1 June 2020 – Monday – #78

You remember Marie Antoinette’s famous words, yes? “Let them eat prawns!”

“Let them eat cake” is attributed to Marie Antoinette

Or was it cake? The oligarchs never catch a break with fake attributions.

I only mention this because the price of prawns has dropped precipitously here in Catalonia as restaurants closed their doors during the Covid-19 pandemic. A kilo of prawns ran about a hundred euros when I arrived on the first of January. Now it’s thirty six euros. This explains why the paella I bought para llevar from Morryssom, one of my local tapas bars, came with a juicy prawn.

“Everybody has been talking about not being able to go to a restaurant, but clearly there is also the less visible side of this story, namely the special suppliers who have been suffering heavily because of the coronavirus.”

Paco Pérez, Spanish chef, owner of several Michelin star restaurants

The Catalan fishermen are lucky that the prices of prawns and oil dropped simultaneously. They still can turn a profit. The viability of their businesses, however, depends on which price goes up first, prawns or gas. The Spanish prawn market provides a glimpse into nightmarish supply chain and economic disruptions due to Covid-19.

Two months ago I wrote about the enormous economic implications of Covid-19. Now we’re getting to see the markets play out. Countries that either avoided lockdowns or are easing Covid-19 restrictions successfully are about to find out how much help markets need to come back to life, and how much life is left in them.

I don’t pretend to understand European politics yet, but it looks to me like Europe will be more generous in helping about member countries now than it was after the 2008 financial meltdown. Spain and Italy will receive the most help.

EU sources said that Spain may be getting a total of €140 billion to help shore up its economy, which is expected to contract by anywhere between 9% and 13% as a result of the coronavirus lockdown, according to the latest estimates by the Bank of Spain.

El Pais, “Spain could get €140 billion from EU’s Covid-19 recovery plan,” 27 May 2020.

There is a trade-off for member countries. By raising unprecedented debt to provide Covid-19 bailouts, the EU effectively centralizes power in the region. That comes, of course, with centralized policy objectives. None other than ArtForum takes issue with the lack of educational and cultural support in the package.

This seems like child’s play compared to the US, which is having a more scary time bringing back its markets than Europe. First, it seems like the US may have opened up too early. I use rt.live to track individual states.

R values for US states, 31 May 2020.

A couple of weeks ago there were four states with R of 1.0 or greater. Now there are ten states (see above). Covid-19 also is overloading ICUs in some states.

How is it possible the US opened too early or isn’t following relaxation guidelines? How hard is it for the US to do what so many other countries have accomplished? This chart illustrates the kind of ideological mishmash that’s dividing the US. It’s a manifestation of the country’s lack of leadership.

The Bulwark, “The Curious Case of the People Who Want to “Reopen” America—But Not Wear Masks,” 14 May 2020.

Trump’s lack of interest in Covid-19 and intense interest in re-election prevents anyone from providing the leadership that would help the country line up behind a common objective, even one as simple as let’s get the economy going. Crises requires a leader who can stick to a simple message for several months. Trump is not that leader.

Hopefully the rt.live numbers are a blip. Hopefully I’m wrong about the US relaxing Covid-19 restrictions too early. Even if I am wrong, though, the big flaming issue now facing the US is that Covid-19 has re-opened the Pandora’s box of America’s original sin: racism.

Covid-19 set the stage to re-open this Pandora’s box by killing low-wage workers and minorities disproportionately, and by putting 20% of the workforce out of a job. The murder of George Floyd by Minneapolis police is the catalyst that blew the lid of this Pandora’s box. Riots across the US have continued for five days.

The riots combined with the lack of leadership is distressing to watch from across the Atlantic. The US has found itself facing the quadruple whammy of systemic racism, pandemic, economic collapse, and poor leadership. Not an enviable position for a nation that was the leader of the free world.

I’m going to end today with a video U.S. Senator Chris Murphy recorded Saturday night. While the White House message in May was essentially the same as “let them eat cake,” there are skilled politicians who understand the issues, can frame them coherently, and have a way forward. Please have a listen to Sen. Murphy.

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