A Bowl of Mush

It's been a long time - much too long - since posting anything to this blog.  Life got up-ended a bit.   I had to go off-salary for a while to keep my ship afloat.  I took the time to finish a new cabin and move out of an older one.  The gold price spiked (I'm a prospector), calls came in, and I was able to get back to work in July.   I had little time nor energy to keep at this.  I'm sure many of you have been through something similar.  I hope you're doing better.

Coming up for air at the end of July, it seems like we're watching a descent into chaos.  When the COVID virus struck, people instinctively did the right thing well in advance of any political directives.  They headed for cover, returning home and holing up to see what might happen.  Our scientific folk got out in front, issuing conflicting and sometimes contradictory rules and recommendations, convincing many of us they probably didn't know much more than we did.  Politicians in our major parties took the opportunity to capitalize on the fear either issuing draconian and sometimes foolish rules or stoking false hopes of a quick recovery with quack ideas or by encouraging people to "get on with life" in the face of something obviously serious.

The COVID virus was an unknown but the reaction was our decision and we'll live with the consequences.   The lockdowns have disproportionately affected those on the bottom of our social pile.  Working from home is no biggie if you're in the top 20% - pecking away on a computer, having Zoom meetings and above all receiving a steady paycheck.   The rest - starting with the foot soldiers in Nevada's hospitality, gaming and travel industries - took this in the teeth.  They caught and spread COVID more readily; lost their jobs and income; and got cooped up in less-than-fancy accommodations to wait this out.  A lot of small businesses are teetering on the edge of ruin with owners facing the specter of losing their life's savings and decades of work.  A whole generation of young people who had recently entered a buoyant job market with every hope of doing better felt a trap door open under their feet.  As the weeks dragged on, hope turned to despair and fear spread.   People reacted differently.  A few headed to the desert; others went into total isolation; snitches ratted out "violators" and some ripped off their masks and protested against the rules.  Most people did as they were asked and felt they should, staying at home waiting this out.

Of longer term consequence, our politicians went on a spending spree but at least this time (unlike 2008/9) they tried to put the money in the hands of ordinary Americans.  The Fed blew out our balance sheet turning every crappy bond they could get their hands on into "money".  We've finally cut the tether and created true fiat currency.  There isn't a prayer savers will ever see better than 1% interest from a bank in the near future and all likelihood that the things they really need - like food - will cost a lot more even as we are assured "inflation is under control."  

In this atmosphere tinged with fear and hopelessness, it was no surprise to me that a tiny spark could spark an intense conflagration.  The militarization of our police forces is a problem and the issue of bad apple cops is always with us.  The reaction to George Floyd's killing by a police officer however seems to be more an explosion of inchoate rage than a focused response to an awful incident.  There has to be a deeper cause and it seems to me it reflects a reaction from many people on the bottom of the pile to what COVID has done to their lives.   While there are many non-white protesters, it is notable to me that so many are young white people involved.   I suspect in this crowd there are more than a few recently unemployed baristas, retail sales people, low level clerical folk and free-lancers all with huge student loans to pay and perhaps facing eviction.

People at the top of the pile - corporate CEO's, tenured intellectuals and those in the media - have deflected and channeled this rage into a weird sort of Salem witch hunt or American version of Mao's Cultural Revolution.   They have stoked the "cancel culture", with justification of looting, assault and murder; and a wholesale attack on virtually all American institutions.  I suspect was done out of fear of what might happen should this rage be turned against them.   Billionaires and perhaps our new trillionaire can't sleep soundly at night watching what is going on around them.  It's always easier to turn people at the bottom against each other.

Politicians in our established parties have responded with either opportunism or cowardice.  The Democrats are stoking the current unrest with their rhetoric, seeking to channel it into a massive repudiation of the Republicans in November.   The Republicans are running scared with the President showing every sign of cracking up and likely to lose by a sound margin.  They're afraid of getting sucked down the same toilet.   Only a handful of politicians on either side have shown the courage to stand up and speak for ordinary Americans profoundly upset at what they see happening.

I wish I could say I thought the Alliance Party was the way out but I really can't.   We've spent the last couple of years building infrastructure but no heart.   What constitutes our "platform" is mush - a smorgasbord of ideas cherry picked from the two main parties in the hope of straddling some mythical middle ground.  Our presidential candidate seems defined primarily by ambition not by principle.   Americans want and need a vision of what the country is and stands for.  I think we used to have one but have lost it. 

I honestly believe that America has to look back into its history and realize it is founded on Judeo-Christian principles, values that were the recognized bedrock of our political culture.   We didn't fight a Civil War, leaving 600,000 dead, over some politically correct concept.   At the heart of it was the belief that all of us are equal in the eyes of God and  were given the fundamental freedom to work out our destiny. Any system which denies that is evil.  All of us should have the fundamental right to be born, to live our lives to their natural ends, free to do good.   Houses and political parties built on quicksand will fall.  What passes as political moderation these days is still based on these principles but without recognizing them, fleshing them out and sticking to them - we'll be in the ditch.  History is replete with examples.

Going into this election cycle, I feel like I'm facing a choice between the terrible and the awful.  The results of the 2016 election tell us Americans are hungry for change and are fed up with cynical politicians backed by amoral power brokers and wealthy manipulators.   If the Alliance Party is really going to amount to anything, it had better wrestle quickly of the issue of what it stands for, tell America and be prepared to defend it.  If it wants to, it had better get on with the job.

This constitutes my last posting to this blog.  To those who may have been following it, I offer my very best wishes and thanks.

- Mike Power

What's in store for Nevada?

We're beginning to face the full fury of the COVID 19 epidemic.  What can we expect in the weeks and months ahead?

At this point, there appears to be some good news; current models are a lot less dire than those being discussed just a week ago.   The latest (April 7) model prepared by the Institute for Health Metrics and Evaluation (IHME) suggests that current outbreak in Nevada will peak on or about April 18 with mean / average estimates of 1080 hospitalizations, 216 ICU hospitalizations and 22 deaths on that date.  Their model is shown in the graph below

By the end of the month, we should see the end of the current outbreak. 

Unfortunately history suggests this isn't over.  There is no cure or vaccine for COVID-19 as yet.  A recurrence is likely when the current shut-downs, quarantines, travel restrictions and social distancing are relaxed.  During the 1918 Spanish Flu Epidemic this happened as shown in data provided by the National Geographic.

It looks likely we will see either continued restrictions or some relaxation followed by a second outbreak and re-introduced restrictions later in the year. 

And what about the economic impact...   

 

Until we reach the peak and see daily death rates falling across the country, the economic impact of this pandemic won't be headline news.  The stock market appears to be pricing in a rebound but that might reflect the anticipated stimulus cash and not be a good guide to what might be in store for average folks in Nevada.

At this point the entertainment and travel industries look like they are in for a world of hurt.  Las Vegas and, to a lesser extent, Reno are likely facing a major protracted slowdown.  Regulations will likely keep the major casinos shut well into May.  More importantly, business likely won't rebound quickly when they do re-open.  Millions of Americans will be at least temporarily out of work, in financial hardship or both.  Small businesses will take a big hit.  Entertainment, travel and vacations are first to get cut when the belt gets tightened.  The airline industry and hospitality industries might lose a couple of big players and those remaining are likely facing drastically lower revenues into the third quarter of this year - at least. 

Our natural resource industries may see a rebound once they can get back to work.  With trillions of new dollars being created both in America and world-wide, commodity prices at least will probably rise due to inflation.   Farmers, ranchers and especially gold miners will likely see good prices for their products in dollar terms and this, coupled with low energy prices, should strengthen bottom lines.  Unfortunately, returns to our natural resource industries can't replace the lost revenue in Las Vegas.

This crisis is going to translate into deep cuts in state tax revenue and the current administration deserves credit for beginning to tackle this now, asking departments to come up with $687 million in possible budget cuts for the coming year.  

A lot depends on how Washington chooses to get America back on its feet.  Hopefully cash will be funneled directly to those who have lost their jobs and small businesses to keep their noses above water until we return to more normal conditions.  Don't bet on it once the lobbyists get out of self-isolation.   No matter how you cut it, we are facing some very interesting times.

For the moment however, the focus has to be on doing our part to keep each other from catching this bug by complying with reasonable requests made by our state and local governments.  I hope you and yours will avoid this scourge and be able to resume normal life soon.

-- Mike Power
 

Flatten the curve...or else

There's a lot of talk about "flattening the curve" this last week but not a lot of hard answers.  Here's a guess what might be in store in Nevada.

I have to start with a quick digression on epidemic (epi) curves.  Epi curves plot the number of new cases with time.  The total number of cases, mortality and other statistics can in turn be calculated from the epi curve.  Natural epidemics obey basic mathematical laws and tend to form bell shaped curves with long tails on the down side.  With no measures taken to stop them, highly infectious diseases can spread very quickly throughout a population but eventually the rate of new infection drops once a large proportion of the population gets infected.

Since medical resources are finite, an infectious disease outbreak can swamp the medical system, forcing medical practitioners to ration care and triage patients based on expected outcomes.   You can change this outcome by taking preventative measures to minimize the spread of the disease, thereby prolonging the outbreak but lowering the number of new cases the system has to deal with.  This is "flattening the curve" shown below:

  So - what's the story in Nevada?  In the absence of any guidance  from state authorities (at least that I can find), I decided to take a stab at estimating what might happen.   Below is an epi curve for Nevada cases of COVID-19 constructed from data collected by the Johns Hopkins University Center for Systems Science and Engineering, current to March 17.

 For the last seven days, the average daily rate of  increase in new cases is 29.8%.

The Nevada Current estimates there are 6,000 hospital beds in Nevada.   Statista estimates the average utilization rate of hospital beds in America is about 66%.  So that leaves about 2,000 beds in Nevada available to cope with the COVID-19 outbreak.  When might all those beds be filled?

In China, the World Health Organization documented that roughly 15% of COVID-19 patients required medical attention (oxygen and / or ventilation) and that the average patient required 3 to 6 weeks of care.  For comparison, the current COVID-19 hospitalization rate in New York is 19% (CNBC).  From the epi-curve we can estimate the number of patients who will require care and the number of beds required.    Assuming a 29.8% compound case growth rate, 15% hospitalization rate and 4 weeks care, you can calculate what demand an outbreak might place on our medical system:

The bottom line: by April 8, our hospital beds could be full and we could be turning away COVID-19 patients.

Now I get why there is panic in the air. 

The CDC has told us what to do: we'd better cooperate and flatten this curve.

-- Mike Power

COVID 19 in Nevada

A real life pandemic is upon us and will upend our lives for some time to come.  What can we look forward to? What can we do about it?

The pandemic

Anyone reading this blog likely follows the latest news feeds so repeating headlines is a waste of our time.  What might be more useful is looking at the trajectory of the COVID 19 crisis and its associated after-effects in an effort to foresee what is to come.  Let's start with the disease itself since this seems to be something science can help us with.

The COVID 19 outbreak is moving from continent to continent and is just beginning in North America.  In China where it began, the published data suggests  it took approximately 18 days for new cases to peak but that the strain on the medical system peaked about a month after the outbreak.

   
 South Korea is widely reported to have handled their outbreak well: quickly isolating the point sources, testing widely to determine the full extent of the outbreak, and implementing effective measures to damp it down.  Here is what their epidemic (epi) curve looks like (Helen Branswell):

In South Korea, it took about 14 days for new cases to peak.   By all reports, their medical system was not swamped by new cases and their mortality rate was consequently lower than in China.

In the public interest, I think I'll repeat the arguments about "flattening the curve" before turning to effects.  Person-to-person outbreaks have epi-curves that look like your classic bell curve with a tail  except that they vary in amplitude (maximum number of new cases reported) and how tight the curve is.  Here is a cartoon describing this (Economist):

Without effective public health measures, an epidemic spreads quickly and a large number of new cases are reported daily until the epidemic burns out.  With effective public health measures, the spread of disease is slowed and the duration of the epidemic is extended.  In the best case, the number of daily new cases never strains the health care system beyond its capacity and everybody gets effective treatment.

This did not happen in China or Italy and is likely not happening in Spain.  The death rate curves tell the story (Coronadaily March 11):

You can draw your own conclusions on how America is doing; my read is that there is hope that the outbreak won't be as serious as it was in China but these are early days.


I think the World Health Organization daily situation reports are probably the best source of up-to-date information on what is going on.  Here is the epi curve showing new cases (excluding China) in the March 14 report:

It looks like the epidemic really got going in North America around March 9 but it may have been earlier because of a lack of testing, particularly in America.  The incubation period ranges from two to 14 days, with an estimated median incubation period of five to six days, according to the World Health Organization   In a worst case scenario, if it did really take off on March 9, we can expect new reported cases to peak about the end of March and the health care system to feel the maximum strain about the third week of April.

Available evidence suggests that this respiratory disease is most dangerous to the elderly and those with underlying cardiovascular conditions.   There is a lot of misinformation circulating and I've found it hard to get reliable data.  I think the mortality summaries from Wikipedia might be trustworthy:

  Can we make an estimate of how bad it might get?   There are an awful lot of different and some scary numbers being thrown out there.  Let's assume that it is entirely as bad as has been reported in China.  If we make the liberal assumption that Chinese government figures are under-reported by a factor of 5, we might see 15,000 to 20,000 deaths in America and perhaps 300,000 people requiring hospitalization or serious medical care.   The CDC reportedly has a more pessimistic view.  According to a New York Times article.  Their worse case scenarios suggest between 160 and 214 million people will be infected, as many as 200,000 to 1.7 million people could die and between 2.4 and 21 million people could require hospitalization, swamping our nation's health system with only 925,000 hospital beds. A very important caveat to this estimate is that it doesn't take into account the effect of public health measures currently underway which could reduce these estimates dramatically.  Finally, an interesting point they raise is that this epidemic could last as much as a year with local resurgences.
   
So, in summary, it appears likely the current COVID 19 outbreak could peak in America by the end of March in terms of new infections by mid to late April with respect to the pressure on the health system.  If we are lucky in the first pass, our health system may not be overtaxed and hopefully the death toll will not be over 10,000.   But this won't be the only or perhaps the most serious effect on American's in the weeks to come.

The infodemic

American news and other media got interested in COVID 19 about the time the epidemic peaked in China in early February.   The story continued at a slow boil throughout February until early March when the extent of the epidemic in Europe became apparent.  Since then the story has gone ballistic (Social Media Matters):

 The recent spike occurred when the number of COVID 19 cases in America began to accelerate and the epidemic looked like it was well established.   But wait.. there's more:

The stock market has corrected sharply, originally in response to the COVID 19 outbreak but later exacerbated by the Saudi - Russian oil price war.  The price war has has led to a credit crunch requiring the Federal Reserve to inject liquidity into the banking system as it did following the 2008 financial crisis.  The airline, tourist and entertainment industries have already taken a big hit with mass layoffs at some airlines already as air traffic has plummeted.  All in all - a perfect storm.  Until the epidemic crests - again hopefully by early April - there may be big losses on both Wall Street and Main Street.

In Nevada  

So what can we expect in Nevada?   Here's a guess:

• Serious slowdown in the gaming / entertainment industry, hitting Las Vegas pretty hard in about 2 weeks.   We've already seen signs of it with Delta cutting flights by 40% and other airlines noting booking slumps similar to 9/11.  Event cancellations multiplied last week and there might be a race for the exit as no organizer wants to be responsible for holding an event that spreads serious illness. 
• School shutdowns - similar to that being mulled over in Clark County.  With closures already announced in Washington, California and Ohio don't count this out.  I think these are likely within the next 2 weeks, starting first in Las Vegas and then in Reno.
• Public facilities closures, likely announced along with school closures.
• Steadily escalating hospital admissions with elective surgery being cancelled.
• Continued run on some stores for groceries and essentials.
• A general business slowdown with consequent layoffs as people hunker down and avoid many smaller social events.  

It could be bad for at least 6 weeks ahead; hopefully we will see improvement by then but we should expect this to drag on for a while afterwards.

So what should we do?

We owe it to our families, neighbors and community to do our bit to fight this epidemic.  The Center for Disease Control has laid it out for us, using the best currently available information:

• Practice good personal hygiene:
• Wash your hands frequently with soap and water; there's a proper way to do it. 
• Don't touch your face; the virus enters the body through the nose, eyes and mouth.
• Wash items you handle that could become contaminated with disinfectants containing at least 70% alcohol or strong bleach.
• Cough / sneeze into the crook of your elbow not your hands.
• Avoid hand shaking and other personal contact.

•  Avoid large public gatherings and keep about 6 feet apart from others in most situations.

• Especially avoid contact with the elderly or people with underlying health issues.

•  Watch for the symptoms you might have it:
• Fever
• Dry cough
• Difficulty breathing

• If you do think you have it:
• Wear a mask to avoid spreading it.
• Rest
• Stay at home and away from others to avoid spreading it.
• Get tested, if available.
• Seek medical attention if it gets serious and you see:
• Difficulty breathing or shortness of breath
• Persistent pain or pressure in the chest
• New confusion or inability to arouse
• Bluish lips or face
• Other symptoms of concern (this list isn't exhaustive).

All this sounds and perhaps feels a little weird but the good news is that these small measures will help immensely by slowing the spread of the disease and giving our health care system time to deal with what will likely be quite a case load.  

Above all, we should not let this crisis bring out the worst in us.  Fear can lead to either nastiness or irresponsible neglect.  There are going to be tough economic times ahead in the near term and we will all feel the pinch; who among us will remain generous?  David Brooks made an interesting point in his weekly PBS session with Mark Shields on PBS.  In reviewing the history of the 1918-1919 Spanish Flu Epidemic which killed between 500,000 and 675,000 Americans he noted the lack of sources and the reticence of people to talk about it.  He attributed this in large part to shame; individually and collectively we did not deal well with this event and it left real scars.  We have a chance to avoid this here.

On a personal note, I can tell you this is real and coming soon.  At the end of February, I attended a large mining industry convention in Toronto, Ontario with 23,000 other delegates.  There was hand sanitizer at every booth, attendants continually washing the escalator rails and elbow bumps or waves instead of hand shakes all round.  Nonetheless, one case of  COVID 19 was reported almost immediately after the convention.  I went up to the Yukon in northern Canada afterwards and had dinner on Monday with a friend who had also been at that convention.  He developed a fever on Thursday and tested positive for the virus along with his daughter on Friday.  I won't be able to travel back to Goldfield anytime soon; Canada issued a blanket air travel advisory today which voids my health insurance if I return to Nevada.  This virus has probably been circulating in North America for many weeks and is just starting to break out.   There is no vaccine to prevent this disease; all you can do is to prevent yourself from being exposed to it.

I am confident this will break in a few weeks but things will be interesting until then with plenty of alarms and challenges.  With prayer, preventative measures and practical charity I feel we will weather this as our ancestors have weathered similar and worse crises throughout our history.

 -- Mike Power   







 

Healthcare options

Like it or not, health care is going to be a big issue in the coming election.  Bernie Sanders is an unapologetic supporter of universal government-provided healthcare and has pulled the entire Democratic party over to his corner on the issue.  Health care was a top concern of Americans going into the 2018 mid-term elections.   It won't be far off the top of the list in 2020.   If there is corona virus epidemic in America this year, it could be the issue in the election.

As we grapple with how to deal with health care in America, it might be useful to look at a couple of other options which preserve much of what we value in our current healthcare system - freedom of choice for both patients and physicians.  Here are a couple of articles that look at healthcare systems in  Australia and Switzerland.

A Public Baseline: The Australian Health Care Model by Rosalind Dixon and Richard Holden describes the Australian health care system in fairly glowing terms.  It is not a single payer system like that in Canada, the United Kingdom or some European countries; it is a combination of both public and private medicine.  Their "Medicare" system provides a base level of services:  emergency, critical care, non-elective surgery, primary care coverage and coverage for essential pharmaceuticals.  It isn't fancy but it's enough for the basics.  The government pays for this.

They do have private insurance.  If you want anything at all extra, you pay out of pocket or take out insurance coverage.  In fact, the government strongly encourages you to get insurance coverage.  If you fail to sign up early or only do so when you get sick, expect no help; they freely allow insurers to charge significantly higher premiums.  In addition, if you're well off with a high income, you're penalized (with higher income taxes) if you don't have some sort of insurance.  The net effect of this is to take a lot of pressure off what otherwise would be an overloaded system.

The authors maintain this works very well, striking the right balance between allowing patients freedom to chose and physicians freedom to practice.  It appears to deliver solid outcomes:

 Total health care expenditures (public and private) in Australia are around 10 percent of GDP, compared to 18 percent in the United States. And the Australian system works well—contributing to a life expectancy of 82.8 years, the fourth highest in the world.

It's an interesting idea and they freely admit there might be problems implementing such a system in America.  With relatively open borders for example, such a system might exacerbate our illegal immigrant problem.  Perhaps with modifications it might work.

 

Kevin Williamson at National Review provides another view, based on the Swiss health insurance scheme.   This apparently was the model Massachusetts used in designing their system, a precursor to the Affordable Care Act.  The way it works is that there is no government provided health care service - none, zip, nada.  Instead, all citizens are required to buy health insurance and the government strongly penalizes you if you don't.  They provide generous supplements to poor folks but it is still everybody's responsibility to go out and get coverage and prove they have it.  If you don't, the government signs you up for very basic coverage and comes after you with the bill, including missed payments.  He proposes a modified form of this program, which strangely for a libertarian Republican, has a lot of similarities to the Affordable Care Act.

It's safe to say the ground has shifted in America with respect to health care.   Our old employer-provided system is a legacy of  World War II when wages were capped and companies were permitted to compete for employees by offering "free" healthcare.  They were also allowed to expense the costs in what can be considered an indirect government subsidy to large corporations.  It hardly helped the self-employed and those working for small businesses.   Nowadays, employer-provided health care is a dream for a very large group of us.   Finally, neither of these articles deal with problems within the health insurance industry, abundantly clear to those of us dealing with huge co-pays, rising premiums and gaps in coverage. 

Nonetheless, this election cycle there is going to be a debate about the fundamental structure of our health care system.  Other countries have experimented with various schemes and we can profit from their experience.  We should do so and use it as a guide to build a system where all Americans have access to affordable quality healthcare.

-- Mike Power