Sunday, August 30, 2020

The Real Estate Baron

One of the standard narratives the Democrats and mainstream media like to repeat about President Donald Trump is that he became President simply because he wanted to enrich himself.

If that is the case, it is not working out very well for him.

According to Forbes, Trump was worth $4.5 billion in 2015 before he ran for President.

Forbes estimated his net worth at $3.1 billion in 2019. It is undoubtedly worth less right now considering how much of Trump's assets are in New York City and are tied to the hospitality industry and are invested in commercial real estate.

Forbes reports that Trump has dropped from the 156th wealthiest American to 275th since he became President. 

Another narrative that the Democrats and mainstream media like to perpetuate is that they need to see Trump's tax returns because he might be hiding potential conflicts of interest or economic ties with foreign interests (Russians!).

As I have pointed out in the past, a tax return is a very poor vehicle to do this. Trump's personal tax returns would be very limited in understanding his entire financial picture. They would only provide details related to his specific individual items and any sole proprietor income. They would not provide any detail on income, expenses or debt on those things held in partnerships, limited liability companies or corporations. A financial disclosure form is much more informative for someone like Trump who has significant and wide ranging business interests.

All federal executive branch officeholders are required by law to file an annual financial disclosure statement. President Trump recently filed his for the calendar year 2019. It is 78 pages long and provides almost everything anyone would want to know about Trump's financial situation. You can view it yourself here.

Here are Trump's checking and savings accounts and investment in gold (very minimal considering his net worth).

Here are all of Trump's liabilities.

Here is an example of some of Trump's assets and the "income" associated with the assets. Note that what is reported are revenues. This should not be confused with the net income that went into Trump's pockets. These are gross sales before expenses or cost of goods sold. Trump's hotel in DC. grossed over $40 million. If he was lucky, he netted no more than 10% of that.

When it comes to the subject of enriching oneself as President let us now turn to Barack Obama.

When Barack Obama was first elected to the United States Senate in 2004 he was a law professor making $85,000 per year. Forbes did an analysis shortly after he left office of the income of Barack and Michelle Obama made between 2005 and 2016.

Since the Obamas are now private citizens there is no official document that tells us exactly what their income is or how much they are now worth. However, those amounts are surely small potatoes compared to what they are now bringing in.

The International Business Times estimates the Obama's net worth today at $70 million. Obama receives a reported $400,000 per speech. The couple also have a lucrative production deal with Netflix that is reported to be worth $50 million to them. There also must be a number of other revenue inflows that we don't know about.

What we do know is that Barack Obama has become a real estate baron in his own right since he left office. I am not talking about hotels, golf resorts and commercial properties like Donald Trump. I am talking about residential real estate.

Let's look at the houses that Barack and Michell Obama own.

He reportedly still owns the house that he had in Chicago when he first ran for President. Zillow currently values the house at $2.5 million.

They own this house in the Kalorama neighborhood of Washington, D.C. which they paid $8.1 million for in 2017.

They own this home on Martha's Vineyard which they purchased for $11.75 million in 2019.

Reports surfaced this week that Obama is also in the process of building a home in Hawaii that he will use as a "retirement home". It made news because Obama's front man is reportedly using a planning loophole to circumvent some environmental regulations during the building process. That property cost $8.7 million and that is before the costs of tearing down the house on the property and the costs to be build a compound with three new houses on the tract of land for the use of Obama and visitors.

The building site is famous as being the exterior shot used to represent the mansion in the Magnum PI tv series.

This is the 3-acre site overlooking Waimanalo Bay.

This is the view looking out over the bay.

This is the house that was on the property before it was torn down. $8.7 million before it was torn down? Whoever knew that being a private investigator was such a lucrative business?

Credit: Armando Rossi via The Daily Mail

I am not begrudging Barack Obama for making a lot of money and buying a lot of houses.

However, how is it that Donald Trump is said to be enriching himself as President when he is giving away his entire salary as President and his net worth has decreased by over $1 billion in the last four year and Barack Obama is considered a dedicated and selfless public servant?

Trump is the only President in my lifetime that will undoubtedly have less wealth when he leaves office than when he entered. Contrast that with Obama, Clinton and others who enriched themselves by tens of millions of dollars when they left office. For that matter, compare Trump with Joe Biden after he left the Vice Presidency.

I wrote about what was revealed in the tax returns of Joe Biden earlier this year. This is a guy who became a United Senator at age 30 and spent the 44 years doing nothing other than taking a federal paycheck. His income in the first year he left public service? Over $11 million. Middle class Joe? Seriously? Who really enriched themselves due to holding public office?

Obama, Biden and Clinton's make much of the need to raise taxes and redistribute the wealth.

Obama has said that a lot of the success of those who are better off in our society is due to the American system of education, infrastructure and others who helped them along the way. Therefore, they should be more than willing to pay more in taxes.

 He famously stated in a 2016 speech that "you didn't build that" income and wealth by yourself.

"If you’ve got a business, you didn’t build that. Somebody else made that happen," 

However, if you think about it, there is no one that argument applies to more than a former public official that goes into the private sector and capitalizes on their name, their contacts and their experience than people like Joe Biden, Barack Obama, Hillary Clinton, Paul Ryan or John Brennan.

In each case, their entire personal career or brand equity has been earned in a public sector job that the American taxpayers paid for. For these people it is really true that "somebody else made that happen." For most politicians, everything that they earn after leaving the public sector would not have occurred but for the taxpayers funding that prior experience.

The Democrats seem to be desperate to raise more in taxes.

My suggestion is that we start first with a surtax on any earnings of former elected or Senate-confirmed executive branch appointments wherein a percentage of post-public sector earned income would be subject to an income tax surcharge.

That surcharge would be equal to 1% for each year of federal service. For example, Biden had 44 years of federal service before he started writing books and giving speeches. Under this proposal he would be subject to a 44% surcharge on this income.

Doesn't it seem fair that the taxpayers should get some return on the investment they made in Joe Biden over the years that allowed him to be so much in demand by the private sector?

After all, "the somebody else that made it happen" were the American taxpayers.

I can't think of anything that would be fairer when it comes to taxes.

I suggested in these pages earlier that Michelle Obama would have been Joe Biden's dream pick for VP. Why didn't that happen?
First, there is the question of what a loss to Trump would do to the Obama legacy? Don't think that was not a consideration

However, I also could not see how Michelle would ever agree to be the ticket considering the scrutiny that would mean and the financial loss that would mean for the Obamas. That would mean no Netflix deal. No $400,000 speeches for Barack. No corporate board seats or high-paid consulting gigs.

Owning and maintaining four houses requires a lot of cash flow. What do you think the taxes, insurance, upkeep, utility and maintenance costs are per year on those properties? It has to be at least $1 million per year. That is not easy on a VP's salary---or even a President's pay.

For context, here is what Barack Obama said on the subject of wealth inequality a little over a year ago at a speech in South Africa.

This is the full quote from the speech.
“There’s only so much you can eat. There’s only so big a house you can have. There’s only so many nice trips you can take. I mean, it’s enough.”

Enough for you and me maybe. It is just not enough for a real estate baron like Barack Obama. 

Tuesday, August 25, 2020

Magnets for Fraud

Under the original Covid-19 stimulus plan an additional $600 per week in unemployment benefits was provided to supplement the state unemployment benefits for the unemployed that are normally available.

This is ended up being controversial in that in a number of states this additional amount made it much more lucrative to continue to receive unemployment benefits than return to work. As employees were recalled to work after the economic lockdown ended, employers in some states revealed that many workers did not want to return to their previous job because they made more money on employment than working.

The Trump administration wanted to extend the benefit when it expired at the end of July and curb this disincentive to work but the Democrats were steadfast in stating that it had to be continued at the prior level.

No agreement was reached so President Trump, not wanting to see deserving people lose the benefit, signed an executive order extending the benefit with $300 in extra federal payments per week as long as the state chipped in an additional $100 in matching funds.

This further angered the Democrats who argued that many states could not afford the extra $100. 

Interestingly, there does not seem to be a concern on whether the federal government can afford it.

Overlooked in all of this is how much has already been spent and how much fraud has been perpetrated with those trying to get their hands on this government largesse.

Consider this story out of my home state of Ohio in which it was revealed that the state had paid out hundreds of millions of dollars in fraudulent unemployment benefit claims.

The state reported that it had paid as much as $200 million per week to what appeared to be as many as 270,000 fraudulent accounts. 

The state did not seem to be pick up on the scheme until early July. That would be almost 12 weeks after the wave of unemployment filings began. $200 million x 10 is a lot of money.

If this is going on in Ohio it makes you wonder what is going on in New York and California? What is going on in other states?

If there is one thing that is certain, when the government is involved in anything the chances that fraudulent activity will occur is almost certain.

Consider the fraud in Medicare and Medicaid payments. The Department of Health and Human Services revealed several years ago that improper payments (i.e. fraudulent claims) for Medicaid amounted to 12% of all payments. Fraud involving Medicare is estimated to be 11% per year. We are talking about costs of over $100 billion per year in improper and fraudulent payments.

Between 2004 and 2017 the Social Security Administration admitted that it had made improper payments totaling over $1.3 trillion. That is also over $100 billion per year.

Back in 2014 I wrote about the increasing fraud resulting from the electronic filing of tax returns and the fact that the IRS was putting money on prepaid debit cards. The thieves don't even need to have a bank account or receive a check so the fraud can be traced! Why? Because it might be discriminatory to assume someone might have to cash a check or have a bank account.

A thief can steal your name and Social Security number and e-file a completely phony tax return. The IRS has no way of checking the accuracy of the return data at the time the return is filed (including whether the withheld taxes are correct because no W-2 is filed with electronic filing). The IRS accepts the tax return at face value and if a refund is claimed it will transfer the money on to a prepaid bank debit card.

All the fraudster has to do is file the fraudulent tax return before you file your legitimate return. In fact, if you file your tax return after the fraudulent tax return, I have heard stories that indicate that you will feel like the criminal. As you can imagine, it can take hours and hours of your time to get the IRS bureaucracy straightened out.

With the increased use of e-filing this fraud has become rampant. For example, the Treasury Inspector General for Tax Administration recently reported  that it believed that the IRS paid out over $5.2 billion in fraudulent refunds in 2011 alone!

What is certain about all of this?

Government is a magnet for fraud. It is big. It is impersonal. There are trillions of dollars in play. There is very little accountability by those who are in charge. After all, it is not their money. It is your money.

The biggest topic of interest right now for the Democrats is the push for mail-in voting this Fall.

Consider the examples above and tell me how that is not just a perfect recipe for fraud.

Our voting systems are not set up to handle volumes of ballots that are mailed in. All the systems (voting machines, poll workers etc) have been established for in-person voting where collecting and counting the votes is done with automated machines and identities can be checked (where voter ID is permitted) by poll workers. Even if voter ID is not required in a state, in-person voting requires a real person to show up in person at the polls which limits attempts at voter harvesting and other fraudulent acts.

Some argue that mail-in voting is no different than absentee voting. This could not be further from the truth. Absentee voting requires that the voter request a ballot. It also typically requires that some reason be given that the voter cannot vote in person. It also requires some form of ID so that identification can be confirmed (drivers license number, etc). A signature is required that is supposed to be matched to the voter rolls.

Absentee ballots have also typically made up less than 20% of the ballots in an election year. They were 17.7% of all votes cast in 2016.

Moving to mail-in ballots when the entire voting system and infrastructure is geared to in-person voting is an invitation to fraud every bit in line with the unemployment benefits fraud seen in Ohio this year.

To insure the integrity of the election it would be necessary to have scores of people opening the mail, tabulating results and verifying signatures and voter id's against the registration rolls. It would be many times more laborious than the current system and require more time.

It would also almost guarantee that we would not have election results for days or weeks after the election day.

Mail-in voting (or something more sophisticated technologically) is something that may make sense in the future.

However, it must be accompanied by changes in the systems and election infrastructure that have been developed to service in-person voting over a period of years. It is not realistic that it could be changed in a matter of a couple of months without confusion and chaos occurring. I can think of nothing worse happening in a year when the integrity of the vote is so important to gain public trust.

One requirement that I believe is absolutely necessary in mail-in voting is that the votes must be in hand at the Elections Board by election day. Voters deserve to know the final results on election day and not days or weeks later as we have seen in some of the mail-in states like California and New York where ballots are coming in days after the elections. Allowing votes to come in and be counted after initial results have been tabulated is another invitation for fraud.

The bottom line is that anything that Government touches is a magnet for fraud.

Taxpayers pay for that fraud every day as their hard earned tax dollars are stolen.

Voters should not expect that their votes will be cancelled out by fraud as well. 

Sunday, August 23, 2020

The Biggest of Bets

There has never been a drug in my lifetime that has been more maligned than Hydroxychloroquine (HCQ).

There has also never been a drug in my lifetime that more doctors, who have used it successfully with their patients, have stepped out to defend and advocate for its use.

When I see something like this I become very curious.

How could there be such a disconnect between doctors who are treating patients and the government bureaucracy that is supposed to be protecting the public health?

How could there be so many positive stories of the effective use of HCQ only to have the FDA or Dr. Fauci claim there is no benefit in using the drug? In fact, the argument is being made that HCQ is actually harmful.

Something else is clearly at play.

Drugs come to market all the time that have long lists of potential side effects. Even then, we often hear that this drug or that drug resulted in serious side effects over time. There are endless cable tv ads by attorneys asking you if you have taken this or that drug and telling you they will sue for the cancer it caused.

HCQ is a drug that has been in existence since 1955. I have seen estimates that during those 65 years over 1 billion doses have been prescribed. I personally know several people who have been on HCQ for long periods of time for lupus and other conditions who have had no problems. They literally could not live a normal life without it. There can be very few drugs in the world that have been used as much and more is known about than HCQ.

What I find interesting is that at the same time that the FDA has been denying the emergency use of HCQ to treat patients in the early stages of Covid-19 (when the drug seems to be most effective) it has granted emergency use authorization of Remdesivir.

Elizabeth Lee Vliet, M.D. explains the gymnastics the FDA is going through to favor Remdesivir (a drug that is still unproven but costs over $3,500 to treat Covid-19) over HCQ ( a generic drug that costs $10 for a course or treatment).

The FDA's denial of the EUA for early outpatient COVID-19 use of HCQ continues the agency's false narrative in claiming outpatient harm for HCQ, based on inpatient data in critically ill patients. Dr. Hahn has ignored established facts of effectiveness and lack of harm for outpatients that have been established in more than 50 recent studies.

The FDA used a standard of "may be effective" for the rapid May 1 EUA given to the experimental anti-viral remdesivir, based on one controlled clinical trial terminated early. Yet FDA is now requiring a higher standard of a randomized controlled clinical trial for the already FDA-approved HCQ in safe use for 65 years. Remdesivir showed very little benefit shown in hospitalized COVID patients and had serious side effects. Nine of the members of the NIH panel relied on for COVID treatment advice were supported financially by Gilead Sciences, maker of remdesivir.

Is it just a coincidence that all of the "bad stuff" we are hearing about HCQ only started at the same time that Gilead determined that they could make a lot of money if HCQ was said to be ineffective and dangerous?

I have learned over the years that when you follow the money you usually get closer to the truth in any issue. Money has a way of talking like nothing else..

However, the money that Gilead might make from Remdesivir cannot possibly explain everything we are seeing in the efforts to malign HCQ and the doctors who have used it successfully. 

Something else is in play.

This might be another explanation.

The Federal Food, Drug and Cosmetic Act provides the authority for the FDA to oversee the safety of food, drugs, medical devices, and cosmetics.

The law sets out a strict set of rules to get a drug approved for use in the United States.

This graphic illustrates the steps that have to be accomplished to get approval under the standard rules.

Source: FDA

It normally takes years to get approvals of new drugs and vaccines under the law. The law exists to protect the public so the statute contemplates a rigorous period of testing, clinical studies and reviews by the FDA before a drug is approved for the public's use.

However, the statute recognized that there might be times when an "emergency use authorization" was required to provide a short cut around the normal process during public health emergencies.

This is what the FDA says about "emergency use authorizations" on its website.

I have highlighted some important words that are necessary for the FDA to be able to use the EUA authority and disregard the normal process.

The Emergency Use Authorization (EUA) authority allows FDA to help strengthen the nation’s public health protections against CBRN threats by facilitating the availability and use of MCMs needed during public health emergencies. 

Under section 564 of the Federal Food, Drug, and Cosmetic Act (FD&C Act), the FDA Commissioner may allow unapproved medical products or unapproved uses of approved medical products to be used in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions caused by CBRN threat agents when there are no adequate, approved, and available alternatives.

What does the law say?

You can only use EUA authority under the law if there are no adequate, approved and available alternatives. 

Consider HCQ.

It is available. It is one of the most available drugs in the world.

It has been approved for use against malaria, lupus, and other autoimmune diseases for decades. It has been shown to have minimal side effects with that use. 

The only question seems to be whether it is adequate.

Do you now see why no one in authority at the FDA, the NIH or anyone else in a position of government authority can say anything good about HCQ?

If they admit that it can be effective in treating Covid-19 it can be construed that they are saying it is adequate as a treatment.

If that is the case, the law states that all of the drugs and vaccines being rushed into development at the cost of billions of dollars can no longer qualify under the "emergency use authorization" exemption.

These drugs and vaccines would have to comply with the normal approval process that might take years.

It is clear this would be horrible news for the pharma companies who think they might have billions in future sales from these drugs and vaccines. It might also be terrible news for the politicians who want to talk about the promising vaccines and therapeutics on the horizon which are going to save us all. 

Less clear is what this means for the general public. The EUA authority may provide us the ability to get a vaccine or other therapeutics to market that is really in the public's best interest. That would be a fantastic development.

However, all of the attacks on HCQ may also be costing thousands of lives in the interim because no one wants to admit that it is adequate to treat Covid-19 if used soon after symptoms present themselves. This may also result in the avoidance of thousands upon thousands of hospitalizations as well.

I understand the potential constraints in the statute but the law can be amended if it is required to deal with this pandemic. That is why we have elected members of Congress. Their job is to legislate based on the needs of the public. Why couldn't they carve out EUA authority during the pandemic which would also not require the FDA and others to summarily reject drugs like HCQ that might have promise?  

All of this talk about vaccines and new therapeutic drugs may also be feeding a false narrative to the public that is not based on reality. As a result, it may actually be prolonging the economic and psychological pain that are such big factors in all of this.

It was recently suggested that people would be more likely to return to normal activities if they thought that a vaccine was not a realistic possibility in the near term. 

Simply stated, people are willing to sacrifice now with the hope that it will end soon with a vaccine. However, if you told people not to count on a vaccine there would be a totally different mindset. People would have to get on with their lives and make the best of it. There would be no other choice.

Throughout history this is what people had to do in dealing with pandemics. It was not possible to close most businesses, shut down schools for months, have colleges only do remote learning, work from home and buy what you need to live online. You did the best you could but you could not stop daily life. Everyone knew that the alternative would be far worse.

We should know that ourselves but the politicians and public health officials have been playing a game of creeping incrementalism with us.

15 Days to Slow the Spread.

Flatten the Curve.

Keep the Hospitals From Being Overwhelmed.

Ban mass gatherings.

Close bar, restaurants and "nonessential" businesses.

Close the schools.

Wash your hands.

Social distance.

Wear a mask when when you go shopping.

Wear a mask when you are outside.

Keep all of this going a little longer because we will soon have a vaccine and you will be safe and everything will return to normal.

What if the vaccine is not ready by the end of the year? Or next June? Or results in massive side effects?

HCQ may not be a cure but it certainly seems to have proven effective in enough places around the world that it should not be dismissed and the doctors who have shared their experiences denigrated. In a public health emergency why would you want to exclude anything that some doctors have found useful and has a long track record of safety?

Our public health officials are making big bets that something will come of vaccines and drugs under their "emergency use authorizations." The bets do not just involve a lot of taxpayer dollars. They involve people's lives. 

What if the simplest and most cost effective answer has been sitting right there under their noses for 65 years?

It is beyond me why politics should be betting people's lives on any side of this. 


If you are interested in taking a deep dive into all sides of HCQ I recommend you read the following article that a BeeLine reader sent me. (Thanks GS!)

It is well balanced and there is not much "Hydroxychloroquine: A Morality Tale" misses in the story of "how a cheap, well-known drug became a political football in the midst of a pandemic".

Thursday, August 20, 2020

Bad Data Begets Bad Decisions

I have written about Covid-19 since January.

From the beginning I thought it was necessary to take the virus seriously.

I supported the actions taken in mid-March in order to stop the spread and flatten the curve. I stated that these seemed to be smart, common sense measures to take given many of the things we did not know about the virus at that time.

However, around the end of March (at the end of the 15 days to stop the spread campaign) bells started to go off in my head.

The reality I was seeing did not match the models that were being used to justify the enormous economic costs and long-term implications of the mitigation efforts.

As an example, I referenced this chart in my blog post of March 29, 2020 that was the projection of deaths in Ohio from Covid-19 from the website CovidActNow. This was similar to the models being used by public health officials in Ohio to justify the actions taken.

That model projected 7,000 (best case) to 174,000 deaths in Ohio over the next three months from Covid-19 assuming the shelter in place order remained in effect during that entire time period.

Source; CovidActNow, March 29,2020

I wrote the following at that time regarding these projections and those of Ohio's Public Health Director, Dr. Amy Acton, who stated that Ohio would see a peak of 100,000 cases per day by mid-May.

I must admit when I first heard that number it was hard to process it. I am not an expert epidemiologist or public health expert. I know that exponential infection rates are hard for the mind to process. However, I am a numbers guy and I have to tell you that at first glance that model does not pass the smell test to me. 
I could be 100% wrong. This might prove to be the dumbest and most misinformed blog post I have ever written. However, let me give you are a few reasons that I question that conclusion.

It is now almost 150 days later and we can look at the actual facts of what has occurred in that span.

You can look at the facts below and make your own assessment of whether my instincts were right or wrong at the end of March.

Ohio never saw 100,000 cases of Covid-19 in one day.

The highest daily total of confirmed cases Ohio has seen is 2,172. However, well over half of the cases reported that day (April 16)  were prisoners at Marion Correctional Institution.

In fact, five months later, Ohio has just recently passed 100,000 confirmed cases in total in a state of almost 12 million people in a period of six months.


What about the predictions that Ohio would have 7,000 (best case) to 140,000 (worst case) deaths by the end of June even if we sheltered in place for three months?


Ohio has still not reached 4,000 deaths five months after that three month projection was made.

For context, in a typical year Ohio registers about 2,500 deaths per month or 30,000 deaths per year.

I prepared the chart below comparing all cause deaths in Ohio from March through May in 2019 and 2020 based on CDC data to show the effects of Covid-19 on total deaths in the state. As you can see from the chart above, this would be the period encompassing a majority of the deaths thus far. This data should also be complete and reliable. Later deaths may still not have been reported as there is typically a lag in death reporting stats.


There is no question there have been excess deaths in Ohio from Covid-19. However, the data suggests that excess deaths are only about half of what is being reported as total deaths from Covid-19.

I did similar research with New York's death numbers.

This is the comparison of all cause deaths in New York in 2019 and 2020 for the March-May period.

New York clearly had a horrible six weeks between April and May 15.

For several weeks deaths were more than double their normal rate.


However, an interesting perspective arises when you subtract out Covid deaths to attempt to discern how deaths were reported for deaths other than Covid during this period.

It is rather shocking. 


The only conclusion that can be drawn is that people either stopped dying from almost all other causes in New York during April and May or Covid was being put down on the death certificate as the cause (or with other reasons) of death in the overwhelming majority of cases.

This chart provides better context of the total numbers of deaths and causes listed between 2019 and 2020 in New York between March and May.


Is anyone really supposed to believe that 60% of the deaths that normally would have been attributed to heart disease, diabetes, lung disease, accidents etc. in 2019 in April and May (or 40% in the entire March-May period) no longer occurred in 2020?

This leads to the obvious conclusion that Covid-19 deaths have been inflated over what would be expected looking at deaths in prior years.

The question is... why has it been done?

Was it done merely to be complete in documenting every possible Covid death?

Was it done because the higher number of deaths recorded made it easier to get people to adhere to public health protocols and mandates? Fear is a great motivator.

Was it done because hospitals could potentially get higher payments from Medicare/Medicaid for those with a Covid diagnosis due to the CARES Act?

I don't know the reason (s) but I do know that bad data begets bad decisions.

Bad decisions begets bad results.

Isn't it bad enough? Why would anyone think we need to make it worse than it is?

That is one question I actually might be able to answer.

Tuesday, August 18, 2020

Fear and Facts

One of the most interesting facets of the Covid-19 pandemic is the incredible divide between what people think and the actual facts of our current reality.

It is a textbook case of the power of the media and of propaganda in shaping people's emotions, attitudes and beliefs.

Early on when the first impacts of Covid-19 were being felt (March 12, 2020) I warned about the fallibilities of humans in dealing with what we were facing.

There are two fundamental truths about human beings that I always keep in mind.

First, the natural human condition is to be a conformist. People do not generally like to separate themselves too far from the herd.

Second, there is nothing more contagious than fear.

We are seeing both in vivid detail right now.

I think you could fairly say that we are into a 4-D technicolor version regarding our reaction to Covid-19 about now.

On that same day I wrote the passage above a psychiatrist had just made a tv appearance in New York City when he entered the green room just off the studio to speak to the next guest who was going to talk about the emerging pandemic. The two had a brief conversation as recounted by Jeffrey A. Tucker in a recent article, "When Will The Madness End."

A thin, wise-looking bearded man with Freud-style glasses sat down across from me, having just left the studio. He was there to catch his breath following his interview but he looked deeply troubled. 

“There is fear in the air,” I said, breaking the silence. 

“Madness is all around us. The public is adopting a personality disorder I’ve been treating my whole career.”

“What is it that you do?” I asked. 

“I’m a practicing psychiatrist who specializes in anxiety disorders, paranoid delusions, and irrational fear. I’ve been treating this in individuals as a specialist. It’s hard enough to contain these problems in normal times. What’s happening now is a spread of this serious medical condition to the whole population. It can happen with anything but here we see a primal fear of disease turning into mass panic. It seems almost deliberate. It is tragic. Once this starts, it could take years to repair the psychological damage.”

I sat there a bit stunned, partially because speaking in such apocalyptic terms was new in those days, and because of the certitude of his opinion. Underlying his brief comments were a presumption that there was nothing particularly unusual about this virus. We’ve evolved with them, and learned to treat them with calm and professionalism. What distinguished the current moment, he was suggesting, was not the virus but the unleashing of a kind of public madness. 

As I have also written before, the drumbeat of repetition by the media can be extremely dangerous in that it can trigger the "illusory truth effect" in humans. This is the fundamental principle that underlies propaganda. Simply stated, the more often we hear something the more likely we are to believe that it is true---even if it is a complete fabrication.

All of this is useful perspective in considering the results of recent research by Franklin Templeton and Gallup to understand the behavioral response to Covid-19 and the perception of risk. Franklin Templeton is an investment firm so they were examining this subject to determine how this all relates to the pricing of that risk in the marketplace and the "safety premium" various individuals might pay for various purchases.

This is the major conclusion of that research.

We find a gross misperception of COVID-19 risk, driven by partisanship and misinformation, and a willingness to pay a significant “safety premium” that could affect future inflation.

Let's look at some of the results of the research.

This chart compares the actual share of deaths by age groups with what people believe are the share of deaths for each age cohort.


These are the comments made in the survey about these findings.

Six months into this pandemic, Americans still dramatically misunderstand the risk of dying from COVID-19:

On average, Americans believe that people aged 55 and older account for just over half of total COVID-19 deaths; the actual figure is 92%.

Americans believe that people aged 44 and younger account for about 30% of total deaths; the actual figure is 2.7%.

Americans overestimate the risk of death from COVID-19 for people aged 24 and younger by a factor of 50; and they think the risk for people aged 65 and older is half of what it actually is (40% vs 80%).

What is most telling is the following chart that compares the % of those in each age group who say they fear the health consequences from Covid-19 compared to the actual mortality data.

For those in the age 18-24 demographic, the share of those who fear serious health consequences is 400 times higher than the actual mortality data!

The only group that realistically understands their actual risk profile are those age 65+.


How could this be the case except for sensationalized and politicized media coverage that is not putting the "facts" in context?

I thought it was interesting that the research survey also came to the following conclusion as to where most of the misinformation was coming from and who was most misinformed about the facts.

For the last six months, we have all read and talked about nothing but COVID-19; how can there be still such a widespread, fundamental misunderstanding of the basic facts? Our poll results identify two major culprits: the quality of information and the extreme politicization of the COVID-19 debate:

People who get their information predominantly from social media have the most erroneous and distorted perception of risk.

Those who identify as Democrats tend to mistakenly overstate the risk of death from COVID-19 for younger people much more than Republicans.

What is most troubling is that all of this has "real world" effects that are largely being ignored. The fears that the psychiatrist voiced last March have really come true.

For example, consider this recent CDC data that indicates that over 25% of those ages 18-24 have seriously considered suicide in the last 30 days!

75% in this age group report one or more mental or behavioral health symptoms over that period of time.


I don't think I have seen anything so troubling in a very, very long time.

Notice that the % of those seriously considering suicide of those age 65+ is 2.0%

What are we doing to our young people with our the response and reporting surrounding Covid-19?

Has there ever been a greater disconnect between fear and facts than what we are witnessing right now?

Let's put the facts in a little better context. 

An interesting fact is that there about the same number of Americans age 24 and younger as there are age 65 and older---approximately 105 million in each group.

If we look at those age 24 and under, there have been 292 total reported deaths from Covid-19 thru 8/12/20 per CDC data.

For those age 65 and older, there have been 118,548 reported deaths.

That would place the risk of dying from Covid-19 of those 24 and under at 1 in 359,589.

The risk for those age 65 and older is 1 in 886.

In the chart below are the one-year and lifetime odds of deaths by selected causes of injury based on 2018 tables.

I would like for young people to pay particular attention to the lifetime odds column as they have most of their lives ahead of them. This is probably the best metric to assess risk from these causes for younger people. I hope you can put any concerns you have about Covid-19 in better context by looking at these facts.

Dying from a lightning strike? Being bitten by a dog? Falling on stairs? Dying in a fire? Compare those odds to the 1 in almost 360,000 related to Covid-19 right now.

You may want to avoid looking at the numbers involved in auto accidents. You may never want to ever get in a motor vehicle again. Or be near one as a pedestrian for the rest of your life.


I have written before about the following book that was written in 1842. This is a picture I took of the copy I have in my library.

Its lessons are well known in explaining what happens to the masses when they get swept up in markets with investment manias on the upside and panic selling on the downside. 

It could just as easily be used to explain what we are seeing right now.

I think this quote in the book from Charles Mackay is especially appropriate.

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” 

Beware of the herd.

Choose facts over fear.

Consider the sources that you "rely" on for those "facts".

Share the facts in this blog post with people who might find it helpful.

Doing this I hope that we will see many recover their senses speedily rather than slowly.

We simply cannot stand by when so many people (especially those between 18-24) are letting fear control their minds rather than facts.

Sunday, August 16, 2020

Paradise Lost

Joe Biden has stated his solution to the Covid-19 pandemic. He wants everyone to wear a mask when they are outside for the next 3 months. I assume he means anywhere outside your home.

"Every single American should be wearing a mask when they're outside for the next three months, at a minimum," Biden said Thursday afternoon in remarks in Wilmington, Del. "Every governor should mandate mandatory mask-wearing. The estimates by the experts are it will save over 40,000 lives."
Does this mean you are supposed to wear a mask in your car when driving alone?

When taking a walk in your neighborhood?

Mowing your lawn?

Playing golf? Sitting on the beach? Hiking a mountain trail?

It is unclear what authority the President would have to unilaterally order everyone to wear a mask everywhere. It is also unclear how it would be possible to override the authority of the Governors of the 50 states under the Constitution.

15 days to slow the spread has now become 3 months of wearing a mask anytime you leave your home 150 days later?

It might also be instructive for Joe Biden to examine what is currently happening in our 50th state right now---Hawaii.

Waikiki Beach on my last visit to Hawaii

If there is any state in which Covid-19 should be under control it is Hawaii.

Hawaii is more isolated and able to control access to the state than any other state in the union. You cannot get there other than by airplane or boat.

All passengers arriving in Hawaii have to self-quarantine on arrival for 14 days.

The latest data from the Hawaii Tourism Authority shows that arrivals in the state from outside Hawaii during June were down 98.2% compared to last year. (17,068 arrivals compared to 951,628 a year ago).

A mask mandate indoors has been required for everyone in the state since April.

The mandate was extended at the beginning of July to require that everyone on the island of Oahu must wear a mask outside.

Google Mobility data shows that those in Hawaii are staying closer to home to a much greater extent than the country at large. After all, if you have to wear a mask everywhere why go out?

This is how Hawaii looks on Google's mobility index.

Note in particular the difference between Parks (which includes public beaches, marinas, public gardens and dog parks in addition to public parks) in Hawaii and the nation as a whole.

This is the United States at large.

As you might imagine, in that Hawaii is largely dependent on tourism to fuel its economy, unemployment is a tremendous problem. In May, Hawaii had the second highest unemployment rate in the country---22.6%. Before the pandemic started, Hawaii had the lowest unemployment rate--2.2%.

You have the most isolated state in the union, with the strongest mask mandate in the country, and with people having much less social interaction than almost anywhere in the United States. The economy has been decimated.

You would think Hawaii would have Covid-19 licked. You would think that Hawaii would have something to show for all these sacrifices.

You would be wrong.

Right now Hawaii is seeing the largest percentage increase in cases of anywhere in the United States. 

Cases are up over 1000% since July 3.

This is after the implementation of a mask mandate outside the home.


Is this merely a coincidence?

Whatever the reason, paradise seems to be lost in Hawaii.

A recent survey showed that almost 80% of Americans says they are wearing a mask when in public.

That was double the percentage in mid-April.

However, cases went up nationally beginning right after June 1. As I have stated before, this also is right about the time that BLM protestors took to the street. Is that another coincidence?

I have also thought it interesting that cases in a number of hot weather states (Florida, Arizona, Georgia etc.) started spiking at the same time that heat indexes increased and people started spending more time indoors in these states in air conditioned environments rather than spending time outdoors.

At the same time, cases started dropping in the Northeast states when the weather improved and more people were spending less time indoors. Is that another coincidence?

As I have stated before, I am not a doctor, public health expert or epidemiologist but I consider the data and common sense when you think about mask usage or anything else.

If masks are the solution how is it possible that cases have accelerated in many places after mandates were put in place?

For example, take a look at South Africa which made face masks mandatory in early May. Beginning in March, South Africa has invoked some of the strongest economic lockdown strategies in the world. South Africa even banned the sale of alcohol and tobacco.

Failure to wear a mask when required was subjected to a criminal penalty of 6 months in jail beginning in July.

Perhaps the face mask mandate has helped bring the cases down since the end of July. Or could it simply be the virus is burning out?

Compare the South Africa peak to the Norway peak which has never adopted mask usage.

As I have pointed about before, there seems to be a natural up and down movement of the virus that generally plays out over a 2-3 month period when it attacks an area. Note how remarkably similar these curves are in various countries.

We have seen similar patterns in different regions in the United States.

Seeing Biden's comments and what is going on in Hawaii reminded of an excellent post I saw a few weeks back on "The Mechanistic Reality On Masks".

It seems to me too many people do not really understand the limitations of mask wearing by the general public that this post does a job of explaining.

First, a "mask" is just a filter. A very imperfect filter with a terrible seal, but a filter nonetheless. (In contrast a "respirator", such as a P100 or N95, is a pretty good filter with a decent to excellent seal.)
All filters concentrate what they filter; that's how they work. That which does not go through them is retained, and thus concentrated. You can see this clearly by looking at the filter in your home's A/C unit. Most modern cars have one as well; go take a look (you should replace both every few months, by the way, and when you look at it you'll immediately understand why.) 
So if I wear a mask for an hour then I've taken whatever is in the air and impinges on that mask and collected it. Much of this will be harmless dust, but some of it will be pathogenic. Some of it goes through the mask and I inhale it. The larger particles tend to get caught in the mucosa of my nose and throat, but the smallest ones, which the EPA calls PM2.5 (2.5um and smaller) go right into the lungs. The bad news is that viruses are much smaller than this and thus go right through anything less than an N95, but some percentage of virus-laden particles (typically around 2% for a cloth mask, and perhaps 10% for a paper one) will indeed get caught on the cloth or paper, where they remain.
Since I generally, if working "lightly" (e.g. walking, as opposed to sitting quietly) will breathe about 20 times a minute, in one hour I have taken up to 1,200 TIMES the amount of material that is in one breath and passed it through the mask. In other words up to 1,200x as much material as was present in one breath has now been placed on that filter. The better the filter is, the closer to 1,200x that figure is.
Even if the filter is only 10% efficient (The other 90% either bypasses it or goes right through it) I still concentrated 120x as much material on the filter. That is, even if I wear a very poor mask that does statistically nothing to protect myself or others I have now created a monstrous biological hazard where one did not previously exist because I have taken very small amounts of contamination and concentrated it by a HUGE amount.
Much worse is that I performed this collection everywhere I was during that hour; if I walked from the parking lot of a business to the door I have now collected both nuisance and biological material from that entire path and brought it inside.
Even if the filter is only 10% efficient (The other 90% either bypasses it or goes right through it) I still concentrated 120x as much material on the filter. That is, even if I wear a very poor mask that does statistically nothing to protect myself or others I have now created a monstrous biological hazard where one did not previously exist because I have taken very small amounts of contamination and concentrated it by a HUGE amount..

All it takes is to touch that "filter" and the concentrated levels with your hands and you have potentially infected yourself.

The only solution is to only wear a mask one time, dispose of it or wash it, and wash your hands immediately after taking if off. It this is not not done a healthy person is going to possibly infect themselves.  This is exactly the procedure followed in a medical setting because they know that is what is required for masks to not become a detriment.

For example, look at the first couple minutes of Biden's VP announcement. He takes the mask off his face, he touches the outside of the mask, he places it on the podium and he then touches the area near his mouth or nose three times in the first two minutes. 

Clearly the correct use of face masks is not practical for the general public (or Joe Biden).  If anyone should wear masks, it is those who are sick. They cannot infect themselves and wearing a mask indicates to others they are sick and tells you to stay a good distance away from them. 

The other factor that seems to be missing in all of this is the fact that it appears that ventilation is one of the most important factors in protecting yourself from being infected with Covid-19.

You have heard for years that there is nothing better for your health than to be out in fresh air. The same is true for combatting Covid-19. Covid is most easily spread in confined spaces with poor ventilation. It is hardest to spread in open air where there is maximum ventilation.

During the Spanish Flu pandemic many doctors found that patients recovered most quickly if they were placed outside. 

Back in 1918 when the Spanish Flu was spreading across the globe, many doctors knew that fresh air would aid in the recovery process.

 In Halifax, Yorkshire, a doctor smashed a window with a rolling pin, and he watched his gasping patients immediately begin to recover. In Alberta, Canada, a doctor treated his patients in tents and they all recovered. In Milan, patients were treated in a courtyard because of overcrowding, and the patients outside recovered more quickly than the patients inside. In London, a doctor at the London Hospital recommended everyone sleep in the open air, believing that cool air increased circulation 

In New York, the Roosevelt Hospital placed children on the roof, protected from the wind by screens. They were put to bed with hot water bottles. It seemed outrageous at first, but six hospitals in Massachusetts soon followed the example. At a hospital in Boston, patients were nursed in tents, warmed with hot bricks wrapped in newspaper. Only 35 patients out of 351 died compared to half the patients in other Boston hospitals.

Why would anyone believe that wearing a mask outside would be helpful? If anything, it is obstructing the normal air intake and exhaust system represented by your breathing in and out. A mask may block some large particles from coming in, but as a filter, it may simply trap those and concentrate those on the outside of your mask. 

However, when you exhale naturally without a mask you are also causing any harmful toxins or pathogens to be expelled and dissipated in the air. This does not occur as easily when you have a mask on. You also are building up more CO2 in your body since the mask is preventing it from being expelled from your body. If your exhaust system is not working normally where is it expelled?  The extra CO2 places more stress on your kidneys which ultimately are filtering waste from your blood that end up in your urine.

As I heard one nephrologist explain it, "If you wear a mask for long periods of time you better have good kidneys."

I have seen other doctors say that this is not a concern. What does common sense say to you?

It is popular to quote science and experts today. For example, consider Biden's quote above that mandatory mask-wearing would save 40,000 lives according to "experts".

Which experts? What about the experts who do not agree?

Back in early April I thought it was curious that the CDC, WHO and others all argued that mask wearing by the general public would not be helpful. This did not make sense to me. How could it be that PPE was so critical that it had to be saved for  hospital workers while it was not helpful to the general public?

I began researching a blog post on that subject and found that the actual science backed up that claim. Face masks other than N95 masks were shown to be of little use in almost every scientific study that was done before the pandemic began. And due to the factors mentioned above, masks may actually make things worse.

One of the better sources on mask usage that I came across at that time was this commentary from two doctors that was published by the University of Minnesota's Center for Infectious Disease Research and Policy.

Since mandatory mask wearing became the "thing to do" to stop the spread the Center and authors got pressure to remove this article from the internet. To their credit, they did not. Further, they have posted answers to common questions that are out there regarding their earlier paper.

It is worth the read if you are really interested in understanding the topic in more detail beyond the political and public health posturing that we are hearing right now.

Why is Joe Biden talking about mandatory masks outside? Why are all the public health "experts" and politicians focused on masks?

They have to tell you to do something. You expect them to do something for you.

They told you to wash your hands. They told you to socially distance. They told you to stay at home for 15 days to stop the spread. They told you that there could be no large gatherings ( later amended that it was ok if it was a BLM or Anti-Trump protest). They told you restaurants and bars had to close. They told you businesses had to close. They told you to work from home. They told you we had to close the schools. They told you that you had to wear a mask when you went into a store. They told you if you did these things we could stop the spread.

What else is left? Go back 150 days and close down everything all over again?

It is far easier to tell you to wear a mask whenever you go outside.

At some point the cases will fall (as they will ) and they can say wearing a mask was the answer.

Paradise has been lost in Hawaii (and a lot of other places) since the pandemic descended on us.

However, I think the biggest loss has been any trust that we should have in the public health experts looking at what we have been told is "science.".

Most of the time they appear to be more political than the politicians.