Coronavirus Is Not an Emergency. It’s a War.

Coronavirus Is Not an Emergency. It’s a War.

This is a short midweek note, something I haven’t done for years. But as we all know, these are very special and difficult times.

Below, I’ll give you two links. They describe the nature of the new coronavirus pandemic and its potential consequences. I have run this past the best medical professionals I know, and they agree.

I was critical of the Federal Reserve for its emergency moves last Sunday. I now assume they had the same information that I’m giving you today. They weren’t panicking, they were trying to get ahead of the situation, going where we know we need to go and doing it now. Good on them. I apologize for my criticism.

Without radical action (some of which is already happening, some places, but not enough), this pandemic could cost many lives and potentially launch an economic depression. I am not exaggerating when I say this. I really mean it.

That doesn’t have to happen. We can solve this. That is what we as Americans or British or Italian or Chinese do. That is what we as humans do. We come together in a crisis.

But it will mean that we have to treat this situation not as an emergency, but as a battle that could turn into a war. World War C. It will be costly and require extraordinary measures, even if we act quickly. This weekend, I will explain why we should forget about balancing the budget, not unlike we did in World War II. I will say things I never thought John Mauldin would ever think or say, let alone write.

In the meantime, I urge you to read the following links and understand the urgent need for extraordinary actions in terms of social distancing. It will come at a terrible cost for much of the country, but if we do it now, we can get through this crisis quickly.

Consider how South Korea, Singapore, and Hong Kong have fared. Swift, comprehensive actions work. And as in a war, we must bear this financial and lifestyle burden together, understanding it will have consequences. The longer we delay, the higher the costs will be.

It is not that I think my ideas are any better than others being proposed, but I will offer some philosophical underpinnings and ideas that can guide us. And I will argue that proposals I have read so far, which may change by this weekend, are inadequate to deal with the nature of the crisis. They merely seem radical in terms of what we have done in the past of those alive. It is not radical if we are to avoid a World War II type of situation.

I am proposing that we do not think outside of the box. We must get rid of the box.

The data below clearly indicates we must take action. That action is going to cost a great deal of people and businesses a great deal of money, time, and blood. The sooner we take action, the lower the cost will be.

This first link talks about the consequences of delaying serious social distancing and quarantine policies, even for one more day. I believe the math and science are overwhelming. And that means you, gentle reader, must take action today for your own family. If you are in a position of power, you must take action for your community or your business. Focus on the actions that will make a difference today and be ready to adapt further as we see how the battle is unfolding.

Coronavirus: Why You Must Act Now

Let me call out my own home state. As of this morning, Dallas has basically shut everything down. Fort Worth, on the other hand, is letting bars and restaurants open with six foot distancing. Fort Worth is putting Dallas and everyone else in the region at risk. Maybe in hindsight, we will find out that Fort Worth was right. However, given the data, can we risk it? Governor Abbott, I know you read my letter. Take charge and kick some Texas ass.

This second link describes a study by the Imperial College in Britain. A link to more detailed data is in the article. Basically, without drastic action now, it is possible a million Americans will die, and potentially even more. Again, the actions we take today can drastically impact what we can and cannot do a few weeks from now. It is very sobering.

Sobering Prediction

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Bluntly, this is going to cost more than a few trillion dollars. It will have unpleasant financial consequences for a very long time. So did World War II. But acting quickly will cut that cost in terms of life and spending. The consequence of not dealing with it financially, let alone medically, will be a depression and an unacceptable loss of life and economic support for millions of people.

Longtime readers know I am the “Muddle Through" economist. But this is not a Muddle Through scenario.

Again, I urge you to read the links, think about your own personal situation, and this weekend we’ll talk about what we must do as a nation.

It is time for our own Greatest Generation to step up. Only this time, it needs to be all of us.

For those of you who are Tolkien and Lord of the Rings fans, it is time to light the signal fires and muster the Rohirrim. I can never watch that 30-second scene with a dry eye.

It is time for us to light our own signal fires and muster our own courage. God knows we will need to support the front lines who go into harm’s way to keep the country running.

I’ll be back this weekend, and look forward to your feedback as always.

Your ready to get through this together analyst,

John Mauldin Thoughts from the Frontline
John Mauldin

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March 21, 2020, 1:23 p.m.

Thank you for sending this John.

James Shutiak
March 20, 2020, 6:19 p.m.





Pat McCoy
March 20, 2020, 3:39 p.m.

I can see your negative feelings, based on the links you’ve provided.  However they are based on assumptions which may not be valid.

Satellite photos of Wuhan before and after the onset of the virus show that it was a center of great pollution, making part of the comparison to the US valid only for those areas with high pollution, not for the vast majority on the US which is non-industrial.

Also, in 2018 (latest numbers available) about 2.8 million folks died in the US, about 90% of them in the 75+ age group.  As the current virus has the most devastating effect on this age group (89% on Italian deaths are age 70+), it seems that 1 million deaths in the Us would mostly be among those who would have died from other causes this year anyhow.

This is not to overlook an issue that needs to be faced, but closing down the economy can be more of a hindrance than a help.  Not to overlook the “socialization” of our government by taking over our liberty.  I agree with Ben Franklin “Those who would give up essential liberty for temporary safety, deserve neither”.

Lon Purvis
March 20, 2020, 8:23 a.m.

Part of the healing system I use also tests emotions and I know John feels a little gloomy.  I treated John and hopefully he will feel better day.
March 20, 2020, 7:21 a.m.

May be too late but getting behind Mario Rubio’s plan to make loans that become grants to keep people at work makes great sense since gov’t will incur cost anyway via unemployment insurance. Use banks, credit unions and other financial providers as they are already on front lines dealing with businesses. SBA and Unemployment offices will never keep up. Also keeping people employed keeps healthcare in place for employer provided plans. Do for all businesses
March 20, 2020, 7:21 a.m.

Occurs to me if a country of over 1.4 billion can keep this thing at bay as they did during their biggest travel period of the year, then there is hope and perhaps a lesson in there for everyone.

Time for the US to show some of that world renowned American ingenuity. The alternative isn’t pretty….

Lon Purvis
March 19, 2020, 10:06 p.m.

I am not a doctor but have studied alternative healing as a hobby since 1969.  There is something called NAET that treats the electrical part of the body and uses muscle testing to determine sickness.  I know it works as I have kept myself well and helped friends for years. It is my hobby.  It can detect the virus while still in incubation before any signs are seen.  A treatment can be done in 15 minutes and in some cases in one minute.  It works on the electrical system God put in our bodies and it WORKS. It is 90% prayer and it works. You dont even have to be with the person you are treating. I agree, I thought this was crazy too until I saw it work 100s of times.  I check about 200 friends and associates every night to make sure they aren’t infected.  Am I 100% sure this will work on this virus; I am NOT but time will tell.  I will trust it until it fails.  Now here is one strange thing.  In my research every person who has tested positive per medical testing also has an allergy to the Australia wild fires.  Those are just the published names I have seen.  I noticed a few people with that allergy a few weeks ago and maybe it weakened their bodies making them targets for this virus. My studies continue and I hope to have good results which will help all of us.  Ok; you just a comment from a weird guy or a fellow who knows our Lord has simple answers to all our complex problems and has the answers in place before we need them. He wants you well. One last thought.  Our emotions effect our electrical system thereby weakening our immune system and fear can cause us to get sick. I pray all of you dont get sick and recover all your financial losses.

Mike Leach
March 19, 2020, 7:53 p.m.

We can and should do whatever takes - in the short term, as TEMPORARY measures.  What is unacceptable - impossible in fact - is to shut down virtually our entire economy for 12-18 months or longer - indefinitely in fact - as the Huffington Post article seems to suggest.

John, your war analogy is appropriate.  In war, you have to win.  “Winning” in this case means maintaining the United States of America as a relatively free and independent constitutional republic with a functioning economy that can ensure the welfare of its citizens to the greatest extent possible.  In war, casualties are inevitable, and a strategy that attempts as its PRIMARY objective to minimize casualties at all costs is one of the best ways I know of to bring about defeat, not victory.  While not agreeing entirely with the post by Mr. Morgan above, I must concede he has an arguable point. 

We seek a cure - but not one that ends up being worse than the disease.  (Doctor, the operation was a success - but the patient died ;-)
March 19, 2020, 7:28 p.m.

Hi John,

When you write “we should forget about balancing the budget”, I am afraid you are losing your grip on reality.

Balancing the budget?

In a country running 1 trillion deficits when its economy is supposedly at its strongest!

So now, it’s going to be 2 or 3 trillion deficits, as far as the eye can see.

And what about these congratulations of yours to the Fed?

Please explain how zero interest rates, or +5% or - 5% rates for that matter, are going to change anything for the now closed small businesses, the millions of unemployed and of course the sick?

Is the banking cartel going to lower interest rates on credit cards from 15% to 1.5%?

You bet!

Instead of throwing money like mad to the markets (let them die once and for all), the money should have been directed exclusively to the healthcare.

Now we are in a typical case of the remedy being worse than the problem.

While few people are going to be really sick from the virus, and for a relatively short period, legions are going to greatly suffer from the economic collapse, for years to come.

Think about it and please remove the rose colored glasses.

Europe and Japan were very close from recession and the US was cutting interest rates, printing money like mad, and running huge deficits, BEFORE the virus was even there!

How do you think this moribund economy is going to absorb the equivalent of a prolonged cardiac arrest?

One the main issues with cardiac arrests is that while the heart is not pumping, organic tissue is destroyed.

It is very much the same for the economy… it is actually getting destroyed, worldwide!

We are not talking about recession or depression, but rather about annihilation!

Finally, you don’t mention it, but we can guess that you have put a complete stop to your frequent travelling.

Have a nice time in Puerto Rico then.

March 19, 2020, 5:09 p.m.

WAR. The WW2 Atom bomb ultimately saved many more lives than it took and ended the crises.

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