Wednesday Briefs – 21 October 2020

A weekly commentary on current events. Follow populyst to receive notification.

This week: Coronavirus Third Wave; Housing’s Boom and Bust; Are the Polls Wrong?; Where the Media Would Miss Trump; Reading List.

Coronavirus Third Wave

The number of daily confirmed cases in the USA has been rising rapidly in recent days and will soon exceed the peak of 78,000 recorded at the end of July. Daily deaths lag by three weeks and have been holding steady in the 700 to 750 range (7-day average). However, we expect that they will start rising to exceed 800 by Election Day and 1,000 in later weeks.

On the other hand, there is a possibility that the rise in cases is not entirely “organic” if it resulted not from an underlying increase in infections but instead from schools and other organizations requiring tests from asymptomatic students and employees during the back to school period in September-October. If this is the case, we would expect deaths to remain more or less steady below 800 and the ratio of deaths to confirmed cases to fall below 1.5 from its current 1.75 (see chart in last week’s Wednesday Briefs).

Meanwhile, the University of Washington’s IHME predicts (base case) as many as 390,000 total US deaths by February 1st. If borne out by reality, daily deaths will exceed 2,000 on several days and will average 1,700 in the next three months, significantly higher than the current sub-750 level. The IHME says that widespread mask wearing could cut the cumulative death toll by as many as 75,000, down to 315,000 by February. Though still alarming, these more recent projections are less dire than the IHME’s numbers of last month when it predicted 410,000 total deaths by the end of the year. The current base case projection for year-end is 315,000, or reduced by nearly a quarter from last month’s projection. See the IHME’s chart here.

MORE >>> Listen to UnHerd’s interview with Scott Atlas, a senior advisor to the President and a member of the Coronavirus Task Force.

Housing’s Boom and Bust

During the financial crisis of 2008, the number of new homes sold and the pace of new home construction crashed to their lowest levels in fifty years and then remained there for a decade (see chart from the St Louis Fed). There was a rise in multi-family home sales but not enough to offset the decline in single-family. Now, the pandemic has brought a new jolt to the market. The combination of super low interest rates and of migration to lower density suburbs has created a spike in the sale of single-family homes, both new and existing.

Since this cannot presumably be attributed to second-home buying or to new household formation, this gain must be largely offset by a loss in other residential markets. In New York City for example, apartment vacancies have risen ao much that some landlords are now offering two months free on new leases. This type of offer was used successfully in the past to forestall any lasting decline in nominal rents since it has a built-in snapback to the previous rent within a year or two. But the strategy only works if the local economy recovers within a reasonable time frame, say twelve to eighteen months.

Because New York City’s real estate market was prematurely written off several times in the past, only the brave would bet on its demise this time around. But we also have to be cognizant of two factors: 1) a sticky correction has not taken place in several decades and is in theory overdue and 2) a Biden victory could increase New York City’s all-in tax rates to levels that will drive more residents away.

Are the Polls Wrong?

We will find out on Election Day whether modern polling is worth anything when it comes to presidential elections. Some polls show Vice-President Biden ahead across the nation by double digits and ahead in swing states by mid-single digits. But polls also showed a solid lead for Hillary Clinton at the same stage of the campaign in 2016. Did most pollsters make the necessary adjustments to avoid a repeat of their 2016 debacle?

Not according to the people at “polling disrupter” Trafalgar Group who called it correctly for Trump four years ago and who are expecting his victory again this year. Among polls compiled by RealClear, only Trafalgar is showing Trump in the lead in the key states of Michigan and Florida. Trafalgar’s deviation is particularly stark in Michigan where it sees Trump ahead by 1% while all other pollsters see Biden ahead by 6 to 11%, and in Arizona where it has the President leading by 4% instead of lagging by 3% to 7% according to others.

Our own view is more circumspect. It is probable that after 2016 other pollsters have made the requisite adjustments to their methodology. If not, we would expect them to make the same decision as Gallup and to quit Presidential election polling altogether after missing another Trump victory by a mile. (Gallup still polls for the President’s job approval but not for voting intentions).

Where the Media Would Miss Trump

In an unspoken way, every news media outlet is benefiting from Donald Trump. Sure, the editors and anchors at many places profess to oppose him but one thing is undeniably clear: Trump has been a boon for the news business, mainstream or otherwise. The infatuation with Trump cuts both ways, profiting both friend and foe. In this must-see presentation, Matt Taibbi tells of a news channel that opted during the 2016 primaries to show an empty lectern awaiting Trump rather than switch to another candidate speaking live.

Between 2015 and 2018, combined revenues at CNN, MSNBC and Fox News grew from $3.9 billion to $5.3 billion (chart in this article), a clear acceleration from the previous three years. The New York Times’ stock has quadrupled in four years. And contributions have grown significantly at non-profit news organizations such as Pro Publica.

A lot of anchors and editors would celebrate a Biden victory but the bottom line might not be as peppy in the next four years. You can’t have everything.

MORE READING >>> The Trump bump in the news media: commodifighting Trump

Recently read and recommended:

Like this time in 2016, Trump looks doomed to defeat — that’s why Democrats are worried

Escape from New York: Urban Flight Seeded the COVID-19 Pandemic Across the United States

West Needs New Ideas, Not Just New Voices

Don’t Fight T-Fed

At Front Lines of a Brutal War: Death and Despair in Nagorno-Karabakh

Covid-19 in Africa: map following the pandemic

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Florida in the Election

A French version of this article appears in L’Express.

Former mayor Mike Bloomberg has announced that he would spend as much as $100 million of his own money to help Vice-President Biden prevail in Florida on Election Day. This underscores once again the importance of Florida in this and every presidential contest.

Florida has a good track record of picking the winner in a presidential election. With the messy 2000 contest between George W. Bush and Al Gore, the state gained prominence as the ultimate prize and must-win battleground. To be sure, it is not a perfect track record, given that Florida favored George H. W. Bush in 1992 and Richard Nixon in 1960 over winners Bill Clinton and John Kennedy. If you go to earlier times, you also find that Floridians misfired with John Davis and James Cox in 1924 and 1920, two unknowns today except among aficionados of electoral history. But in sum, four misses out of 25 elections over a century can indeed be called a strong track record.

The stakes are high in 2020 given the state’s 29 Electoral College votes and the tightness of the race according to the polls. Vice President Biden is now nominally ahead by 1 to 3%, an insignificant gap that can easily close or widen in the remaining days of the campaign, depending on a slew of factors, not least the performance of each candidate in the upcoming debates.

Read more

Camus Against the Virus

Decency is of little value without a foundation of honesty.

Albert Camus’ masterful novel La Peste (The Plague) is enjoying a resurgence in the current pandemic. Published in 1947 in the immediate aftermath of WW2, it was not, or not only, about a biological plague but also about the plague of Nazism or other ideological cancers and their equally devastating effect on humanity.

Albert Camus

Among the many different citations recently lifted from the book, this particular one has appeared in several articles and countless social media posts:

“It may seem a ridiculous idea, but the only way to fight the plague is with decency.”

Coming from Camus, this sentence looked unusual because there is no direct literal word in French for decency as we mean it in English. The closest are décence and pudeur but these words convey different meanings.

In the original French text, Camus had written: Read more

2020 Election: Democrats Heading to a Brokered Convention?

An occasional commentary on the 2020 US Presidential Election in which demographics and identity politics play a bigger role than ever before. Here, we explain why primary and convention rules make it difficult for a frontrunner to emerge in a crowded field.

Today, President’s Day, is as good as any to draw some lessons from the early contests in Iowa and New Hampshire.

Crowded Field

FIRST, the Democrats do not yet have a candidate with proven national appeal. Although Bernie Sanders and Pete Buttigieg ranked first and second in both states, they have yet to show that they can do well in states that are more ethnically diverse. Iowa is only 4% African-American and 6.2% Hispanic/Latino, and New Hampshire only 1.7% and 3.9% respectively. The United States overall is 13.4% African-American and 18.3% Hispanic/Latino.

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For Bernie and Pete therefore, the test of national appeal will come in South Carolina and on Super Tuesday when several states with large minority populations will hold their primaries.

Although Bernie came first in New Hampshire with 25.7% of the vote, that result was as much cause for concern as for celebration. In 2016, running against only Hillary Clinton, Bernie had won New Hampshire with 60.1% of the vote. Of course, the lesser draw this year is explained by a more crowded field. Nonetheless, it showed that 74.3% of New Hampshire Democrats preferred someone else over Bernie, so long as her name was not Hillary Clinton. Read more

The Cure for Inequality is More Laissez-Faire

That means less cronyism and more competition.

“Inequality is not necessarily bad in itself: the key question is to decide whether it is justified.”____ Thomas Piketty in Capital in the Twenty-First Century.

Piketty’s words read like a premise that is only half right, followed by a problematic corollary. Reasonable people will agree that some inequality is not only “not necessarily bad” but also very desirable and very necessary in order to stimulate the economy’s entrepreneurial and innovative spirits. Further, if some inequality is desirable, how much is enough and how much is too much? And who gets to decide?

Clearly, there will never be a consensus on this. And it is not a satisfactory solution that the majority party would decide for the next four or eight or twelve years. The back and forth dominance of one party over the other would mean that any measures enacted to combat extreme inequality would at best amount to a feeble and erratic effort instead of a long-term cure, while the underlying problem gets larger with every electoral cycle.

To make things worse, both of the major parties in the United States are mistaken to ascribe inequality to an excess of capitalism. Democrats claim that growing inequality is the result of unbridled ‘wild west’ capitalism. And Republicans argue that it is a mostly acceptable byproduct of capitalism. But extreme inequality is in fact caused by insufficient competition. Given  that competition is the lifeblood of capitalism, it follows that inequality is the result, not of capitalism, but of a lack of capitalism.

Read more