Category: zerohedge

Remember when ex-Google Chairman Eric Schmidt appeared on CNBC earlier this month for an interview with Andrew Ross “the Sork” Sorkin – an interview that swiftly devolved in Schmidt chiding the Trump Administration for its impudence while defending the longstanding ties between the Chinese Communist Party leadership and Silicon Valley’s elite and warning about the purportedly extraordinarily high costs of ‘economic decoupling’.

Because the downside about decoupling, Schmidt said, is that if China turns elsewhere for ag products and other products, “they’re not coming back” (this as China continues the charade of upholding the trade deal because President Xi needs an excuse to buy US agricultural products without looking weak)

The former Google chairman’s comments on China begin around the 13-minute mark.

In a report that reads like an Intel community plant, largely since it dropped just hours after the US announced plans to add 30+ Chinese firms to a blacklist over their involvement with China’s state security apparatus, CNBC claimed early Saturday morning that Alphabet, Microsoft and Amazon have all been caught providing tech services to several companies that were added to a US blacklist last year by President Trump over allegations that they helped Beijing build the security apparatus use to imprison 1 million Muslims in Xinjiang.

Top10VPN, a site that reviews virtual private network (VPN) services and researches topics on privacy, said in a report that it had identified U.S. technology giants that provide “essential web services that power these companies’ websites.”

CNBC reached out to the U.S. firms named in the report as providing such services to the blacklisted Chinese surveillance companies. None were immediately available for comment.

In October, some of China’s most valuable surveillance artificial intelligence firms were put on the U.S. Entity List, a move designed to restrict their access to American technology. That is the same blacklist that Huawei sits on.

Washington alleged that “these entities have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups” in China’s Xinjiang region.

The territory has made headlines for its detention and “re-education” camps that reportedly hold an estimated 1.5 million Muslims, many of them for violating what Amnesty International describes as a “highly restrictive and discriminatory” law that China says is designed to combat extremism.

Even more bizarre, the US companies provided mostly basic services like website and email hosting, raising questions about why these Chinese firms even needed these American partners in the first place.

According to Top10VPN, some of the services provided by U.S. tech firms include hosting the surveillance firms’ website and emails to authentication methods.

The head of research at the cybersecurity firm that leaked the report to CNBC said that by providing these “essential” services, the US firms helped their Chinese customers develop “highly invasive surveillance products”…kind of like most free-to-use products released by Google and Facebook?

“Through providing essential web services to these controversial companies, U.S. firms are playing a part in the proliferation of highly invasive surveillance products that have the potential to undermine human rights around the world,” Simon Migliano, head of research at Top10VPN, said in the report.

Aside from the big names mentioned above, a number of other smaller US firms were named. Top10VPN said it compiled its report via a combination of techniques including analyzing traffic between certain sites for these Chinese companies.

Top10VPN said it identified that U.S. firms were involved using a combination of public tools, examining source code of websites and analyzing traffic to those sites.

The company alleged that Amazon and Google are providing web services for Dahua Technology and Hikvision, two Chinese blacklisted companies. Meanwhile, Microsoft’s services are reportedly being used by SenseTime and Megvii, two of China’s most valuable artificial intelligence start-ups.

A number of other U.S. technology companies were named, including website authentication and encryption companies Digicert, Lets Encrypt, Entrust and GeoTrust. Domain name hosting firm GoDaddy was on the list as well as cybersecurity company Symantec, which is now known as NortonLifeLock. Stackpath, which works on the delivery of internet content, was also named.

Twitter and Facebook were also named as providing content delivery network services to Hikvision.

CNBC has reached out to all the American firms that were named to request for comment on the report. Symantec declined to comment, and CNBC did not hear back from the rest of the companies.

China’s surveillance firms have been caught up in the tensions between the world’s two largest economies. The administration of President Donald Trump has carried out a campaign against Chinese firms, with Huawei being the most high profile target, that aims to cut off their access to American technology.

But Top10VPN’s Migliano claimed the company’s report shows a relationship still remains between the U.S. and China’s firms.

“Despite the Trump administration’s efforts to decouple the American and Chinese technology sectors, the continued presence of American companies in more discreet settings shows that cooperation between the two remains,” Migliano said.

This is just one more thing to keep in mind next time you see an executive from a big tech firm criticizing President Trump while defending China and the WHO.

Authored by Brandon Smith via Alt-Market.com,

How does one define an economic “reopening”? I think most people would say that a reopening means that everything goes back to the way it was before the crisis; or at least as close as possible.  Most people would also say that a reopening is something that will last.  Simply declaring “America has reopened” while keeping many restrictions in place in certain parts of the country is a bit of a farce.  And, reopening with the intention of implementing lockdowns again in a matter of weeks without explaining the situation to the public is a scam of the highest order.

For example, states like New York, California, Illinois and New Jersey have extended their lockdowns; with LA’s extension remaining ambiguous after they initially declared restrictions for another 3 months. New York’s lockdown is extended to the end of May (so far). This is the case in many US states and cities, while rural areas are mostly open. This is being called a “partial reopening”, but is there a purpose behind the uneven approach?

As I predicted in my article ‘Pandemic And Economic Collapse: The Next 60 Days’, the restrictions will continue in major US population centers while rural areas have mostly opened with much fanfare. The end result of this will be a flood of city dwellers into rural towns looking for relief from more strict lockdown conditions. In about a month, we should expect new viral clusters in places where there was limited transmission. I suggest that before the 4th of July holiday, state governments and the Federal government will be talking about new lockdowns, using the predictable infection spike as an excuse.

This is happening in Northeast China right now – another resurgence has occurred and 100 million people are now subject to quarantine restrictions. China’s reopening is barely two weeks old, and concerns of infection “flare ups” were widespread when the announcement was made. Now the mainstream media seems to be confused; is China open, or locked down? Of course, we may never know how bad the problem is and was in China as their numbers have been shown to be utterly rigged and suppressed from the beginning, but the point is that the phrase “reopening” is meaningless there, just as it will be meaningless here in the US.

This is part of the plan. The farce of reopenings does indeed have a purpose. I discuss this in great detail in my article ‘Waves Of Mutilation: Medical Tyranny And The Cashless Society’ published in April. The globalists are clearly the only beneficiaries of this event; with a world-wide surveillance state now openly on the table along with an accelerated shift into digital currency systems, the globalists are either taking advantage of this crisis to push their agenda, or they ENGINEERED the virus and caused the crisis to push their agenda.

In white papers published by globalists at the Imperial College of London as well as MIT, the plan is openly admitted. They suggest using “waves” of economic openings and then lockdowns to control the spread of the virus. The timelines seem to vary, but in general the models call for a one month open, two months closed cycle. The goal is to deliberately increase infections every couple of months in specific regions of a country, then declare economic shutdown and quarantine measures once the spread reaches a certain level; this is meant to continue until a vaccine is developed, which could take years.

When the globalists at MIT say “We are not going back to normal”; this is what they mean. Right now, the general public (at least in some parts of the country) is cheering the reopenings, but what they don’t realize is that the reopenings are an illusion. Restrictions are going to remain in place in many states and cities, while they will be lifted and then re-instituted in others. In fact the situation is going to become much worse over time, by design.

The next lockdown, whenever it is announced, will be absolutely devastating to the US economy which is already in a downward spiral. The mitigating factors will be how effective central bank stimulus is at stalling the freefall (not very effective so far).  Other factors include the percentage of small businesses that survive the first lockdown and how many jobs those businesses can bring back to the economy. The first lockdown may be survivable for a large percentage of Americans and businesses; the second lockdown will financially destroy all but the most prepared. And make no mistake, there WILL be many more lockdowns over the next couple years.

In the meantime, international banks like Wells Fargo and JP Morgan have seen to it that small businesses are hit hard by the crisis by funneling bailout money and paycheck loans to their larger clients over the smaller businesses that the money was intended to go to. Of the 300,000 clients of JP Morgan that applied for an emergency loan through the government bailout program, only 18,000 actually received one and many of these clients were NOT small businesses.

If the cycle of lockdowns continues, small businesses will be wiped off the map. The elites have rigged the economic game; they control where every dollar of the bailout money goes, and many of their corporations are the only institutions that are equipped to survive the onslaught. Some of these companies will go down, but in the long run the goal, in my view, is total centralization of production and distribution.

This is exactly what happened during the Great Depression when JP Morgan and other major banks devoured thousands of small local banks across the country and removed them as competitors from the system. After the depression, banking was completely centralized into the hands of a select few mega-companies. Today, they are attempting to erase all localized small business competition to international corporations.

Taking over the business infrastructure of entire nations and removing all independent competition is only one incentive for the lockdowns to continue. There is also the process of acclimating the public to the idea that lockdowns are the “new normal”. While I do see resistance in certain parts of the world, including the US, many countries in Asia and Europe have witnessed a rather sheepish response to the idea of medical tyranny. I also see an immense wildfire of unconstitutional legislation and illegal state measures being rolled out in the US while the public is distracted by financial circumstances and the virus threat.

Certainly, it appears that most Americans hate the lockdowns. But will they be fooled by the “reopening” into complacency for the next several weeks while the government gets ready to hit them with the next round of restrictions? Will they be so caught off guard they won’t know how to react? Imagine the economic devastation of just one more nationwide lockdown event? It will be carnage, and a lot of hope within the population will be lost.

This will lead to two possible paths: Submission, or rebellion. Either the majority of the American people will accept the lockdowns as a new fact of everyday life, or they will become so enraged by the destruction of their economy that they will revolt.

If the intent is to keep the cycle going until a vaccine is introduced as elitist publications assert, then we have a LONG way to go and this first lockdown was child’s play compared to what comes next.

The excuse for the wave model will be that they need to control and slow the spread of infection over time to avoid overwhelming our medical infrastructure. But this makes very little sense to me at this stage. Perhaps within the first month or two of the pandemic this was somewhat logical, so that we could gauge the threat of the virus. What we know right now is that the virus is at least three times more deadly that the average annual flu; which is something to be concerned about, but not something we should be destroying our economy over.

Frankly, there’s no logic to the wave model unless the agenda is to destroy the economy. If the goal is to continue infecting the population until everyone has developed an immunity or a vaccine is offered, then why not simply remove all the lockdowns permanently and get it over with now? This would result in far less deaths in the long run compared to economic collapse. If the goal is so-called “herd immunity”, then we can achieve that much faster through viral transmission than waiting years for a vaccine that may or may not work.

But the elites don’t care about “herd immunity”; what they care about is is control. The vaccine narrative itself is a form of control. You have to wait for the establishment to save you. You have to wait for them to allow the economy to be opened, even for a short period of time, so that you can then be allowed to work or run your business. You have to wait for permission to live your normal life. And, if the elites get their way, you won’t be given permission until you accept immunity passports, tracking apps and a vaccine.

I will be covering the vaccine issue in a future article, but the underlying message that the public is hearing daily is that you no longer have the power to make decisions for yourself, you must wait for instructions. While the coronavirus is something that should be taken seriously (to a point), the wave model is not an acceptable solution to the problem.

And while many conservatives are looking to Trump to obstruct lockdowns in the future, I would recommend they not hold their breath.  Trump has flip-flopped many times on these issues, including his position on whether or not lockdowns should be left to the states.  With a cabinet overflowing with globalists and banking elites, I would not put much hope in intervention from the White House.

Do not be fooled by the reopening. It is not real because it is not meant to last. It is a steam valve to calm public outrage and to condition us to periodic tyranny. The elites believe that we will eventually acclimate to lockdowns as long as we have a reopening to look forward to a couple months down the road. They believe that our tendency to rebel will be suppressed by false hopes that the next reopening will be a permanent reopening. They believe that after 18 months or more of the wave model we will be so desperate for normalcy that we will do anything to get it, including willingly giving up every last ounce of freedom we have left. This is the true purpose of the pandemic.

*  *  *

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Where we are in a nutshell: in the past 8 weeks there has been a 38 million rise in US unemployment coupled with a $10 trillion forecast loss in global GDP through 2021; this however has been offset by $4 trillion of asset purchases by central banks resulting in a $15 trillion surge in global equity market cap.

But now that with every passing day more of the global economy is reopening as the coronavirus crisis fades away (at least until a second wave emerges), what investors and ordinary people care about is not where we are but where we are going. To answer that question, here is an detailed overview of the impact of Covid-19 on the global economy through various real-time, high frequency data compiled by JPM as it appears right now, weeks if not months before it makes it into official “adjusted” economic reports.

First, a snapshot of COVID-19 infection count and regional spread:

The latest data on-ground mobility data suggests that there is a long way before normal.

While air traffic is dismal, here too there a slight rebound in mostly non-commercial flights; commercial air traffic remains a disaster, however.

While credit card spending has seen a modest rebound, and consumer activity is clearly starting to recover, restaurant bookings in the US remains dismal.

Some more snapshots of consumer activity looking at retail traffic, footfalls and deliveries.

While hotel, box office and transportation use remains dismal, supermarkets are going strong. Unfortunately for those who believe Facebook that ad spending has normalized, they are in for a shock.

The labor market, unfortunately, remains an unmitigated disaster:

Both industrial and manufacturing activity in the US has been crippled, but it is starting to rebound.

So how about China, after all it’s supposedly all “fixed” now. Unfortunately, the real-time data paints a vastly different picture.

While coal consumption has recovered, power use in the epicenter of Hubei province, remains roughly half of normal.

In Europe, it’s – as usual – a tale of two halves: the northern nations where things are largely normal, and the Mediterranean states where the pain is largely concentrated.

Finally, some mobility charts, first in the UK…

… and then Europe.

In an exclusive interview set to air Sunday, President Trump tells Sharyl Attkisson that he believes he is making inroads in draining the Washington swamp.

“If it keeps going the way it’s going, I have a chance to break the deep state. It’s a vicious group of people.”

– President Trump on “Full Measure with Sharyl Attkisson”

Also in the interview:

• The president calls churches, synagogues, mosques and other religious institutions “essential services” and says they must be allowed to open

• Sharyl asks if someone review his tweets before he sends them out

• Trump weighs in on the biggest strength and weakness of Joe Biden

• He talks about the latest allegations about FBI misconduct and spying on his campaign

• Sharyl ask about mixed messages the government is sending on the anti-malaria drug, hydroxychloroquine

• She also asks President Trump how he can press to investigate allegation about Biden and Ukraine— without appearing to be doing the same thing Democrats did to him in 2016.

Here’s how to watch…

Southern California is descending into an inferno once more, the third one of the year, with elevated temperatures through the end of next week, reported LA Times. 

Eric Boldt, a meteorologist with the National Weather Service (NWS), said temperatures along the coast are expected to be in the mid-70s for much of the weekend. He said the mercury will jump significantly on Monday, some areas could see triple-digit highs, including San Fernando Valley, San Gabriel Valley, and Inland Empire.

Boldt said the heatwave will likely peak Wednesday but linger through the week:

“These high temperatures are going to continue pretty much through next week,” he said. “We might see a little relief toward Friday and Saturday, but it seems like the rest of May is going to be warm.”

For much of Southern California, temperatures will be above normal through the weekend into early next week. 

NWS Los Angeles reports temperatures in the region will be around the mid-80s on Memorial Day, with cities more inland, such as Pasadena could see 90 degrees. For desert regions like Palm Springs, the mercury could climb to triple-digits next week. 

Get ready for period of hot weather across much of SW Cal next week. Hottest areas will be interior locations including the Antelope Valley where an Excessive Heat Watch has been issued valid from Tue afternoon thru early Thu eve. Triple digit heat expected. #cawx #Socal #LAheat pic.twitter.com/qi7lfWLzJw

— NWS Los Angeles (@NWSLosAngeles) May 23, 2020

Down the coast, the weather service issued an excessive heat watch for Coachella Valley, San Diego County Deserts and San Gorgonio Pass, indicating that triple-digit highs are expected next week:

…EXCESSIVE HEAT WATCH NOW IN EFFECT FROM TUESDAY AFTERNOON THROUGH FRIDAY EVENING…

* WHAT…Dangerously hot conditions. High temperatures 104 to 109 degrees Tuesday. Wednesday and Thursday will be the hottest days with high temperatures of 108 to 112 degrees expected.

* WHERE…Coachella Valley, San Diego County Deserts and San Gorgonio Pass Near Banning.

* WHEN…From Tuesday afternoon through Friday evening. * IMPACTS…Extreme heat will significantly increase the potential for heat related illnesses, particularly for sensitive groups and those working or participating in outdoor activities.

🔥 Hot weather incoming next week 🔥

A long-duration heat event is in store for the valleys and deserts next week, with Tue-Thu as the hottest days. The lower deserts could see highs up to 113 degrees on Wed/Thu.

Stay cool and hydrated, especially if you will be outside! #cawx pic.twitter.com/xY0gYoHaan

— NWS San Diego (@NWSSanDiego) May 22, 2020

SoCal folks will have to flock to the coast to get some relief for the next seven days. Some beaches in Southern California have opened up with new social distancing rules (and by the way, some residents are not happy). 

Rising temperatures are expected across the state through end month

Average temperatures are going to be way above normal for much of the lower West Coast into the first week of June. 

A surge in temperatures suggests western cooling degree day (CDD), a measurement designed to quantify the demand for energy needed to cool buildings, is expected to jump above trend on May 24 and peak on May 28, returning to below-average trend in the first week of June. 

Rising western CDD means average daily electrical load and hourly load forecasts for Western Electricity Coordinating Council (WECC), which includes Northwest Power Pool, Southwest Reserve Sharing Group, Rocky Mountain Reserve Group, California-Mexico Power Area (without Mexico), are expected to see above-trend demand as people turn on their air conditioners. 

Energy demand is set to skyrocket in the West because of the incoming heatwave — power prices will do the same.

After 102 years of operation, Hertz is now bankrupt and with $25 billion in debt, it just made the list of the 25 biggest bankruptcies in history.

$HTZ welcome to our top 25 pic.twitter.com/MBdO2h63en

— BankruptcyData (@BankruptcyData) May 23, 2020

And with creditors now looking for creative ways to recover as much of their investment as possible, the Hertz fleet of just over 506,000 vehicles is a hot commodity for what’s left of the company.

Of course, Hertz already tried selling enough cars to stay afloat previously, and it didn’t work. In early March Hertz sold 41,000 used cars in the U.S., but pumped the brakes as returns shrank and auto auctions stopped as traffic fell off a cliff. Used car prices then fell 34.4% in April, and with a ton of new inventory on the market will likely push prices down even more, making it extremely difficult for Hertz to climb out of the hole it is in according to Jalopnik.

Well maybe not: after all, everything can be sold if the price is low enough, and it appears that Hertz is finally realizing that is has no choice but to drastically slash prices on its fleet sales, and will continue to do until it finds a clearing price since we doubt the Fed will step in and buy these cars any time soon.

As we reported previously, earlier this week Hertz dumped a bunch of Corvette z06s on to the used car market in what experts said was a great deal for buyers. And more used car deals are starting too roll out Saturday morning on Hertz’s website after the filling announcement. As caught by Jalopnik, here’s a 2020 BMW 740i for $52,949 and only 8,595 miles on the odometer, more than $10K below Blue Book value for cars in the same area.

Want a 2019 Range Rover Sport with 14K miles for less than $60K? They have that too.

But the real bargains are in the entry/mid level range where Hertz will unleash a deflationary neutron bomb that will cripple the used car market for years to come, which of course will be a huge benefit for consumers seeking great values, even if it forces car companies to drastically slash used car prices resulting in even more defaults, even more liquidation sales, and so on until cars are suddenly… affordable.

For those hoping to get on the early deals, just go to the Hertz Car Sales website and start browsing the half a million or so cars for sale: everything there is priced for liquidation.

 

 

Authored by John Rubino via DollarCollapse.com,

There’s a debate in gold bug circles over whether the price difference between gold and silver – the gold/silver ratio – tells us anything useful.

Some skeptics, for instance, view the original gold/silver ratio of 15 – from America’s 18th century bi-metallic system – as just a political number pulled more-or-less out of thin air by Alexander Hamilton and therefore useless today. Others note that gold is a purely monetary metal and silver is part industrial, part monetary, and conclude that it’s apples to oranges – and therefore not an indicator of future prices.

Both points are factually defensible, sort of. But they’re also irrelevant. The real reason the gold/silver ratio has tended to fluctuate within a broad but well-defined range is that humans have a vivid visual imagination.

Here’s how it works:

Early in a precious metals bull market, people are skeptical of the need for safe-haven assets, so the money that flows into the sector goes mostly to the big-name, super-safe choice, which is gold. Gold goes up relative to silver, and the gold/silver ratio expands.

Gold keeps rising and new money – much of it attracted by the metal’s newfound price momentum rather than an understanding of the nature of money – flows in, pushing gold even higher.

The early gold investors register big gains and begin to feel smart and therefore more willing to take on a bit of extra risk in return for potentially even bigger gains. They look around for “the next gold” and find silver, the other monetary metal, languishing at a relatively low price.

Then they start thinking in images. First, they picture a single one-ounce gold coin and consider what it would cost. At gold’s new, higher price, this seems like a lot of money for such a small, though admittedly pretty, thing.

Next, they consider the price of silver and envision how many – also very pretty – one-ounce coins they can buy for the price of a single ounce of gold. And their imagination conjures up something like this:

Suddenly, silver looks extremely cheap. For the price of a single Gold Eagle, one can get two heaping handfuls of shiny, heavy silver ounces.

A bit more consideration reveals that in a SHTF scenario, silver coins are actually more useful than gold because their smaller denominations allow them to function as $20 bills rather than gold’s illiquid $1,000 +. You can buy groceries and bullets with silver coins.

Suddenly aware of silver’s advantages, investors conclude that at current relative prices, the choice is a no-brainer. Silver is the precious metal to load up on.

Adjust this thought process for the global pandemic’s distortion of most  markets and convert it into a chart, and you get the past two months’ gold/silver ratio, which depicts a bout of hair-on-fire panic followed by a trend back towards traditional norms:

So what happens now? Historically, both precious metals keep rising, with silver rising faster than gold until the imagined pile of silver required to buy a single ounce of gold looks something like this:

Then the process shifts into reverse, with a single gold coin looking better in the mind’s eye than a paltry few bits of silver.

We are nowhere near that point, so expect investor imaginations to work in silver’s favor for years to come.

After weeks of butting heads with the Trump administration over pandemic guidance, the US Centers for Disease Control (CDC) issued guidance on Friday for the reopening of religious institutions.

“Gathering together for worship is at the heart of many faith traditions,” reads a statement from the CDC.

“Because there are several published reports of COVID-19 outbreaks sparked by large gatherings, both non-religious and religious in nature, the recommendations released today will help guide faith communities while respecting their fundamental right to gather for worship.”

Recommendations include;

• Encouraging staff and congregants to wash their hands with soap and water
• Providing hand sanitizer
• No-touch trash cans
• Encouraging the use of cloth masks
• “Suspending or at least decreasing use of a choir/musical ensembles and congregant singing, chanting, or reciting during services,”
• Daily disinfection
• Social distancing
• Limiting the sharing of objects such as books and hymnals
• Identify an area to quarantine people with COVID-19 symptoms
• If someone in a congregation is diagnosed with COVID-19, perform contact tracing and inform anyone with exposure to the person to stay home and self-monitor
• Close off any area used by a sick person and do not use until it has been disinfected – which should be performed at least 24 hours later.
• Designate a staff member to handle COVID-19 concerns

The revised guidance comes after President Trump told a Michigan roundtable on Thursday “I said, ‘You better put it out,’” – one day before calling an impromptu press conference where he announced that places of worship would be deemed “essential,” and called for their reopening.

Trump said that he would “override” governors who keep places of worship closed.

BREAKING: President @realDonaldTrump announces that the CDC will be issuing guidance declaring places of worship ESSENTIAL, allowing them to re-open as of this weekend! pic.twitter.com/G9TzIq1npK

— Team Trump (Text TRUMP to 88022) (@TeamTrump) May 22, 2020

 

Authored by Tho Bishop via The Libertarian Institute/Mises Inst.,

The coronavirus pandemic, and resulting government response, has created one of the greatest disruptions to daily life in modern American history. With much of the country now focused on “reopening,” pundits and policymakers have focused their attention on what the “new normal” of a post-COVID America looks like. Although much of the attention has been focused on the future of massive public gatherings and changes to American work environments, the most significant change to American societies may be faith in our governing structures.

The policy response to the coronavirus has already led to dramatic changes to policy. In the positive, both federal agencies and state governments have waived or altered many traditional regulatory requirements to bypass disastrous delays in medical testing and to better facilitate delivery of services. In the negative, the Federal Reserve has massively escalated its interventionist policies, highlighting how radical these institutions have truly become.

Beyond specific policies, however, the most significant change may be the degree to which the COVID response changes the public view of centralized political power. In particular, there are three relatively unique aspects of this pandemic that may be the precursor to significant realignments going forward.

State Governments Have Taken the Lead in Public Policy

In spite of rhetoric from President Trump about the White House having “full authority” over state governments, the current administration has been largely content with allowing governors to lead the way in responding to the pandemic. This has led to significant differences in the severity of economic lockdowns, testing behavior, and even authorized treatments between states.

Given the hypertribalism of modern politics, it’s easy to simplify this into a typical “red state-blue state” division, but this overlooks significant differences in approach from governors and state legislatures within the same party. For example, although Michigan, New York, and California are high-profile examples of blue states with strong lockdown policies, Colorado is an example of a state with a Democratic governor who has largely followed the reopening guidance promoted by the Trump administration.

The significant differences in policy between states (such as New York and Florida) has meant greater attention, from both the press and the voters subjected to unprecedented restrictions, toward their state capitals and away from the usual circus of Washington. Many governors have seemed to relish this move, such as Governor Gavin Newsom of California, who proudly declared himself leader of a “nation-state.” The power of state governments has even led to some governors engaging in the sort of executive overreach that has become the norm in the national level, such as Colorado governor Jared Polis taking control of federal aid money against the wishes of the state legislature.

The stark contrast between state responses, coupled with differences in outcomes—both in terms of economic and public health measures—is an important lesson in the power of federalism that has been eroded in American politics.

The precedents being set today may further embolden the growing trend of state rejection of federal authority that we’ve seen with such issues as drug laws and immigration enforcement. When we factor in the hyperpartisan environment, and a predictably polarizing presidential election later this year, the future of American politics may increasingly be defined by a battle of federal and state authority.

The State Battle over a Federal Bailout

As Ryan McMaken has noted, state budgets are going to face major shortages as the devastating impact of lockdowns limits tax revenue. Although no state will be spared from the economic fallout, this revenue shock will be particularly devastating for those already on particularly unsound economic footing.

Already we’ve seen this begin to play out in Washington, with Republicans pushing back strongly against Democrat calls for a $195 billion bailout of state and local governments. The Wall Street Journal this week summarized this growing conflict with the question, “Why Should Florida Bail Out New York?,” highlighting the differences in governing philosophy and economic health between the two similarly sized states.

Although it’s obvious that Congress has no stomach for any sort of fiscal restraint when it comes to national economic aid or stimulus programs, the more the debate focuses on state—and partisan—differences, the more we are likely to see the federal representatives of fiscally prudent states hunker down against bailouts in their own interest. Already we’ve seen blue state leaders like Governor Newsom threaten their own version of Washington Monument syndrome, stating that police and first responders will be the first victims if Washington doesn’t bend to his bailout demands.

This could easily erupt into the sort of state-on-state legislative battle we haven’t seen play out in Washington in a long time.

Shared Experience and National Unity

Lastly, one of the aspects of the coronavirus that has driven a lot of the radical differences in narrative and policy between states has been the difference in its severity around the country. In past national tragedies, there has usually been a trend toward national unity, as the event created a common experience among all Americans. Although New Yorkers dealing with the aftermath of 9/11 or Gulf Coast residents during Hurricane Katrina experienced these events in a more personal and intimate way, everyone witnessed them on television and with a similar appreciation for their significance.

This is clearly not the same with the coronavirus.

I recently had a good friend who is a nurse in northern Louisiana visit, and he was shocked at how laxly residents of north Florida were taking the virus. Although the city he currently lives in is very red and culturally Southern, it was an early hot spot for COVID-19, and the scars from that had majorly impacted much of the community. In Panama City Beach, Florida, the greatest fears in the last few months came from the impact that lockdowns were having on a local economy so dependent on tourism and the service industry.

Considering that common experiences can shape national unity far more powerfully than government institutions can, it’s possible that the cultural consequences of the coronavirus will fuel divisions between states in a way that disagreements on marijuana laws never could. It is both reasonable and natural for a resident of New York City, which has suffered nearly twenty thousand coronavirus-related deaths, to be far more traumatized by the virus than residents of Houston, which has suffered fewer than two hundred.

Considering that a major question for political fallout going forward will be the degree to which the economic damage inflicted on this country was “justified” by the threat of the virus, the differences in experience make it unlikely that the coronavirus will build anything resembling a national consensus.

The lasting impact of the coronavirus going forward—alongside the devastating economic consequences that we have yet to truly face—could be deepening a regional, cultural, and political polarization that has been building in recent years. These are also precisely the sort of differences that are only escalated by centralized political power, and that will only be fueled by the upcoming theater of the 2020 presidential election.

Although national tragedies tend to bring a country together, it seems clear that the coronavirus will leave America as divided as it has been in modern history.

A massive four-alarm fire erupted at San Francisco’s Pier 45 on Saturday morning, the city’s fire department tweeted. The incident was first reported at 4:17 am local time (7:17 am ET) and has since been contained to a section of the pier. 

UPDATE Four-Alarm Warehouse Fire Spreading on Pier 45 (North Waterfront, San Francisco) 📲 Live on @CitizenAppSFO https://t.co/eGWySDD5gs

— SAN FRANCISCO FIRE DEPARTMENT MEDIA (@SFFDPIO) May 23, 2020

The San Francisco Fire Department said no injuries had been reported and all occupants at the site were evacuated. They said at least 25% of the pier at Fisherman’s Wharf “has been lost to the flames.” 

Twitter handle Dan Whaley snapped several pictures of dense black smoke and luminous flames that could be seen for miles. 

Fire is raging on SF Pier pic.twitter.com/UEpQIDxJsn

— Dan Whaley (@dwhly) May 23, 2020

The fire department said the blaze caused a partial collapse of the building on the southern part of the pier, spreading to several other buildings and endangered a third.

The SS Jeremiah O’Brien, a battleship used in World War II, was docked next to one of the warehouses that was engulfed. Firefighters were able to save the ship. 

A picture of the #WW2 Liberty Ship SS Jeremiah O’Brien amid the Pier 45 fire taken earlier this morning pic.twitter.com/6VtabjkIvf

— Dr Phil Weir (@navalhistorian) May 23, 2020

SS Jeremiah O’Brien is saved. 

A fire on Pier 45 in San Francisco’s Fisherman’s Wharf destroyed a portion of a warehouse on the pier.

Fire crews were able to keep flames from damaging the World War II era “SS Jeremiah O’Brien” museum ship. pic.twitter.com/4Su9WbJf0n

— Sergio Quintana (@svqjournalist) May 23, 2020

More videos from the raging inferno earlier this morning: 

TwoXSea owner Kenny Belov shares video of the warehouse fire raging at Pier 45 right next to his business. https://t.co/qiNyWQOcBV pic.twitter.com/77on8kJTCL

— San Francisco Chronicle (@sfchronicle) May 23, 2020

BREAKING NEWS: Crews are battling a massive fire at a San Francisco warehouse on the city’s iconic Pier 45 at Fisherman’s Wharf. The fire started around 4:40a.m.
Firefighters said the SS Jeremiah O’Brien, one of two remaining fully functioning WWII Liberty ships, is threatened. pic.twitter.com/C73YMiGVpz

— Peter Soregi (@PSoregi) May 23, 2020

MASSIVE FIRE: Video sent in from a KRON4 viewer of the fire at San Francisco’s Pier 45. Crews remain on scene.

Click link for latest updates: https://t.co/V7jf1euEeP pic.twitter.com/9RA7Mf6CWv

— KRON4 News (@kron4news) May 23, 2020

Major fire at Pier 45 in San Francisco pic.twitter.com/DdLH3jdEIA

— James Evanow (@jamesevanow) May 23, 2020

In the last hour, the fire appears to be contained.

#BREAKING UPDATE: @SFFDPIO says 150 firefighters have a hold on 4-alarm fire at Pier 45 on Fisherman’s Wharf. No injuries reported, cause still unknown. Historic SS Jeremiah O’Brien ship- saved. pic.twitter.com/iLlBjgnHm1

— Cornell Barnard (@CornellBarnard) May 23, 2020 

The fire was so large, satellite imagery was able to detect heat from Pier 45.

Heat from a large fire at Pier 45 in San Francisco can be seen (black squares) in satellite imagery taken from space early Saturday morning. pic.twitter.com/WpUNrC77Tl

— NWS Bay Area (@NWSBayArea) May 23, 2020