New York under heavy assault from the virus

The level of infection in New York state is soaring. Infections are concentrated in the New York metro area. On March 23nd, Westchester county had 3050 confirmed cases per million people, which is ahead of Lombardy in Northern Italy which has 2854 cases per million people. New York City is a little behind with 1465 cases per million.

Seattle and New Orleans are also experiencing severe outbreaks.

Potentially useful US military assets for the fight against COVID-19

Most of the US military is useless for the fight against COVID-19. However there are some bits and pieces of gear that might be useful.

US military protective suits

 The US military has a large stock of protective suits and gas masks which were intended to protect soldiers from biological and chemical weapons. Viruses have been used as biological weapons, so these suits and masks would probably provide protection against COVID-19. The suits are hot, heavy and uncomfortable to wear. They could be used to relieve the desperate shortages of protective equipment currently being experienced by hospitals.
Wikipedia article

US army field hospitals

The US army appears to have 22 combat support hospitals, which can provide up to 250 beds each. Potentially, they could provide 5500 beds. Most of these are in the reserves. They might not  be suitable for infectious disease, if the beds are located close together. They are really designed to provide surgery for battlefield injuries. Also, staffing them would require taking staff from medical facilities serving military bases and possibly Veterans hospitals. Taking military doctors from one area of the country to send them somewhere else is likely to be controversial.
Wikipedia article on Combat support hospitals

US Army Corps of Engineers

Army engineers could rapidly build temporary hospitals to provide extra bed capacity. They could also help to convert existing assets like convention centers and hotels into hospital and quarantine facilities.

US Navy hospital ships 

The US Navy has two 34 year old hospital ships, the Comfort and the Mercy. One is in port in Norfolk, and the other is in port in San Diego. Each has 1000 beds. They were designed for treating battlefield casualties, so their effectiveness for handling infectious disease patients is uncertain. Cruise ships have proven to be very bad environments for stopping the transmission of COVID-19. It is possible that these ships could not properly isolate infectious patients. The hospital ships might be suitable for providing normal medical services to the victims of heart attacks and accidents, allowing shore based hospitals to concentrate on handling COVID-19 patients. Staffing the ships could be an issue, as it would likely mean taking doctors and nurses away from existing shore based jobs.

Wikipedia article on Mercy-class_hospital_ship

Ski towns breed covid-19

There are numerous indications that ski towns are incubators for covid-19. To compare outbreaks in different size regions I look at the number of cases per million people. By that metric the most intense outbreak in the US is around the ski areas of Aspen and Vail Colorado (as of March 21st 2020). That really surprised me when I first discovered it.

In Italy, the second most intense outbreak is in the tiny Aosta Valley in the Alps. This area borders France and Switzerland. As of March 20th, this area has 2445 cases per million people, which is just behind Lombardy with 2532 cases per million. The case load is rapidly growing.

At the other end of the Alps, the Austrian ski resort of Ischgl played a major role in transmitting covid-19 to Norway and Iceland. The Icelandic government warned of the danger from Ischgl on March 5th when a plane carrying  15 covid-19 cases arrived in Iceland. 14 of the 15 infected passengers had been to Ischgl. Despite the warnings from Iceland, the Austrian government kept the resort open for  days in a bid to protect tourism profits. The Norwegians later found that 41% of their cases were in people who returned from Austria.

It seems that people traveling for ski vacations to the Alps and Colorado played a big role in spreading covid-19 around the world. Also, conditions in those ski towns appear to have been ideal for the transmission of covid-19, so they provide an example of the kinds of places that are most hazardous.

The Austrian ski town that spread coronavirus
How an Austrian ski paradise became a COVID-19 hotspot
Aspen to Australia
Vail to Mexico

American counties worst affected by coronavirus as of 3/20/20

 The chart shows the ten worst affected counties in the US, with badly hit areas of China and Italy included for comparison.

The worst hit region in the US is the central Colorado ski region around Aspen and Vail Colorado. This is shown in the chart as Eagle County, Gunnison County and Pitkin County in the state of Colorado. Although the absolute number of cases is under 100 these are small towns with a very high per capita rate of cases.

The next worst hit area is the New York Metro area with Westchester County as the worst affected region. New York City, Nassau and Bergen county New Jersey are also in the New York metro area.

There are also nasty outbreaks around New Orleans (Orleans Parish) and Seattle (King and Snohomish Counties). Things have slowed down in the San Francisco Bay Area over the past couple of days, so no Bay Area counties make the chart.

In my opinion, there is a good chance that the outbreaks in New York and New Orleans become as severe as the outbreak in Northern Italy.

Coronavirus travel bans work: How China contained the virus

China was fairly successful in containing the worst of the coronavirus outbreak to Hubei province.The chart below shows the case rates per million people for all the provinces in China

The case rate per million in Hubei went as high as 1145 per million people. No other Chinese province exceeded 22 per million people. This degree of containment was a huge success for the Chinese authorities. In my opinion, it was due to an unprecedented travel ban introduced on January 22nd for the city of Wuhan. This was expanded next day to cover 35 million people in Wuhan and the surrounding cities. US experts interviewed  at the time were skeptical that the travel ban would work, but in hindsight it seems to have been a big success.

Also important for containment was the vigorous public health response in other Chinese provinces. The travel ban ensured that other regions were not overwhelmed by infected people coming out of Hubei.

Reducing the load on the health care system seems to have had a big impact on the death rate. The death rate was 4.5% for Hubei province but only 0.9% for the rest of China.

The US is currently doing a much less effective job of containing the virus than the Chinese did. After Hubei, Zhejiang was the worst affected Chinese province with 21 infections per million people. Several US states are now above that level.

However, I think there is still time to avoid severe, widespread infection by imposing travel restrictions on the worst affected states. Seattle, the San Francisco Bay Area, the New York City Metro Area, Louisiana, Colorado and Massachusetts are the worst affected areas. Shutting down passenger air and rail travel from those regions could prevent them from sending large numbers of infections to the rest of the US.

NY Times January story on Wuhan travel ban

Government bond yields and trade

Most discussions of trade imbalances focus on the desirability of the goods that a country produces. Countries with trade surpluses are believed to be those that produce highly desirable goods.

However, trade imbalances are linked to capital flows. What if it is the demand for capital flows that drives the trade deficit, rather than the other way around? Capital flows from regions of surplus, where interest rates are low, to regions where interest rates are higher.  Government bond yields provide a measure of the demand for capital.

The chart below provides some evidence for this point of view. It shows that trade surplus countries tend to be countries where government bond yields are very low, indicating a surplus of capital.

The lowest bond yields are in Switzerland and Germany , while the highest are in Australia, Italy and the US.

Data note:  Government bond yields are for the 10 year bond on 5/31/2017. The data are from the Bloomberg or Trading Economics website.  The current account balance data is from the OECD stats website.

Home ownership and trade

There appears to be a negative correlation between the home ownership rate and the current account balance for advanced economies. Below is a chart showing the data.

Here is the same data plotted in a way that makes the correlation more obvious.

I have a couple of theories about why these two variables are linked.  Countries with high home ownership rates may have policies that make it easy to get mortgages and other forms of consumer credit. This leads to strong demand for savings which tend to drive capital inflows and associated trade deficits.

Another theory is that home ownership reduces the need for cash savings in bank accounts. People who own houses never have to pay rents and they don't have to worry about inflation in housing costs.  Less bank saving is offset by capital inflows and associated trade deficits.