As US COVID-19 deaths grow, blaming China helps Trump politically

So much news over the weekend, particularly on the US-China story. Let's talk about why. Numbers that we're talking about in the United States are changing. I think everybody heard when Dr. Fauci came out and said, we probably can do under 100,000 total deaths if we all socially distance.


Then you heard the 60,000 number and okay, 60,000. Let's do 60,000.

President Trump wants to be the most optimistic possible cheerleader of any topic at any time, whether it's how far the Dow can go up, how great the economy can be, we can have 4% growth this year, all of it. How quickly you can get the deficit down despite expanding it. And now how few deaths we could have - he oriented towards that 60,000 figure. Even though at the time, five significant and respected modelers of coronavirus cases and deaths in the United States, 60,000 was always the most optimistic. But that's where they anchored. Now we're at about 70,000, with a couple thousand more a day. And even though New York City, and the New York metropolitan area, after all of this lockdown, Connecticut, New Jersey, you're getting a significant reduction in case transmissions. We can feel better, at least with this first wave, that we have it, I wouldn't say under control, but it's a much more optimistic trajectory. And you feel like you could start to, in a controlled way, open bits of the economy to a greater degree.

But so many of the states that are now opening, and keep in mind, President Trump and the CDC have supported phase one, phase two, phase three in how you would go about opening. They're not making the orders, the governors are the ones responsible, but they created the baseline to go against. Many of the states that are now opening across the country have not actually hit those metrics. If you've got conditions that are set out by the Trump administration and you're not actually adhering to them, then expect much more significant numbers of cases. And that's keeping in mind that if you look at the New York metro area, we're seeing a reduction in cases and deaths numbers every day. But if you look at the rest of the country, the numbers are going up. Not as fast as they were in New York and not as many as you've had in New York, but still going up. And not just cases because they are testing more, but hospitalizations and deaths too.

Some of those states are rural and the case numbers are small. So, if it gets bad, you still have time to change your path and maybe it won't. But in many states, that's not the case at all. I think our expectation now is without changing the expectation for US GDP all that much, you're probably going to be closer to 100,000 or more over the coming month, two months. And that's going to be much harder for Trump to sell. He will do his best. He will reorient it towards, well, if I hadn't done anything, we would have a million or 2.2 million deaths. That's what they originally said and of course, I'm the guy that shut down the border with China and all of that. But, for those that have heard him in the last four-eight weeks, say not 100,000, hopefully 60,000, and now back to 100,000 or more, that's going to hurt.

Trump was at his highest level of approval, inching 46%-47%, blended rate. Hard to see that he's going to be doing that well going forward. You expect in the next few weeks, months, it's going to take a beating. Why am I saying all this, first of all, it's relevant in what's happened to US, but secondly, that's why you are seeing the Trump administration going much harder against China. If you're going to be blamed for much worse case load and death count in the United States, and if the very formulation that your administration put forward in terms of how you're supposed to reopen the economy is not actually being adhered to by your own governors, your own red state governors, it's making it hard for you to blame internally. You'll try. But it's much better to have an external bogey man that everyone can't stand. And China is that bogey man.

Especially because the Chinese are actually responsible. We know that the original virus came from Wuhan. And we know that they covered it up for a month. And while they were covering it up, people were traveling from Wuhan. Five million Chinese left the region, 400 plus thousand left China. And that's what got you the original cases, not in New York, turns out those came from Italy, though those cases from Europe had originally come from Wuhan. But from in Washington State, California, originally came from China. Also Iran. Also Europe. So, without that level of cover up, the chances you could avoid a pandemic and certainly avoid this kind of crisis, very and very much higher.

Now you're seeing people starting to say, we want to litigate against the Chinese, they should pay reparations for the economic damage being done. Of course, that's not going to happen. But they are going to take a fair amount of blame. And Trump sees that as an opportunity. Mike Pompeo, the secretary of state, over the weekend most dramatically said that they have conclusive evidence that this originally came not from a wet market, but from a bio lab. Not intentionally. Not that the Chinese were trying to cause bioterror with a new virus, but rather that their security was inadequate. They were experimenting on these viruses and they got out.

If it turns out that that's true and the Chinese lied about that, even though I view the cover up as by far the more significant issue, that is going to drive an enormous amount of bad will from the United States towards China. It makes a cold war with the Chinese much more likely. Of course, we haven't yet seen that evidence. And demanding that the Chinese provide us access to the lab to ensure there isn't any is very different than saying, we have a smoking gun. If it's the former, it's going to be partisan, just Trump supporters. If they have real evidence, the whole damn country is going to be baying for blood on this issue.

And at that point, you would expect the phase one trade deal to fall apart. You'll see higher tariffs. It will have a much bigger negative effect on the American markets this year. But will give the Trump administration a much juicier target for not taking accountability and blame for the for the pandemic.

Having said all of this, let us keep something very simple in mind, which is that China lied, they covered it up; but everyone else in the world, including the Chinese people, found out about it at the same time. Given that, there are a lot of countries around the world that have managed the COVID crisis much better than the United States, much better than Trump administration. There are a bunch of small countries like Iceland and New Zealand that are isolated. But there are also some big countries like South Korea and Germany. And the big issue I have is that, for all that we should appropriately blame the Chinese and want them to take accountability for not handling this, we also need to ask why the Trump administration was incapable of having a response befitting the world's greatest superpower. Why couldn't we look more like South Korea or Germany? I wouldn't expect us to look like Taiwan or New Zealand. These are tiny, tiny states. It's much easier to close your borders. They are much more homogeneous. It's much easier to get everyone to listen to what the government says. The US federal system, it's a lot harder. But you know what? Germany is a federal system, too, and they had a hell of a lot more willingness to go along with authority and they had a much more scientifically oriented approach. They weren't cheerleading from day one saying, everything will be awesome. And an everything will be awesome Presidency, without much focus on science, ultimately is likely to get us more than 100,000 deaths here in the United States.

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