Monday, March 23, 2020

Who Will Count the Cost?

If the dream is won
Though everything is lost
We will pay the price
But we will not count the cost

-          Bravado, Rush

This will be long.  Read through to the end, or at least be sure to read the end.  It will make you sad.

John Mauldin has written two pieces on the coronavirus in the last few days – including a mid-week letter, the first I ever remember receiving from him in more years than I can remember; let’s call these his dream regarding a national response.

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.

It is the radical action that will cause the depression (well that, and all of the money pumping of the last decade), not the virus.

…we have to treat this situation not as an emergency, but as a battle that could turn into a war. World War C.

I am guessing that by “C,” he means coronavirus.  It would be better if he thought of “C” as the vitamin.  Along with sunshine, vitamin D-3, and zinc, it will do far more to alleviate this flu than any governmental lockdown.

Bluntly, this is going to cost more than a few trillion dollars.

Says the man who for a decade or more has made a great living blasting government deficits as the big risk to society.  Actually, it will cost about $20 trillion per year, because that is what it will take to replace the now comatose US GDP. 

We will pay the price of whatever the governments (federal and states) want to incur; but who will count the cost in lives destroyed – not just disrupted – by the draconian measures put in place?

From his second letter, The Beacons Are Lit, March 20, 2020 (the reference is to the lighting of the beacons in the film version of Tolkien’s Lord of the Rings: Return of the King (video):

Today in the real world, we also face a dark, implacable, powerful foe. It is a microscopic virus that we now know is a threat, a very serious one. We in the United States have just seen the beacons. The warning travelled not just a few hundred miles but around the world: from China and Korea, to Italy and Spain, and now here.

The beacons are lit. How will we answer?

We will answer like madmen, consumed by a mad disease. 

Mauldin points to his experts, for example:

Dr. Scott Gottlieb is not some crazed liberal. He is a physician and public health expert who was appointed FDA commissioner by President Trump.

Because only crazed liberals have reason to expand bureaucratic power, so I guess this guy is OK?

Note, both of those were on the reliably conservative WSJ editorial page.

Because conservatives are not known to act like crazed liberals?  If these “conservative” characteristics are meant to confer credibility, Mauldin has been asleep ever since Robert Taft left this world and the Senate at the same time.

I’m saying this strongly because as recently as this week, I’m still hearing from lots of readers who don’t get it. I won’t give examples.

Mauldin is talking like a crazed liberal.  If you disagree with him, it isn’t because you see things or interpret facts differently than him; it is because you “don’t get it.”  Still!  I am surprised that he didn’t drop a “let’s get on the right side of history, you deplorables” somewhere in here.

The US lost 2,996 lives on September 11, 2001. We thought that was enough to go to war.

And “we” were wrong about that decision (just as we were wrong about Vietnam, Iraq, Afghanistan, Syria, the war on drugs, the war on poverty, the war on the family, etc., etc., etc.).  Every major traumatic and cataclysmic event in the United States in my lifetime – and for decades before – is due to a lie or false narrative.

The measures we must take to save lives necessarily mean shutting down large parts of our consumer-driven economy. People are losing jobs and businesses are losing revenue.

He is willing to pay the price (actually, to force you to pay the price); the cost to those whose lives will be destroyed is irrelevant.  No problem.  The government can print the money.  Just ask Mauldin:

We need to sustain the economy for however long it takes to beat down the virus. That’s going to mean massive fiscal stimulus spending—multiple trillions of dollars’ worth.  We are going to have to do for everyone the kind of things we have long done for natural disaster victims—emergency grants, subsidized loans, exemptions from rules, and more.

For everyone!  Now, do the math: no one is working; therefore, nothing is being produced and no taxes are being paid.  At the same time, everyone must be subsidized.  There is no way to square this circle – it is impossible.  Who will do the subsidizing?  Not with digits, but with real goods and services? 

How will we pay for it? There are several ways but they all involve massive government debt and deficits that will shock us.

He goes on to show a chart – the relative debt levels after WWII were large (not as large as what is being projected now, as we are projected to pass the WWII peak even this year) and he notes that “we” handled it. 

But did we?  We reneged on gold, we suffered debilitating price inflation with economic stagflation, we created bubbles and busts that made a mockery of saving and investing.  And this was with the wind at our sails of being the only country that came out of that war virtually unscathed.  We enjoy no such luxury today.

He shows another chart – the percent of hourly workers employed is already down 39% from the average in January.  That’s just two months.

San Francisco, Boston, Pittsburg, New York, and San Jose currently have the greatest reduction in hours worked, down by more than 50% in each city on Tuesday. 

What happens when this is halved again – as it likely will?  What happens when many of those people never again find a comparable job – as they likely won’t?  We know what happened in the aftermath of 2008-09 – a dramatic increase in suicide, opioid dependency, and a malaise in what was once a reasonably robust and vibrant middle-class.

Sidebar: A hotel exec friend who runs 125 hotels has let 90–95% of the staff go. Literally tens of thousands. There are 54,000 hotels in the country. Do the math. Another friend handles the backroom for 2,200 dentists. 80% have shut down as they can’t get the masks and other things they need. There are 100,000 dentists with an average employment of maybe 10 people. Minimum 500,000 employees, plus dentists, without income. Average income per employee is $50,000. Dentists are critical but they have to have the basic gear to do it.

This he calls a “sidebar.”  Mauldin should “do the math.”  He is using this tactic to browbeat us into joyfully paying the price, yet ignoring the real-world cost for those so affected.

There are literally hundreds of examples. Dear gods…

I am reminded of the line: “Whom the [dear] gods would destroy they first make mad.”  Yes, they do.

Let me be clear. The US is facing a deflationary depression. One cannot have the economic impacts we are seeing and think they will magically go away when the virus does. That’s not how economics and business work. (Emphasis in original)

Let me be clear.  The US was headed this way before the virus.  The deflationary (for asset prices) depression was already baked in the cake, given the central bank reactions dating back to every “crisis” since at least 1987.  This virus is merely being hyped as the pretext for it – so blame can be diverted from central banks and the governments that enable these.

This will be combined with a consumer price inflation: lots of “money,” no one productive.

I am calling for significant quantitative easing or whatever you want to call it. I get the irony in that.

Yes, irony (as Mauldin notes) in that it was the Fed that made this mess, and irony (as I note) that Mauldin has (on and off) chided them for it.  It seems they finally found his weak spot – the virus has infected Mauldin’s brain. 

We must let bygones be bygones:

But we have to deal with the situation as it is today. And today, much of our country is under stress and wondering how they’re going to feed their families. How do they pay their rent? Electric bills? 100 other items? Some of us can individually help our family and friends, but collectively we need to step in and help everyone.

We have to help everyone?  Everyone has to help everyone? 

Feed them with what?  Produced by whom?  These shuttered resources and skills can’t be turned on overnight.  No one is producing when everyone is socially-distanced out of productive employment.

Spending even a few trillion dollars to protect everyone’s income during the lockdown period isn’t crazy at all. I think it is the best option available. And we need to do the same for our business so they will be there when we get through this.

Here a trillion, there a trillion, everywhere a trillion-trillion.  Old MacDonald had a farm, e-i-e-i-o.

In addition to “absolutely” having to help the airlines, we have to help “Hotels, cruise ships, microbreweries and restaurants, hair salons, and a hundred thousand other small businesses need to survive in order to hire people when we reach the other side.”

Who is the “we” that can help when all of the “we” is in need of help?  You can’t eat digits.

Of course, we have to be smart about how we do this. We also have to be fast. Speed trumps everything. (emphasis in original)

This is when you can safely conclude that a previously rational man has lost his marbles.  It is impossible – absolutely, completely, fundamentally impossible – for the United States government to be smart or for it to be fast.  It is impossible-squared when wishing for both.

You want more evidence?

Fortunately, we can save companies and jobs without rewarding executive incompetence. It’s really not hard. We can save our economy without turning socialist. That’s not hard, either.

He is right.  It’s not hard.  It’s impossible.

We could be talking $4–$5 trillion. Everyone knows that I have been a deficit hawk and a scold on debt for over 40 years. I am the anti-Paul Krugman. Except right now, in this particular situation, I think Paul Krugman and I would agree. (I am seriously laughing at myself as I write that.) The stimulus that is being talked about today is not enough. It must be more. Much, much more.

I am laughing at you as well.  I am crying for the country (and for others close to you – more below). 

…a lot of jobs that existed pre-crisis are simply not going to come back in any viable form post-crisis.

Well, this is true.  Because of the insane reaction to this virus – policies that were not even implemented in some of the “successful” countries.

We cannot keep a small business going beyond a certain point. Pick a number. Three months? Six months? At some point if you as a business owner can’t figure it out, you have to lose government support.

Talk about callous and arrogant.  The small business owner had it “figured out” until your experts decided to crush him.  Anyway, why pick on “small” businesses?  Where was (and is) this attitude for big businesses – in 2008 and today?

I suggest that since we are blowing out the budget anyway, why not sell a few trillion dollars of 100-year, 1% bonds and use the entire proceeds on infrastructure projects over the next four years.

What dolt would buy such bonds, given that Mauldin now desires deficits to go to infinity and beyond?  Don’t worry, he has a plan.  Of course, it is not allowed for the Fed to buy such bonds directly (rules are rules, after all…except when you have to break a few eggs to make an omelet), so…

Why can’t the Fed offer a 1% profit to anyone who would buy that bond and sell almost immediately?

Sell to the Fed, in case you missed the implication.  Trillions in infinite quantitative easing on the Fed’s balance sheet. 

He happily leaves the door open for the little guy to get in on this action.  So…let’s see: I can buy a $100 bond and make a quick buck; Bill Gates, George Soros, and Warren Buffett can buy $10 billion bonds and make a quick $100 million.  Sounds OK by me – just one more way that the wealthy can leverage the system.


What that does is put people back to work—people whose jobs are no longer viable.

Why didn’t this work since 2008?  Jobs and GDP grew far slower than did the deficits.  Can this go on indefinitely?  Mauldin didn’t used to think so; apparently, he believes it today.

And, for the icing on Mauldin’s dystopian cake:

I’ll bet you between Facebook, Google, SAP, and other Silicon Valley computer wizards, they could come up with a way to identify need and connect with the US Treasury to make sure checks go out.

Oh, just implant the chip and get it over with already.  Download software updates as necessary.


I hate saying this. I truly do. But we may be in a period like at the end of WW2 where the Fed controlled the entirety of the yield curve.

You can see when a man of principle is a man of no principles.  How many things does he hate saying, or does he laugh about saying, or does he think he never would have said, or does he find ironic?  He also advocates full-blown National Guard, lockdowns, stopping of all flights (except for food and medicine), etc. 

There is a reason to have principles: in order to prevent us from going into funny-farm mode; to ensure that we keep our bearings in times of stress.  Mauldin has learned to resist anything but temptation.  There is nothing conservative about this, no matter how many so-called “conservatives” Mauldin parades in front of his readers.


This is very sad…and it is a story that will soon enough be repeated hundreds-of-thousands of times – where the cost paid by those who suffer Mauldin’s recommendations will be far greater than the risks Mauldin wants to avoid.  In his final paragraph, Mauldin writes:

As I was doing the last-minute edit, I find my daughter Amanda, who lost both her jobs yesterday, is in the hospital as she lost all feeling on her right side. In the CT scan now. Stress as her husband just went back to school and she was the primary breadwinner with two young girls? This stuff is all too real…

And the publisher adds:

(Publisher’s Note: I am sad to inform you that as we were preparing this letter for publishing, we learned that Amanda has suffered a stroke. John, our thoughts and prayers are with you, Amanda, and your entire family. –Ed D’Agostino)

This is what Mauldin wishes for all Americans.  God bless your daughter, John.  God damn those who think like you do.  You are damning us all to this.

My Final Thoughts

You can tell by my tone that this entire subject is upsetting to me.  I am living with personally seeing thousands of people lose their jobs, knowing that for many of them they will never have similar employment.  I saw this personally as well in 2008, it will be significantly worse this time.

Who will pay for the millions of lives destroyed?  It won’t be Mauldin (except for his daughter, obviously).  As a result of 2008-09, I dealt with the murder-suicide of a friend and his wife – a once strong and proud man, humiliated by not being able to find employment.

How many times have I heard: it is better to over-react than to under-react?  No, it isn’t.  it is only better for those who have the luxury of over-reacting.  Those like John Mauldin.

There are too many articles by too many experts with too many facts that call into question this narrative being forced upon us.  It is unforgiveable that Mauldin does not at least expose these to his audience and address the points.  You know, articles from flakes like this guy:

In an analysis published Tuesday, Stanford’s John P.A. Ioannidis — co-director of the university’s Meta-Research Innovation Center and professor of medicine, biomedical data science, statistics, and epidemiology and population health — suggests that the response to the coronavirus pandemic may be “a fiasco in the making” because we are making seismic decisions based on “utterly unreliable” data. The data we do have, Ioannidis explains, indicates that we are likely severely overreacting.

He will probably lose his job soon, socially-distanced from productive employment.

This whole thing is sickening, and criminal. 


  1. That coming from Mauldin doesn't really surprise me. He showed a similar propensity for logic inversion in the period leading up to the Iraq invasion. At the time I was about to hand his hedge fund a considerable portion of my net worth, but his change of position convinced me to reconsider.

    Many of the forums I haunt have changed in ways I would never have thought possible. Long time government skeptics are at best skeptical that the measures being taken are sufficiently radical. Hardly anyone is calling the measures overblown. I get more of that from the people at my gym than anywhere else.

    I think part of it comes from a natural fear of illness. Some of the prepers I know seem legitimately afraid, not of the economic destruction or of the surging police state, but of the virus. I have no words for this. I just hope some of them regrow their spines soon.

    1. When all of this is behind us, there are some people I am looking forward to connecting with. They will have a perspective on this entire episode that is of great interest to me.

  2. Yes, I read Mauldin's posts and reached the same conclusions as you. It is sad and disheartening that he can promote this viewpoint to such a large audience, many of whom will accept it as "gospel."

    It is interesting that Denmark is considering "freezing" their economy in much the same way as Mauldin recommends. The author of the article interviews an "expert" who says that, by taking this course of action, WE can simply unfreeze the economy in a few months (or whenever Corona has run its course), pick up the pieces, and go on our merry way. The government, of course, will pick up the tab and we know who will pay the price.

    I, personally, will never again listen to anything Mauldin says without a huge amount of skepticism and/or disbelief.

    Thank you for writing this.

    1. Thank you, Roger.

      If they wanted to purposely force the economic reset, I don't think they could have done a better job. We will see what comes.

  3. I'm fully on board with you and let me introduce you to Amazing Polly, a Canadian lady who does wonderful work at dot connecting.
    While this video might be too long for most people to watch, I think you'll find this to be fascinating and blood boiling at the same time.
    It shows the interconnectedness of the institutions, organizations and the usual suspects in how they've created international slush funds to plunder the wealth the of world while at the same time using those funds to enrich themselves and to destroy both freedom and prosperity that they may usher in their insane, nwo.
    Please watch and put what you learn here to good use.

  4. If you've heard, Rand Paul has supposedly contracted C-19, though at this point he doesn't have any symptoms.

    I have to wonder if someone deliberately infected him, because he was the sole "no" vote in the Senate for an 8.3 billion dollar Coronavirus spending bill earlier this month, and because his venerable and fearless dad (the great Dr. Ron Paul) wrote a column asking whether or not all the hysteria and government overreach in response to a viral outbreak that had caused only about one hundred deaths at the time was a hoax?

    I'm not familiar with Mauldin. I've seen the name, but I don't frequent his articles or analysis. I don't imagine he'll be alone among conservatives who re-discover the boundless potential of Federal Reserve stimulus. It sort of reminds me of how Milton Friedman criticized the Fed for causing the Great Depression, but not because of all the credit expansion throughout the 1920s. No, he simply believed it didn't do enough when the money supply fell in 1929 during the stock market crash. His free market diagnosis was that the Fed should have done more and sooner.

    I think I'm split on whether these crashes are due to a business cycle generated by credit expansion that ends unavoidably in a panic when confidence in the credit creation system is lost (ABCT), or whether this is happening on purpose in order to consolidate wealth and power in the hands of a corrupt and an entrenched elite. Perhaps it's a bit of both.

    Just think about it. The economy didn't tank prior to the 2016 election, like many Austrians were predicting, but maybe this was because the elites thought that they were ushering Hillary into office. Maybe the Donald was genuinely a surprise to them. Now that he is the sitting President, and none of their numerous attempts to remove him from office have worked, it should be clear that there's nothing like a severe economic crisis (on top of a health crisis they can paint him as mishandling whilst also being "racist" on top of it) as a means of unseating an incumbent President.

    I hope I'm wrong, but I get the feeling we're not through the worst of this my friends (the economic disruption and government overreach, not the virus). Take care, prep responsibly, and God bless you all.

    1. I had similar thoughts regarding Rand and why him.

      As to the reasons for the crashes, I vote "both." See here (talk about a blast from the past):

      As to the worst of this being ahead of us, no doubt. By their fruits we shall know them. The legislation passed in the coming months (starting with a $2 trillion stimulus and unlimited Fed expansion), along with the level of social conditioning achieved, will answer the question: why? Why did this flu get special treatment?

  5. Mauldin has been a crony capitalist from the get go.
    Here in 2005, he praises the forcing of money out of the pockets of the unwashed into the hands of power elite:

    He is for central banking, tariffs, centralized government and perpetual war. No different than the typical mainstream pundit consistently supporting the gang of thieves writ large.

    1. He once worked with / for Gary North. Maybe Mauldin decided that economic truth and honest weights and measures didn't pay enough?

  6. [NB: My take is different. It is not criminal. It does not make me angry, it makes me sad because it is INTRINSIC to the human psyche, and many are susceptible to this form of over-reaction. Bill Whittle described it in his long video over the weekend. This deep-seated FEAR of plague has been adaptive and protective of humans at times in the past. But it also can be terribly dangerous because it causes a shunting, or a shutting off, of the higher reasoning functions. It has less to do with “commitment to principles” than it has to do with basic incapacity to continue to employ rational thought. Unfortunately when such deep-level-fear is thoroughly triggered there is no readily accessible mechanism to bring the fear-struck individual back to rational thinking. And therein lies the great danger staring us in the face – galloping herds of big, panicky animals. The great conundrum is in two parts: First, how to stay out of the path of the stampede; Second, how to rebuild after the herd destroys essential components of civilization.]

  7. Office workers are staying at home and ordering food for delivery. It's all fine and dandy as far as they're concerned. They even get to virtue signal about all those deplorables who refuse to listen to the "experts" and "don't care about lives".

    We may have reached the point where the rubber meets the road with reality detachment in the West. If "the elites" are orchestrating this, then they've upped the ante by an order of magnitude.

  8. And the most expensive part of this is yet to be counted. That is the millions of people losing jobs will apply and for the most part be accepted into the world of Medicaid. Once in this roach motel with unemployment the folks there not only see small increases in income when they do find work, but they are limited in income to keep their zero deductible, zero copayment, zero premium Medicaid.

  9. Three million new jobless, and the Dow is up more than 5%. can you ask for a better picture of today's reality?

    I am sure Mauldin is very happy to spend trillions without counting the cost to those newly unemployed. His balance sheet improved on the backs of millions.


    This article, on LRC March 25, is as frightening and horrifying as anything I’ve read lately. It nearly made me weep, and not because the virus is dangerous, but because “government” is.

    Also, Gore wrote a follow-up, called Basic Math, which looks at some of the virus numbers. It’s on his website too, which is linked when you go to the 2nd page of the LRC article. Peg

    1. Thank you for the links, Peg. Whatever they were trying to avoid (financial collapse) and whatever they have planned for us must be huge, given the size of the reaction to the flu.