All right, y'all, welcome to the Scott Horton Show.
I am the Director of the Libertarian Institute, Editorial Director of Antiwar.com, author of the book Fool's Errand, Time to End the War in Afghanistan, and I've recorded more than 5,000 interviews going back to 2003, all of which are available at scotthorton.org.
You can also sign up for the podcast feed.
The full archive is also available at youtube.com slash scotthorton show.
All right, you guys, introducing David Stockman, formerly a congressman and a Wall Street trader and Reagan's budget director.
And now he writes davidstockmanscontracorner.com.
And boy, does he write every single day because he's mad as hell about what is going on in the world.
Welcome back to the show, David.
How are you?
Yeah, happy to be with you.
And, you know, I don't know if I'm mad, but I am utterly baffled and perplexed by the way things are unfolding day to day.
I mean, who could have imagined that we would have had a Dr. Fauci in the White House basically encouraging the mayors and governors of America to shut down the economy, you know, in a cold start.
And that's exactly what's happened.
Even though they're bullish this morning because the job numbers weren't quite as bad as expected, we still have 20 million fewer jobs in May by the BLS reckoning, and I think they overcount, than we had in February, three months ago.
That's the first point.
And the second point is the resulting number of about 132 million jobs is the same number we had in December 2000.
In other words, Fauci and the doctors and the mayors and the governors have basically wiped out all the jobs created during the first one fifth of the 21st century, you know.
So then we have governments trying to make up the difference by borrowing like crazy, you know, things we've never seen before.
The debt, public debt, was $23.4 trillion, actually, on March 13, when they declared the national pandemic emergency.
It's pushing $26 trillion right now.
We've been borrowing $35 billion a day for the last three months, you know, shoving money in every direction into the economy to try to fill the hole that was created by these insane shutdown orders from the government.
And then on top of that, we get, you know, the total upheaval and turmoil we've had for the last week as a result of the events in Minneapolis.
So you get all that sort of calculated in, factored in, and we find that the Nasdaq 100's at an all time high.
The S&P 500 has essentially recaptured everything that was lost between the February peak and the March 23 bottom.
I mean, none of this makes any sense at all.
And now we're heading into an election that I think will be one of the most fraught in history.
And anybody who's got any, you know, regard for liberty or free enterprise or prosperity or the Constitution or, you know, the future of our children and grandchildren is going to have no one to vote for.
I mean, both of these guys are extremely bad.
One has spent 40 years creating the mess that we have.
The other has no clue about what he has stumbled into and what we're going to be facing as we move forward.
Yeah.
So, well, when it comes to the new Great Depression, you say all the growth built in the entire, you know, 20th century so far, the last 20 years has been wiped out.
So what does that mean for what society looks like six months from now or a year from now, then?
Yeah, I think that the point I was making is all the jobs that have been created.
All the jobs have been created.
Yeah.
Well, but, you know, that's kind of a proxy for growth, because job, you know, the growth of jobs, the growth of hours account for at least half, some 60, 65 percent of all the real GDP growth.
So it's a good proxy.
And when you wipe out the entirety of the job growth since December 2000, you know, something major, you know, stunning has happened to the economy.
And it's not going to go away anytime soon, given the fact that it would have been a lot worse had the government not gone crazy, borrowing and passing out helicopter money to 130 million people, a lot of them who didn't need it or should have been relying on their own savings or ability to tap their credit card or something if their income was, you know, interrupted.
And, you know, we're handing out money hand over fist to small business, medium business, big business.
The Fed is just going off the deep end printing money.
I know we've been saying this for a long time, but every time a new crisis or upset or unexpected development occurs, they double and triple down.
And so now you have the balance sheet up to $7.1 trillion.
It was $4.2 trillion on March 13.
You know, so they printed $2.8 trillion in a matter of, you know, 80 days.
Now, what kind of insanity is this?
I mean, this isn't real money.
And, you know, the irony of this whole moment that we're in because of all the protests and really the murder of George Floyd, you know, it's got some irony to it because apparently they sent four big husky policemen after him for the major crime of passing a counterfeit $20 bill.
OK, the guy, you know, the Minneapolis Police Department apparently didn't have anything better to do.
And they sent four guys after him.
And then they, you know, we all know what happened.
It's all there on the video.
But the point is, the Federal Reserve is counterfeiting money to the nth power compared to what a poor old George Floyd was alleged to have passed, you know, a week, 10 days ago.
Yeah.
And they killed him for it.
Yeah.
And of course, right.
This assumes that it's even true that he passed a fake bill and then and presumes in a way that he even knew it if he did, you know?
Yeah, exactly.
I mean, so, you know, you got that 20 out of the ATM, you know, where is he supposed to get a fake $20 bill from, you know?
Well, effectively, it is fake because the Fed actually prints the currency.
But that is, you know, part of their overall expansion of fiat credit.
And, you know, here we are, as I say, $7.1 trillion of balance sheets, a balance sheet up from $4.3 trillion, you know, only three months ago.
And here, no one cares.
I mean, look at Washington.
They're so busy in this kind of identity politics war.
Trump, I'm the law and order man.
And the Democrats, you know, we're the Black Lives Matter party, the party of social justice and all the rest of that.
You know, it's totally a phony political debate.
But, you know, that's where we are.
Rather than facing the real fact that we have a central bank out of control and we have a budget fiscal situation, you know, that is off the charts of history if, you know, in a way that we can hardly imagine.
We're going to spend over $7 trillion this fiscal year after all these bailouts.
And they got another one in the pipeline.
We had $3 billion.
The conservative party, so-called the Republicans, agreed yesterday, well, I had another trillion in the fourth bailout.
The Democrats want $3 trillion, so they'll probably end up somewhere in between.
But my point is, as a result of the shutdown of the economy and the absolute drying up of revenue, we'll be lucky to collect $3 trillion this year.
We're going to spend $7 trillion.
In other words, banana republics collect $0.40 on a dollar of what they spend, and they print the rest, and it doesn't work out very well in the long run.
And even though we've had huge deficits for years and years, there's never been anything like this fiscal year where we're going to be running a $4 trillion deficit or a deficit that's bigger than the actual revenues that we're collecting.
How does that compare to Obama's first year?
Didn't they have the $6 trillion stimulus thing that year?
Well, no, their stimulus, Obama was a piker.
The shovel-ready stimulus in 2009, they passed hurriedly that nobody read.
I think Nancy Pelosi said, we need to pass it so we can find out what's in it, or maybe that was the health care bill.
That was the health care bill, but yeah.
That was Obama, but it doesn't matter.
That was roughly $800 billion, OK?
They've already done $3 trillion of bailout and stimulus already, and there's another trillion already baked in the cake because Trump and McConnell and the House Republicans have already signed on, endorsed it, and the Democrats want a lot more.
And by early July, something's going to pass big because otherwise a cliff is coming.
There's 20 million people out there getting a $600 boost to their unemployment check because of this temporary federal add-on that was in the bailout bill.
Well, that's going to disappear in July.
And so there's going to be a huge political fight to extend it, how much, how long.
And all of that's going to take a huge amount of money.
State and local governments are going broke faster than you can calculate, and so they're going to be throwing in hundreds of billions more to bail out the state and local governments.
And then they're going to need more for small business.
They've already used up the $650 billion, practically, that was made available in the first two bills.
In other words, this thing is out of control.
There is no financial discipline.
There's no fiscal order left.
There's no monetary sanity left.
And I don't know why people believe that this will all end well, because it's not just more the same, you know, borrow and spend, or borrow and spend and then print at the Fed.
This is just madness.
This is unhinged madness on all financial fronts, including on Wall Street, where I guess none of this matters, because as long as the Fed keeps pumping massive liquidity into the stock market, the machines, the robo-machines and the day traders will buy and the index will go up until at some point something stops, and then it's going to be not a very pretty picture the next morning.
Well, OK, so if you could please break it down a bit, the difference between the money appropriated by Pelosi and the Congress in the official bailout there and then the part that most people don't see, which is the Federal Reserve going ahead and monetizing debt and not just government debt, but whatever, all kinds of debt they've decided to monetize now.
And then as you say, you know, first of all, the totals, but how it is, what's the mechanism that all that gets shoveled straight to Wall Street and the stock market like that?
OK, maybe we could go through a couple of steps, but let's put it all in an 80-day envelope between March 13, when suddenly and unexpectedly Trump caved to his doctors and they started this whole lockdown nation, and it was only a matter of weeks or a few days before all the mayors and governors chimed in.
And by the end of the month, it happened so fast, you know, no one really realized the hurricane that was hitting the economy, but the economy was shut down.
Take the March 13 starting point and June 2nd, because that's where the data in.
That's an 80-day period.
I roughly calculate based on what happened in March and what the models are now showing for second quarter GDP, that during that 80 days, the economy generated about 4.1 trillion of GDP.
And during the same period, the public debt of the United States went up by 2.5 trillion.
Now, I think you really got to listen to those numbers carefully.
We borrowed 2.5 trillion in 80 days.
That compares to 4.1 trillion of GDP, which means that in 80 days of madness, these cats down there in Washington have borrowed 63 percent of GDP, and that's permanent debt, you know, that's going to be sitting on taxpayers and future generations till time immemorial.
Then that should have blown up the economy.
You can't have the U.S. Treasury borrow 63 percent of GDP in 80 days and not think you're going to blow everything up, save for the fact that the Fed came in right behind them and during that same 80-day period created 2.8 trillion of new balance sheet.
In other words, it's what I was telling you before, the 4.3 trillion going to 7.1.
Now, you know, balance sheet means that they bought hand over fist 2.8 trillion worth of Treasury bonds and bills and notes and government-backed mortgage securities.
And then they're into buying ETFs now and corporate paper and commercial paper.
You know, it's a whole variety of things they're doing, including municipal bonds.
But they, you know, they created 2.8 trillion of credit in 80 days, which means that in effect they monetized more than 100 percent of the debt that was created by these madmen on the either end of Pennsylvania Avenue on the fiscal side.
Now, these kinds of numbers, you know, borrowing 63 percent of GDP, printing 120 percent of the debt in new money, these things are so off the charts, so, you know, so from outer space financially that somebody's going to shake their, scratch their head a few years down the road and wonder what the hell happened.
I mean, did we really descend in this country into a kind of hysteria that we haven't seen since 1692 in the Salem witch trials, you know, when that little corner of Massachusetts went nuts?
This, this is, you know, a very dangerous moment we're at because everybody's fiddling with grotesque experiments that defy every law of common sense, economic, economics and sound money that's ever been imagined by mankind for the last several centuries.
All right.
But America is exceptional.
And none of these rules apply to us because this isn't Argentina.
This is the USA.
And we're so productive that we can make up for it somehow.
And it'll be fine.
That's what everybody in charge thinks.
So why are they so wrong about that?
Well, I guess it's sort of this whole old saw about how did you go bankrupt?
And the answer was slowly at first, then of a sudden.
Okay.
And what we're doing here is, you know, you've been watching some of the obviously you see all the video watching the news of these kids in the middle of the night, looting all these stores in a very brazen, bald faced manner, as if there's nothing at all to worry about.
Because the cops are all busy attacking the protesters.
Anyway, go ahead.
Yeah.
But I mean, the point I'm getting to is that kind of brazen behavior is exactly what the government is engaging in today, you know.
Because the cops are busy attacking the protesters.
Go ahead.
No, you know, but I mean, when you print that much money in 80 days, when you borrow that much money in 80 days, when you step into an economy and just shut down, you know, there were 17 million people working in leisure and hospitality industry in February.
You know that hotels, restaurants, bars, sports venues, theme parks, all the rest of it.
Even after today's slight comeback, there's still only 8 million people working in that industry.
9 million people just got wiped out in the last 80 days.
Their paychecks were wiped out, I mean.
And, you know, what's the average age of people that work in leisure and hospitality?
It's probably 20-somethings, 30-somethings.
Where are they now?
They have nothing to do.
They're all protesting.
OK, so I think, you know, they're coming out of house arrest.
They are suffering a serious case of cabin fever.
They're getting their paychecks, at least till the end of July.
So this is probably the biggest subsidized protest movement in American history.
Yeah, and of course, there's still varying degrees of lockdown across the country.
So they're not going to have anything to do.
Yeah, that's what they're all crowing about this morning.
See, you know, we're reopening the economy, the lockdowns are being rolled back.
Well, when you tell restaurant owners that they got to cut their capacity to 50 percent or even less, which is what most of the state reopening orders say, they're all going to go bankrupt because a restaurant was sized to have a certain occupancy rate, you know, a table turn rate, whatever metrics they use in the 90 percent range.
And when you tell them all of a sudden you could only use half capacity, you're still paying the same rent, the same utilities, you still have to have a large share of the same staff.
You got many costs that don't change and they're going to go bankrupt.
So we haven't seen the end of this at all.
In fact, I think this reluctant reopening from jurisdiction to jurisdiction is going to be the real surprise because it will keep the economy pinned down and in bad trouble for months and months and even longer in the future.
All right.
So, I mean, clear enough, then the mandatory lockdowns have just completely decimated all sorts of economic sectors more than you could list or name, although you have all the charts on your site that show it all.
Well, at the same time, they're creating so much money to bail out mostly the corporate elite and the big banks and all of the, you know, financial types who always get the most welfare at the expense of the rest of us and doing such a big bailout of the economy that they're essentially preventing any kind of real recovery at all.
And so, in other words, this is just the worst of all worlds to you.
Yeah, it's not even the worst of all worlds.
It's worse than the worst of all worlds because the Fed is basically now, you know, assumed the posture of being the monetary, strict monetary central planner of the entire financial system, if not the economy.
And so they have determined that interest rates should not exist and that even today with a little uptick, 10-year treasury, which is the benchmark, is 80 basis points, which is absurd.
You know, that's less than inflation.
Then there's taxes.
And then if somebody puts their money aside for 10 years, they're supposed to earn something on it.
So my point is all interest rates have been crushed and compacted, compressed down practically to zero.
They don't work anymore.
There's no price discovery in the entire loan and bond market.
And so what they're doing as a result of that is rewarding the reckless behavior of companies that spent the last 10 years loading up their balance sheets with debt or using all their cash flow to buy back stock and stock and do, you know, overvalued M&A deals.
Now their cash flow gets interrupted drastically because of the shutdown orders.
And they're being bailed out by the ability to borrow money at 2 or 3 percent because the Fed has opened up the spigots on all these different lending facilities and direct interventions in the market.
I used the example the other day of Carnival Cruise Lines.
You know, over the last 10 years, they didn't generate that much cash flow.
They spent 120 percent of that on stock buybacks and dividends.
And then when this crunch comes, and obviously the cruise line industry got hit hard, they were facing a need to pay 15 percent or more plus some dilution of their equity to get real money from the financial markets because obviously that industry is in a world of hurt for a while to come.
And their balance sheet had been trashed in the way I described with a lot of debt over the last 10 years.
So what happened was the Fed suddenly announced that we're going to buy all this corporate debt.
The corporate bond market rallied instantly around March 20th, and Carnival Cruise Lines was able to go out and borrow money at 5 percent.
You know, what I'm saying is, how can there be any financial discipline if no matter how imprudent and reckless the behavior of big, small or medium businesses, when the crunch comes and they have no balance sheet, they have no reserves, they have no shock absorbers, the Fed comes in and says, well, you know, that's OK.
We're going to make sure you get an endless amount of cheap money.
The only thing it's doing is just burying the whole system under more and more debt.
And setting us up for the next crash, too, which happens every 10 or 12 years.
We were due for one anyway before the lockdown.
Yeah, but what they're doing is they keep prolonging and intensifying the day of reckoning in this sense.
They do these things because they know there's 75 trillion of debt on the economy, public and private, that if there is a real repricing or risk-based adjustment of interest rates, that huge amounts of damage will be done because people have, you know, over borrowed and over leveraged.
And they jump to the barricades to stop it from happening the instant, and this was only within days in mid-March, that it looks like interest rates might actually reflect, you know, some honest price discovery in the bond pits.
You know, they killed it off within days.
Within days of the lockdown orders and interest rates began to rise modestly.
You know, in the BBB, I think it went up from 3.8 to 4.9.
And nevertheless, the Fed, you know, jumped into the situation with these massive bond purchase programs and new facilities and basically shut off entirely any price discovery or financial discipline in the bond pits.
Now, you can do this over and over, and at some point, you have a house of cards that is so flimsy and so, you know, extended that even the mighty money printers are going to have, going to run out of capacity to keep the Ponzi going.
This is just a giant Ponzi scheme, you know, full stop.
There's no other way to describe what's going on.
Yeah.
All right.
Well, and now I'm sure you've seen this over and over again.
We certainly all saw the way it happened in 2008 and 2009, where government ruins the economy and freedom takes the rap.
And so you see, free market, laissez-faire capitalism has failed, even though we all learned that the last time anybody tried that was the 1920s, which even then we had a Federal Reserve, which set us up for failure.
But at least in school, we all learned that Franklin Roosevelt came and put an end to all that stupid laissez-faire stuff.
And that was way back then.
And yet it doesn't matter.
Every time there's a crash, it's free market capitalism's fault.
And so now we just need more bailouts, more regulations.
And yet they never do put the actual criminal bankers on Wall Street in prison, the ones who really do commit fraud with all the new money that they're committing.
They always get away with that.
And so, you know, I guess in a way it's as Mises says about the middle of the road leads to socialism.
The more government intervention, the more they ruin everything, the more people turn to them to take more and more control of the situation to try to fix the problem that they created because there's no one else to turn to.
Just like with the cops being hired to quell the riots that they caused.
Yeah, you know, I agree with you.
We have two parties, a big government.
It's just a difference of emphasis.
The Democrats want more social program and plenty of war.
The Republicans want a lot of war and go along with the social programs.
The Republicans are supposed to be the guardians of sound money.
They have no clue that they're madmen running the Federal Reserve.
You know, we talk about why are no bankers prosecuted?
Why are none of them jailed?
I mean, you could short circuit the whole problem by arresting the people in the Eccles building.
I mean, these are the real counterfeiters.
These are the real looters.
These are the real criminals in our society.
I mean, you know, what they're doing is just flat out criminal.
OK, because what if you're a saver?
OK, because you're trying to look ahead for the next 10 or 20 years and provide for your retirement or the education of your kids.
I mean, you're just getting massacred.
You're making nothing, nothing, nothing unless you go out and buy some junk bonds, which are a very imprudent thing to do, or throw your money into the casino and hope the stock market keeps going up.
OK, so the savaging of savers and retirees.
You know, I happen to be a retiree and fortunate, but if you're a retiree and maybe you were able to put away four or five hundred thousand dollars over 40 years of hard work and a little sacrifice and spending restraint, how much are you making on $400,000 in interest if that's what you've accumulated when interest rates today for a CD are about one fifth of one percent?
I mean, you could go calculate the number, but it's not even enough to buy Starbucks, you know, cappuccino once a week.
It's criminal.
It's criminal.
And the whole system is basically an exercise in power by a unelected cabal of central bankers who are drinking their own Kool-Aid and are so enmeshed in groupthink that they can't even see the stupidity of what they're saying.
You know, two days ago, you probably saw this.
Powell had the audacity to say that whatever the Fed has done over the last 10 years or so has had no impact on income and wealth distribution in the United States.
I mean, how ridiculous, how absurd can someone get?
Of course it has, because 88 percent of all the stock is owned by the top 10 percent of households and 53 percent is owned by the top one percent.
And what's gone up is the stock market three, four times.
What has not gone up is good paying jobs and the real Main Street economy.
And yet this clown has the audacity to say with a straight face, you know, maybe there's an income distribution issue, but we didn't have anything to do with it.
Yeah.
Although when there's such a clampdown, though, along with such an inflated stock market, that means, as you said previously, there's another major crash coming to that stock market sooner than later.
Right.
I mean, how much can they keep inflating to hold this thing up when every chart that you republish on your website is a nightmare of an absolute bottomless pit?
Yeah.
Well, you know, the higher it goes, the harder it falls.
We know that.
I mean, we saw that in 2008 between September 15th and March 10th of the next year, which isn't very long, you know, five months or so, six months.
I mean, the world came to an end.
The stock market dropped by 60 percent.
Nobody knew what was happening.
It was Armageddon.
And it was only because the Fed stepped in and, you know, turned the printing presses on red hot that the market recovered.
But it never did anything seriously for the economy.
It just resulted in piling on more and more debt for unproductive purposes.
And that's the important thing.
If the Fed were, you know, artificially repressing interest rates and causing companies to borrow because capital or debt capital was cheap, and they were expanding businesses and investing in technology and in their labor force and maybe their plant and equipment or their stores, whatever, then you could say, well, that's growth, that's growth debt, growth investment.
None of that happened.
Almost all the incremental borrowing between the eve of the crisis in 2007, which was about $52 trillion, and today, which is about $75 trillion, that $23 trillion gain in debt all went into either government spending or stock buybacks, dividends, M&A deals, nothing that will help the Main Street economy thrive, become more productive and produce more goods and services sustainably over the long haul.
So that's, you know, that's what happens.
Hold on just one second.
Be right back.
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Now, so Ron Paul always said that, look, at some point you can only create so much money and this thing is going to fall apart.
People will lose confidence in the dollar on a global basis.
And yet, as you pointed out on the show last time, there's so much downward pressure on everything, essentially, that no matter how much money they create, it'll go to the stock market or certain sectors like that, but we probably won't see widespread hyperinflation or that kind of thing.
But that's what it would take to really break the dollar.
So in other words, this will never stop until it hits the absolute brick wall, but there are so many countervailing forces going on that we're not going to hit the brick wall.
They can keep making it like this until, I guess, we end up hitting that thing at light speed by the time we finally get to it or something.
Well, as I said, the higher this goes, the more absurd it becomes, the greater the pain on the day of reckoning.
But I think the point on the dollar is to remember over and over again is what the Fed is doing is being copied and aped, sometimes on steroids, by all the other central banks of the world so that the dollar really is the cleanest dirty shirt in the monetary laundry of the planet.
And therefore, the dollar stays up because all the other currencies are clearly worse.
Japan, People's Republic of China, the ECB and so forth.
Even now, with all the craziness of the last month?
Yeah, because, you know, the ECB announced yesterday, we're not going to be left behind by the Fed's madcap printing.
They just doubled the size of their pandemic program, as they call it, to 1.5 trillion that didn't even exist three months ago.
So they're doing the same thing.
The Bank of Japan is hopeless.
I mean, it never stops running its printing presses.
And the same thing is true with all the other major economies.
So the issue is not hyperinflation of consumer goods, as I've said before, because all this cheap debt that's being artificially generated or enabled by the central banks is on, in part, creating a huge amount of excess capacity in the world.
Plus, there's a huge amount of labor in East Asia, in the villages of the developing world that can be brought into the globally traded goods and services system.
So, you know, there's huge amounts of malinvestment and excess investment.
All of that keeps the price of industrial goods and commodities down.
And it means that all the money printing never gets out of the canyons of Wall Street and, you know, the London market and the Tokyo market and so forth.
So we're just creating.
The central banks are pretending, you know, if you listen to them talk, it's never about what they're doing for Wall Street.
It's all about how, you know, they're helping the economy hit some growth targets.
And they talk about the labor market and they talk about housing and, you know, industrial investment and so forth.
But what they're doing has nothing to do with the Main Street economy because it never gets there.
You know, all of this excess credit they're creating stays in the canyons of Wall Street, as I've said, and it drives the price of financial assets higher and higher and higher, which creates worse and worse incentives for business managers and boards of directors to do exactly the wrong thing, which is to say, use their cash flow to buy back stock or borrow money to buy back stock rather than investing in the long run future.
So it's a, you know, you could almost call it a doomsday machine, where the more the Fed and the other central banks print money, the more inflated the financial system becomes, the more overvalued financial assets become, which creates incentives for everybody to do the wrong thing.
Nobody saves.
Everybody borrows.
Nobody invests.
Everybody speculates.
And, you know, that isn't how that isn't, you know, compatible with a solid economic foundation and one that's sustainable over time.
Right.
All right.
Now, so back here in the real world and back to the beginning of the conversation here with the mandatory Great Depression from the lockdowns.
Which are still in effect, as you pointed out, in many places.
But this is the thing that is most astounding when I look at your articles, is you reproduce all these charts from the Fed.
And I was wondering if you could just give us a few examples of the manufacturing of this.
And I think I saw one that was like, retail furniture sales and how here's how they've lost all their growth since 1993 or whatever it was.
And you have a lot of these to really show.
And it really makes a great counterposition to what you're saying about the amount of cash being created and funneled to the top of the game.
While this is the reality out here in the world about what's really being produced and consumed.
Yeah, in the most recent numbers, industrial production was rolled all the way back to the level first crossed in 1998.
OK, so let's call that 22 years of retrogression.
Or, you know, obviously leisure and hospitality and travel and tourism, that whole sector has been decimated.
You know, airline travel is still down 85 percent from on a year over year basis based on TSA screenings, which is a pretty good daily real time measure.
So what that leads is to this crash of employment in that sector, which is a pretty good proxy for economic activity because, you know, it's a very labor intensive business.
Restaurants are and hotels and bars and all the rest of it, as you know.
So if we look at the real measure of what's going on there, it's hours work because, you know, the average job in the retail or in the leisure and hospitality sector is only 25 hours a week on the clock.
It's not a 40 hour job.
It's not a full job.
It's, you know, hit and miss depending on peak periods and so forth.
But my point is the number of hours worked in the leisure, the whole leisure and hospitality industry, and I didn't check it out yet for today, but it hasn't changed much as of April, had been rolled all the way back to 1979 levels.
OK, 40 years ago, there were more hours being clocked in the leisure and hospitality industry than there were in April.
And it's only changed a tiny bit in May.
I mean, you can you could go across the board and find all kinds of evidence of this.
Even the total job count that we were talking about before that came out this morning, the number of jobs that was reported for May 2020 is nearly identical to the number in December 2000.
So in other words, this isn't your normal cycle, business cycle setback or even recessionary dip or even dive.
This is like a massive assault on the fundamental heart of the economy.
And we're in really deep.
You know, maybe there have been some fraudulent unemployment claims filed.
I wouldn't be surprised at all because there's a scam for everything.
But there have been 43 million claims filed in the last 11 months.
And that's under state programs.
If you add to that the certain categories of gig workers and contract workers that weren't eligible for state unemployment that were put into the so-called CARES Act, the bailout, there's another five million there.
So what I'm getting at is 48 million people have filed for unemployment in the last 11 months, and that's over 30 percent of the entire workforce.
48 million people filing claims is bigger than the entire employed workforce of the U.K. or Italy or France.
OK, this has happened in 11 weeks.
So, you know, we've got, you know, we've got some injury, some damage to the economy that is off the charts.
And it wasn't it didn't happen because the plumbing of the GDP got all messed up or aggregate demand, according to the Keynesians, suddenly went limp, you know, got punk.
This was a government-ordered collapse of the economy by people speaking in the name of science who were full of, you know, you know what, the brown stuff.
OK, and I would like to complete, you know, our discussion here this morning by just updating the facts of life about this, because, you know, the CNN and the rest of the mainstream media have been running this what I call a chyron of death, you know, across the bottom of the screen, how many have died from COVID.
We know they're being overcounted because you can these are really deaths with COVID, not because of COVID.
And most of them have comorbidities, you know, respiratory illnesses, heart disease, hypertension, you know, all the rest of it.
But take this number.
There are 104 million people, like all the school age population in America, under 24 years of age, 104 million.
There have been a total of 126 with COVID deaths, 126.
I mean, it's a rounding error.
I'm not making light of deaths, but it amounts to one tenth of one death per 100,000.
OK, I mean, and yet we shut down all the schools.
We shut down all the bars.
We shut down all the gyms.
And all these kids, you know, have been cooped up for three months.
And probably that's why a lot of them are out there, you know, making mayhem on the streets right now.
Now, if we go to the other end of the spectrum, 85 and over, there's 6.5 million.
But, you know, over a third of all the with COVID deaths have been among people 85 and over, most of them in nursing homes.
And on average, having 2.5, you know, so-called comorbidity conditions per person, literally, it's all in the CDC data.
So their mortality rate per 100,000 is 550.
So let's just look at the young versus the old.
And then, you know, you could talk about everything that's in between.
But your risk of death if you're 24 or under, I mean, excuse me, your risk of death if you're 85 or older is about 3,500 times greater than for the population, you know, 24 and under.
And what this is getting at is the idea of one size fits all, lock down the whole system, put everybody under house arrest, was the craziest damn idea ever invented.
You should have drawn the wagons into a circle around the nursing homes and around the aged population that had the kind of existing medical ailments that were especially vulnerable to what this is.
And it's just a bad kind of flu.
But, you know, of course, we didn't do that.
And here's where we end up.
I have another, I think, good number.
Even if you take the population 25 to 64, that's the heart of the parents of America.
That's the heart of the working population of America.
There's 171 million of them.
And even among that population, you know, the death rate or the mortality rate is only 10 per 100,000, which is just a fraction of the normal mortality rate for this population, which is 400 or 500 per 100,000.
But another way to look at it is you shut down the whole system.
You threw all these people out of work right here in the heartland of the population.
As I said, the parents and workers nation.
And the survival rate through the end of May, from this four months of COVID, February through May, for that population was 99.9990 percent.
And we shut down the whole economy, even though 99.9990 percent of the population, even in that group, survived the COVID.
Yeah, although you've got to give some credit to the lockdown for that, right, or not?
I mean, one reason I haven't gotten it is because I've stayed away from it.
Well, you can say that, but if you look at it around the world, you can find that there really is no rhyme or reason as to mortality rates based on whether they had any lockdown, total lockdown or anything in between.
For instance, New York, the mortality rate is 153 per 100,000.
They had a big lockdown.
New Jersey, 128.
Rhode Island, 64 per 100,000.
There are definitely a lot of variables.
I mean, in New York, isn't it all just the subways and the nursing homes where Cuomo forced the nursing homes to accept COVID patients when they were free of COVID at that point?
And stuff like that, that'll really skew your numbers when you have a government policy like that.
And also, in New York, I mean, I'm a Texan.
What the hell do I know?
I've only been on New York subways once.
But it seems like that's a very unique way of building a city, the way everybody rides on those tubes together.
We don't live like that.
It can be overstated because the overwhelming share of deaths in New York were elderly people who don't ride the subway to work or were in nursing homes.
Well over half are people that never got near the subways or the bars or the restaurants or anything else.
But take this one.
The mortality rate in Sweden so far has been 42 per 100,000, and Illinois has been 40 per 100,000.
Illinois is a total crazy lockdown state.
You got this J.B. Pritzker guy in the governor's office who's now decided he's the Democratic equivalent of Donald Trump, bully in the big chair.
He shut down the whole state.
He even decreed that no more than four people could be in a fishing boat, even if they're in the same family.
Of course, they could all drive to the lake, but they can't get in the boat.
All kinds of nutty stuff like that.
And it's got the same mortality rate as Sweden that didn't do any of it.
Well, I'll tell you what.
These protests and riots are sure going to be a big experiment to see what happens with that.
Everybody all shouting together.
I don't think much is going to happen because, again, as I say, there's a lot of 25 to 34 year olds out there.
You can just look at the videos.
You know who's out there.
A huge amount, 25 to 34.
The mortality rate through the end of May was one per hundred thousand.
So there's not going to be, you know, they may get asymptomatic infections or they might get a minor case and have to stay home for a few days.
But there's going to be no big outbreak in the population that's there on the street, because, again, one death per hundred thousand in three months from COVID or with COVID in that population, 25 to 34.
And that's where all the demonstrators are coming from.
So I don't think there's going to be any outbreak.
Well, and I guess it depends on and it's still somewhat unknown and conflicting reports about pre-symptomatic or asymptomatic spread, because I guess as long as the lockdowns persist, especially then these people, if they have been getting it, they could still be getting their parents and grandparents sick with it.
You know, and older people.
You know, they could, but by now you would think that someone 20 years old and is circulating out in society would know better than to expose the grandparents.
OK, you don't visit them in the nursing homes.
That's where they are.
And, you know, the idea that all these kids, all the grandparents live with the kids.
Well, you know, that was true 100 years ago.
It's not true now.
There's 50 million people in the United States, 65 and over.
Only 5 million of them have live in households where there are grandchildren.
OK, 45 million of them either live in extended care facilities, nursing homes or their own, you know, their own castle.
And they could take steps accordingly.
The idea that we should shut down society so that you don't infect great-grandma, that's ridiculous.
All right.
Well, if you're looking at all these numbers so carefully, tell me this.
Is the virus finally burning itself out and we're on the backside of the curve and all of that yet or not?
Yeah, totally.
And across the country, not just with New York skewing all the numbers.
No, not only across the country, across the planet.
And of course, you know, I think, you know, China is like some giant ponzi and they lie about a lot of things.
But, you know, they're under such a microscope now that I think they're probably roughly reporting accurately.
They, listen to this, in the last two weeks, these crazy communists, when they decide to do something, you know, they can make it happen across the board.
They tested for COVID all 10 million people in Wuhan, OK?
And guess how many infected people they found out of the 10 million they tested that was in the epicenter, ground zero of the whole damn coronavirus pandemic globally.
You know how many they found?
Well, the answer is zero, zero symptomatic patients and a couple of hundred asymptomatic.
Now, if the virus came and went in three months at the very epicenter and it's totally gone now, you know, it just tells you this is just another bad strain of influenza, coronavirus influenzas that mankind has been dealing with for millennia.
Well, they're going to say, the communists are going to say, well, they put everybody on house arrest and anybody who had been exposed to anybody who they knew had it, they took them away too and quarantined them.
And it was their totalitarian exercise of health policy that whooped the virus there.
Well, you know, you can say that, but I don't buy it for a minute because it's pretty clear that this is a rather contagious virus.
And unless you put everybody in a seven, six foot cylinder of isolation, there is no way that you're going to prevent, you know, the virus from spreading.
You know, they do know right now, and this is not my numbers, it's the state of New York.
They were in absolute lockdown mode and yet they did these antibody tests, which is a good way to find out how many people have been or were exposed.
And in New York City, 22% of the population had antibodies, which means they had been infected and most of them didn't know it.
And some of them were sick and didn't go to the hospital and a few of them did.
Now, if you have the kind of draconian lockdown that you had in New York City and you still had 22% of the population infected, which is what these studies clearly demonstrate, well, then you can't in this world, in this modern world, you can't lock down the population even unless you do it day one.
If you really find patient zero for some weird reason and you clamp him into a six foot isolation chamber and find the 18 other people he's talked to and do the same to them, then maybe you can stop it.
But once the virus, so to speak, is out the barn door and is circulated in the population, there's no way you can stop its spread.
And that's why the sensible people in this, epidemiologists and scientists have said, you know, you've got to let, and this is what Sweden did, you've got to let herd immunity run its course because this isn't the black death.
It's not a killer for 95% of the population.
And it is fatal for a small fraction.
And what you need to do is, you know, figure out how you can best isolate and protect that tiny share of the population that is susceptible to fatal effects.
Yeah.
Well, I'm kind of just hoping for the Texas sun to come and burn what's left of this thing away and it'll all be over by July or something like that.
What do you think?
Yeah, I think it'll be pretty well gone.
But of course, they're going to keep saying, you know, the second wave is coming.
And so therefore, all you bad people going to the beach, you know, you ought to be, you know, slapped with a wet noodle or something.
But I think it's, and then in a few months, we're going to get to a great, I hope, a period of recrimination.
What the hell were we doing?
What kind of science were these doctors, witch doctors, you know, promulgating, propagating?
I think there's going to have, you know, when people find out they lost their lifetime effort in their business because Dr. Fauci and company scared the hell out of everybody and the shutdown orders were implemented by mayors who wanted to throw their weight around.
When they find out it was all for naught, which it was, absolutely, I think there's going to be hell to pay.
And I hope there is because, you know, it's time for the people of America to wake up.
No, I don't think they'll be able to do another lockdown once they finally relent on this thing.
And after this long, hot summer, man, it's going to be something else.
And to try to do this again, right around election time, and here comes Christmas and all of that.
I mean, what are they going to do for Thanksgiving travel and all that?
They're going to keep everybody on lockdown.
They're going to cause a riot.
Yeah, and even, you know, and I think you could count on Trump to resist the second lockdown, for sure.
You know, he made a huge mistake by listening to Dr. Fauci and the scarf lady, as I call her, Dr. Birx.
You know, those two people, you know, there is an issue here that we keep talking about, and that is the enemy of prosperity and liberty is the state.
We never should stop, you know, remembering that.
And here are the two people that were most instrumental in convincing Trump that he had to let the country commit Harry Carey economically, Fauci and Birx.
Between them have 94 years on the government payroll and nothing more, okay?
They've never met a payroll, they've never been in a business, they never had to raise money, they never had to make tough choices.
They don't know anything about the economy.
And they decided, well, it can't hurt to shut everything down, because maybe we can slow the spread of the virus.
Well, you know, that was the worst advice that any president's ever been given.
Yeah, Rand Paul got in his big argument with Fauci where he got all the press from it for saying, you know, you're not the end all of everything.
And this is only very recently, a couple weeks ago, I guess.
And Fauci said, no, you're right, I'm not the end all.
I'm just the germologist.
You guys got to take all kinds of other things into account besides what I'm saying.
But that was the first time he'd ever said that, you know?
Yeah, he never said that.
He never said, well, you know, here's some guidelines.
They would be, I understand that they would be quite disruptive, if not catastrophic economically.
But if you want a few people to die, go ahead, you know.
But he didn't say that.
He basically said there's going to be, at one point, they said 2.2 million Americans are going to die if we don't do something drastic to stop the spread.
And that was a big lie, because frankly, the COVID is, the Grim Reaper of COVID is a bully that went after the old, the frail, and the weak.
There was only a certain number of those.
And it basically harvested most of them in the first few months.
And a lot of the social distancing all kicked in before the government ordered it.
People started staying home and stocking up and all those things before it was even mandatory.
Yeah, yeah.
They didn't need to be locked down.
They were doing, they were taking appropriate measures because they're grown adults, a lot of them.
Yeah, but also people could take measures depending on their circumstance.
I think a lot of people that lost their jobs would have kept going and worn a mask if they felt that would help if the government hadn't shut down their business, you know.
Like the shoemaker.
Why'd they shut down his shop?
Walking down the street the other day here where I am in Greenwich, Connecticut, the shoe repair shop is closed.
Ridiculous.
Yeah.
And you know, of course, we hadn't had time to mention, I'm sorry for keeping you so long, but all the collateral damage of all the heart attacks and not just people not going to the hospital because they're afraid of getting COVID, but by far the increased number of heart attacks from the stress of people out of work and unable to take care of their business.
And the number of, you know, the number of cancer screenings that didn't happen, the number of chemotherapy sessions that didn't happen.
And people locked up alone who killed themselves.
Bodies that haven't even been found yet, David, seriously.
Yeah.
Well, anyway.
Hey, on that note, thanks so much for talking about the economy.
And seriously, I believe you that this is just the beginning, that they're so reckless that, you know, people who thought that their days of prepping were over because the virus is passing, still have an economy to face and years of it, of a real crisis here.
So sobering stuff.
Okay.
So we'll talk again.
Thank you very much.
Appreciate it.
All right, you guys, that's David Stockman.
It's David Stockman's Contra Corner.
The books are The Great Deformation and All About Trump, this and that, you know, davidstockmanscontracorner.com.
The latest article here is called The Pandemic of Fake Money.
The Scott Horton Show, anti-war radio, can be heard on KPFK 90.7 FM in LA, APSradio.com, antiwar.com, scotthorton.org, and libertarianinstitute.org.
