Some Observations About Pandemics

The virus epidemic is having a major impact. People are in quarantine in more than 100 countries. Thousands are infected. Almost 5000 have already died. Airlines, cruise ships, retailers, sporting events, hotels, tourism, schools and houses of worship are taking countermeasures to combat the spread.  Many employees have been urged to stay and work at home.

A Common Thread

Pandemics appear to be more frequent and more severe, although some experts will take issue with that. In the past century we have witnessed and experienced the Spanish Flu, Aids, Ebola, the Swine flu, SARS, the Coronavirus and other worldwide health tumults.  During the Middle Ages the bubonic plague alone claimed 50 million lives.

What do these pandemics have in common? They seem to have a common denominator: human interaction with animals. The bubonic plague was attributed to infected rats. The Spanish Flu, which did not originate in Spain, is attributed to human interaction with birds. Aids is suspected to have come from Africa as a result of human interaction with monkeys. Ebola has been associated with animal flesh eaten by humans. The Coronavirus is suspected to have been caused by eating rats and bats sold at an open food market. 

There is no room for politics when it comes to pandemics. It is also regrettable that folks would use racism, xenophobia and rumors to criticize the government response to the epidemic. Unless we are capable of examining and debating the issues rationally, we will not learn much from the experience and are surely condemned to repeat mistakes.

In all cases, lack of hygiene appears to be the principal reason for the dispersal of viruses. Unsanitary conditions are found everywhere but in developing countries they appear to be the worst. Poverty and local traditions that rely on eating exotic animals seem to compound the problem. Ignorance is another important factor in the equation.

Fundamental Risks of Globalization

In an increasingly inter-connected world, a virus in one country can affect the entire world. Unwittingly globalization has impacted many supply chains and disrupted world markets and local economies.

Developed countries have ceded self-sufficiency protocols, seduced by the low cost siren. The search for low cost has reached the diminishing returns point. Countries would be wise to pay attention to excessive reliance on imports. Time seems ripe to reconsider national strategic imperatives; and, it is wise to reduce dependencies.

High tech, biotechnology and manufacturing companies would be wise to adopt a fallback or backup position to protect their supply chain. In worst case scenarios companies must consider as a threshold the ability to continue production using home resources. Increased home capacity will create jobs and better level the wage field. It might be a cost worthy to be absorbed. The current crisis has caught many companies flatfooted and unable to mitigate the situation.

Reliance on India, China and other countries to provide the U.S. with generic medicines puts at risk millions of Americans who depend on these drugs for their survival. Cheaper prices become meaningless when the supply chain dries up. Certain drugs should be included in the nation’s strategic reserves. The US should have fallback plans to address this looming risk. China has threatened to stop shipping antibiotics to the US in retaliation of what it perceives unfair media and government in the US.

China has cornered the market for certain raw materials and rare minerals. As a result, sections of the US industry are at risk with their supply chain possibly being shut off during pandemics and wars. National interests should supersede low cost incentives. Rare minerals should be included in the country’s strategic reserves.

Globalization can be a conduit to social and climate cost transfer from one country to another.  A non-compliant country impacts the well-being and security of another. China and India comprise together about half of the undesirable emissions. Yet in the Paris Accord they are given a pass on emission restrictions because they have “special” development needs. This arrangement makes it difficult to have an integrated strategy to fight climate change.

Proponents of open borders need to open up their eyes, not just their hearts. Infectious diseases such as measles, mumps and tuberculosis once eradicated in the U.S, are infecting many citizens as thousands of people enter the country from developing countries.

Where Next?

It is time for the pendulum to swing back toward the middle. Let’s reap the economic benefits from globalization but let’s mitigate the social downside. Prudent planning might increase economic costs but it can make the nation more secure and less vulnerable to external instability and chaos.

Nations need to set aside the “nice guy” approach to international relations and support policies that are mutually beneficial. Striving to be loved has not enhanced national security. What might enhance it is respect for one another’s sovereignty and national interests. Lets face it, not all nations will cooperate; some are driven to be competitive.

My good friend and colleague Don Nielson reminds me that we need to reign in our compulsion to consume far beyond our needs thus falling prey to the cheapest rather than the better choices.  Don also cautions us to place limits to hoarding. Watching folks shop during this period at grocery stores and discount houses illustrates this phenomenon.

The Three Faces of California

A Little Background

California is the most populous and richest state in the union. Its forty million inhabitants drive the fifth largest economy in the world surpassing Argentina, Australia, Brazil, Canada, Great Britain, India, Indonesia, Italy, Russia and Spain. It is home to some of the largest corporations such as Amgen, Apple Computer, Broadcom, Chevron, Cisco, Disney, Facebook, Google, HP, Intel, Qualcomm, Tesla and Wells Fargo.

California stretches 1,000 miles along the Pacific coast with a width of about 250 miles. Its topography ranges from sunny south to northern forests, from blue waters to snow capped mountains of the Sierra Nevada, from luscious and fecund valleys to desert plains. Its temperate climate is one of the most desirable in the world with abundant sunny days and low humidity.

California’s fertile valleys and productive farmlands produce humongous quantities of vegetables, fruits, legumes and nuts to feed the entire nation. Rich mineral deposits make California self sufficient. 

California is the most diverse state in the union. It is a state where minorities are the majority. It is also home to 12 million undocumented immigrants. Politically, the Democrats rule the state with little opposition from Republicans.

California has a top-notch university system with 23 campuses stretching from north to south and inland. The State is home also to world famous private universities such as Stanford, University of Southern California, Santa Clara University, University of San Francisco and University of San Diego.

Big Challenges

 It is not all honky dory for California. Its booming economy and creative spirit are not enough to solve deep structural issues. Fissures in its social fiber reveal major income inequality, more than 150,000 homeless people, sky high cost of living and an out of control surge in petty thefts, burglaries, strong arm robberies and other crimes and felonies.

Sanctuary policies at the local and state level intended to shield illegal aliens from deportation have been hailed as compassionate and humane.  However, little has been done to assuage the public reaction to crimes by illegal aliens. The State supports illegal aliens by offering free tuition at public colleges, free legal services and subsidized health insurance. Many criticize the State for not doing as much for its poor US citizens.

Raising the minimum wage by cities and the State have not solved the underlying issues regarding home affordability. The minimum wage does not translate into a living wage. In San Francisco, for example, if you earn less than $ 125,000 you are below the poverty line. Some workers spend 2-3 hours commuting to work every day because they cannot afford to live in the cities in which they work.

California has spent already over one billion dollars attempting to solve the housing problem. Governor Newsom has recently asked the legislature to approve another 750 million dollars for the upcoming fiscal year. However, the problem is getting worse. Why? Many believe that the State lacks a robust and coherent plan and a competent leader to implement it.

Political Landscape

California is a one party state. The golden rule (those who have the power rule) appears to be in the hands of an inbred enclave of powerful San Francisco liberals. This group pretty much decides the legislative priorities, who will run for key offices, and who calls the shots on a number of fronts.

California has the highest income tax rates and sales taxes in the nation. High home prices generate huge revenues in property taxes. Stringent environmental laws generate additional tax revenues from gasoline taxes, development fees, and other use fees.  

California has been the destination of many for several decades. Plenty jobs, delightful weather, innovative polices and a welcoming culture have served as a magnet for millions.  The trend has been slowing down over the past ten years as a result of the high cost of living and tight home market.

In the past couple years the number of folks leaving the state outpaces the number of new arrivals. Many escape the heavy taxation burden and cost of living differential by moving to nearby states such as Oregon, Nevada, Washington, Utah, and Arizona. Some leave in search for a more welcoming conservative environment.

Close ties between the Democratic Party and public unions have resulted in sweetheart labor agreements that create statewide-unfounded pensions liabilities. Loopholes in labor agreements permit retirees to bank their sick leave and vacation accruals in order to inflate their average earnings for the previous 5 years of service prior to retirement.  The amount of retirement pay is calculated based on this formula. As a result, many retire at up to 125% of their basic earnings.

Examining the Political System

I have chosen three archetypes (prototypes) to shed light on the faces of California’s political landscape. These terms are intended to illustrate one side of each class. It is acknowledged that there are other sides not addressed in this piece.

Politburo

A small enclave of powerbrokers, wealthy donors and politicians from liberal San Francisco occupies this circle.  The term Politburo is used here to describe the principal policy-making executive committee (no connection to the Communist party is intended). Members select office holders; they pass judgments on legislation; they pick winners and losers; and they set the priorities of California. They choose who shall have access to the inner circle. They prefer labor leaders, company executives, major financiers, academicians, party aficionados, environmentalists, and well-healed contributors.

This group occupies the top tier of the pyramid. It has the power and is the in-group. I estimate this circle to include fewer than 1,000 folks. The group will fight tooth and nail to hang on to its power. It relies on the Claque Class to keep the Schlemiel Class at bay by dispensing favors.

The Politburo knows that the bottom class has no money. Therefore it relies on the Claque Class’ income tax, real estate tax and capital gains tax to raise most of the revenues.  The Schlemiel Class will be taxed mostly through user taxes such as sales tax, gasoline tax, and fees.

Claque 

The term claque comes from the French. It was used to describe people who were given free tickets to theaters on condition that they would clap on command. This group is in but has no real power. This group’s responsibility is to manage the expectations and the upward pressure from the Schlemiel Class. The group is expected to keep them in their place where they cannot harm the status quo but can be mobilized on short notice to join the political parade. Their political contributions are key for the Politburo Class to hold on to their power.

This middle group represents, I estimate, about 5-10 million folks. It is the public face of the Politburo. To stay on the good side of the Politburo Class, this group will mouth compassion, solidarity and fellowship to the bottom class in order to gain their sympathy. When the bottom class pushes harder than usual for reforms and more access, this group runs interference on behalf of the Politburo Class.

Schlemiel 

I have carefully chosen this moniker. It comes from Yiddish. It means, according to Merriam-Webster, “an unlucky bungler: Chump.’ The list of antonyms is long e.g., blockhead, dimwit, jerk, schmuck and meathead.

This pejorative term, however, is not to define who members of this group are but where they are. Those occupying this circle, by and large, are smart, hard working, and dedicated folks. Their only sin is being born poorer. The group represents those who are out and powerless.

A fraction from this class escapes but the great majority is doomed to a lifetime of making ends meet. Escape routes are formal education, superior artistic ability, athletic skills, entrepreneurship, and military service. Those who escape are said to have lived the American Dream.

Politicians euphemistically call this circle the American People. It includes the working class and the bottom slice of the middleclass tier. These folks struggle to earn enough to support their family, and often live from paycheck to paycheck. To buy their votes the Politburo Class dispenses healthcare, BMR housing, food stamps, tuition aid, welfare benefits, and other social services.

This bottom group, I estimate, contains the great majority of California or about 30 million folks.  

At the very bottom of this pile we find the homeless, the drug abuser and the wretches of society. This penniless bunch is rewarded with no jail time for so-called lifestyle crimes e.g., DUI, burglaries, shoplifting, drug use and selected felonies. To avoid jail time, cash bonds have been eliminated. The police often look the other way because this group has no money to pay fines. You can see many of these brothers and sisters at stoplights with their signs asking for donations.

Summary

The reader might accuse this writer of cynicism for the use of the three descriptors to define how power and influence are distributed amongst the classes. The criticism is accepted. There are no uplifting qualities to the “hardening” of the three circles.

Famous play writer Giuseppe Tomasi di Lampedusa wrote in the play The Leopard (film with Burt Lancaster): If we want everything to remain as it is, it will be necessary for everything to change.

Government programs bombard Californians on a daily basis. Just about every month a new tax or fee is proposed in order to solve a particular problem. Huge amounts of revenue are raised, even though the public is told that the State is running a surplus. Yet problems go unsolved. They just morph into something else, often accusing the feds for insolvency. Money is spent without impacting its intended beneficiaries. Nothing really changes. The percentage of poor people either remains. the same or goes up. The homeless seems to increase. Drug abuse is widespread. As Tomasi warned us “everything remains as it is” even though change is everywhere.

Some Questions to Ponder

How can we shrink the gap in income between poor and the rich? How can we dispense healthcare fairly and compassionately? How can we become more competitive on the world stage? How can we solve the homeless problem? How can we better help those in the street victims of substance abuse?  How can we provide more affordable housing? How can we reverse the exodus from California?

Stay tuned ….