America faces 'darkest winter', has no master plan: US whistleblower
Rick Bright, a US government whistleblower recently fired by the Trump administration, delivered a chilling testimony in the Congress on Thursday about the country hurtling into the "darkest winter in modern history" unless there is strong leadership and a master plan to tackle the Covid-19 pandemic—both of which he said were absent right now.
 
Bright's testimony came barely 48 hours after America's top infectious diseases expert Anthony Fauci warned in a Senate testimony of suffering and death if US states reopen too quickly.
 
Bright testified before a Congressional panel on Thursday by which time Covid-19 has killed more than 84,000 people in the US. America now accounts for the world's highest caseload with more than 1.4 million sickened by the virus since the first case was reported in January.
 
Bright painted an alarming picture of organisational chaos in the US government after he warned of insufficient mask supply back in January.
 
According to Bright, America's biggest mask manufacturer was ready to crank up production, but it took five full weeks for the bureaucracy to move.
 
"The undeniable fact is that there will be a resurgence of (Covid-19) this fall, greatly compounding the challenges of seasonal influenza and putting an unprecedented strain on our health care system," he said.
 
"Without clear planning and implementation of the steps that I and other experts have outlined, 2020 will be the darkest winter in modern history," Bright said.
 
Bright tore into America's response and urged the government to allow scientists to be allowed to speak without "fear of retribution". During his testimony, Bright contradicted nearly every major claim that US President Donald Trump has made so far on pandemic planning and testing in the US.
 
Bright warned Americans that there is neither a "vaccine plan" nor a "master plan" in the US at the moment.
 
He called for increasing public education around "simple things" like hand washing and mask wearing in public. "Frankly, our leaders must lead by modelling the behavior," Bright said, without naming US leaders who continue to go maskless in public.
 
"We need a national testing strategy. The virus is here, it is everywhere. We need to be able to test and isolate," he said in a sobering, five-minute opening statement.
 
"Pages from our pandemic playbook have been ignored by leaders," Bright said.
 
"Our window of opportunity is closing," Bright said, adding, "If we fail to develop a national coordinated response, based on science, I fear the pandemic will get far worse and be prolonged, causing unprecedented illness and fatalities."
 
Trump has dismissed Bright as "a really unhappy, disgruntled guy". Trump's comments on Bright follow after he brushed aside Fauci's warnings earlier this week that premature reopening may "turn the clock back".
 
Bright claims that he became a target after he urged early efforts to invest in vaccine development and stock up on strategic national supplies. 
 
He said the friction escalated after he opposed widespread use of hydroxychloroquine, a malaria drug that Trump has touted multiple times as a "gamechanger" for treating Covid-19 patients. Bright was removed from his post in late April.
 
"We still do not have standardised, coordinated plan to lead us through this response," he said on Thursday.
 
Echoing Fauci's view, Bright said a 12-18-month trajectory is the most aggressive for vaccine development. Before that, therapeutics will be America's best bet, he said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Impact of COVID-19 on Global Supply Chains: What Changes Are Here To Stay?
    The corona virus (COVID-19) has devastated supply chains globally due to which the manufacturing entities have been particularly badly impacted. .
     
    Indeed, COVID-19 has proven to be a crisis where manufacturing companies have faced supply, demand and work force availability shocks. 
     
    Several questions arise regarding this issue: (1) What will the manufacturing and associated supply chains look like in the days, months and years to come? (2) Will Michael Porter’s cost leadership (1980) still be relevant in choosing supply chain partners or will there be other considerations like reduction of supplier and buyer concentration risk? (3) Will domestic manufacturing increase at the expense of globalisation and what factors will propel it? and (4) Will we see more nationally integrated supply chains in the future? These and other questions are taken up in a series of articles.
     
    During the COVID-19 crisis, manufacturing supply chains have been disrupted in many countries because of their over-dependence on China due to lower cost of production and the overall favourable environment in China for manufacturing.
     
    However, having suffered greatly because of lack of access to components, intermediate goods and even finished products due to the COVID-19 crisis and the Chinese lock-down during January – March 2020, many countries are now waking up to the fact that they need to diversify sources of supply and also have fall back domestic suppliers because none of them wants to get locked down again. 
     
    The key that companies are now looking for is reduction in supplier concentration risk from a single country or geographic source or location.
     
     
    Thus, there is going to be no one preferred location as countries and companies are all trying to diversify away the concentration risk of suppliers and supplies—be it for components, intermediate goods or finished products. That is very clear and Mike Porter’s cost leadership being a key factor in choosing (global) suppliers has been substituted by the need for multiple, reliable, valid and consistent, even domestic suppliers from alternative locations. 
     
    The converse is also true whereby suppliers are also looking for diversification of buyers including domestic buyers across locations to reduce buyer concentration risk. Clearly, risk diversification across global supply chains to reduce concentration risks in suppliers, buyers and other stakeholders in the chain is very much in vogue and a trend that is here to stay. 
     
    As a very knowledgeable industry observer from the US notes, “I believe supply chains will focus more on complete diversification and resilience and optimize cost within that constraint. This would take the shape of national diversification, beyond just firm diversification. If you have diversified your vendors from single source to three or four, but they are all in one country, then we have not eliminated geographic supply shocks. Single source diversification is not enough and we would need single country diversification.” 
     
    All of this, of course, implies multiple suppliers from multiple countries including one or two mandatory domestic suppliers. That would be the new normal. 
     
    A second change that is coming is to the just-in-time (JIT) inventory system, based on the innovative Toyota Production System. Having been locked out of supplies due to shutdowns across and within nations, companies are now being forced to use the just-in-case (JIC) inventory system—this implies use of more and larger warehouses and increase in inventory carrying costs, all of which will have to ultimately be borne by the customers. Of course, supply chains will still try to optimise cost; but, all said and done, costs for the end consumers are bound to increase.
     
    A third issue that is relevant here is the one of enhanced domestic production. Certainly, every country will have domestic suppliers, which could enhance cost of production depending on the strategic context, but that is a cost that countries and customers would gladly bear rather than be locked out. 
     
    However, that could be offset by the huge advantages that come with automated production and other aspects that accrue now from Industry 4.0—apart from increased productivity you are also going to see other advantages with the use of robotics and artificial intelligence (AI), including machine and deep learning.
     
    Industrial giants like US and Germany should lead the way here as they have had very strong manufacturing bases for decades and also because they are perhaps more amenable to assimilating automated production and associated aspects. 
     
    In fact, the US may perhaps well and truly become the leader here, in the post COVID-19 world. While increase in domestic manufacturing may sound like music to ears of politicians in the US, like Bernie Sanders or Joe Biden or even President Donald Trump, it necessarily will not mean employment for the same kind of folks who worked in manufacturing decades ago. New kinds of skills are going to be required and a lot of that will have to do with robotics, AI and related fields. 
     
    And for countries like India, to take advantage of the above global changes and become one of the many preferred destinations, we need major taxation, labour law, land acquisition, ease of doing business and other reforms. In other words, the entire ecosystem must be productive—"ecosystem productivity is a function of a number of factors: political stability, business friendly regulations and favourable taxation, cooperative unions, infrastructure quality, and well-developed industrial clusters"
     
    Much will also depend on how well India is able to contain COVID-19 and its fallout economically as well as how many Indian manufacturing SMEs and large companies live out and survive the COVID-19 crisis.
     
    To summarise, given the on-going COVID-19 crisis, the re-engineering of supply chains is going on and the objectives are to ensure lower supplier and buyer concentration risk, greater chain resilience and enhanced chain adaptability. 
     
    If this re-engineering works out as planned, it should result in several aspects such as the following:
     
    (a) vulnerability reduction for primary producers and other chain stakeholders—one important aspect is ensuring seamless flow of materials and components. Most stakeholders in the supply chain became extremely vulnerable to due to dearth of raw materials, intermediate products and finished goods during the COVID-19 shutdown and thereafter;
     
    (b) improved and stable returns to various chain actors;
     
    (c) productivity increases in the entire chain especially due to automation and use of robotics, artificial intelligence and related tools to offset the cost increases caused by diversification of supplier/buyer concentration risk and also adoption of just-in-case inventory system;
     
    (d) newer kind of employment generation across the supply chain, although the skills-sets required may be very different from those necessary in the past; and
     
    (e) reliable and consistent supply of quality and affordable goods and services to chain customers at various levels of analysis as well as end users and the like. 
     
    (Ramesh S Arunachalam is author of 12 critically acclaimed books. His latest release in January 2020 is titled, “Powering India to Double Digit Growth: Five Key Steps To A Robust Economy”. Apart from being an author, Ramesh provides strategic advice on a wide variety of financial sector/economic development issues. He has worked on over 311 assignments with multi-laterals, governments, private sector, banks, NBFCs, regulators, supervisors, MFIs and other stakeholders in 31 countries globally in five continents and 640 districts of India during the last 31 years.) 
     
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    The Bailout Is Working — for the Rich
    The economy is in free fall but Wall Street is thriving, and stocks of big private equity firms are soaring dramatically higher. That tells you who investors think is the real beneficiary of the federal government’s massive rescue efforts.
     
    Ten weeks into the worst crisis in 90 years, the US government’s effort to save the economy has been both a spectacular success and a catastrophic failure.
     
    The clearest illustration of that came on Friday, when the government reported that 20.5 million people lost their jobs in April. It marked a period of unfathomable pain across the country not seen since the Great Depression. Also on Friday, the stock market rallied.
     
    The S&P 500 is now up 30% from its lows in mid-March and back to where it was last October, when the outlook for 2020 corporate earnings looked sunshiny. Companies have sold record amounts of debt in recent weeks for investment-grade companies. Junk bonds, historically dodgy during an economic swoon, have roared back.
     
    If you’re looking for investors’ verdict on who has won the bailout, consider these returns: Shares of Apollo Group, the giant private equity firm, have soared 80% from their lows. The stock of Blackstone, another private equity behemoth, has risen 50%.
     
    The reason: Asset holders like Apollo and Blackstone — disproportionately the wealthiest and most influential — have been insured by the world’s most powerful central bank. This largess is boundless and without conditions. “Even if a second wave of outbreaks were to occur,” JPMorgan economists wrote in a celebratory note on Friday, “the Fed has explicitly indicated that there is no dollar limit and no danger of running out of ammunition.”
     
    Many aspects of the coronavirus bailout that assist individuals or small businesses, meanwhile, are short-term or contingent. Aid to small businesses comes with conditions on what they can do with the money. The sums allocated by the CARES Act for stimulus and expanded unemployment insurance are vast by historical standards. But the relief they provide didn’t prevent tens of millions from losing their jobs. The assistance runs out in weeks, and the jobless live at the mercy of a divided Congress, which will decide whether that help gets extended and, if so, for how long.
     
    It’s a bailout of capital. “If the theory is: Let’s make sure companies are solvent and the workers will be OK, that theory could work. But it’s a trickle-down theory,” said Lev Menand, a former New York Fed economist who now teaches at Columbia Law School.
    We do know one thing, he said: “It worked for asset holders.”
     
    The Fed’s efforts, universally praised for their boldness and speed, have come in two stages. First, in February and March, the central bank shored up capital market “liquidity,” which marks how willing investors are to buy and sell. The central bank role is to be a “lender of last resort,” working through banks so they can get money to companies and people.
     
    That expanded in the wake of the 2008 global financial crisis. The Federal Reserve, historically viewed as reserved Brahmins who controlled the money supply, stepped into a new job: “the dealer of last resort,” in the words of economist Perry Mehrling. The Fed bought assets and it bailed out the shadow banking system. “Shadow banking” takes many forms and can mean many things, but generally it describes activities that look like classic banking — taking in deposits and lending out that money — that are undertaken by, for example, a private-equity fund or another institution outside the traditional system of federally insured deposits. Continue Reading...
     
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    COMMENTS

    drbheda

    2 weeks ago

    It had happened in 2008 too. The disparity only increased post GFC, which shows that the elites gained at the expense of commoners. Here too most market ppl are not tired of pointing out what fed is doing & wants the GOI to bail these fat cats out. Ppl state in courts that they are penniless but have purchased yatch for their wife. Thankfully GOI has not fallen in their trap.

    ganesanjaicare

    2 weeks ago

    indian public lost huge money by way of crashing psu stocks to two decade low.wher as reliance gained and reached new all time high.

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