Good Friday Morning, especially to Novavax, who should be the next vaccine approved by the FDA ASAP. Novavax announced:
[A] final efficacy of 96.4% against mild, moderate and severe disease caused by the original COVID-19 strain in a pivotal Phase 3 trial in the United Kingdom (U.K.) … The company also announced the complete analysis of its Phase 2b trial taking place in South Africa, with efficacy of 55.4% among the HIV-negative trial participants in a region where the vast majority of strains are [South African] variants. Across both trials, [the Novavax vaccine] demonstrated 100% protection against severe disease, including all hospitalization and death.
From previous statements, they expect to be granted a EUA by May 1st, but as I’ve said with Johnson & Johnson and others, the Biden administration should step in and fast-track this vaccine as well. This vaccine has proven results against variants and is also showing incredible indications it can stop all severe forms of the disease, which is true of Pfizer, Moderna, and Johnson & Johnson. I’ll keep repeating this same line: Operation Warp Speed is the greatest medical miracle the United States has ever produced. It’s not even close.
This week, I’m diving into the political and economic consequences of the $1.9 trillion COVID-19 relief bill signed by Joe Biden – links to follow.
Where you can find me this week
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It’s time for Trump to hold rallies and celebrate his greatest victory – The Conservative Institute.
Politicians are behind the curve (again) on post-pandemic life – The Conservative Institute.
The potential blowback of a $1.9 trillion spending boondoggle.
Biden got his COVID-19 relief bill. $1.9 trillion in spending that he and Democrats claimed was about bringing immediate aid to the COVID-19 pandemic. It’s short of the $2 trillion initial legislation Trump signed into law during the spring, but you’d never know that by tracking the media coverage.
I’ll go to my grave calling the American press coverage of a global pandemic one of the greatest historical embarrassments in US history. It’s been awful since the initial reports and never improved. My first column on COVID-19, on March 2, 2020, was titled: “National media fails, local reports win on COVID-19.” And the coverage only got worse from there!
But here we sit with another relief bill. In true Congressional fashion, this thing is getting dropped on American’s laps right at the end of the pandemic when more people are getting vaccinated every day. It’d have been nice to get this in the fall before the winter surge, which every epidemiologist predicted was coming. As I sit here writing this on a Thursday evening, the CDC’s data says we’ve administered 98.2 million vaccine doses across the country. If trends hold, we should cross the 100 million dose mark Friday or Saturday.
17,383,306 Americans aged 65 and older have been fully vaccinated, which is good for 32% of the total population. 33,715,207 have received one dose (not counting Johnson & Johnson), good for some level of immunity, which is good for 62.4% of the population aged 65 and above. If you zero in on the deaths in that cohort, especially the nursing home categories, death rates are collapsing. We’re bringing the virus under control.
What we’re experiencing in the United States matches what is happening in Israel. In Tennessee, for example, nursing home cases from COVID-19 have dropped by 90% due to vaccines. Israel has experienced a 94% drop in symptomatic patients of COVID-19 among its vaccinated citizens. A broader study of cases, hospitalizations, and deaths in Israel has shown stark declines in every necessary category, proving that these vaccines are dropping the hammer on the novel coronavirus from China.
In other words, we’re on the tail end of a pandemic. I understand that Anthony Fauci is going around saying a recent New York variant of the virus is more dangerous. He’s using that variant as an excuse to claim people can’t get a vaccine and have their lives return to normal. That is, to be blunt, a politically insane idea. In the initial phases, Fauci deliberately lied to get the public to do what he wanted. I’d bet he’s doing the same here because he wants the maximum containment strategy of “everyone get vaccinated, but change nothing while we verify things are safe by next year.”
That’s not going to happen. And if people hear, “my life won’t change after a vaccine,” they won’t get a vaccine. We need to encourage absolutely everyone to get vaccinated. The carrot at the end of that stick is returning life to normal. If we hit a new variant, then we produce a new vaccine. Lying in an attempt to get an ideal world destroys credibility, and Fauci is annihilating the credibility of the public health establishment (which I went on at length about last week).
But that’s not where I wanted to go with this newsletter. It seems like every time I sit down to write, I see some recent public health pronouncement, and I have to get a rant about it out of my system. Thanks for bearing with me.
I want to go into this boondoggle of a spending bill, which no Republicans joined. It’s significant that no Republicans joined this legislation, and it’s meaningful that Biden did nothing to court Republicans. This situation is not, as the press and Democrats would have you believe, Republican obstruction. There were plenty of Republicans who wanted onboard, but Biden shunned them. That decision will have consequences. The legislation itself could also have economic consequences.
The political consequences of the $1.9 trillion spending plan
The year was 2009. A previously unknown upstart Senator from Illinois named Barack Obama had just swept into the White House with massive Democratic majorities in the House and Senate. Republicans were the most demoralized they’d been politically in a generation. They couldn’t stop anything Democrats planned on legislating. The trio of Obama, Nancy Pelosi, and Harry Reid wielded political power most politicians only dream of having.
Bob Woodward and Tim Alberta chronicled this period roughly the same in their respective books. Mitch McConnell in the Senate and John Boehner in the House both had the same thought: if Obama wanted to, he had the political power to obliterate the Republican Party. Suppose Obama cut a deal and used more moderate Republicans to his advantage to pass bipartisan legislation. In that case, he’d decimate the Republican Party and gut the party leadership from having any power.
Obama never took that path. Instead, he decided to ram through hyper-partisan legislation that received little to Republican support and was filled with progressive line items across the board. Obama gave his infamous line, “election have consequences.” Instead of dividing the conquering the GOP, Obama gave them new life.
That decision to ratchet up partisan tensions and rub it in the face of Republicans consolidated Republican support behind McConnell and Boehner, who ended up riding the partisan anger of Republicans through the Tea Party and into the 2010 midterms where Obama experienced some of the worst midterm losses of any President in history. The same thing happened in 2014 (arguably the most consequential midterm election in a half-century).
I recite that history because we just witnessed the broad beats of the same thing. Biden campaigned on being an uniter and dealmaker. With the COVID relief bill, he shot that entire campaign promise and took the same path as Obama. This decision caught the eye of Charlie Cook over at National Journal:
Democrats repeatedly emphasized the urgency of getting help to those who have been hurt, pointing to the fact that extended unemployment insurance benefits are scheduled to end the week of March 14. Given the exigent nature of the crisis, Democrats said they were willing to push the legislation through via the budget-reconciliation process—and party-line votes—if necessary. Over and over, Democrat after Democrat professed dismay that no Republicans would cross the aisle to support it, implying that the GOP was unsympathetic to the suffering resulting from this plague. Yet while the White House would not budge for Senate Republicans, when they hit resistance from moderate Democrats, then concessions similar to those Republicans had made were suddenly possible.
Yet if the extended unemployment insurance was so urgent, why was it not pushed through as a stand-alone measure weeks ago? Regarding immediate funding for vaccines and testing, the 10 Republican senators who met with the president five weeks ago offered a measure containing identical funding levels for both as the Democrats had proposed. Attracting 60 votes would hardly have been difficult for these core provisions, and probably not necessary as a filibuster on those items would be pretty unlikely.
It would seem that after that one token meeting with GOP senators on February 1, Biden effectively gave up on working anything out with Republicans.
Cook ended his column with these observations:
A former chief of staff to a Republican senator told me, “I was awed by Biden’s inaugural speech. His insistent appeals to unity and his pledge to ‘work just as hard for those who didn’t support [him] as for those who did’ were political music. It was a rhetorical moment that could have been cultivated into a theme and a reservoir of goodwill for his presidency. [But] he, or at least his staff, dropped it like a hot potato.”
Biden may have, in the early moments of his term, crippled his ability to do grand bargains.
When the histories of the Biden presidency are written, there’s a fair chance that this will be looked upon as a serious error of judgement—one that may plague this administration for a good while.
Obama kneecapped his entire Presidency in the first month and never learned from his mistakes. He was great at getting himself elected to national office. However, his style of politics ended up being a kryptonite for the party long term. After Democrats won historic majorities in the House and Senate, Republicans wielded more political power the rest of the decade, and Democrats still have not recovered on a state and local level from the Obama-era decimation.
I’m not saying that’s going to happen because of Biden’s actions here, but I am saying that the Congressional and White House leaders here, many of the same actors in the Obama years, haven’t learned a single lesson in a decade. That’s significant. And with Biden allowing a growing disaster to ferment on the southern border (again; the 2014 midterms were decided, in part, on a migrant crisis that Obama never dealt with), that could give Trump and Republicans a very familiar path back to victory in 2022 and 2024.
The economic consequences of the $1.9 trillion spending bill
The other issue is this: what impact is this spending bill going to have on the economy? Unemployment currently sits at around 6.2%, more than half of where it was at the height of the pandemic last spring. There was a massive increase in jobs in the restaurant and leisure sector in February, indicating that those businesses are experiencing a swift turnaround right now. America is reopening right now. This reality is not something that Joe Biden can say will happen later. Americans are actively returning to everyday life now.
American citizens and Wall Street are already ahead of the Biden administration. Wall Street, in particular, is instructive. For the better part of six months, Wall Street analysts and investors have been trying to figure out the impact of both a post-pandemic life and a massive infusion of cash from the federal government. Both are happening simultaneously right now, and Wall Street is banking on one future in the near to medium term: inflation.
The million-dollar question is this: will inflation be manageable, or will the Federal Reserve struggle to get its hands around the problem as it did from 1965 – 1982? The Biden administration is putting all its eggs in the basket of, “we learned our lessons from the 1970s and there’s nothing to fear.”
Wall Street is less sure. The Wall Street Journal reports:
The looming demand surge has also fueled concerns that high inflation could follow, forcing the Federal Reserve to raise interest rates in response. That could deal a setback to the economy and labor market before a complete recovery is achieved.
“There’s a real possibility that within the year, we’re going to be dealing with the most serious incipient inflation problem that we have faced in the last 40 years,” former Treasury Secretary Lawrence Summers said in late February.
Fed officials acknowledge that annual inflation is likely to jump in the coming months, as the economy picks up and ultralow readings from March and April of 2020 fall out of 12-month price indexes. There is also a possibility that a spending surge after the economy reopens, or supply-chain bottlenecks, could cause some prices to rise faster than normal.
But decades of slowing inflation—the consequence of globalization, technological advances, and aging populations—in rich countries prompted the Fed last year to ditch its longtime practice of raising interest rates to pre-empt higher prices. Now, policy makers plan to wait until inflation hits their 2% target and is expected to remain above it for some time before they will contemplate interest-rate increases.
Of the economists surveyed, 80.6% said they expect inflation to rise above the Fed’s 2% target for a period of time due to the latest relief package. But 85% also don’t see the Fed raising interest rates until 2022 or later.
To defeat stagflation from the 1970s, the Federal Reserve raised interest rates dramatically in the early part of the Reagan administration, which led to an immediate recession. Once inflation got brought under control, Reagan started ripping apart regulations and dropping taxes to kickstart the economy again. The result was an economic boom that continued with minor blips until the Great Recession.
Inflation largely hasn’t been an issue since then because the Federal Reserve has kept its sights on running inflation around 2% ever since the 1970s. The WSJ report suggests the Fed will continue targeting that. But realistically, until 2022, inflation would have to go north of 4% before they’d act.
There are some signs inflation is already here. Global food prices are the highest they’ve been in years due to stress from COVID-19. Axios points out that those prices are typically correlated to periods of political unrest. Add to this energy/gas prices, which are up, and there are two data points. Overall, inflation data is cool right now, showing no warning signs, but investors aren’t buying that. This is why, over the last few weeks, tech stocks have taken a beating in the markets while more inflation-safe investments have gained traction (hence why the tech-heavy Nasdaq has suffered while the S&P 500 has gone up).
This massive spending boondoggle, which has more in common with a progressive’s wishlist than actual COVID-19 relief, could help kickstart inflation further. Again, the Biden administration is banking on the Federal Reserve controlling any inflation surge. But the Fed doesn’t want to raise interest rates right now, not for another year at least. If things get hot by May on the inflation front, as some analysts expect, both the White House and Fed could be looking for answers.
That’s not to say there aren’t some good things in this spending bill. There are if you look for them. But it could have been done better, with more political purchase and more immediate aid to issues the country needs right now. This legislation will have long-term consequences, and we don’t fully see them yet.
Links of the week
Cuomo created disabled group home deathtraps, whistleblower says: Some 552 developmentally disabled individuals died from COVID-19 in the past year living in small residential group homes, while an additional 6,382 residents and workers were infected, according to the New York State Office for People With Developmental Disabilities – The Washington Examiner
US Researcher With Chinese Ties Admits He Convinced WHO Team That Missing Wuhan Lab Data Was Irrelevant: The Wuhan Institute of Virology deleted a public database containing info on at least 16,000 virus samples in Sept. 2019. The WHO didn’t even ask for the data during its investigation because one of its members personally vouched for the lab. – The Daily Caller
H.R. 1 Is a Partisan Disgrace – Rich Lowry, National Review
Inside the Lincoln Project’s Secrets, Side Deals and Scandals: A civil war broke out in the group as it antagonized Donald Trump, with leaders splintering over financial arrangements and revelations of online harassment by a top official. – NYT
Twitter Thread(s) of the week
Satire of the week
American Patriots Dump Harry And Meghan Into Boston Harbor – The Babylon Bee
CDC Recommends Double-Caging Children At Border For Extra Safety – The Babylon Bee
Thanks for reading!