Saturday, February 29, 2020

Ep. 31: The Crash Begins (podcast script)

This is the script for my Demographic Doom podcast episode (#31) released on 29 February 2020. It may differ slightly from the final broadcast. This episode is available on major platforms, including PodbeanApple Podcasts and a video version on YouTube. See the description on the YouTube version for anonations, links and corrections. You can also comment on this episode there. (If you leave comments on this blog post, I might not see them.) The main website for this project is

I’m Glenn Campbell. I call myself a demographic philosopher. I’m looking at life and trying to predict the future through the lens of demography, or the study of human populations.

Today is Saturday, February 29, 2020, the last day in February. In previous podcasts I made some predictions about the economy in response to the coronavirus epidemic, and it looks like I was vindicated. In the past week, there's been a massive selloff in worldwide stock markets. US markets were down roughly 12% in the last week. That's the biggest drop since the Global Financial Crisis and roughly comparable to the initial fall of the stock market at the beginning of the Great Depression in 1929.

I want to talk about what this means for our future, but first I want to take a moment to pat myself on the back. 18 days ago I released my episode entitled "Coronavirus Predictions."At that time, February 10, investors were still in full denial. Even though the coronavirus news was getting worse by the day, investors were treating bad news as good news and were continuing to bid up stocks. If you go to the end of that episode, around 27 minutes 30 seconds, you will hear me say, quote, I'm going to go out on a limb here and say that by the end of February, stock markets will be in obvious distress, unquote. So I got it right. Can I get a medal for this, maybe a free buffet? You should call me Nostradamus now.

In fact, I've been predicting economic collapse long before the coronavirus. In Episode 22 on December 13, three and a half months ago, I predicted the 2020s would be a horrible, no good, stinky decade when financial systems would collapse and everyone would be miserable, and I'm sticking with it. My previous predictions of financial doom go all the way back to my first Demographic Doom video recorded in the Canary Islands over a year ago.

Of course, I knew nothing about any virus at the time. I only knew about three things: the world's colossal debt, its absurdly high asset values and its ominous demographics, where old people were retiring in large numbers while the workforce supporting them was shrinking. The shrinking workforce meant that, ultimately, the debts could never be paid and high asset values couldn't be justified. I knew a crash was coming but I didn't know when or what would trigger it.

Well, now we know. It's happening now, and the trigger was a random epidemic. Epidemiologists have long predicted something like this, but its timing was unknowable. No one gets to choose their Black Swan. When it happens, it happens, and you have to deal with it. The coronavirus and its unstoppable spread means the day of reckoning can no longer be put off. I have no idea how long the crisis will last, but we now have a clear start date. It was this past week, February 24-28, 2020. Things can only disintegrate from here.

Now to be honest, I also made the some prediction in December 2018, 14 months ago, when the stock market took a dive. In that case, the stimulus was pretty mild: The Federal Reserve tried to raise interest rates to inch them back to normal levels. This triggered an unpleasant stock market correction, and the Fed quickly reversed course, lower interest rates again. 2019 turned out to be an banner year for the stock market, which I certainly didn't predict, but it was based mainly on the free money the Fed was essentially giving away. Stocks reached new highs without any fundamental business improvements.

So what makes it different this time? This time we are facing an undeniable external threat, the  coronavirus, that would be crippling to the economy even in the best of times. It is not virus itself that is sabotaging the economy, but the widespread fear of the virus and all the actions that flow from that fear. No one wants to die or even accept a 1% chance of dying. Whether we're talking about the actions of governments or the behavior of individuals, in the end hardly anyone can ignore this threat. The epidemic is rapidly changing people's behavior and the behavior of governments in ways that can only be bad for the economy. Couple this with the huge unpayable debts of the world, and you've got an unavoidable disaster.

As of this week, it is becoming clear to any well-informed citizen that the virus has gotten loose and is coming after us all. Some people are still in denial, but I think they will accept it as soon some celebrity dies, like Tom Cruise or the Pope. There's a lot of debate about what the fatality rate is for this disease. Is it 1%? 3%? It's pretty clear that at least 85% of those who get the virus will suffer only mild to moderate symptoms, but no one wants to take the chance of being in that other 15%, where they have to depend on the medical system to keep them alive. Even if only 1 out of 100 die, no one wants to spin the big roulette wheel to see if they're the chosen one.

So the virus is going to change human behavior, and this can happen incredibly fast. I think in even the past week, a lot of people outside China have changed their opinion from "This is no big deal" to "Maybe I should be stockpiling food."

When a significant portion of the population goes into self-protection mode, it changes everything. Consumers have great discretion over the way they spend money, and most of the products and services they normally buy can be canceled or delayed at a moment's notice. As soon as great masses of consumers adopt a bunker mentality, our current economy isn't sustainable anymore, and the fear is self-perpetuating. When people stop using non-essential services, the people who provide those services get laid off, then those people stop spending money, and the cycle repeats.

The stock market is not the economy. The fact that it fell 12% this week doesn't affect most consumers directly, but it has ripple effects. It's just one more piece of evidence that tells consumers it's time to hunker down. It doesn't matter if you are hunkering down to avoid the virus or hunkering down because your 401K just lost 12% of its value. As soon as you stop spending money like you did in the past, and millions of other consumers do the same, the real economy begins to plunge, and once it begins it may be unstoppable.

So now that I'm a little cocky over my success in predicting the past week's stock market, what are my predictions for the coming week? The truth is, I don't know. Stock prices could go up or could go down. The Fed could lower interest rate, which could fuel a temporary bounce back. I don't know what's going to happen next week, but in the long run these indexes are going to keep falling, and I don't know where they will stop. At some point the whole integrity of the monetary system is at risk.

Consider this: As investors are pulling out of stocks, they are putting money into bonds, especially US government bonds, where the effective yield is being pushed toward zero. People, in effect, are loaning the government money for ten years and getting virtually no reward for it, and this is one of the most dubious assets of all. Given its deficits and soon-to-be-plunging tax revenues, the government can't possibly pay back all the money it owes, yet investors are treating its promises as though they were gold. Something has to fail here, and I don't know what, when or how.

And what about real gold. Where is that going? I have to admit that gold is the asset I understand the least. You can't use it for much, but people treat it as a store of value. How high can the gold price go? I have no idea. What happens when everyone on Earth tries to buy gold? What does this do to the price of all the other assets? I just can't get my head around it.

If you sell your stocks and put you cash in a bank account, well, banks can fail, and they will. You may think your deposit is guaranteed by the US government, but what does that mean? What good is the word of an insolvent debtor?

Keeping you cash in a mattress? Well, I don't know if dollars tomorrow will have the same buying power as dollars today. Ultimately, if the Federal Reserve keeps printing money, there has to be more consumer inflation, but I don't know when it is going to come. In the meantime, deflation might be the order of the day as foreign investors seek the perceived safety of dollars.

The bottom line is that I don't know where things are going in the long run. I only know that there are more perceived assets in the world, more perceived wealth, than can possibly be backed up by reality. You may think you own a house worth a million dollars, but in the long run it is really worth a lot less. No matter how you cut it, most of the wealth people think they have is going to evaporate, but I know yet how that evaporation will take place.

I feel more comfortable making predictions for the medium term, say the next few months. It is clear now that the coronavirus has breached its containment walls and will race through countries outside China, including Europe and North America. Regardless of the fatality rate, it's going to change human behavior. People are going to be a lot more cautious about where they go and what they touch, and they know that they safest place to be is at home. This may be great for Netflix, but it's bad for any business that requires people to go out and do things, or that requires people to give up money they could otherwise hold onto.

We've already established that the travel industry is already screwed for the rest of 2020, but think of all the other industries that require people to step outside or otherwise interact with other humans. Restaurants seem vulnerable, along with retail stores and shopping malls. Who's going to want to go to a sporting event or the Olympics? If your retirement fund just lost 12% of its value, who is going to feel comfortable initiating a home renovation project. You might not even go to the dentist for routine checkups, because things like that can be put off.

Right now, the main fear is the virus itself, but I predict that in the next month or two this will morph into financial fear. People will either lose their jobs or fear losing them. Retirees and prospective retirees will discover that much of the wealth they thought they had has vanished. Everyone who thought they were financially comfortable will feel less comfortable. The virus itself encourages people to not leave home, which only incidentally prevents them from spending money. Financial fear encourages them to hoard their money and spend as little as possible. Up til now, people with money were spending it in all sorts of insanely wasteful ways, and in an instant, all that wasteful spending can dry up. This is disastrous if your whole economy is built on wasteful spending, as is ours.

I think that within the next few months, we're going to start seeing massive layoffs. As of today, there is no evidence of it. The unemployment rate in the U.S. is just about the lowest it has ever been, 3.6%. Just about anyone who wants to work and is functional enough to show up can get a job. It may not be a great or well-paying job, but it's a job. I predict in the next few months, those jobs are going to start going away. It's going to start in industries that are already under stress, like travel. Around the world right now, there are already a lot of idled airplanes and unoccupied hotel rooms. The people who service this market are going to get laid off or have their hours reduced.

And that's just the most obvious example. Any product or service that could be labeled as "luxury" or "fashion" or "entertainment" or "relaxation" or "self-fulfillment" could take a hit, and a lot of people in those industries are going to get laid off. Laid off people are especially tight with their money. They spend only the bare minimum they need to stay alive. When push comes to shove, they're probably going to pay for food and their electric bill, while debt and mortgage payments will start to slide.

Debts are so high in all sectors of the economy that it takes only a small downturn to trigger widespread defaults. When people default on, say, their car loans, this is going to have a chilling effect on the whole automobile industry. For one thing, it's going to push a lot of repossessed cars onto the market, which will suppress used car prices and make new cars less attractive.

Debt is a big interrelated web. Once one class of debts fail, then other kinds of debt follow. We saw this during the global financial crisis, where the crisis in subprime mortgages in the U.S. eventually led to a sovereign debt crisis in Greece and other countries far from the U.S. Last time around, central banks were able to intervene. They lowered interest rates and pumped cash into the economy to to stimulate spending. That's not going to work this time. If you are hunkered down at home because you fear the virus, and the Federal Reserve lowers interest rates, it's not going to change your behavior. It's not even going to change the behavior of businesses that are hunkering down. Nothing the central banks can do will encourage people to spend when they are fearful. They won't get on a cruise even if the cruise is 50% off.

Here's a specific prediction for you: I think the cruise industry is dead. I think all those massive Princess of the Seas ships with five swimming pools and fifteen restaurants are going to get mothballed in 2020 and most of them will never be returned to service. If there was anything emblematic of things you don't need, it's a cruise. You need a huge economy of scale to run those things, and I don't think the traffic will ever be back, even after the virus abates.

If enough purchases get put off or canceled, the Doom Loop begins. Once a certain threshold of fear is crossed, a feedback cycle takes over, and it can't be stopped. Companies that are on the edge of solvency right now are going to fail. Consumers are going to lose confidence, and there's nothing the government can do to bring it back.

Even if we could just stop the virus in its tracks right now, I don't think things can ever go back to the way they were. The trigger has already been pulled. All the market absurdities built up over the past decade must face a reckoning. Governments can't pay their bills—especially the US government. Consumers can't pay their debts. Assets values for things like real estate are fundamentally unsupportable. Everything has to crash in some manner.

I can't envision what this will look like on the ground. I only know that a lot of people will be in dire straits. On a worldwide basis, I honestly wonder whether starvation will kill more people than the virus. That's what happens when millions lose their jobs.

So as of this moment, the last day of February 2020, the official unemployment rate in the U.S. is 3.6 percent, which is just about the lowest it has ever been. I predict that by the end of June, 4 months away, it will be at least twice that: 7.2 percent. Although the viruses—both medical and economic—will move more quickly than that, there will probably be a lag time before people get laid off. As a reference point, unemployment in the US peaked at 10% during the 2009 crisis, from a prior level of 5%. After June, I think things will continue to get worse, but my crystal ball gets cloudy at that point. There are too many variables to allow me to see beyond the summer. Everything I foresee is bad, but I can't make out the form of that badness right now.

If you want to see the news I'm seeing and read what I'm reading, you should subscribe to my Twitter feed, DemographicDoom. Every significant article I come across is tweeted here. I try to focus on significant changes in the coronavirus story and the financial crisis, without too much repeated information. Furthermore, all my tweets are linked together by an indexing system based on hashtags. I have my own set of special hashtags that begin D-D-O-O-M underscore. This lets you call up my tweets from the past relevant to a certain topic.

When I started the twitter account last year, I wasn't concerned with pandemics, only with demographic and economic collapse, hence the name "Demographic Doom". Now that a pandemic has begun, I realize it is a demographic issue. For one thing, this pandemic is probably going to trigger the financial crisis I talked about all last year. That crisis, in turn, is partly fueled by falling birth rates and the growing proportion of old people in the world.

A pandemic also has an direct effect on demographics because it kills off people in certain predictable proportions. Right now it's clear that children and young adults will be largely spared by the virus, which is good. We can't afford to lose any of them. Old people are much more likely to die. Fatality rates are extraordinarily high for the elderly. It's at least a 10% death rate for people 80 or older. Ironically, this going to have an effect on pension plans, reducing their costs, but I don't think this will be enough to rescue Medicare or save fragile retirement systems.

Here's a definite demographic effect: If this week was the beginning of deep, long-lasting recession, it's going to suppress birthrates even further than they are. No one wants to bring a child into a world that seems to be falling apart. If South Korea's fertility rate is 1.0 right now, it is certainly not going to rise during a prolonged financial crisis. Women are going to be having half a baby each. As long as people lack confidence in the future, they're going to have fewer babies, which is only going to exacerbate the workforce and retirement problems decades later. In a global financial collapse, babies are one of the first luxuries that desperate people are going to do without. Outside of Africa, the world's baby making system could essentially seize up. No one with foresight is going to have a child if they are not sure they can safely raise them.

The more I think about the coming economic crisis, the more my brain malfunctions. The only thing I can equate it to is the devastation of World War II. The best I can say about the coming crisis is that I don't think it will be that bad. 85 million died in the war. I can't say whether the virus will kill more than that or less, but at least it is targeting the old and sick, and it isn't blowing up cities and killing children. So that's my worst-case prediction: Not as bad as World War II. I know this doesn't sound very reassuring, but it's the best I can offer.

Sunday, February 23, 2020

Ep. 30: Pandemic + Financial Collapse = Chaos (podcast script)

This is the script for my Demographic Doom podcast episode (#30) released on 23 February 2020. It may differ slightly from the final broadcast. The final episode is available on major platforms, including PodbeanApple Podcasts and a video version on YouTube. See the description on the YouTube version for possible notes, links and corrections. You can also comment on this episode there. (If you leave comments on this blog post, I might not see them.) The main website for this project is

I’m Glenn Campbell. I call myself a demographic philosopher. I’m looking at life and trying to predict the future through the lens of demography, or the study of human populations.

Today, I’m trying to comprehend the great worldwide social and financial crisis that’s bearing down on us, triggered by the coronavirus out of China, and the bottom line is that I can’t. It’s just too big for anyone to get their head around. It’s like someone in 1939 trying to predict what World War Two will be like. It seems evident that a lot of bad things are coming down, but it’s impossible to predict how they will unfold.

I’m talking to you from a motel room in Laramie, Wyoming, in the early morning hours of Sunday, February 23, 2020. The epidemic in China has been known for about a month and a half. January 10 is when the first official death was reported. As of today, most of America seems to be in denial. I haven’t been outside the US during this period, so I don’t know what the rest of the world is thinking, but here in my own country it’s business as usual. No one seems to be altering their plans or taking any precautions for the coming epidemic.

I know you may be listening to this episode a long time after I record it, so let me summarize this moment in history. Until a week or two ago, the coronavirus seemed like a Chinese problem, but over the past few days, it has become increasingly clear that this is a pandemic involving the entire world. There are now uncontrolled cases in South Korea and Iran and probably North Korea, Italy and a dozen poorer countries that don’t really have the means to test for it. The virus now seems unstoppable. The majority of the world population is probably going to get it. At this point, it is only slow-downable, meaning that with good hygiene and a cooperative population, some countries might be able to slow its spread.

This is important, because survival rates depend on what kind of medical care people can get.
At this early stage, it’s hard to come up with good numbers on the fatality and complication rate, but it’s clearly huge compared to routine bugs like influenza. The best information suggests that at least 80% of the population will have only mild, non-life-threatening. This is good in the sense that most people are going to survive with minimal physical effects. It’s bad, however, in that most people who get the virus probably won’t seek medical attention or take appropriate actions to protect others. It appears that some people can even spread the virus asymptomatically, meaning that can get the disease and spread it to others without even knowing it.

The real danger lies in those other 20%. A significant proportion of people who get the virus will suffer serious complications requiring hospitalization, and some of them are going to die. We have only ballpark numbers now. Maybe 10-20% will suffer serious complications and 1-2% will die. Deaths seem to be weighted toward the old and sick, but 1-2% is still a big thing. It means that someone you know will die—possibly you—and millions will die worldwide. Millions more will require hospitalization or will be struggling to try to get it. This isn't the common cold. This is something no one can ignore.

The1-2% figure depends on people getting good medical attention. If they don't, many of those in the "serious complications" category are going to die. That's why it's really important to slow the infection down, so medical systems have time to respond.

North Korea might become a perfect test case, along with other poor countries. Although officially North Korea has no cases, it is clear that it can't keep the virus out from neighboring China. Here you have a malnourished population with an incompetent government and virtually no medical care. In North Korea, the epidemic will progress in its purest form, much as it might have done in the Middle Ages. In this case, the fatality rate might begin to approach the complication rate of 10-20%.

But the epidemic itself is only one aspect of the worldwide crisis. The other side of it is the coming financial crisis that's certain to result. I want to emphasize that there is no major financial crisis as I record this. In fact, a couple of days ago, the NASDAQ and S & P reached all time highs. This indicates that most investors in the U.S. are in denial. They don't comprehend how bad things are going to get. I don't think anyone can truly comprehend it right now. Even me. I know a lot of bad things are going to happen, but I can't get my head around how those bad things are going to be experienced by myself and others. Humans tend to focus on minutia. They have a lot of trouble grasping the Big Picture. This is understandable, because there are so many threads involved.

Today, we generally understand how World War II or the Great Depression unfolded, but it's hard to see things clearly when you right in the middle of it. It's like you're strapped into a roller coaster, in the dark, and you just have to go where it takes you. There have been no safety inspections on this roller coaster. You don't know how long it's going to last or how bad it will get. You just have to ride it out, doing whatever you need to do to survive.

As I record this, I think the business world and general public outside of China are right on the cusp of recognizing they're in big trouble. I predict the coming week will be a busy one, with lots of news on both the medical and financial fronts. In the past few weeks, the coronavirus has hardly made the front page of American newspapers. The main story has always been Donald Trump and the Democrats trying to unseat him. In fact, the main story has been Donald Trump for four years now, all the way back to 2016. It will take a powerful worldwide crisis to displace him, and so far the coronavirus hasn't managed to do it. Maybe it could happen this week: coronavirus becomes that main story in the American news.

Right now I feel like an ant in an underground colony at a construction site. I know the bulldozers are coming, but I'm too small to understand how things will unfold. I'm pretty sure a lot of people are going to lose their jobs and lose a lot of money in failed investments. I'm also pretty sure that within the next few weeks we'll all be living in deadly fear of a domestic epidemic. The chance of it not taking off in the US and Europe are increasingly slim. I know a great social and financial collapse is coming, but I don't know how it will unfold or how people will adapt. You can't predict it. You can only live it.

The best I can do is point out all the bad factors that are ganging up on us. The world economy is at the peak of an Everything Bubble. The coronavirus didn't create the bubble. It's just the thing that's going to pop it. For many months, I and an number of more reputable experts have been predicting a major economic collapse. To call it a "recession" would be an understatement. The basic problem is that after the Global Financial Crisis in 2008, central banks lowered interest rates, which resulted in all sorts of unsustainable dysfunctions in the economy. Assets like stocks and real estate have exploded in value, while wealth inequality has increased and the lives of average people in developed countries have gotten relatively worse.

It is particularly telling that stock markets have continued to boom even as the news out of China has gotten worse. Even if the virus never leaves China, supply chains are going to be disrupted, and traditionally stock markets are supposed to fall on such bad news. These days, stock markets seem to RALLY on bad news. The reason appears to be that investors expect the central banks and big governments to intervene. They will supposedly lower interest rates and pump more money into the economy to save the stock market. Unfortunately, there's a limit to how much the central banks and big governments can do. Since interest rates are already low, even negative in some cases, they can't lower them much further, and governments can't keep spending themselves into debt without some eventual consequences.

For months, I and the reputable experts have been saying, "This has to end badly," but it was never clear exactly WHEN it would end badly. The saying goes, "Markets can stay irrational longer than you can stay solvent." For months, most investors and economists have said, "There's a recession coming," but the timeframe has been elastic. The most common advice you hear on the business TV shows is that a recession is coming, for sure, but not right away; maybe next year.

Well the coronavirus is guaranteeing that "next year" is actually going to be this year, 2020. This is the year the whole house of cards starts collapsing. There's no way to stop the march of coronavirus around the world. At the very least, the whole Eurasian continent is going to get it, and it takes only one uncontrolled case to bring it to America. Based on countless epidemics in the past, we have a pretty good idea of how they unfold. They happen fast. Just look at how fast the virus spread in China, in spite of all their Draconian measures to stop it. In less Draconian countries, it could spread even faster.

This podcast is supposed to be about demography, and it turns out that the spread of epidemics is a demographic problem. Demography isn't just concerned with counting people and measuring their reproduction rates. It can also be applied to any living thing—like a virus. An infection rate is a lot like a fertility rate. A fertility rate is the number of babies an average woman gives birth to in a given community. If each woman, on average, has more than two children, and all those children survive, then the population will grow. If each woman has less than two children, the population will fall.

It's pretty much the same with a virus. Instead of a fertility rate, a virus has something called an "R-naught", which is the number of new people that each person with the disease infects. In this case, since there are no "males" in the virus community, the cutoff point is one instead of two.  If each person with the disease infects more than one other person, on average, the epidemic will expand. If they infect less than one other person, the epidemic will eventually fizzle out.

In the case of the coronavirus, the R-naught is very high. It's not yet clear what that number is, but it could be anywhere from 2 to 6. There are some people who infect many more than that, like so-called "super spreaders" who infect many. One woman in South Korea infected at least 40 members of her church, which means her personal R-naught is 40. With the high numbers we've been seeing, the infection is certain to expand fast. It's like a ooor country in Africa having fertility rate of 6 babies per woman: You know that over time the local population will explode. It just does it slowly, over years, because it takes nine months to make a baby and about 15 years for that baby to reach reproductive age. In the case of a virus, the "pregnancy" of the virus is only a few days, and it's ready to reproduce immediately.

So what you have with a virus is a real population explosion. The only thing that stops it is running out of victims. Pretty soon, everyone in the community gets the disease. Either they die or they gain immunity, at least to the current form of the virus. That's when the R-naught falls below 1 and the disease fades out.

You can try to erect a wall around your community, but there's a limit to how effective it can be. You can try to build a wall around China to keep the virus from spreading, which is what other countries have tried to do, but if there's the smallest breach in the wall—just a single case—a new community is infected, and the virus will start expanding exponentially there.

I can imagine there will be some island communities that will hold the virus at bay for a lot longer than a connected continent would. New Zealand comes to mind. It's surrounded by water, so it can control its borders better than, say, France or Italy can. New Zealand already has some stringent border controls in place to prevent the introduction of pests and new invasive species, and I'm sure they're putting into effect some serious controls on visitors from China. If need be, New Zealand could suspend all international flights, which might be necessary if people from outside China are spreading the disease asymptomatically. So far, New Zealand has had no reported coronavirus cases, and it is within their power to keep it that way—but at what cost? What is the life-blood of the New Zealand economy? It is tourism. If you cut off international flights, you cut off the country's economic sustenance. There's going to be a massive recession. People in the tourist industry are going to lose their jobs. Everyone will suffer, even if the virus never gets in.

And it might not even be necessary to suspend flights. Foreign tourists may decide, on their own, not to come to New Zealand. Even if all the firewalls hold and the disease doesn't spread beyond its current locations, 2020 is certain to become a truly horrible year for tourism. Tourism is discretionary. No one has to do it, and if people feel that their lives are at risk, they won't. Think of the passengers on the Diamond Princess cruise ship. They found themselves trapped on the ship and subjected to a potentially deadly disease. Given how well it was publicized, who in their right mind would book a cruise right now, anywhere in the world?

New Zealand's dilemma is a microcosm of America's. America could be seen as a sort of island state, at least compared to the countries of Europe or Asia. It can close its borders relatively easily, but at what cost? America's life blood, like New Zealand's, depends on international trade. In particular, it has outsourced most of its industry to China. Even if the virus never gains a foothold in Amerca, where are we going to get all the products we need? America is pretty much self-sufficient on food and services, but it seems like everything else is Made in China. Furthermore, America needs China to sell its own products to. If America had to live without China, it might eventually adapt, but in the meantime, the losses are devastating. You can't close factories in China and prevent people there from buying things without huge disruptions across the ocean in America and Europe.

All of this ought to trigger a huge stock market correction. It ought to lead to layoffs and defaults everywhere in the world. So far these things haven't happened yet, but they will. There's no avoiding it.

Things will only get worse if the virus starts spreading within the US. As of this moment, all US cases—officially less than 100—seem to be controlled, but that can change in a minute. Once the virus is known to be spreading domestically, everyone is going to start taking defensive measures. They're going to hunker down. They're going to leave their homes as little as possible, and they'll stop spending money. The greatest vulnerability of the American economy is that very few of the products and services we buy are truly necessary. No one really needs a new car, a new home or meals in fancy restaurants. Once people lose confidence and stop spending, the whole economy starts collapsing in on itself. The collapse becomes a self-sustaining feedback loop when lower spending means more layoffs, which leads to even fewer people spending money.

In the background of all of this is absolutely astounding worldwide debt. Whether you look at governments or corporations or individuals, there's more debt out there than ever before in history. When the economy takes a dive, a significant portion of the debt becomes unpayable. Debtors will default, and the people and institutions who lent the money are going to lose their investments.

As I say, I don't know how it's all going to go down. I only know that it will go down. You can't put the virus genie back into the bottle, and you can't restore a healthy economy if it was unsustainable to begin with. I don't even know how to prepare for this myself. What should I do apart from buying hand sanatizer? My impulse is the same as everyone else: Just hunker down, conserve my resources and wait for the storm to pass.

Unfortunately, hunkering down is the worse thing possible for the economy. For the past few years we've been high on drugs—the drugs of low interest rates and irrational exhuberance. Now we have to experience the downside of those drugs, which is the terrible withdrawl symptoms when you take them away.

Ep. 29: Introduction to Triagism: A Philosophy of Life Based on Medical Triage (podcast script)

This is the script for my podcast episode on 21 February 2020. It may differ slightly from the final broadcast. This episode is available on major platforms, including Podbean, Apple Podcasts and YouTube. This script has not been proofread for publication and may contain typos and minor errors. See the description on the YouTube version for possible corrections. You can also comment on this episode there. (I might not see any comments left on this blog post.) The main website for this project is

I’m Glenn Campbell. I call myself a demographic philosopher. I’m looking at life and trying to predict the future through the lens of demography, or the study of human populations.

Today, I want to talk about “triage”. In a medical sense, triage is the sorting of patients and allocating of resources to save as many lives as possible. If you go to the emergency room at a hospital, triage is the first station you encounter. Here, a nurse will make a quick assessment of your condition and decide whether you need to be taken immediately into the operating room or whether you can sit in the waiting room for a while.

Triage happens to be highly relevant at this moment in history, on February 21, 2020, because it’s an important part of the coronavirus response. Emergency rooms around the world could soon be deluged with more patients than they can handle – as has already happened in China – and somebody, somehow has to decide which of those patients are going to be served and where they’re going to go. That’s literal medical triage, and how well it is conducted has a strong correlation with the fatality rate.

But I am also interested in figurative triage. In fact, I have built a whole philosophy of life around it. I call my philosophy Triagism. That’s T R I A G I S M. Triagism. I invented this term about four years ago, in November 2015, when I made four videos about it. I had forgotten about them until now. You can find my videos by searching YouTube for Triagism as I just spelled it. The basic idea is that every choice in life is a triage decision. You’re trying to choose your own actions in such a way as to maximize certain outcomes or minimize damage.

For example, if you are visiting a new country for the first time, and you’ve only got two weeks to see it all, you have to make some triage decisions about what cities and attractions to see and which to skip, and you’ve got to make these choices in advance in spite have having never been to the country before and having limited information about it.

In this episode I’m going to focus on medical triage because it is easiest to understand and most relevant to the current moment, but I hope you will see by the end how this could turn into a whole philosophy of life.

First I want describe the current moment. I realize that you could be likely listening to this episode months or years after I recorded it, so I want to summarize my current positio in history. Today is Friday, February 21, 2020. The coronavirus has spread across all of China and seems to be on the verge of erupting in several other countries if not the entire world. The growing consensus among disease experts is that the disease will eventually become “endemic”, meaning it will become a permanent disease of humanity, much like the common flu. The difference between this virus and the flu is that it is far more transmissible and deadly. It might kill 1 or 2 percent of the people who catch it, compared to a tiny fraction of that for the common flu.

I already recorded a couple of podcast episodes on the coronavirus, so I don’t want to repeat that discussion here. The most remarkable thing I have observed since my last episode ten days ago is the high degree of denial here in the United States. Virus-related shutdowns in China are already severely disrupting supply chains around the world, yet stock markets like the Nasdaq and S&P have been making all-time highs. This is insane to me, but then again, the markets have been insane for quite some time thanks to central bank intervention. I still believe this epidemic is the Black Swan event that will bring down the economy, but the panic hasn’t yet begun. Don’t worry, it will, and as a denizen of the future, you may already know about it.

The disease experts on TV all “hope” that the virus is contained, but I think most of them know that it won’t be. The big challenge now is not stopping the virus but slowing it down, so new cases don’t overwhelm medical resources. A relatively low fatality rate depends on people with serious complications getting adequate medical care. Even though hospitals have no cure for the disease, there are things they can do to keep people alive, like giving them supplemental oxygen or antibiotics for secondary infections. If people with serious complications can’t get treated, the fatality rate goes way up. If everyone who needs treatment gets it, the fatality rate goes down. Since there are only limited medical resources in any particular country, you want to slow down the rate of infection as much as possible so hospitals aren’t overwhelmed.

When hospitals are overwhelmed, you get into the realm of triage. Triage is the sorting process that takes place when casualties enter a hospital. Someone has to decide who gets treated and who doesn’t and how patients are going to assigned within the hospital.

What happens when a hospital with only 10 intensive care beds gets slammed by 1000 sick people demanding attention? That’s the essential triage problem. How do you decide who gets into those 10 beds? The general goal of triage is to save as many lives as possible, and that means selecting the right patients for treatment.

The default form of triage is what I call “First Come First Served”. The first ten patients who show up at the hospital’s door get admitted, then the doors are barricaded and no one else gets in. The trouble with this method is that not all the 10 people you let in are seriously ill. They might have survived anyway, but now they are occupying a bed that could have been used to save someone in greater need. You might also be admitting someone who is already too far gone. No matter what you do, they are going to die, so your efforts are wasted. The bottom line with the First In First Out method is that it doesn’t save as many patients as it could. It’s an inefficient use of medical resources that might end up saving only two patients when it could have saved, say, eight.

Another form a triage might be bribery. Only the richest people get treated. If you can slip some cash to the guard at the door, maybe you can get one of those precious 10 beds, but the problem here is the same as the First In First Out method: You aren’t maximizing the number of people saved. This method is effective only if you believe rich people are inherently worth more to society than others, so they deserve special treatment.

A third method a triage might be to admit only your own family members and allies. You try to save your clan or the people who you identify with. Everyone else gets locked outside. I can’t say that this is morally wrong. People do it all the time: They prioritize their own kin over others. All you can say is that it’s not saving the maximum number of patients, because some of those family members might not be seriously ill.

The most effective form of triage is something called “yield management”. Someone takes a broad survey of all the 1000 people outside the hospital’s doors and selects the 10 patients who they think will benefit most from treatment. You’re going to ignore the people who are only mildly sick, because they are probably going to survive anyway. And you’re also going to ignore the people who are so seriously ill that they’re probably going to die anyway. Why waste your resources on them? Finally, you might make a judgement about who is going to most benefit others if they survive. For example, if you save the life of a doctor, that doctor might go on to save 100 other lives, so in an epidemic, it is appropriate to prioritize medical personnel.

And there you have triage in a nutshell. It is simply the judicious allocation of resources to maximize final gains. The basic concept isn’t hard to understand. Triage is difficult only in its real-world implementation. For one thing, you usually have to reject more people than you select. If you choose 10 people for treatment from the 1000 outside your door, the other 990 people aren’t going to be happy about it. They might rush the hospital, ram down the doors and lynch all the doctors, in which case no one gets saved.

I’ve been thinking about triage since around 2009, when I first wrote a one-page essay about it. You can find it by Googling for “Triage Kilroy CafĂ©” That’s Kilroy K I L R O Y space C A F E. The essay is called “Triage: Doing What You Can With What You Have.” Although I hadn’t invented the word “Triagism” then, I pretty much captured the essence of it. Every decision is a relative one based on the goals you are seeking and resources actually available. There will always be more needs than resources, so you have to judiciously apply those resources to maximize outcomes.

I’ve always thought of triage in abstract philosophical terms. Everything we do is an exercise in triage. But the coronavirus pandemic means that triage is now being practiced in pragmatic medical terms. Triagism isn’t just academics discussing things. People are living and dying based on this philosophy.

Prior to the outbreak, if you went to a hospital emergency room in North America or Europe, you knew you were going to be treated. You would still see a triage nurse upon entering the E.R. but this only determines how long you wait. In wealthy countries not yet in crisis, there are usually enough medical resources to go around. The people who are shot up with bullet holes get wheeled into the operating room right away, while others may have to wait for a while, but ultimately everyone gets served and an optimal number of lives are saved. In more of a battlefield situation, like a pandemic, Triage decisions have a huge effect on who lives and dies. In this case, the triage nurse may actually have more power than the doctors in determining how many live and die, because they are determining who gets treated.

In a modern emergency room not in crisis, every patient is evaluated in isolation. The nurse takes them into an exam room, assesses their symptoms and decide what the best practices are for this kind of situation. There are all sorts of rule books and procedures for this, and a triage nurse can take pride in making the optimal decision for every patient. In a battlefield situation, you don’t have the luxury of looking at each patient in isolation. You have to have a broad overview of all the patients who are vying for medical attention. The decisions you make when the ICU has plenty of beds are different than those you make when beds are at a premium and only a limited number of patients can be served. In this case, you have to look at all of the patients and select the few who are going to benefit the most from treatment.

Medicine in wealthy countries usually has the luxury of treating every patient equally, at least in the emergency room. It doesn’t matter who you are or whether you deserve treatment; when a doctor sees you, they are going to make the best decision for your particular case. This is true even in the United States, with a notoriously screwed up insurance system. If you turn up at an emergency room full of bullet holes, a doctor is going to treat you, and they are not going to discriminate against based on your ability to pay or whether you’re a gang-banger who deserved to be shot full of bullet holes.
Doctors, in fact, face great legal liability if they discriminate against a patient for any reason. If someone comes into the hospital with cancer and they’re 90 years old, the doctor is obligated to offer them the same costly treatment they would give a 25-year-old – assuming, of course, that they both have health insurance. The doctor can’t say, “I’m not going to treat you because you’re too old and are probably going to die anyway.” That would be a breach of his Hippocratic Oath and could get him in trouble.

Things change when you’re in a pandemic situation and you’ve got all ages and conditions scrambling for medical attention. The triage nurse might have no choice but to discriminate. It’s not a discrimination based on skin color but a discrimination based on the probability of survival. If you have two patients with the same life-threatening condition, one is thirty years old and the other is eighty, the triage nurse might select the thirty year old for treatment, because they have a better chance of survival.

I want to emphasize how hospitals and medical personnel in the United States and elsewhere aren’t set up for this kind of triage. Triage in America means directing a patient’s treatment. Triage in a crisis might mean denying treatment altogether. Every medical professional has been trained to pursue the best practices of each individual patient. They haven’t been trained to balance the needs and prognosis of one patient against those of another. They haven’t been trained to look at 1000 people and pull out the 10 who can most benefit from treatment. They haven’t been trained to ignore some patients and let them die. This is the sort of triage decisions that a battlefield medic had to make in World War One, but I don’t think modern medical staff are prepared for it. They have been trained to give optimal care to everyone who comes through the door. They haven’t been trained to balance the needs of the entire community to maximize overall survival.

Consequently, I don’t think modern healthcare systems in democratic countries are going to handle a pandemic well. I think the kind of triage they will use, at least initially, will be the First Come First Served method. All the hospital beds will fill up with the first patients who come in the door, then police will be called; the doors will be bolted, and no one else will be let in.

That’s not to say that non-democratic countries will do any better. Right now, in February 2020, no one outside of China has a big-picture view of how well the epidemic is being handled there, but I would wager it’s being handled poorly. China famously built a hospital in about 10 days, but that doesn’t mean they have competent staff to man it or that they’re using the facility effectively to save the maximum number of people. At every hospital, there is an entry point where choices have to be made about what happens to each prospective patient. Will this patient be admitted to the hospital, and if so, where will they go? Do they go to the Intensive Care Unit? Do they go to an isolation ward? I doubt China is making these decisions well, because they weren’t prepared. No one is.

Even in the United States, the health care system is finely tuned for the mix of patients we have now. A hospital might have its cardiac ward and its cancer ward, and most of those beds are already filled with routine patients. It might have only ten ICU beds available for emergencies, because that’s the number of emergencies they normally have. If they get slammed by a thousand virus patients demanding to be seen, they’re going to fill up those 10 beds on a First Come First Served basis, and they won’t know how to deal with the rest.

When and if the virus invades the U.S. Authorities might have to do what they did in China: set up temporary hospitals to deal with the influx. Gymnasiums can be turned into makeshift hospitals, but then how do you staff them? All the doctors and nurses are already occupied at their own hospitals, so who is going to man the new makeshift hospitals? What is prevent these makeshift hospitals from turning into pandemonium? Everyone is crying “I’m dying, please help me!” but there’s no one to help and no system in place for effectively distributing resources.

Our only real hope lies in slowing down the spread of the disease to give us more time to prepare. This means educating people on how to avoid infection. People WILL pay attention if they know their lives depends on it. If you can limit the number of new infections each day, then you give your country more time to develop new systems to handle them. Unlike the medical systems we are used to, these systems are going to seem imperfect and brutal. You can no longer say, “We’re going to save every patient.” When the system is overburdened, you have to say, “We’re going to save as many people as we can with the limited resources we have.” This is a brutal philosophy because it means many people are going to be denied care, and those people won’t be happy.

This is the essence of triage, and it extends to all aspects of life. In everything you do and every decision you make, you are engaged in triage. You’re not going to be able to go everywhere and do everything, just like you can’t save everyone during an epidemic. You have to parcel out your limited resources to the options that offer the most gain, which means denying your resources to many noble causes.

I hope you can begin to see how the concept of medical triage can morph into a whole philosophy of life. This is what I tried to do when I invented Triagism back in 2015. Maybe it’s time for me to reactivate that project. Triagism. How do you get the most you can from the limited resources you have? I’m sure there will be plenty of opportunity to think about triage in the coming weeks. Everyone will be thinking, “If I catch the disease, what is going to happen to me?” What happens to people when they go to the hospital and there aren’t enough beds. In country after country, we’re going to start putting this question to the test.

I didn’t start this epidemic, and I can’t control its spread, but if its going to happen, at least I can use it for something. It can help me refine this philosophy that I had forgotten about. Assuming you and I survive, we might come out of it with some new tools for dealing with life.

The main lesson of Triagism is that there are no perfect solutions. There are only solutions that are relatively better than others. It all depends on your resources and how you choose to divvy them out.

[Note: Episodes prior to this one (#1-29) and earlier videos were recorded without scripts.]