID-19 or symptoms. Again, no details, no idea when it could happen.

Like we said, timid.

... In Indiana, Pence’s home state, a hospital chain is begging the public to sew face masks for use by its overwhelmed and underresourced staff. The hospitals’ Facebook post includes a video, pattern and instructions. In Georgia and California, the people who play doctors on TV are donating the contents of their costume and props departments to their real-life role models who have been told by our government to improvise essential safety gear using bandanas, scarves, and paper napkins.

...The president has clearly washed his hands of this national ordeal. After his administration has known since January that the deadly wave of coronavirus was going to wash ashore; after reportedly seeking to suppress the number of confirmed infections in the country by slow-walking test kits to the states; after taking “no responsibility” for the spread the disease domestically; after telling governors they’re on their own if they need medical supplies; after having no words of comfort at a Friday press conference-- Not. One. Word.-- for scared Americans, it’s not a stretch to say that this president does not fundamentally care whether we live or die.

DeSantis must step up, whether he ticks off his benefactor Trump or not. He must add his voice to the bipartisan group of U.S. lawmakers and insist Florida get those “vital medical supplies, equipment, and personnel required to protect healthcare professionals, treat patients and combat the spread of COVID-19.” Otherwise, he’s as derelict as the president.


He must spearhead a plan to help the abruptly out-of-work. DeSantis made a decent start by eliminating the requirement that people seeking unemployment benefits must actively be looking for a job. Now, he must raise the abysmally low payment rate. In Florida, unemployment can reach a measly maximum of $275 per week, for anywhere between 12 to 23 weeks. In high-cost South Florida, that’s a joke. In fact, according to FileUnemployment.org, Florida is almost rock bottom in what it pays for unemployment insurance compensation. Only Alabama, Louisiana, Arizona and Mississippi, which pays the lowest at $235, keep Florida from complete embarrassment.

By raising the rate of payment, Florida will draw down more in federal funds. A provision in the coronavirus relief package passed last week by Congress and signed by the president-- What else could he do?-- says federal government will pay whatever Florida needs for unemployment compensation, U.S. Rep. Donna Shalala told the Editorial Board. However, those funds will be based on the level that individual states already pay. Florida’s pay rate is so low, Shalala said, that, “A lot of our tax money is going to go to Michigan.”

Why would DeSantis allow that to happen? Will he let a “small government is best” ideology cheat Floridians out of adequate healthcare, as did his predecessor’s refusal to expand Medicaid?

There are nearly 400,000 people employed in Florida hotels and businesses that support the hotel industry who are out of a job, according to data released by the American Hotel & Lodging Association. That number will soar when those employed in just about every other industry hard hit by coronavirus closures lose their jobs, too.

Unemployment and self-quarantine would be easier to bear if we knew that it would actually reduce the spread of the virus and save lives.

Public health professionals know how to do that, but DeSantis has elected not to put such people in charge. In the absence of coherent, evidence-based marching orders from DeSantis, local officials and industry executives have been making it up as they go along, getting farther out ahead of the curve than the governor.


The consequences of the governor’s hesitating approach are even being exported. Jeffrey Ghazarian, 34, died last week at a Pasadena, California, hospital, just days after a trip to Orlando’s Disney World and Universal theme parks. Pictures of Florida’s crowded beaches, taken days after every expert in the world was sounding the social-distancing alarm, have further cemented our place as an international punchline. Friday, DeSantis closed the beaches in Broward and Palm Beach counties, but is being sued by a Florida attorney to close all the beaches in the state.

On Friday, DeSantis issued the most widespread mandatory statewide restrictions on businesses to date-- closing gyms, fitness centers and limiting restaurants to delivery service.

The virus is so contagious that universities were closed indefinitely, but the college kids were still mobbing Florida beaches for Spring Break.

Asked to explain, the governor delivered a rambling, incoherent monologue that went on for too long.

But DeSantis thinks he’s doing a heckuva job. He’s not.

Midnight Meme Of The Day!

by Noah

John Kenneth Galbraith was one of the very top go to economists in the world 40 to 60 years ago. He may have been right about the conservatives of his day but today's conservatives do not even bother with the pretense of searching for "moral justification" or anything similar. However given what we can see of today's conservatives, it's more likely that Galbraith was afflicted by the disease of civility that has always made allowances for bad behavior. or, he was just being naive. One thing for sure is that today's conservatives have totally dispensed with even hints of pretense. To today's conservatives, "moral justification" effectively means entitlement or the justification for their greed. Hence the grab as much as you can from anybody and anywhere that you can attitudes of today's Republicans, aka the Greed Over People crew.

People In Afghanistan Get High... Are We Just Figuring That Out For The First Time? You Could Have Asked A Hippie... Or A Soldier

I wonder what this stuff is for. Soup?

I was in Afghanistan twice-- once in the late '60s and then a couple years later in the early '70s. I loved it both times. It seemed so free (though not necessarily in the sense that the Heritage Foundation means free). It sure wasn't part of the modern world. I spent one winter in a... well, not a village; there were only two compounds... and no one had ever heard of the United States or experienced electricity. My first day in Afghanistan, though, was in a far more sophisticated setting-- Herat, not from the local fount of civilization, Persia, recently called Iran. I rolled into town with my brand new shiny red VW van and every dignitary in town understood that I was there to buy hash. (I wasn't-- I was on my way to India... although I was easily talked into it.) The hash is really strong, strong like acid and heroin are strong. The best Mazar stuff never gets exported. They just smoke it up in Afghanistan. I never met an Af who wasn't a stoner. Never. Well, I once met an Af in DC who was driving a taxi and he wasn't a stoner as far as I know. I never spent a single night in a hotel on either trip. I was down in the hood with the peeps. And the peeps were either smoking or chillin' but that is the stonedest society I was ever in.

My best friend in Kabul was the postmaster and his father was a governor and a cousin of the king's. He was stoned. The cops who arrested me and threw me in jail... they were stoned. The soldiers who made believe they were going to kill me and my friends... they were goofing... and stoned. The butcher, the baker, the candlestick maker... everyone. So, you can imagine that I wasn't exactly surprised when ex-UN envoy Peter Galbraith announced this week that Karzai's a stoner. Like someone isn't? You think I'm joking, right? Or nuts. Watch this short clip of some British troops working with the stoned out Afghan army.



Galbraith attributes Karzai being "emotional" and "off balance" to him being on "drugs." I bet Galbraith was a real odd man out over in Kabul. Drugs! Ooooooooooo... Maybe Karzai is off balance and emotional because his country's been fighting a war for decades and because American planes keep shooting up innocent civilians and their relatives all blame him and he-- unlike Galbraith apparently-- knows that the Pashtun code, Pashtunwali, means they have to kill him. Have to-- no choice in the matter. I'll wager the only time Karzai isn't emotional and off balance is when he's zonked. Watch these three clueless squares:

Joining the Taliban isn't really an option for Karzai. "The Americans are furious, his own supporters are incredulous and opposition politicians think that he is mad."

In three successive outbursts this month, President Karzai of Afghanistan has blamed foreigners for last year’s election fraud, accused Western troops of meddling in his country’s internal affairs and even threatened to join the Taleban.

Yesterday the Afghan leader suffered two key blows as the insurgents ridiculed his offer and, more seriously, the White House seemed ready to show a diplomatic cold shoulder.

Speaking of Mr Karzai’s planned visit to Washington on May 12, Robert Gibbs, President Obama’s official spokesman, said that the visit was still on, but added: “We certainly would evaluate whatever... further remarks President Karzai makes, as to whether it is constructive to have that meeting.”

Scoffing at the idea that the Afghan leader might join the insurgents, Zabiullah Mujahid, a Taleban spokesman, told The Times yesterday: “It’s just a game he is playing. He is trying to show people he is not under the control of the Americans but it’s completely false.

“If he really wants to join the Taleban, first he should face justice. He should face justice for bringing foreign troops to Afghanistan. He should face justice for all the crime which has happened during his rule in Afghanistan, and for the corruption and for what is going on now. Then we’ll decide whether we will join with him or not.”

It was at a closed meeting of Afghan parliamentarians in Kandahar on Saturday that the increasingly eccentric President-- who is still smarting from a failed attempt to change election law-- threatened to join the Taleban. He also said that the Taleban could be seen as a legitimate resistance movement. “If I come under foreign pressure, I might join the Taleban,” he told MPs.

Galbraith may come off as a blithering fool from a cross-cultural context but he gets the American politics of this right. He explains that the untenable domestic situation in Afghanistan dooms Obama's absurd and ill-informed strategy. At least Obama has been high; he should have been able to... no, no... forget it. It's hopeless. Anyway, Galbraith points out that "counterinsurgency strategies depend on having a reliable, local partner." Like that was ever going to happen! "We need," he went on, "an Afghan government who can come into an area after our troops have kicked the Taliban out, who can provide honest administration and win the loyalty of the population." He could be asking that everyone gets a pony. [Obama wants a pony too.] Or he could be describing Norway, which is where he was doing the interview from. But he's surely not describing anything that has to do with thousands of years of Pashtun tribal history. The idea that Karzai is "in office by fraud" (meaning not fairly elected by some Western procedure as foreign to Afs as predator drones killing their women and children) is the reason the counterinsurgency won't work is beyond idiotic. The counterinsurgency won't work for the same reason no people like being occupied by a foreign army. How empathetic does one have to be to figure that one out?

Is Tim Geithner Just Another Wall Street Avatar Of The Predator State?

I was uneasy yesterday because I couldn't understand what the hell Treasury Secretary Tim Geithner was talking about when he presented the Administration's latest bailout proposals. Turns out even before I couldn't figure out what the hell he was talking about, members of Congress, in a private late Monday meeting, greeted the double-talking bullshit worthy of a Bush Regimist that he was dishing out with laughter, sarcasm and derision.

The laughter was at its height when Obama officials explained that the White House planned to guarantee a wide swath of toxic assets -- which they referred to as "legacy assets" -- but wouldn't be asking Congress for money. Rep. Brad Sherman (D-CA), a bailout opponent in the fall, asked the officials to give Congress the total dollar figure for which they were on the hook. The officials said that they couldn't provide a number, a response met by chuckling that was bipartisan, but tilted toward the GOP side. By guaranteeing the assets, Geithner hopes he can persuade the private sector to purchase a portion of them.

Meanwhile both Democrats and obstructionists seem to be wary of Geithner's plans-- way beyond laughter. And the self-inflicted collapse of the country's banking system is hardly a laughing matter and the congressional merriment at Treasury's expense didn't exactly make me feel any better. When I read Paul Krugman's incomprehension late yesterday, at least I felt like my own inability to comprehend didn't mean I was a moron. The Nobel prize winning economist wrote that "It’s really not clear what the plan means; there’s an interpretation that makes it not too bad, but it’s not clear if that’s the right interpretation." Still, Krugman seems to be making a lot more sense out of it than anyone else can.

The plan deserves praise for what isn’t in it, at least as far as I can tell. There doesn’t seem to be provision for mass purchases of toxic waste at premium prices; there also doesn’t seem to be a massive “ring-fencing” guarantee against private losses on bad assets. In that sense the plan is better than what the last few weeks of leaks led us to expect.

What is in it, in reverse order:

1. Super-TALF: a big expansion of the Fed’s quantitative easing, with Treasury backing. I’m OK with that.

2. Private-public purchases of questionable assets; as I understand it, private investors would be the junior partners, so this is probably not a big giveaway (unless there’s huge public financing, in which case it amounts to ring-fencing after all). I also suspect it wouldn’t accomplish much, but no harm, no foul.

3. Stress test: everything depends on how this is actually implemented. What happens if, or more likely when, a major money center bank is stress-tested and found to have negative net worth? One possibility is that the auditors are told to come up with a different answer; that’s a big concern. The other is that the bank is effectively nationalized; as I read the language that could be achieved as part of the public capital injection.

The Wall Street Journal hasn't figured it out yet either, although I don't understand why a proposal to rescue a pack of crooked, thieving banksters with 2 trillion taxpayer dollars doesn't cause half the commotion the $800 billion Stimulus package, meant to rescue the whole economic and millions of working families, gets filibustered within one vote of its life by the Republican Party obstructionists. At least Geithner claims he has a plan he'll be releasing "in coming weeks" to stem the tide of foreclosures. I sure hope it's to help homeowners and not banksters!

The absence of detail speaks to the thorny issues that lie at the heart of the financial crisis: how to value the toxic assets causing banks to report losses and how to shuffle aid to homeowners and stem the rise of foreclosures. Many of the potential solutions come with a host of fresh problems, which Obama officials have grappled with much as their predecessors did.

...Geithner presented the moves as a multi-pronged effort to encourage financial institutions to lend again. The administration's goal is to unfreeze dysfunctional credit markets that have dragged the economy into a recession. He also announced new conditions on banks receiving aid, including documenting how the money is helping to generate new loans.

Many U.S. banks will be subjected to rigorous examinations to see if they are healthy enough to lend before receiving additional financial aid. The move could address disagreements between bank regulators about the viability of scores of institutions. Regulators have struggled to come up with a common set of criteria for deciding which banks should receive money. Setting up a stress test could create a more objective set of standards, which might reveal the depths of the industry's problems.

Meanwhile, Geithner certainly didn't do the stock market any good; the Dow lost nearly 400 points after he started making his case. Economist James Galbraith was Amy Goodman's guest on Democracy Now and it's worth watching his analysis. Like many people, he thinks the banks that need to be bailed out with taxpayer money should be declared insolvent. So far it looks to me that Geithner thinks his role is to protect the crooked banksters rather than the economy. I'm wondering if Obama didn't pick the wrong guy for the job.