I was almost surprised that over the course of our 16-day road trip through the South, through crowded airports, full restaurants, jammed into large groups at museums and interacting with a large number of individuals that neither my wife nor I came home with COVID. We did not mask up and only saw a small number of people who did. We are up to date on all of our COVID vaccinations but know by experience that doesn’t mean that you will not get COVID. There are still 300 to 400 people dying every day in the U.S. from COVID, so the pandemic is not over but it has become manageable. First of all, our vaccines work. They do not prevent COVID but they did add immunity to our population to where hospitalizations and deaths were reduced. Those who rejected vaccinations contributed to the number that acquired natural immunity in the general population. I don’t think that it has reached the level of true herd-immunity but it did reduce the public risk down to a level that our healthcare infrastructure capacity could handle. There was a point where critical care capacity was close to being overwhelmed. We got through it. Travel traffic is back close to pre-pandemic levels so if there is a new strain out there, we will soon know it after the holidays.

When the COVID epidemic in the U.S. threatened the critical care capacity of our hospitals, effective vaccines arrived just in time through advanced technology. Vaccines, along with home-stay isolation of a portion of the population kept the pot from over boiling. Many were highly critical of our shutdowns as an infringe-ment on their personal freedom but they were nowhere near as draconian as those in China and even in France for that matter. In France you needed a permission slip to go outside and could be fined by authorities if out without it. Some Americans demanded choice and did not want to adhere to CDC protocols. They were at greater health risk than those who accepted vaccines, wore masks and were socially distanced, but that was their choice. This lack of compliance with health protocols could have crushed our critical care hospitalization capacity but didn’t. I do not know how close of a thing that it was. We got through it and what happened is that this unvaccinated slice of our population that survived acquired immunity from exposure. Our economic supply chains were stressed and many temporarily broke but that too did not last long. Both the Federal government and Federal Reserve threw every stimulus possible into our economy avoiding a melt-down. It worked so well that we are now dealing with the unintended consequence of inflation.

Once again, our economy is open and functioning, kids are back to school, hospitals are not inundated, supply chains are recovering, Broadway is back performing and the airlines are busy. Not to minimize a million deaths from COVID, but if we can get through all of what we went through and all that we suffered as a long-term economic consequence is a round of inflation, we should consider ourselves fortunate. By and large the U.S. COVID epidemic could have been much worse.

The reason that we know that is because it is worse, much worse in China. Reportedly 93% of Chinese have been vaccinated with their domestic vaccine. Their problem is that it doesn’t work. The efficacy is nowhere near ours. They test more and when they find positive cases, they shut everything down. It is a hard shutdown. When they do lockdowns in China the local economy slams to a screeching halt. As long as they keep getting positive COVID tests it doesn’t end. If their vaccine had worked, then maybe this would have controlled the pandemic in China but the evidence from the huge resurgence of cases in China is that the verdict is that their COVID plan has not worked and is badly failing.

What they have done may have had a short-term temporary suppression of the epidemic in their country but is nowhere near any kind of effective longer-term control. Run by their Communist party, this failure comes home to roost. It takes a lot for the Chinese people to protest and rebel, but that is what is reportedly happening with public demonstrations occurring. This response will be perceived as a threat to the party power. I doubt that Beijing has an answer. They need an effective vaccine and that would require admitting that the one that they have does not work. They have shown that they can build a hospital in a week and they are going to have to build many more of them so they have capacity to handle a surge in cases requiring hospitalizations. Suppressing outbreaks with lockdowns does not work long term. While there are protests, I do not think that the Communist party control is anywhere near threatened but they have near zero tolerance for dissent.

There is a threat that their COVID suppression plan is blowing up and if they shut down local economies as the virus spreads, eventually it will have a dire impact on their economy in general.

Beijing is already dealing with a real estate bubble, demographic crisis and fiscal balloon that makes ours look tiny by comparison. China’s economic growth is at risk and Beijing is responding again with more stimulus. At some point the monetary stimulus itself becomes the threat. Money would pour from the yuan to the dollar if it could. Beijing restricts that too. They have their fingers stuck in a lot of leaks in their massive dyke.

China is a hot mess. So, if China’s economy tanks, they will import less food, right? That is what many think. I am not one of them. The Communists have always been extremely sensitive over their food security and the last thing that they will risk is people going hungry there. The Chinese people will not tolerate that and hunger would be the most threatening issue to Communist party power. My bet is that Beijing will import more food to keep the masses there well fed …not less.