Coronavirus and Inflation: 2020 - 2021
In a blog post appearing on this website on May 19, 2020, some statistics and predictions were presented for the coronavirus SARS CoV-2, which causes the Covid-19 disease. This coronavirus can be aerosolized by normal breathing and spread to others, expressing itself in hyperactive immune response, pneumonia, stroke, excessive blood clotting, and the failure of lungs or other organs.
By way of contrast, the European plague (Black Death) of 1347 - 1351 C.E. was most likely an expression of bubonic plague, which is typically estimated to have killed between one-third and one-half of the European population during that interval. Black Death is an infectious fever caused by the bacterium Yersinia pestis and spread by fleas. That long-ago European plague, as well as today’s global pandemic, caught their contemporary societies completely by surprise.
The origin of SARS CoV-2 is controversial: No pangolins, bats, or other non-human animals were ever found to have had the disease before its massive human outbreak centered on Wuhan, China in late 2019 or early 2020. On June 24, 2021, Ewen Callaway published a news article (“Deleted coronavirus genome triggers scientific intrigue”) on nature.com. There, Callaway stated that some SARS-CoV-2 genome sequencing of the early outbreak in Wuhan was removed in May 2020 from a U.S. government database by the scientists who had done the work. The missing sequences, once recovered, were not dispositive of the origin of SARS-CoV-2. Nevertheless, one wonders why those data files were temporarily withdrawn; why there was, apparently, U.S. government funding for coronavirus research at a Wuhan lab under Communist military auspices; whether that Wuhan research fell under the category of “gain of function” (the tweaking of the genetics of one virus in order to produce an even deadlier virus); and whether “gain of function” research is ever justified apart from the fact that “research makes money flow.” These issues are not pursued here.
It should be noted that controversy also exists on the significance of asymptomatic cases (infected individuals without signs of disease) and on the distinction between “deaths due to Covid” and “deaths with Covid.” How many co-morbidities are necessary before a death due to Covid-19 is relegated to a death with Covid-19?
It now seems appropriate to compare some of the early Covid-19 predictions from the May 19, 2020 blog post on this website with some of the actual results since then (as of the last half of January 2022). (Here, all SARS-CoV-2 variants are considered together, including Delta and Omicron.) As of May 1, 2020 the coronavirus pandemic had resulted in 3,334,416 reported cases and 237,943 officially attributable deaths world-wide; while the corresponding U.S. data were 1,098,565 cases and 64,577 deaths. According to initial U.S. federal reports as of May 1, 2020 the estimated upper bound on the number of U.S. deaths in 2020 due to this outbreak of Covid-19 was 2.2 million. Starting with these numbers and a total U.S. population of approximately 330,000,000, the implied upper bound on the U.S. Covid-19 mortality rate in 2020 was 0.67% (2.2 / 330).
In contrast, the plague of 1347 to 1351 could be associated with four consecutive years with an annual mortality rate of 12%, which would account for the death of 40% of the population. (Note that 1 - 0.88^4 = 0.4, which is in a mid-range between the historical estimates of 0.33 and 0.50.) Thus, the implied upper bound on the U.S. mortality rate due to Covid-19 in 2020 was about 18 times smaller than the historically estimated annual European mortality rate due to bubonic plague during the mid-fourteenth century (0.67% ≈ 12% / 18). On this metric, the bleakest U.S. outlook for 2020 would have had to be multiplied by a “horror-factor” of 18 in order to capture the reality of the earlier bubonic plague.
Fortunately, the actual number of U.S. deaths attributed to Covid-19 as of January 21, 2022, as reported by the New York Times, is “only” about 860,000. Of these, worldometer.info states that there were 370,781 such deaths in 2020 and 478,405 in 2021. Using the number for 2021, the actual U.S. Covid-19 mortality rate in 2021 was 0.14% (0.478 / 330); and the corresponding “horror factor” was approximately 86 (0.14% ≈ 12% / 86). On this metric, the actual U.S. Covid-19 mortality for 2021 would need to be multiplied by a “horror-factor” of 86 in order to capture the reality of the earlier bubonic plague.
It was, and continues to be, a widespread presupposition that public health measures could have been (or still can be) instituted that will swiftly eliminate coronavirus deaths without regard to economic consequences. This presupposition has proven to be false: So-called lockdowns of travel, trade, and commerce have led to world-wide economic recessions; portending ruinous taxation, hyper-inflation, and expropriation of rental properties; and auguring famine, civil chaos, and stark authoritarianism. The U.S. Department of Labor’s March-to-April 2020 grocery inflation rate was 2.6%, the highest monthly increase since the mid-1970’s. The year-over-year Consumer Price Index (CPI) for December 2021 (comparing December 2021 to December 2020) saw a 7.0% increase, which was the highest inflation rate since 1981.
One notes in passing that the CPI, a venerable economic index of long standing, was set up to ignore what its creators considered to be noisy data (food and fuel) and capital investment (housing). Consequently, the CPI grossly underestimates the “real” inflation rate by ignoring some key inflation drivers. Hence, it is fair to say both that inflation is at its worst since 1981 based on the CPI and its “market basket” of what people actually buy, apart from fuel, food, and housing; and that a more realistic inflation rate, as experienced by most individuals today, greatly exceeds 7%.
One also notes that the Roman Empire flourished economically from its inception in 27 B.C. until the reign of Marcus Aurelius (the Antonine dynast who reigned from 161 - 180 A.D.). The earlier Roman Empire had relatively low taxes and a money supply that grew approximately in proportion to the size of the economy. According to some historians, the so-called “Antonine plague” (smallpox or measles), imported into the Roman Empire by legionaries returning from battles in Mesopotamia, decimated society; drove up wages so as to create too many denarii chasing too few goods; made public administration and military preparedness impossible to finance; and caused inflation amounting to a factor of 100 or more from 200 A.D. to 300 A.D. Diocletian and other exemplary military leaders extended the life of the Roman Empire, but inflation was ever present; and by 476 A.D. the last nominal Roman Emperor in the West was sent into exile by the barbarian Odoacer.
The root cause of inflation in the late Roman Empire seems to have been the Antonine plague (imported by Roman legionaries), which in turn caused depopulation, economic disruption (high wages and low output), debasement of the currency via creative metallurgy, and ruinous levels of taxation imposed by desperate emperors simultaneously confronting foreign invasion. (For example, in 251 A.D. a Goth army killed the Emperor Decius in battle in what is today northeastern Bulgaria.)
The root cause of post-2020 inflation in the United States is the coronavirus pandemic (imported by infected airline passengers), which in turn caused unacceptable mortality, economic disruption (trillions of dollars printed for welfare, lack of incentive to work, and supply-chain impediments), and debasement of the currency via printing press and spreadsheet. Still looming are the ruinous levels of taxation to be imposed by a desperate governing class simultaneously confronting massive illegal immigration and declining real wages.
Comparing the root causes of inflation in each case, one might well expect increasing societal instability in the U.S. analogous to that in the late Roman Empire.
Exacerbating its modern-day economic crisis, the U.S. governing class has superimposed internecine sociological warfare based on a very recent neo-Marxist theory in which one fixed class of high-incarceration-rate individuals is oppressed by a second fixed class of low-incarceration-rate individuals. Old Marxist theory never succeeded because inter-class mobility left no fixed class to vilify. In contrast, the neo-Marxist theory holds that incarceration-rate status may be identified by racial group, which is a fixed characteristic. Hence, there are well-defined, static groups of oppressors and victims awaiting Marxist redress of grievances and establishment of societal stability. (How well are these oppressors defined? What is the assigned racial group for high-incarceration-rate individuals guilty of loan fraud involving billion-dollar real estate?) Dogmatically assuming the existence of fixed classes of oppressors and victims, the neo-Marxist theory holds that laws serve only the “privilege” of the oppressors until such time as a Marxist ruling class will re-issue superior laws.