We’re All In This Together, A Note On Supply Chains, And Brazilian Gangsters To The Rescue

Last week we were optimistic. This week less so. The U.S. federal government continues to be a disaster abetting a natural one. But Trump has set the bar so low that we are giving state, regional and local officials too much leeway. Not being Trump is not good enough. Most despairing of all, we see no efforts to develop a South Korea or Taiwan-like response–of testing cases, tracing the infected and then quarantining them. This would allow us to start to end shelter in place policies and begin to re-open the economy. Can we get at least one governor or mayor of a major city to take the approach below at their next press conference?

UNKNOWN GOVERNOR OR MAYOR OF MAJOR CITY

Here is our current data. As of this morning, we have x number of people tested and confirmed to have Covid-19. Y number of people have been confirmed to have died as a result of Covid-19. Yesterday we had Z number of new cases of Covid-19. We tested W number of people.

We need to be able to test N number of people per day. Our current capability is H. To get to get to N we are taking the following actions. (list these actions–this is a difficult supply chain challenge but it is doable)

Once we get to N number of tests per day, we can start “testing and tracing” as they have been doing in South Korea. To be able to effectively trace, we are taking the following steps to secure tracers, equipment, create a database, determine how to isolate cases, and ensure they are able to isolate, etc.

Once we are able to test and trace we will be able to start opening up businesses. At current rates of building up testing and tracing capabilities, we will be able to begin opening up businesses on ___ date. By taking the steps described above, we hope to do testing and tracing sooner than that.

We will update you regularly on our progress on this.

Thank you for coming to our press conference.

Taiwan’s success and techniques, which we wrote about on March 12, continue to be ignored. Nearly every chart of the pandemic you see online does not include Taiwan (thanks to Roy Ngerng for the one above that does). This is because WHO bans Taiwan and because countries are scared of China. There’s a mid-term solution to the pandemic and Taiwan offers one of the answers. 

Without further ado (and lately we have much more ado than usual), here’s what you need to know.

Like It Or Not, We’re All In This Together

One of the many reasons why China and the U.S. sniping at each other during this pandemic is dangerous is that we all need each other. This is certainly true health wise—a virus by nature is transnational—but also economically. As China gleefully trumpets that there are many more cases of Covid-19 outside of China than in, and that things are slowly returning to normal there, they forget that to get their economy back on its feet, they need the markets of the world. And those markets have now collapsed because of the pandemic. For China’s economy, it’s nearly as damaging what is happening in New York, Paris and New Delhi as what is happening in Shanghai, Xiamen and Shenzhen. According to Caixin, “Output contracted in March more than February, work weeks shrank further and hiring declined despite labor shortages…return to work has not meant return to growth for China.” In addition there have been reports that local governments are forcing companies to cook the books to make production look better than it is. The truth is they don’t have enough customers for which to produce. After all, 40 percent of China’s economy is still tied to its exports. And gleeful American policymakers back in February who chortled about the problems in Wuhan might have wanted to stop and think what that was doing to our economies both then and when the virus inevitably traveled to our country. We’re all in this together. At some point we need to start acting like it.

A Note About Supply Chains

All the pieces matter noted the great TV show The Wire. That’s even more true for supply chains, which as we noted a while back, are likely to change radically due to the pandemic. Countries will not be putting all their virus vaccine eggs in one basket anymore. But decisions we are making in one area are affecting supply chains in ways people don’t often understand. For example, understandably air travel has been severely restricted and airlines have smartly responded by cancelling routes—in other words restricting supply. There is talk of the United State closing down domestic air travel. Again, there might be good reasons to do this to slow down the spread of the virus. But we also need to think through how to mitigate the impact on the supply chain. When you are flying to Chicago for a business meeting or to Florida for vacation, below you in the belly of the plane is lots of air cargo, not just your checked bag. Someone we know at an air logistics company tells us, “Capacity is already outrageously reduced but is getting worse by the hour with more airlines cancelling lanes, even on freighter services. Prices are skyrocketing to a level we have never seen before! The only thing moving now is food and any medical supplies requiring the quickest transit time so the ocean freight industry will continue suffering as well.” All the pieces matter. Never forget that.

Put Brazilian Gangsters in Charge of White House?

A number of years ago, when interviewing small businesses for a project I was a part of, I heard consistently how hard it is to do business in Brazil. The bureaucracy and corruption made it difficult for these companies to be successful there. That same combination, along with a Trumpian-like president, is bringing Brazil to the brink of Covid-19 disaster. Brazil’s President Jair Bolsonaro who earlier this week called the virus “a little flu” has berated his subordinates for suggesting Brazilians stay at home and businesses close, much less prepare to do test and trace. It’s become so bad that the gangsters of Brazil have taken matters into their own, presumably gun-toting, hands. On Tuesday night, according to Andrew Cesare, Rio’s gangs enforced a lockdown that started at 8 pm that night. The statement the gangs issued read, “If the government won’t do the right thing, organised crime will.” We advocate for better organized crime inside the White House.

The Trump/Xi Axis of Evil Stupidity, China Propoganda Machine, and the World is Less Free

We’re almost finished with The Sympathizer, a novel about a North Vietnamese mole in the South Vietnamese army who has an outsized ability to see and understand multiple points of view. Perhaps that’s why even though we see Covid-19 spreading darkness around our world, and worry deeply about the future, we also can see glimmers of hope and positive signs. Not least of which is the army of helpers out there. Health care workers, of course, but the neighbor offering help to our Mom, people providing daycare to relatives, Facebook groups formed to help small businesses, arts organizations and other distressed communities. In fact, the hated tech companies have been stalwarts so far in bringing people together. In addition, although I feel like I should be allowed make a citizen’s arrest of certain high level federal officials for negligent homicide, there is great progress being made in testing capabilities in the U.S. so that finally perhaps in six to seven days, America will be able to test at South Korea levels. Not only that but a whole variety of possible effective treatments are being developed around the world. Chinese scientists are making progress on understanding the virus so that we can better contain it. We don’t forget that there have been massive mistakes made by leaders in a whole host of countries, including here in the United States, but because, as we have often noted in this space, the world has continued to improve over the last 100 plus years, we are in much better shape to deal with this pandemic, almost despite ourselves. So yes, we present to you the Trump/Xi Axis of Evil Stupidity, the China Propaganda Machine and a Less Free World, all stories of darkness. But the light is seeping through. And as we showed over a year ago here, the world can lean on each other, if we just sing it loud enough.

We can’t get videos to embed in Mailchimp anymore. Any Mailchimp experts out there, please email me. In the meantime, click on the Everlasting Arms video link

Without further ado, here’s what you need to know.

The Trump/Xi Axis of Evil Stupidity

In our upcoming book about the challenge of China and how the U.S. and world should react to it, I document how the Trump Administration has trashed the post-World War II/post Cold War liberalized world order. I also explain how that “opens the door for China to remake the world order with Chinese characteristics.” More and more of the challenges in the world are transnational with a global pandemic being the obvious current one. But instead of cooperation among countries, we are often seeing competition. In addition, many countries are using the crisis as an opportunity to score points or push forward nefarious goals. Just this week alone, rather than working together, Trump provocatively called Covid-19 the “Chinese flu” while one of his officials called it “Kung Flu” to an Asia American reporter. Meanwhile, China has started a full-blown propaganda push on Corona (see story below), flew J-11 fighters into Taiwan’s airspace and is kicking out American journalists from China, including those from the New York Times, Wall Street Journal and Washington Post. We suggest Trump, Xi* and their minions be quarantined to an island while the rest of us get to work.

*Criticism of the Trump Administration is not to say there is a moral equivalency between China and the United States. Trump is an incompetent, narcissistic buffoon, but a duly elected one with checks and balances of a liberalized, federalized society. Xi’s constraints come within an authoritarian unelected regime with no way for the people to change it or its direction. But, if we want America to improve and to continue as a functioning democracy, we must maintain a high standard on our leaders and the government—it is even more important to criticize them than China for that reason. That I have to write such a long footnote explaining this obvious fact, knowing that many people will attack what I wrote in this story, nearly causes one to despair…except that we are a fan of footnotes! Regardless of length. In fact, one day we’d like to write a book with one sentence and the rest of it a very, very long footnote.

The China Propaganda Machine

The most important step a country can take during a global pandemic is to take full advantage of it for propaganda purposes. China has obviously learned this lesson so well it could write a dissertation—in tabloid style. Early in the week, a China Foreign Ministry spokesperson tweeted, “It might be the U.S. Army who brought the epidemic to Wuhan.”  Yes, China is engaged in a worldwide propaganda effort to convince people that the virus did not start in China. They are also propagating the line that China “bought the world time” and the world is increasingly thankful for it. They did not buy the world time. A China government spokesperson retweeted fake videos of Italian citizens clapping along to the PRC national anthem, as if Italians believe China is their savior. China has also been claiming to be giving away equipment and masks to places like Italy. In fact, they are selling them. However, there are plenty of Chinese, not the government, who are generously giving aid (and comfort) in this challenging time. We ourselves received a wonderful email from a Chinese partner worried about us in Seattle: “We are deeply concerned with the situation in your area. If you need any assitance, please let us know.  We will be more than happy to offer a hand to our friends.” This is why it is so foolish and short-sighted of Trump and others to call Covid-19 the “Chinese virus” and otherwise engage in racist bullsh**. Go after China’s government strategically and intelligently, but win over the Chinese people, who often have been and continue to be, heroes in this pandemic.

World Less Free

If you are one of the many people in the world currently locked down due to Corona, and are looking for something to read to cheer yourself up, we don’t recommend Freedom House’s latest Freedom in the World Report. The world, as you’ve probably noticed, is becoming less free, and has been deteriorating since 2009.  According to the report, “64 countries experienced deterioration in their political rights and civil liberties while those in just 37 experienced improvements.” Freedom House notes that minority rights are under attack, including in democracies and spell out the bad consequences of this, “The progression illustrated how violations of minority rights erode the institutional and conventional barriers that protect freedom for all individuals in a given society.” The same with immigrants: “Attacks on the rights of immigrants continue in other democratic states, contributing to a permissive international environment for further violations.” The whole world is looking shaky, and this report documents it, “The unchecked brutality of autocratic regimes and the ethical decay of democratic powers are combining to make the world increasingly hostile to fresh demands for better governance.” And what about one of the most important countries in the world and the second-largest economy?  “China pressed ahead with one of the world’s most extreme programs of ethnic and religious persecution, and increasingly applied techniques that were first tested on minorities to the general population, and even to foreign countries.” You may want to pick up whatever crappy book Oprah’s peddling instead.

The Fog of Corona, Taiwan’s Response, and Domestic Violence Increase Due to Corona

When last we left you, we were about to fly to Japan for vacation and work. We cancelled our trip if not at the last minute, than certainly at the last hours. We cancelled not so much because we feared there was a greater chance to contract the conornavirus in Japan, but because just before we left, Japan essentially closed everything down. There would have been nothing for us to do over there but sit in our hotel room. In fact, as we were cancelling, we told the INTN spouse that likely by the end of our vacation it would be more dangerous here than there. Of course, by here we meant the U.S. not the Seattle area specifically which within days of our cancelling our Japan trip became the American epicenter of the Covid-19 epidemic. But our home town is one of the most internationally tied in the country so it should not be surprising that SARS-CoV2 has gripped its infectious tentacles here.One of the more amusing, astonishing, depressing behaviors we see from a minority of people is that they are not at risk from the virus so they will continue on in their lives doing what they want when they want. We presume they have parents or grandparents. Maybe they hate them or are expecting a big inheritance they want sooner than later. Or maybe they are just idiots. Whatever the answer, we raise the fog of corona, point to which country we all could learn from and warn about consequences of quarantining. It’s a special coronavirus edition of International Need to Know, coughing ahem at bad pandemic takes wherever we find them.

Since we wrote the above, Seattle has cancelled all events of 250 or more people, the U.S. has banned all flights from Europe,Tom Hanks(!) has been diagnosed with corona, people are using Tinder (!!) to communicate with people in Wuhan about the epidemic, and the NBA postponed a game just before tip-off when moments earlier one of the players tested positive for coronavirus. The world has officially entered the Tyson Zone when events are so insane there’s literally nothing that could happen that would shock or surprise us at this point. On a more serious point, the President of the United States started his speech Wednesday night by insulting Europe, EU countries refused Italy’s desperate pleas for medical equipment and China has threatened to cut off medical supplies to the U.S. if it doesn’t back off against Huawei. The world is quickly reverting to a pre-World War I order–that is, there is no cooperation at all, it’s every country for itself. This ultimately is a bigger concern than the virus. Unless the U.S., EU, China and the rest of the world start working together, using whatever is left of the liberalized post cold war order Trump and Xi are destroying, 50 years of amazing progress in improving human lives will go down the drain. Definitely worry about the Covid-19 virus pandemic and take all necessary precautions, but don’t take your eye off the ball–a rotating orb hurtling through space.

Now without further ado, here’s what you need to know.

The Fog of Corona

Inevitably in an age of instantaneous communications, people are making broad assumptions and assertions about SARS-CoV2 corona (screw it, corona is much easier to type). Regular readers of INTN will remember we were early on the coronavirus beat, bringing it to our readers’ attention on January 9th. By early February, in both work interactions with logistics and manufacturing companies, and in our reading of a variety of Chinese experts, it became clear to us this is the most impactful economic event since the 2008 financial crisis. In fact, it is likely to change supply chains more than any event since September 11th with consequences that are difficult to entirely understand. Today that is becoming a common place belief. Meanwhile, people rightly condemning China’s inept actions at the beginning of the outbreak in Wuhan, when officials were more concerned about controlling information than the virus, are now praising China as a model for how to deal with the virus. In fact, too many analysts are making the jump to asserting authoritarian governments are a better way of governing. This is childish thinking. During such a crisis, or course there needs to be intrusive state interventions. Even in robust democracies the laws are written to provide powers to governments not granted during ordinary times, thus Washington’s government banning gatherings of 250 or more people. Praise for authoritarianism is making the rounds partly because China’s government is selling the line that the world needs to learn from their successfull taming of the epidemic. As a part of this propaganda campaign, China is promoting the idea that the virus did not start in China, and may have originally started in the U.S. There are many things the world does not understand about the virus itself and the most effective public policy reactions to it. In fact, we are willing to wager that much of what we think we know will turn out to be wrong in the light of longitudinal studies and time. But unless we think we are in a permanent state of pandemic, then we do know the answer to which system is better: authoritarianism or liberal democracy.

PS There has been some heroic work by medical workers in China. They should be lauded, whatever worries we have about the government there

Look to the Other China on how to deal with Corona

There has been much concern expressed about governments responses to the coronavirus. That is true here in Seattle about the U.S. federal government, but it was especially true of the people of Wuhan about their local, provincial and federal government. (check out this video of their citizens shouting “shame, shame” at a CCP official). But some countries have so far been more successful than others in containing the virus. South Korea, of course. But the “other China”, Taiwan, also stands out. So far, despite being only 81 miles off the coast of mainland China, having 850,000 citizens who live in China and another 404,000 who work there, Taiwan currently has only 30 confirmed cases of Covid-19. Back in 2003, Taiwan was hit hard by SARS—but they learned from it. They set up a National Health Command Center in 2004 “that focuses on large-outbreak response and acts as the operational command point for direct communications among central, regional, and local authorities.” With Covid-19 they have established a checklist of 124 actions, including “border control from the air and sea, case identification (using new data and technology), quarantine of suspicious cases, proactive case finding, resource allocation (assessing and managing capacity), reassurance and education of the public while fighting misinformation, negotiation with other countries and regions, formulation of policies toward schools and childcare, and relief to businesses.” Other countries have much to learn from Taiwan. Here’s an excellent primer on how they have reacted to this pandemic.

Surge in Domestic Violence in China Due to Corona

As American officials consider whether to strengthen social distancing policies, it would be wise to at the same time strengthen domestic violence infrastructure. Because one of the many trade-offs of mandatory quarantining that we’re learning from the China experience is that domestic violence will increase when people are holed up in their homes for weeks at a time. A recent article in the invaluable Sixth Tone notes that “While millions of people are spending time indoors, rights activists say there have been increasing instances of domestic violence — a crime in China since a landmark anti-domestic violence law went into effect in March 2016.” The virus, it turns out, is as damaging on the psyche as the lungs, or at least public policy response to it can be. “Wan Fei, a retired police officer who is now the founder of an anti-domestic violence nonprofit in Jingzhou, a city in the central Hubei province, told Sixth Tone that reports of domestic violence have nearly doubled since cities were put under lock down.” This is not to say a lock down of a city is inappropriate (in fact we think we need to go further than we have–“wash your hands and avoid people” for the time being), but mitigating measures on a whole host of issues—economic, social and criminal—must also happen. Good times 2020.