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Kerala and KK Shailaja Show the Way!

By Shlomo Maital  

KK Shailaja, Kerala Health Minister

   On Jan. 21: The first case of the coronavirus is confirmed in the United States, in Seattle.

   On Jan. 22: Trump makes his first comments about the coronavirus, saying he is not concerned about a pandemic: “No. Not at all. And we have it totally under control. … It’s going to be just fine.”

   Contrast this with the Health Minister of Kerala, K.K. Shailaja, a former teacher. (She is known affectionately as Shailaja Teacher). Kerala is a state in southwest India, with some 35 million people, and its population is quite highly educated; its politics are socialist and, let’s say it, Communist.

        According to a fine article in The Guardian by Laura Spinney:

     “On 20 January, KK Shailaja phoned one of her medically trained deputies. She had read online about a dangerous new virus spreading in China. “Will it come to us?” she asked. “Definitely, Madam,” he replied. And so the health minister of the Indian state of Kerala began her preparations.     Four months later, Kerala has reported only 524 cases of Covid-19, four deaths and – according to Shailaja – no community transmission. The state has a population of about 35 million and a GDP per capita of only £2,200. By contrast, the UK (double the population, GDP per capita of £33,100) has reported more than 40,000 deaths, while the US (10 times the population, GDP per capita of £51,000) has reported more than 82,000 deaths; both countries have rampant community transmission.

       What does Shailaja Teacher and Kerala understand, that President Trump does not?

       The Guardian continues: “Three days after reading about the new virus in China, and before Kerala had its first case of Covid-19, Shailaja held the first meeting of her rapid response team. The next day, 24 January, the team set up a control room and instructed the medical officers in Kerala’s 14 districts to do the same at their level. By the time the first case arrived, on 27 January, via a plane from Wuhan, the state had already adopted the World Health Organization’s protocol of test, trace, isolate and support. As the passengers filed off the Chinese flight, they had their temperatures checked. Three who were found to be running a fever were isolated in a nearby hospital. The remaining passengers were placed in home quarantine – sent there with information pamphlets about Covid-19 that had already been printed in the local language, Malayalam. The hospitalised patients tested positive for Covid-19, but the disease had been contained. “The first part was a victory,” says Shailaja. “But the virus continued to spread beyond China and soon it was everywhere.”   In late February, encountering one of Shailaja’s surveillance teams at the airport, a Malayali family returning from Venice was evasive about its travel history and went home without submitting to the now-standard controls. By the time medical personnel detected a case of Covid-19 and traced it back to them, their contacts were in the hundreds. Contact tracers tracked them all down, with the help of advertisements and social media, and they were placed in quarantine. Six developed Covid-19.”

     Spinney observes: “ The Communist Party of India (Marxist), of which she is a member, has been prominent in Kerala’s governments since 1957, the year after her birth. (It was part of the Communist Party of India until 1964, when it broke away.) Born into a family of activists and freedom fighters – her grandmother campaigned against untouchability – she watched the so-called “Kerala model” be assembled from the ground up; when we speak, this is what she wants to talk about.”

       Trump vilifies socialism without understanding what it is, calls the Democrats ‘socialists’, and his sycophants caution against becoming “like Denmark” (a society and economy far more equitable, healthy and unified than the US).  Imagine what Trump would say about Kerala, if he knew where India was on the map or what Shailaja Teacher had done.

         How many people died, because Trump leads the US and not Communist Shailaja? How many lives could have been saved, had Trump acted weeks or even days sooner?

         And will voters rightly fix the blame on his shoulders, on November 3, in the US?

         Postscript: One of the world’s leading medical journals is The Lancet. Read The Lancet’s unprecedented Editorial, showing how Trump gutted the Center for Disease Control (CDC), politicized it, and made it unable to deal properly with the COVID-19 crisis. No-one can remember the last time when a scientific journal like the Lancet has editorialized so fiercely.

[Special thanks to Pramod Arikal, my former student, for drawing my attention to this important story].

Beware of the Second Wave! 

By Shlomo Maital

   As the ‘rate of doubling’ (number of days COVID-19 cases double, from every three days to weekly or more) slows, in some countries, even plague-ridden ones like Italy, a new danger emerges: Complacency.

   Writing in the New York Times, Nicholas Kristof warns of a second wave.

“….countless thousands will still die because of past mistakes and complacency. A pandemic is like an oil tanker: It continues to move forward long after you hit the brakes. In China, deaths didn’t fall sharply until a month after controls had been imposed. The benefits from social distancing in the United States will take time to ripple through the system, and there will continue to be new infections — and many more deaths.

  Kristof continues: “The Institute for Health Metrics and Evaluation at the University of Washington has a constantly updated model that predicts that the daily death toll across the United States will rise until April 16 and then slowly decline. By the beginning of August, it estimates that more than 93,000 Americans will have died from Covid-19.”

   “More bad news: Case fatality rates have been creeping up, and lethality may be greater than many had expected. Germany was hailed for a death rate of only about 0.5 percent, and South Korea was not much higher; now both have case fatality rates well above 1 percent.   In models of the virus that my colleague Stuart A. Thompson and I published, we used a death rate of 1 percent. But if the South Korean death rate by age is applied to the demography of the United States, the American case fatality rate is about 2 percent, according to Dr. Christopher Murray, the director of the Institute for Health Metrics and Evaluation.

 “A great majority of the deaths in the United States will have been avoidable. South Korea and the United States had their first coronavirus cases on the same day, but Seoul did a far better job managing the response. The upshot: It has suffered only 174 coronavirus deaths, equivalent to 1,100 for a population the size of America’s.

  “That suggests that we may lose 90,000 Americans in this wave of infections because the United States did not manage the crisis as well as South Korea did. As of Friday night, the U.S. had already had more than 7,000 deaths. ….. while we can bend the curve, it will bend back when we relax our social distancing.

  “This is more bad news, for many people seem to believe that once we get through this grim month or two, the nightmare will be over. But the virus is resilient, and health experts warn that this may be just the first wave of what may be many waves of infections until we get a vaccine sometime in 2021.

   “We’re just looking at this first wave,” noted Dr. Murray. He estimates that in June, some 95 percent of Americans will still be susceptible to the virus. “The world’s on fire with this virus,” said Michael Osterholm, an epidemiologist at the University of Minnesota, and this means that even if one country succeeds in putting out the blaze, sparks will keep arriving from elsewhere to cause new outbreaks. He added: “I think the transmission will continue to occur for some time.”

 

 

Global Slowdown – Beware!
By   Shlomo Maital

 
  
  I regularly participate in an economic survey run by a Munich-based research institute, that tracks how the world economy is doing.  The latest results are not good.
  The heat map shown above indicates whether economies are booming green or slowing yellow, orange, light red, dark red. 
    You can see at a glance looking at the ‘heat map’,  that the US, Europe and emerging and developing economies in Asia are all slowing.  Basically the whole world is slowing down, economically.
     Why?   The US is cooling, as businesses choose not to invest the tax windfall given by the Trump Administration but rather to buy back their shares.  China is cooling, owing to the trade war with the US.  Europe is cooling, owing to deep uncertainties about Britain, Italy, Hungary and other nations, and a growing spat between France and Italy.
    In short – look for a global slowdown, that feeds on itself —  US demand slows, hurts China, which hurts the Asian economic ecosystem..which in turns slows….
     A good time to set aside some savings, for rainy days ahead.

US GDP Growth: The REAL Story

By Shlomo  Maital   

             inventory             

Inventory of unsold automobiles

   New estimates for U.S. economic growth in the 3rd quarter of 2013 have just been published by the Bureau of Economic Statistics, Dept. of Commerce.  They reveal two key facts.

   * First, never ever just read the headline and lead paragraph, which is what most of us do.  The lead is:  the annualized GDP growth rate in Q3 2013 was a torrid 3.6 per cent!  This is an adjustment of the initial estimate, which was only 2.8 per cent, and a big jump from Q2 2013,  2.5 per cent.

   But if you dig down to around the 12th paragraph of the BEA release, you find this:   “The change in real private inventories added 1.68 percentage points to the third-quarter change in real GDP, after adding 0.41 percentage point to the second-quarter change.  Private businesses increased inventories $116.5 billion in the third quarter, following increases of $56.6 billion in the second quarter and $42.2 billion in the first.”

    What does this mean?  It means that  the increase in GDP, the stuff PRODUCED in Q3, was far bigger than the increase in final sales, the stuff people actually BOUGHT in Q3.  Final sales rose by only 2.1 per cent.  This is because businesses were overly optimistic about the ‘recovery’, produced too many cars, refrigerators, TV’s and cell phones, and ended up dumping them into the warehouse instead of selling them.  This has happened now for three straight quarters.

     This is bad news. It means that in Q4 and next year, 2014, businesses will cut production to sell off their inventories. That will reduce GDP growth, reduce job growth and weaken the recovery.  Always ALWAYS check the inventory numbers, not just the GDP numbers.

    * Second,  short term business cycles are alive and well. And they are always caused by human emotion.  We become overly optimistic, produce too much, fail to sell it, then have to cut back because inventories are expensive and stored goods soon become unsellable.  So the boom-bust cycle is permanently with us, because economies are driven by human beings and human beings jump from excessive hope to excessive despair and back again. 

     Prof. Robert Lucas’ statement in 1995 that the business cycle had been forever smoothed was simply, like Mark Twain’s description of his death,  “premature”.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
May 2020
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