A Strange Liberty: Politics Drops Its Pretenses

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 eighteen 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, two-thirds or more of deaths are over age seventy, but even among the elderly more than 90 percent of those infected survive covid. And among all covid deaths, only about 7 percent 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 unpersoned, removed, erased. But even if he ends up a casualty of this war—and whether you agree with him or not—people like him have managed to challenge the official narrative in ways unimaginable even twenty 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 percent of all US dollars ever issued were issued in 2020 alone. On the fiscal side, more than forty 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 uncertainty 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 we’re 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 with our own money, reducing what we have to spend on actual goods and thus reducing production of those goods.

The past sixteen months we’ve had lots of government bads, to the point where we might call them “worsts,” which are even worse than bads. The covid and Afghanistan debacles come to mind. 

It may be facile and self-serving to compare the federal state’s inability to manage Afghanistan with its inability to manage a virus, but the comparison is just too perfect to resist. So I won’t resist.

Among the bads government produces is misinformation. One analogy between covid and Afghanistan is the phenomenon known as the fog of war: the uncertainty in situational awareness experienced by participants in military operations.

Paraphrasing Carl von Clausewitz: war is the realm of uncertainty; the factors on which action in war is based are wrapped in a fog of uncertainty. Fog and friction cloud the commander’s judgment—even where the commander wholly shares our interests, which is hardly a given with covid. When we declared war on a virus, clarity went out the window. And so we’ve lived with sixteen months of fog, of covid misinformation. This happens in tandem with the media, which parrot official pronouncements from sources like the deeply compromised Fauci and stir up alarmism at every turn.

And we’re still living with it. Consider we still don’t have definitive answers to these simple questions:

Do masks really work?

Do kids really need masks? As an aside, our great friend Richard Rider reports that San Diego County—population 3.3 million—shut down its public schools for a year with one student death!

Is there asymptomatic spread?

Does the virus live on surfaces?

How long does immunity last after having covid?

How many vaccines will someone need to be “fully” vaccinated? How many boosters? Annual?

Aren’t delta and other variants simply the predictable evolution of any virus?

How do we define a “case” or infection if someone shows no symptoms and feels fine? Can covid really be eradicated like polio? If so, why haven’t we eradicated flu by now?

And so on. We never get clear answers, but only fog.

But perhaps the most shocking thing about sixteen months is our childlike inability to consider tradeoffs! I’m not only talking about the tremendous economic consequence of shutting down businesses, and the horrific financial damage it has done and will do to millions of Americans. I’m not only talking about the depression, isolation from friends and loved ones, alcoholism, untreated illness, suicide, weight gain and obesity, stunted child development, and all the rest.

I’m talking about understanding the basic economic tradeoffs of covid policy: supply chain, food, energy, housing, unemployment. This is bread and butter economics.

I can’t stress this enough: millions of Americans have no conception of economics, and simply don’t believe tradeoffs exist. They think, and are encouraged by the political class to think, that government can simply print money in the form of stimulus bills and pay people enhanced unemployment benefits to stay home. That the CDC [Centers for Disease Control and Prevention], of all cockamamie federal agencies, can simply impose a rent moratorium and effectively vitiate millions of local contracts—it will just work itself out somehow. That Congress can simply issue forgivable PPP [Paycheck Protection Program] loans to closed or hobbled businesses so they can magically make payroll. That the Federal Reserve can simply buy up assets from commercial banks, lend them limitless funds, and command lower interest rates to stimulate housing and consumerism.

Millions of Americans, through sheer ignorance of economics, literally think these actions are costless and wholly beneficial—without downside.

And now we wonder why the economy can’t just flip a switch and get back to normal. But that’s not how an incredibly complex global supply chain, with just-in-time delivery, works. And that’s why thousands of Ford F-150s are sitting unsold, and unsellable, in huge parking lots—there is a global semiconductor chips shortage. Many of them come from a single company in Taiwan. By the way, semiconductor chips are used in everything from iPhones to Xbox consoles to Surface laptops to refrigerators.

CNBC recently wrote about the supply chain interruptions. It gets the cause of inflation wrong, blaming it on the pandemic rather than central banks, but it paints a vivid picture of the serious problems facing a radically overstressed global manufacturing sector. Delays in delivery are said to be the longest in decades. And inflation plus delays is bad news, because it’s so hard for buyers and sellers at all stages of production to know what to charge and what to pay for either capital goods or consumption goods. How many construction projects, for example were blindsided by the five-time rise in lumber prices last year? Ports are clogged awaiting trucks—not enough drivers—so containers sit for weeks rather than days. Empty containers have become scarce. Rail schedules are affected by the ports like dominos, and freight prices are spiking. Will West Coast longshoremen strike in 2022 when their contract is up? Will new emissions regulations which slow ships kill more capacity? Will key Chinese factories shut down again due to delta?

None of it is pretty, and may last into 2023. So buy your Christmas presents now!

We are starting to see the unseen, but economists, whose job it is to show us the tradeoffs, have been largely AWOL over the past year and a half. Consider this recent post by a famous libertarian free market economist:

US GDP is now higher, in fact a fair bit higher, than when the pandemic began.

US labor force participation is about 1.5% lower than when the pandemic began.

Was there really slack to the tune of a few million people in Jan of 2020?

Has inflation really changed enough to make the GDP numbers misleading?

Has total factor productivity improved that much in that time, under those stresses? (i.e., more output from less input, labor & capital).

Or is this all a sign that the structure of the economy is more stratified than we think—that there are millions of people in more-or-less filler jobs who can be cast out and the economy just keeps on running along? Yes, there are all sorts of reports of labor shortages, and all manner of supply chain hiccups which seem too often be associated with off shoring, but general activity is still high. (Or is it? Are the numbers reporting “vapor GDP?”—or are the inflation adjustments really out of whack so real GDP is not what we think it is?)

This is clever masquerading as smart, and it’s the sort of thing which makes people dislike economists. It’s homo economicus nonsense. This kind of navel-gazing—wondering aloud, as though we could shut down the world for a year, send everybody home, suspend rent payments, and not suffer tradeoffs—makes me think economics as a profession is not doing the world any good. People desperately need productive activity for their basic health and happiness, even if that activity doesn’t much add to the national economy.

A friend who runs a large chain of retail stores across several states sent me this in response.

It’s amazing how [BLANKED]-up this person is. An economy is a way to get stuff. Is there much stuff, or less stuff, than when this all began? More cars or less? More computers and personal digital devices or less? More food or less? More oil or less? Greater business to business supply chain or less?

But because this [BLANK] thinks the economy is a symbolic architecture, not a real thing for getting real stuff, he’s absolutely flummoxed by a simple question. Go outside, moron. Step away from the keyboard and the spreadsheet.

I thought he was spot on. Economics is the study of choice in the face of scarcity, of how we get the goods and services we want in an environment of tradeoffs and uncertainty. Nothing could be more disastrous to that environment than vague, open-ended government lockdown measures. We don’t need to move numbers around until they please us as some kind of substitute gnostic knowledge. We shut down the world over a virus, restarting it will be difficult, and the economic damage will be enormous and long lasting. Economists should be showing us the unseen damage, not cheering the juiced-up data.

My point here is to suggest the economics of our present situation are worse than advertised, and that economics is about what holds us together. What we think of as America is mostly an economic arrangement, not a social or cultural one—and certainly not a political arrangement. America is hardly a country anymore, and I take no pleasure in saying that. What happens when the economics unravel?

The Great Unraveling

But there is a happy upside to all of this. A silver lining, perhaps.

Over eighteen months we’ve learned that all crises are local. For eighteen months it has mattered very much whether you live in Florida or New York, whether you live in Sweden or Australia. And the physical analog world reasserted itself with a vengeance: no matter where you are, no matter how rich you may be, you must exist in corporeal reality. You need housing, food, clean water, energy, and medical care in the most physical sense. You need last-mile delivery, no matter what is happening in the broader world. Your local situation suddenly mattered quite a bit in 2020. It was the year localism reasserted itself.

Whether your local reality was dysfunctional or did not matter quite a bit in the terrible covid year. And people are waking up to the simple reality of this dysfunction. We know the federal government can’t manage covid. It can’t manage Afghanistan. It can’t manage debt, or the dollar or spending, or entitlements. It can’t even run federal elections, for God’s sake, much less provide security, or justice, or social cohesion.

So how can it manage a country of 330 million people? How can it manage fifty states?

Whether we want to call it the Great Awakening or the Great Realignment, something profound is happening. Imagine if the twenty-first century reverses the dominant trend of the nineteenth and twentieth, namely the centralization of political power in national and even supranational governments? What if we are about to embark on an experiment in localism and regionalism, simply due to the sheer inability of modern national governments to manage day-to-day reality?

A kind of centrifugal force is at work. Here in the US, people are self-segregating—both ideologically and geographically—in what we should think of as a kind of soft secession. United Van Lines confirms what we already knew: people are fleeing California, New York, New Jersey, and Illinois for Texas, Idaho, Florida, and Tennessee. This is simple flight from the dysfunction of big cities and unworkable progressive policies, laid bare by the analog lessons of covid.

We should cheer this. If just 10 percent of Americans hold reasonable views on politics, economics, and culture they would constitute 33 million people—we could coalesce as a significant political force! And this nation within a nation would be larger and more economically powerful than many European countries.

Furthermore, we are witnessing a tremendous shift in political power away from cities toward exurbs and rural areas. There really is nothing like it in US history. America started in colonies and villages, before moving westward to farms and ranches. When factories began to replace farms as major employers, Americans moved to the old Rust Belt cities like Chicago and Pittsburgh and Detroit. When tech and finance began to overshadow manufacturing, Americans moved to Manhattan and Seattle and Silicon Valley for the best jobs. But that revolution in finance and tech means capital is more mobile than ever, and covid accelerated our ability to work from home. All of this could have huge beneficial effects for smaller cities and rural areas, which in turn could have profound effects for the congressional map and electoral college. If the angry school board meetings over masks are any indication, politics already has become more localized.

Covid policies ruined cities, at least for a while, and the Great Unraveling will reduce the political and economic power of those cities. 

So, a once-in-a-generation opportunity is before us. The federal government is far and away the biggest, most powerful institution in America and faith in institutions is crumbling. And it should crumble. Washington, DC, has been the centerpiece around which we have organized society for a hundred years now, and that’s a profoundly evil reality. So, we should cheer when Americans lose faith in it due to Trump or covid or Afghanistan or public opinion polls which show a deeply divided and skeptical country. There is a growing sense that DC is over, it’s done, and it’s time to turn our backs on it. We are losing our state religion.

Contra our political elites, covid and the disastrous reaction by governments may end up reducing their power and standing in society.

This article is an excerpt from a talk delivered at the Ron Paul Institute conference on September 4, 2021.