Porter Stanton on How We Blew Handling of COVID-19

Recently, an old friend said to me (Porter)... Porter, I'm almost afraid to ask... but what do you think about all of this madness, about the government telling everyone they have to sit in their houses? How long do you think this can go on? What do I think? You probably won't like it... We are going through the greatest mass delusion in history. Never in my life have I ever been more ashamed of our elected officials. And never in my wildest dreams did I think our entire country would fall for such complete nonsense on such an enormous scale. In today's Digest, I'll show you why virtually everything we've done so far has made the impact of this virus worse than it would have been if we had done nothing at all. And I'll also show you how simple doing the right thing could have (and should have) been. I can also predict what will (eventually) happen next – the only steps that can actually protect those most at risk from this virus. But before I get to the facts that inform my view... I would like to review how completely inane and idiotic our political leaders have become in the midst of this health problem. My favorite example so far? The thousands of outdoor recreational activities that have been closed or forbidden – including those that involve individual pursuits, like surfing. And what did CBS News publish as a headline above the story documenting a surfer being chased down by patrol boats? It read: "Scientist Says Beaches Are Dangerous Right Now." How does anyone read this stuff and not laugh out loud? It's impossible to watch the video of a surfer being chased down by patrol boats in the name of public health and not think something has gone terribly wrong in America. But what's the root of the problem today? What's the foundation of all of these bad ideas? At the heart of every mass delusion, there's a 'big lie'... The big lie is a falsehood so outrageous and so obviously wrong, in retrospect people can hardly believe that anyone took it seriously. The most famous example of the "big lie" is the Salem Witch Trials, where four bored teenage girls convinced their pastor they were possessed by the devil and that dozens of people in their community were agents of Satan. The pastor, in turn, convinced most of Massachusetts that the colony was inundated with witches. Even though it's hard to imagine today, some 200 people were arrested over the next year. One poor man, Giles Corey, was crushed to death under a pile of giant rocks because he wouldn't confess to being a witch. And what happened to those who did confess? They were forced to name more witches. Then they were hanged. Before anyone came to their senses, 30 people were put to death. We "modern" Americans look back at these events and wonder how anyone could have taken seriously a bunch of teenagers prattling on about witches and devils. But don't be too proud... A court in Arkansas sent three teenage boys to prison in 1994 for murders they couldn't have possibly committed, mostly because the jury firmly believed they were devil worshippers and thought they'd used black magic to pull off the crime. And with COVID-19, Americans have become just as irrational as those Salem witch hunters or that Arkansas jury. What's the big lie today? The big lie today is that "we" are all in "this" together. It's utter nonsense... "We" – the people of the world, the people of our country, of my state, of this city (Baltimore), and even the people in my neighborhood – do not share the same values, ideals, or circumstances. We do not have anything like the same immune systems or face the same risks of this virus. While it might sound friendly to say "we're all in this together" – the reality is that we are not. And enforcing policies that treat all of us the same is the very worst approach we could take to dealing with this health crisis. Some of us are at much greater risk of serious harm by this virus. Some of us are much more susceptible to infection. Some of us own businesses or work for companies that haven't been impacted at all. Others have seen their livelihoods, their careers, or even their life savings wiped out. We are NOT in this together. As with everything else in our lives, our abilities and our priorities and the risks we're willing to take all differ. We are individuals – not a monolithic polity. Saying "we're all in this together" sounds like Mao's China, where people abandoned the cities to die from starvation on communal farms. It seems like a disaster in the making... because it is. Rather than assessing our own risks and our own priorities and then making our own decisions, we have decided to allow the government – really just a handful of governors and the president – to make one decision for all of us. And we're told not following the rules means we're putting other peoples' lives in jeopardy. It's complete and utter nonsense. What's putting all of us in jeopardy is the idea that Washington D.C. knows best and we could follow directions – because "we're all in this together." Adolf Hitler, in his book Mein Kampf, explained why such "big lies" are at the foundation of all tyranny. If you want to understand how despots operate, you should consider how one of the worst in history manipulated large groups of people... In the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie... Not only are 'we' not in 'this' together, we shouldn't strive to be either... The strength and resilience of a free society is NOT based on the idea that we are all the same or should share the same goals – but upon precisely the opposite. A free society recognizes a fundamental truth of nature: We are not the same. We do not have the same strengths, the same ideas, the same histories, or the same goals. There's no such thing as "The Public Good." There's a myriad of competing interests, as Adam Smith explained in The Wealth of Nations more than 200 years ago. What we do share, however, is a common philosophy that champions the rights of the individual and limits the power of the State. We do not exist to serve the State. The State exists to serve us. That distinction lies at the very heart of what it means to be an American, and I think our leaders have completely forgotten this fact. Why is this idea so important, not merely for philosophical reasons, but for the best possible outcomes? Why do free societies produce so much more wealth and happiness than countries led by tyrannical governments? America has proven, again and again, that the "spontaneous order" of free people and free markets evolve far superior solutions to every human need and want. If you want to botch something up, just ask the government to take over. If you want efficient solutions that work, allow people to compete in a free market. That's why America has long led the world in the creation of wealth and innovation. That's why we produce the highest-quality creative art, entertainment, design, and technology. But... what about when we fail? Look back at all of our country's biggest blunders and you won't find freedom or free markets. You'll find a government that has far overstepped its constitutional limits. It happens every single time: When we allow our liberty to be taken from us in the name of a political theory, disaster will follow. Consider the Vietnam War, for example. Did Congress declare war as the Constitution requires? Nope. Instead, the country was sold on yet another "big lie"... And it was a whopper. We were told that propping up a corrupt dictatorship in a tiny Asian nation was the key to stopping communism from spreading around the world. Meanwhile, without our involvement in that country's internal politics, no one in America would have ever known who Ho Chi Minh was... or cared. And ironically, all we had to do to stop the spread of communism was simply leave it alone. Empty grocery store shelves and hopeless lives were the only bane needed to wipe out that stain virtually everywhere. Yes, some folks still seem determined to adopt those ideas and destroy their societies (Venezuela), but we seem to have finally wised up to the fact that the only thing we have to do to make sure it fails is simply wait a decade or two. It's certainly nothing worth sending our kids to die over. And that brings me back to today... Should we all sit in our home prisons, with our freedom to work, to associate, and to speak taken away from us – all to universally support "flattening" a curve, because "we" are all in "this" together? Or is this the public health service's Vietnam? I have a prediction for you... By the time this virus is thoroughly understood, what will become extremely clear is that these shutdown orders did virtually nothing to stop the spread of the disease or to reduce its lethality in the population. Why do I believe that? Because it's apparent already that at least 5 times more people have been infected than are reflected in the number of "confirmed cases"... and the real number may be much, much greater than that. In a town in Germany, one of the only places where a reliable statistical sampling has been done, 14% of the population has antibodies for the virus, which means they have already been infected. Germany has a population of 83 million... so that's more than 10 million people who have potentially already had this virus. And that's only in one country. Germany has also tested twice as many people per capita as we have, so they know far more about the actual spread of the virus and its real lethality. So... how dangerous is this virus? The official confirmed infected count in Germany is only 135,000. And almost 4,000 Germans have died because of this virus. That's a 3% "case rate" mortality – that is, out of the population that has been proven to be infected, about 3% have died. That sounds really bad and scary. After all, the average annual flu has a mortality rate of between 0.1% and 0.2%, depending on the year. So, for example, in 2015 to 2016, the Centers for Disease Control and Prevention (CDC) estimates that 30 million people got the flu and around 60,000 people died, or 0.2%. But, wait... we know for sure that far more people have gotten this coronavirus than have been tested for it. As I just noted, the statistical sampling of antibodies in Germany suggests a much, much lower lethality rate. The real mortality rate is probably somewhere closer to the regular flu. So what do you want to bet that we eventually figure out that the population-wide mortality rate for this virus is about the same as all of the other coronaviruses? But what if I'm wrong? I might be. Nobody knows how widespread the virus is already in the U.S. But since we don't know for sure, why in the world are we ordering everyone to stay in their homes? Why don't we find out and then decide? Knowing the real lethality of the virus (which can only be calculated if you know how many people are infected) informs us how dangerous the virus is for most people. We already know that this virus isn't a significant killer for people under the age of 50. Virtually no one without serious existing conditions has died from this virus under the age of 50. And we also know from places that have actual data that this coronavirus is no more dangerous than the other viruses that we know circulate around our country on a regular basis every year. Knowing how many people are infected is also critical to figuring out which policies are needed to mitigate the impact of the disease on the hospital system. After all, if tens of millions of people already have the virus, you're not going to stop it by making people stay in their homes... It's already too late. I strongly suspect that was the case here. I suspect we will eventually learn that this virus had been circulating undetected in the U.S. since at least December. And what is certainly different about this virus, as compared with the regular flu, is that when it emerged, there was zero existing immunity to it... which meant it spread like wildfire. But the good news is that super-contagious viruses also burn out quicker because herd immunity impacts the growth rate. So... should we have shut down our entire economy for a month in March, long after the virus had spread to millions? No! What we're doing will not reduce the total infection rate or the mortality rates of this virus. It's far too late for the strategy we're using... How do I know? The best evidence of how widespread the virus has become comes from studies of fecal matter in wastewater treatment plants... A group of researchers from Harvard, MIT, the Brigham and Women's Hospital, and medtech startup company Biobot Analytics has published research submitting that viral loads in the wastewater from an area in Boston suggests at least 2,300 people in the water treatment area are infected with COVID-19, roughly five times more than the official 446 confirmed cases. No one wants to go to a hospital or a doctor's office right now unless they absolutely have to, so it makes sense that the vast majority of these infections go unreported. And that's not all we know about how fast this virus spreads... Although nobody in Washington, D.C. wants to mention it, one group of people was thoroughly tested. This group offers a striking example of what happens when you lock people into their homes after this virus has been circulating amongst them. We know exactly how many people on the Diamond Princess cruise ship were infected. We know when the virus appeared on the boat. And we know exactly how many people died. There is no dispute about these facts, whatsoever. There were 3,711 people on the boat (passengers and crew). We know that 712 people were infected, despite restricting everyone to their cabins as soon as the infection was discovered. That's an infection rate of almost 20% in a matter of days. This is a very, very contagious virus. Keep in mind, the lockdown on the boat began on February 5, which was only four days after the first case was discovered in Hong Kong. This virus spreads like wildfire. On the other hand, even in a population that is much, much older than average and that featured substantial population-wide comorbidities like high blood pressure and obesity, only 12 people died. That's 1.7% of the people who got infected. Yes, that's much worse than the average flu – but not if you adjust for the age and relative health of the population. Researchers who have studied the cruise ship outbreak in detail estimate that this virus will have 0.5% lethality in the general U.S. population – which is, again, comparable to the regular annual flu. We have already seen that the initial forecasts of more than 2 million deaths are complete nonsense. When the president ordered the economy to shut down, he claimed that if we didn't take this step of cowering in our homes, then millions would die. "People will be dropping dead on the subway," Trump claimed, as though Ebola was on the loose. All bullshit. This virus is definitely dangerous to the old and the sick. To everyone else, it's going to be a nonevent... just like any other flu season. Here's a prediction... In a "bad year" for the flu, between 50,000 and 100,000 Americans die from the virus. I'm willing to bet that by the end of this year, roughly the same number of people will have died from this virus. And I'm also willing to bet that there's zero difference in either the total per capita number who become infected and the mortality rate between our country (which ordered a shutdown) and Sweden's, which has refused to order anyone to shut down their business or stay in their homes. If you accept that the virus had been circulating in our population for months by the time the lockdown orders arrived (which is certainly the case) and if you know it's highly contagious, then ordering everyone into their homes in mid-March was closing the barn door when the horses were already long gone. What does work to control the spread of a novel virus? Herd immunity. Humans have immune systems. They work great, especially in younger people. We can handle viruses. What we should do is tell older and sicker people to put on a mask. Wear rubber gloves. Avoid crowds at all costs. Avoid hospitals. Stay home whenever you can. We should have told everyone else: Go about your lives. Yes, we should also add that some of you – probably about 20% – are going to get this novel coronavirus this year. (Normally about 9% of the population gets the flu every year... so your chances of catching COVID-19 this year are about double what you'd normally face with the regular flu.) And if you get it, it's probably going to suck. But the younger you are and the healthier you are, the more likely it is that you won't have any symptoms at all. So, let's not cancel school. Let's let the kids go and get exposed to this virus when they are young, when they can handle it, and when they can quickly develop immunity. That's the best way to build the herd immunity we need – allow everyone who can manage the virus to get exposed. As quickly as possible. After all, the sooner the herd immunity we need develops naturally, the safer we will all be. If the media hadn't gotten hold of this story and if our political leaders hadn't panicked... This year would have just been a really bad flu season – nothing more. And whether you agree with me or not, one thing is certain... Hiding in our homes will not make us any safer – not for long. As soon as we leave our isolation, the virus will spread again. There's no way to stop a virus that's this contagious and this widespread in a population this large. It will take at least a year to build a vaccine. And until then, what we desperately need is for people who aren't at risk of dying to expose themselves and build immunity. And guess what... That's exactly what's going to happen – eventually. The only question is when. It can happen six months' from now if we want to cripple our economy and lose $10 trillion to $20 trillion (plus all of our liberties). Or it can happen in about six weeks if we all just go back to work and deal with it like adults. So what should we do? If you're over 60 or if you're in poor health, by all means, do everything you can to avoid catching the flu this year. The hospital isn't going to be able to help you. You have to make sure you don't get sick! But if you're in good health, and especially if you're under 50, simply ignore everything and live a normal life. It's no big deal. Interestingly, if we had respected people's civil liberties, that's almost certainly what would have happened. A lot of people would have gotten sick at first because nobody knew a new virus was circulating. But as soon as people saw what was happening, the old and the sick would have taken much greater precautions. The rest of us would have gotten exposed – probably about 20% of the population in 60 to 90 days. And then it would have burned out as immunity in the population grew – just like the regular flu. Meanwhile, there are tens of millions more people who have far more to fear from the economic consequences of these policies than they have of the virus. And guess what? There's no way to develop immunity from the State... This situation sets a precedent that will surely be exploited for years to come. The government's getting used to ordering us all around. It isn't going to stop. Meanwhile, God gave us the ability to reason – to judge for ourselves what risks to take and which to avoid. God also gave all of us the liberty to live our lives as we see fit. Our leaders don't have the right to make these choices for us. When we let them, we doom our country to the worst possible outcomes. Just imagine what John Hancock, John Henry, or Paul Revere would say to themselves in our current situation. Do you have any idea what our Founding Fathers were up against? They took on the greatest army in the world with little more than a bunch of starving farmers. They had no navy... against the greatest navy in the world. They didn't even have the support of all Americans. And if they lost... they would all been hanged for treason. Why take on those terrible odds? For liberty... to establish the greatest society the world had ever seen – a grand experiment to find out how much better our world could become with civil rights for the common man and free markets. And what do you think these men would say today, watching a governor ordering millions of people to stay locked up in their apartments while their businesses fail? Can you imagine what our founders would say looking at us cowering in our homes like whipped dogs? I guess we've all forgotten about Valley Forge, where two-thirds of our soldiers died because of the flu! Trust me, they didn't have ventilators either. But did George Washington go home? Hell no. If our country's willingness to kowtow to the most blatantly unconstitutional orders in the history of our nation doesn't bother you because you still believe in the "common good"... or because you buy into the big lie that we're all in this together... I think you should be ashamed of yourself. First, because you're naïve to have any faith at all in our leaders' ability or willingness to make good decisions. They don't even know how many people have the virus already and they never bothered to find out! They've completely ignored the Diamond Princess cruise ship case study, the German data, and the wastewater studies. They're doing the only thing they can with their very limited understanding of this virus: Ordering everyone to stay home. Meanwhile, plenty of hard evidence shows why this strategy won't work and isn't necessary.  But beyond all of the facts and the medicine... There's another reason I believe every American ought to be ashamed of the way our government has behaved... We've acted just like the communists in China behaved – ordering everyone around, telling them they can't travel, telling them they can't work. That ain't what we do here. By all means, if you want to wear a mask, be my guest. And if you are older or if you have health problems, please, take sensible precautions. But those decisions are rightfully yours to make... We aren't in this together. You have your health and your priorities... And I've got mine. I hope you'll join me in calling out anyone who supports these tyrannical and unconstitutional new laws. I believe every American should willingly risk death before surrendering an iota of his liberty. "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive... those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." – C. S. Lewis "All, [a quote from Howard Marks] in your recent Digest: Most of us believe in the free-market system as the best allocator of resources. Now it seems the government is happy to step in and take the place of private actors. We have a buyer and lender of last resort, cushioning pain but taking over the role of the free market. There's an old saying – variously attributed – to the effect that "capitalism without bankruptcy is like Catholicism without hell." It appeals to me strongly. Markets work best when participants have a healthy fear of loss. It shouldn't be the role of the Fed or the government to eradicate it. What's the Fed's purpose in buying non-investment grade debt? Does it want to make sure all companies are able to borrow, regardless of their fundamentals? "I mean, what exactly is he talking about? The market crisis today is not due to some issue with fundamentals. It is due to the government shutting down the entire economy. The government caused this problem. It should mitigate or solve it... and if that requires Fed intervention, then so be it. It is utterly wrong to think that the government is trying to prevent the consequences of weak fundamentals." – Paid-up subscriber O.P. Regards, Porter Stansberry Baltimore, Maryland April 17, 2020