The lockdown of the economy is easing a bit, but I am sure that the hysteria will come back in the fall with the new flu season. The only way out of this mess is for people to stop paying attention to the constant flow of bad news from the media and move on with their lives.
The damage to the economy is huge and our governments are doing a terrible job in handling this simple issue. As always, over time the economy will adapt and it’s not just about working from home. It is about office space that is not needed and shopping malls that are not important anymore. Working from home means less demand for cars (I just gave up on buying one in Canada and may give up on buying one in Switzerland too.) The restaurants will stay in business, I hope. I still like to go out and I am a simple man with acquired taste– I like the Kempinski hotel on the boulevard Mont Blanc in Geneve. The restaurant there is called “Le Grill” - a fantastic view of the Jet d'Eau when it is on, meaning when a high wind is not spraying the water over the city. It’s a hell of a design. Back to eating - I am not good at trying new things and I prefer to eat the same meal every time. This tells you how we square-headed civil engineers think, or at least this one here, typing this essay with one finger. Let’s get down to business, but I will save some good news for the end. The German government will take 20% in Lufthansa, really nationalizing the business, and this is just one of many to come. The airline will be flying, of course, just under different owners. What people don’t understand is that a bailout is a transition of ownership, from private investors to the government. And there is a long line up for bailouts – we’re looking at a massive nationalization of the economy in Europe. Throughout history there are three schools of thought in my view. The first is liberalism, which lasted the longest and brought most of the progress. In essence that is the freedom of a person to develop, grow and act. Then you enter the vulgar ones – first was communism, where the class of people matters, not the individual. That lasted over 70 years, ruining the life of millions. You would think that nothing worse can happen, but it did. The leftist fascist ideology was about dominant race, not person, not class, and it was spit out to the garbage of history after just 17 years, but with the greatest human suffering ever. I think that this reflects on the human nature in good way – we dispose of nonsense quickly and hard. That means that there is God in us, or at least our vision of him is in us. The settlement after the war was called the Nuremberg trials when the justice was served to the war criminals. By the way, don’t believe in the suicide stories among some of the top nazi officials – they were beaten to death, like Heinrich Himmler. Herman Göring was too, I am pretty sure. History will always repeat and your memory becomes your greatest weapon so use it good, which is harder for men since the ladies are so much better at remembering things. I have a woman in front of me right now and she remembers what shoes she was wearing at the high school graduation party and I don’t even remember that there was a party. I think she had a dark blue dress on, but I may be mixing events. Now for the good news, and no, it will not be from the gospel of St. John. I bought a Yamaha VMax motorcycle, which is capable of 200hp and 300 km/h on the highway. “I may have gone crazy,” I said to a friend of mine. “It wasn’t a long trip,” she said.
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I knew that this week was going to be weird because it started off weird.
On the floor of the Italian Parliament, Bill Gates was accused of intentionally looking to reduce the world population by 10-15%. There were politicians, and you can watch it on youtube, who immediately protested to protect him. Why not let the investigation take place for they have no answers unless they are being paid to have none. The US Senate approved by unanimous consent legislation that could bar some Chinese companies from being listed on U.S. stock. The bill would require companies to certify that they are not under the control of a foreign government, but obviously there is way more to it. I grew up in a communist country and I know it first hand – EVERYTHING is under control of the party. That’s the very definition of the communist system, that’s how the CCP (Chinese Communist Party) stays in power. So the US now has the power to chase out any Chinese company that happens to be listed in New York, the most liquid stock market in the world, and China will retaliate in the effort not to lose face. It is useful to look this way at what’s coming – China’s main customers are entering a serious recession and the Asians have no domestic demand, except a few cities on the East coast. Say, the foreign demand goes down 20% which likely means about 100M jobs lost in China. How long before these people will be on the streets rioting? What is the brilliant plan to deal with that? Increased oppression works for a while, but not for long. And there is no back up plan. Let me tell you what I learned in life – if you don’t have a back up plan, you don’t have a plan. I’d say I am a little concerned of what’s coming, and if somebody says they’re a little concerned – that means they’re very concerned. And if they say that they are concerned means they’re desperate. The Japanese can one day wake up on the wrong side of the bed, scream banzai! and shut the whole Chinese economy down, given the strength of their navy and easy access to oceans, two factors that China doesn’t have. Cut off the supply and delivery lines, that means. It could be a matter of weeks. Here is my take on it – if your company has a business with staff in China, now is the time to get them the hell out of there. America will re-industrialize, and we will do it fast, and the rest of the world will have a reality check. The so-called “developing countries” need to get their affairs in order. You look at sub-Saharan Africa – it’s a royal mess and no leadership. Who should solve it for them? The Americans used to care but they do not anymore. You’ll miss them when they’re gone. In Western Europe the political leadership is nowhere to be found since the problems started, and things go bump in the night.. Saudi Arabia has just tripled its taxes from 5% to 15% percent, as it is suffering from the collapse of oil demand and price. Not to be outdone, federal finance minister Olaf Scholz of the Socialists in Germany (SPD) floated the idea to raise income taxes to 70%. So you make 100K and you bring home 30. Let this thought sink in for a while. This is how problem-solving thinking went at the highest level there.
Or what passed for thinking. It is not less wild in the US – some states impose what are known as inventory taxes, which means that regardless of whether a business makes a profit, they will be taxed on having inventory, which in this environment they were prohibited to sell anyways. You can’t make this stuff up. And I know what’s coming next – property taxes will rise, as the municipalities are starved for money. The mad hunt for taxes is on. I have no idea who is pushing this corona virus nonsense, but someone is. What I know for sure is this: one of the main functions of power is to conceal power. If you don’t have a lot of power you have to exaggerate your power. You try to conceal your weakness. People who have lots of power don’t want to attract attention to it, so it is really difficult to know where power lies in the 21th century. What is clear, however, is that the way the elite stays in power is by shaping the way we think, mostly through the mass media narrative. The politicians are playing along – they don’t bother to look at the data, which proves this virus has been tiny in comparison to the flu. Times of extreme change are often painful, but for many they provide an opportunity - the Chinese alphabet has the same sign for crisis and opportunity. In all fairness, they don’t live by it at all. They screwed up royally the handling of corona virus, which simply shows the lack of quality leadership over there. Beijing has accused the French of using their nursing homes as death camps, has blamed Italy for being the source of the coronavirus (at the very peak of Italian deaths) and has charged the US Army with bringing the virus to China in the first place. And you know how easy it is to offend the French, they live the life their own way, which I admire by the way. Even on iPhones they don’t have Siri, they have chéri. And I realize that my opinion comes form nostalgia for a better world. Dispensing it is my way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it's worth. But trust me on the economy. And I will keep doing it, simply because I grew up listening to people who had something original to say and I learned that basic rules of life mean a lot. Strong leadership is essential. Now for the title of this essay - afterburner is a device fitted to the exhaust system of a turbojet engine to increase thrust for the few moments when you really need it. Or in life, if you go strong for something and you make the extra effort and it costs you. I can relate – I am not a steady performer, but I have brilliant moments and I live for them. Luckily I have a hard loving woman who takes me as I am. It was a late, chilly spring night, and we were sitting on a balcony in the old town with a friend of mine. “Let’s have a toast”, he said. “For what?” “For keeping the rules.” “I’ll drink for that.” My rules are from the times before political correctness poisoned the society. Guess his are too. All of us, old guys, are pretty strange. I went shopping the other day. The parking lot was full, so I parked more or less illegally by the curb. The two gentlemen were sitting on the bench drinking beer straight from the cans and were in a visible need to talk to someone.
“Don’t worry man, we’ll watch the bike for you.” None of them was able to drive it away, that’s for sure, so fine, I even left the key in the ignition. People are just killing time during the corona madness and having a beer on the bench outside is better than rioting in the streets. Life has changed and I have a theory about it that may surprise you. When we have a set back, like right now, the real question is - what do we set back to? I am of the opinion, that the corona virus didn’t really change the trends already in motion, it just accelerated them. Like stress, viruses reveal the weaknesses in the system. China was in turmoil since 2008 and now their main customer is entering a recession. Russia was on the ropes before oil prices collapsed and this is their main source of income (30% of their GDP comes from selling oil), as it is for Middle East exporters. The point is - oil is going to zero, as there is no storage capacity left. Europe was fragmenting fast, and the virus scare will only add to the national separation trend. The borders have come up and there is no pretense any longer for a genuine European solution to this problem. We see food shortages in developing countries, lines to buy something to eat 4 km long in South Africa for example. The developing countries traditionally didn’t do well on their own, they waited for somebody from outside to come and solve their problems. Well, nobody is coming anymore. US already have the demography younger than China (which is one of the fastest aging societies in the world) and this is crucial, because the young people spend. But – the US is slipping into the reality that it trades with itself and maybe a handful of other countries (Japan, Korea, Mexico, Canada and the UK). That transition from global trade into “friends and family” arrangement would normally take a few years to accomplish; however the corona will make it happen fast. In the past five weeks the United States has thrown $3 trillion in new government spending at coronavirus-related bailouts, relief and economic stimulus. In total the US has already spent more on coronavirus-related actions than the rest of the world combined, tripled. And they will throw in another few trillion during the summer. Which means that price is no object for the Americans, suddenly making this transition within a few months, not the few years. What will emerge on the other side of it is that we’ll have American security, but not global security as they provided for free up until now. We’ll have American trade network, but not a global trade network. China can’t possibly interact economically with the rest of the world without the security umbrella provided by the Americans. Their navy can control maybe 2000 mile radius from the ports, no more. If you look at the history of China in the last 3500 years, they very rarely have been unified. Their unification now comes courtesy of the American’s security protection. China only works if someone from the outside provides reasons for it to exist – protection of supply lines, availability of resources and open markets to sell to. Their way to handle this issue is “social management”. There are already more than 600M cameras installed on Chinese streets. Now they can install cameras in private homes to monitor for “corona virus symptoms”. Let’s be real – if people meet to discuss something, the government will know about it. If this is not desperation, I don’t know what is. The trade-off associated with the COVID-19 threat has been portrayed as being between lives and money, but the correct way to view the trade-off is between lives today and lives in the future. Ponder the last sentence and you won’t regret it. |
AuthorTom Kubiak is the author of The Traveler Archives
February 2021
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