The Terrible Economic Ignorance Behind Covid Tradeoffs: My Speech to the Ron Paul Institute
This article is excerpted from a talk delivered at the Ron Paul Institute conference on 4 September 2021.
Some of you may know the name Alex Berenson, the former New York Times journalist who comes from a left-liberal background. He has been absolutely fearless and tireless on Twitter over the past 18 months, documenting the overreach and folly of Covid policy– and the mixed reality behind official assurances on everything from social distancing to masks to vaccine efficacy. He became a one-man army against the prevailing Covid narratives.
Mr. Berenson is famous for creating a viral (no pun intended) phrase which swept across Twitter last year: Virus gonna virus.
Which means: whether one is in Sweden or Australia, whether in New York or Florida, whether you have mask mandates or lockdowns or close schools or require vaccine passports—or do NONE of these things—Virus gonna virus. Covid hospitalizations and deaths will be concentrated among the obese and elderly. In almost any community, 2/3rds or more of deaths are over age 70, but even among the elderly more than 90% of those infected survive Covid. And among all Covid deaths, only about 7% are “Covid only” without other serious contributing factors.
What we won’t ever know, unfortunately—because we don’t have a control group, at least in the West—is what would have happened in a society which simply did nothing in response to the virus. What if a country simply had encouraged citizens to build up their natural immunity through a healthy diet, exercise, vitamins, and natural sunlight? What if it had taken precautions for elderly and immune-compromised populations, while allowing younger and healthier people to live normally? Would such a country have reached a degree of natural immunity faster, with overall better outcomes for the physical and mental health of its citizens? And with far less economic damage?
All of this is the Unseen. And no, it wasn’t “worth it” to shut down the world.
Back to Mr. Berenson. Last week Twitter decided it had enough, and permanently suspended his account. This is no small thing for independent journalists–and God knows we need them—who reach a lot of people via Twitter and rely on it to make a living.
Search for his Twitter profile and you’ll find something spooky. His name is still there, but with a quietly menacing “Account Suspended” warning. All other traces of his existence are erased: his header photo is gone, his profile photo is blank, and the descriptive bio is missing. Just blank. It’s eerie, and reminds me of that famous old photo of Stalin by the Moscow Canal. He’s standing next to Nikolai Yezhov (I had to look him up), who fell out of favor with Stalin and was executed–then erased from the photo by Soviet censors.
Alex Berenson has been similarly un-personed, removed, erased. But even if he ends up a casualty of this war1—and whether you agree with him or not—people like him have managed to challenge the Official Narrative in ways unimaginable even 20 years ago. The financial journalist John Tamny made an interesting point last week: complain about social media all you want, but Facebook and Twitter have been great sources of information during this Covid mess. And after thinking about it I had to agree. Most of the alternative information about Covid I’ve consumed via social media. But of course Mr. Berenson no longer has this luxury.
The Covid Economy and Tradeoffs
Speaking of narratives, we have especially lacked clear and sober thinking about the injuries to the US economy created by Covid policies. We profoundly fail to understand the economics behind Covid, because we so desperately want to kid ourselves that the economy will be “normal” soon.
Governments are good at two things, namely bossing us around and spending money. They do both in spades whenever a supposed crisis arises, and both Congress and the Fed went into hyperdrive beginning in March 2020. The Fed pumped more than $9 trillion to its primary dealers; estimates are that more than 20% of all US dollars ever issued were issued in 2020 alone. On the fiscal side, more than 40 federal agencies have spent $3.2 trillion in Covid stimulus spending. So that is $12 trillion of inflationary pressure introduced to our economy.
What the economy wants and needs during crises is of course deflation. When uncertainly rises, and it certainly did for millions of Americans worried about their jobs in 2020, people naturally and inevitably hold larger cash balances. They spend less. Meanwhile they were staying home, driving less, dining out less, traveling less, working less. All of this is naturally deflationary, so of course Congress and the Fed embarked on an effort to fight this tooth and nail with intentional inflation. So now were in a wrestling match between two opposing forces, one natural and one artificial.
Dr. Hans-Hermann Hoppe has a famous dictum: markets produce goods, which are the things we want and willingly buy or consume. Government produces bads, which is to say things we don’t want at all. Things like wars and inflation. They do this wi
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