Goolsbee Promotes the Mainstream-Mediated Viral New Mania

McKenzie and Company analyst Adi Kumar has just reported on an important interview with Austan Goolsbee, the liberal University of Chicago economist who recently served as chairman of President Obama’s Council of Economic Advisors, and now serves as senior advisor to the New York Fed.

From the beginning in a March article in The New York Times, Goolsbee has been a cheerleader for the panic.

In a deeply depressing interview, he now urges a still more crushing lockdown. He also ascribes the loss of business activity not to the government lockdowns but to “peoples’ own decisions to stay at home.”

He does not speculate on what caused these bizarre decisions.

Our basic idea is to compare places where policies are different on either side of a state border. In Illinois we had shutdown orders, but across the border in Iowa they didn’t. Several metro areas span that border and we have 110 different industries. Take barber shops as an example. If the policies were driving the activity, then we should have seen people still getting haircuts in Iowa but not in Illinois. But that didn’t happen. In the same week, everyone stopped getting their hair cut by similar amounts. That kind of evidence leads to the conclusion that the 60% drop in consumer activity from pre-COVID-19 times to the depths of the pandemic was more about individuals’ own decision to stay home. We found that only about 7% of the fall-off was due to the policy. Everything else we attribute to other factors, mostly fear.In the United States, these findings are relevant to the debate about reopening. As we say, the virus is the boss. Slowing the spread of the virus, lowering the likelihood that people will catch it if they come to your business, helping them feel more comfortable and less fearful — those will be the key elements in bringing the economy back.

The frustrating thing about the United States right now is that most of the other rich countries have figured this out. Without vaccines or treatments, Germany, New Zealand, Japan, and other countries have stopped the rampant spread of the disease and are coming out of lockdown. Children are returning to school; people are returning to work.

In the US, we had half-measures; we did not bite the bullet at the beginning.

It is not a trade-off. Just look around the world. The countries that prioritized health not only had better health outcomes, they had better economic outcomes too. Here, where the main focus is on the economy rather than stopping the disease, we got the disease and it wrecked the economy. So the two go together, for better or worse…

These times are exactly what debt is for. You cannot pay for a once-in-a-century event all in the same year. On June 6, 1944, you can’t have General Eisenhower canceling two-thirds of the landing craft because the D-Day landing isn’t revenue neutral. We are going to pay for this relief. The right way is to pay for it over time, which is what debt allows you to do. But we need the money now, or the recession will be much worse.

In early March… I [Goolsbee] said that an epidemic in the US would have a far greater impact on the economy here than it had in China, because our economy is much more dependent on face-to-face services than is China’s…

The best realistic scenario is that we do enough testing, supply the population with enough masks and other protective equipment, and slow the spread of the virus to the levels we see in New Zealand, Korea, China, Germany, Japan. Then our employment picture would improve as theirs did. Here unemployment went up by more than 10% in a month. They had increases too — but by 2% in Germany, 1% in Korea…

We have $5 trillion in federal lending that is going to big business, backed by $500 billion under the control of the Secretary of the Treasury. Of the $5 trillion, only $150 billion has gone out the door. So we have a trough of money as never before seen, and zero clarity on who gets it or how that is decided.

The headlines will be dominated by stories of misappropriated funds. We were extremely transparent with the funds during the last financial crisis and they [the Trump Administration] seem to have concluded that transparency makes people mad…

But the lesson I learned was the opposite. If the Obama administration had been as secretive as the present administration has been — I think the stimulus bill would have gone nowhere.

In the aftermath of 2008-09, we forced financial institutions to build up more capital, and that is a success story. If this pandemic had struck then, we would have had a disaster that could have taken down most of our financial institutions… I’ve been thinking of the idea of contagion. It creates fear, whether of a physical disease or of financial ruin. And the two are linked. The fear created by financial contagion causes people to pull their money out of financial markets. The fear created by the pandemic stops people from going to the doctor, to restaurants, to hair salons.

In financial crises, recovery measures are of little use, as the Fed [US Federal Reserve Board] reminds us, until we stop the run on the banks. With the pandemic, life cannot begin to return to normal until we control the disease. The two are closely linked.

The world is linked, so we all have a long way to go. We have to bring down the infection rate and need more testing.

It is as if Goolsbee believes the mainstream propaganda campaign — who knows? Perhaps these gullible leftist fools still believe it. He continues to promote the mainstream mediated viral new mania. He apparently believes the continuing canards on “more cases” and “infections” and the mantra of “more testing.”

The only reason for “more cases,” though, is the millions of more tests (at a now at last declining rate of some 750,000 per day including many repeated tests by people returning to work).

He carefully fails to mention the humongous elephant in the room: a perfectly ordinary year in total all-cause deaths. All-cause mortality is the only number that matters. Goolsbee denies the obvious fact that the medical crisis has been over for months, followed by an egregious political crisis of tin pot pols flailing and thrashing about in an effort to avoid culpability for the most expensive policy blunder in world history.

Today’s Prophecy

How can anyone with a brain believe that the lockdowns do any good whatsoever in the face of global evidence that the virus ignores them (and masks make you sick). As Jay Richards, Cornell statistician William Briggs and biologist Doug Ax show conclusively in their new book, The Price of Panic, out in October, and the Israeli Space Program researchers showed in April, the epidemic is totally unaffected by lockdowns. With no lockdowns, for example, Sweden did no worse than the European average in deaths and suffered merely a 1.5% GDP drop, compared to our 35%.

“There is no signature whatsoever in the data of any effect of lockdowns,” as Richards reports. Lockdowns are merely economic self-abuse, which is of course the favorite prurient activity of leftists and perhaps explains their affection for masks.

But why on earth did President Trump go along with the suicidal Leftist parade, now even donning a ridiculous pathetic mask with VP Pence?

I am genuinely and completely baffled. It may be true that leftists so cherish their global COVID-coup that they cannot see the real world at all. But why Trump and Pence? Are they merely dotty old men following doctors’ orders? And are the credentialed clowns around them simply hallucinogenic and blind to the data that proves no crisis?

Are the politicians deliberately lying to preserve their hypertrophied powers in the face of their catastrophic mistake? I really don’t think so, but how else can you explain their power mad edicts? Or Doctor Fauci’s new call for mandated goggles? Masks are not enough! Or are these pompous tyrants criminally gullible and stupid?

Or do masks insidiously derange their wearers, invoking the amygdala and releasing adrenalin, as my brilliant “Moonshot” colleague John Schroeter speculates (John is suing Washington Governor Inslee for the constitutional overreach of his compulsory mask mandate).

Probably some of all the above. But I simply don’t know. It is the biggest mystery since the Murder on the Orient Express. Does it have the same explanation? They all did it together. But we know such conspiracies don’t work in real life.

I suspect it is all uncoordinated but flawless preparation for a repeat performance in the name of climate change. We must remember that crisis is the health of the state, and of statists.

And if we are to prevail under these conditions we have to reward companies around the world that boldly proceed with the human endeavor in the face of risk and madness.



George Gilder
Editor, Gilder’s Daily Prophecy


You May Also Be Interested In:

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology — and its impact on our lives.

He’s an established investor, writer, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

And he’s certainly no stranger to the financial newsletter...

View More By George Gilder