As it's not paywalled for me, I think I can post it here:
Three weeks ago there was much talk of a Chernobyl moment for Chinaâ€™s Communist Party, discredited by totalitarian attempts to suppress news of the spreading coronavirus in Wuhan.
But fast-moving events can play wicked tricks, especially on a White House allergic to scientific facts. COVID-19 is more likely to be the Chernobyl moment for Donald Trump.
His systematic destruction of US pandemic defences - policy vandalism of the first order - and his surreal efforts to conjure away the virus with denialist spin suddenly brings an unthinkable prospect into play.
The coming backlash may sweep Bernie Sanders into power on a socialist manifesto of Piketty wealth taxes, the partial closure of the US oil and gas industry, and vast increases in the size and role of the US government, all with an implicit budget deficit of $3 trillion. Try feeding that into your models for GDP growth, equity prices, or bond yields.
The Trump administration has cut funding for the US Center for Disease Control by 9pc. This month he proposed slashing it a further 16pc. The worst hit area has been pandemic preparation. The CDCâ€™s global health security initiative has been chopped by 80pc, reducing country coverage from 49 to 10.
Mr Trump got rid of the US Complex Crises Fund. He shut down the pandemic and global health machinery at the White House, and fired the lot. He tried to cut the budget of the National Institutes of Health - the worldâ€™s finest concentration of science - by 20pc in 2018, and by 27pc in 2019. Congress stopped the worst but damage has been done.
Tom Frieden, ex-head of the CDC, warned two years ago that the cuts would leave the US at the mercy of the next killer virus. â€œThe surveillance systems will die, so we wonâ€™t know if something happens. You canâ€™t pull up the drawbridge and expect viruses not to travel,â€� he said. Ouch.
It has been a war on science. Mr Trumpâ€™s cuts have nothing to do with fiscal austerity. They happened just as he was pushing through tax cuts and driving the US cyclically-adjusted budget deficit to 6.3pc of GDP (IMF data), spraying money with Peronist abandon. The science cuts were ideological. Some readers chide me for being an unreconciled Never Trumper. This is why.
Coronavirus live map
And now the White House has a disaster on its hands. â€œThe epidemiological conditions for a pandemic are met,â€� said Prof Marc Lipsitch, Harvardâ€™s guru on infectious diseases. Donâ€™t be fooled by the seemingly low numbers of infections in the US (57 as I write): the country has tested just 426 people. Only three of the 100 public health labs even have working test kits.
One reason why South Korea appears to have so many cases is because it has carried out 44,981 tests. â€œThey are looking, so they are finding,â€� says professor Caitlin Rivers from John Hopkins University.
Dr Nancy Messonnier, head of the CDC, is doing her best. She told America on Tuesday that COVID-19 cannot be stopped and that public policy will have to switch from containment to mitigation (already Japanâ€™s policy), a way of saying that the virus will ultimately circulate like flu.
â€œIt's not so much of a question of if this will happen in this country any more but a question of when this will happen. We are asking the American public to prepare. This might be bad,â€� she said.
The White House will have none of this. The virus is â€œvery much under controlâ€� and a vaccine is very close, tweeted Mr Trump.
The Coronavirus is very much under control in the USA. We are in contact with everyone and all relevant countries. CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!
â€” Donald J. Trump (@realDonaldTrump) February 24, 2020
Up to a point, Lord Copper. Key indexes on Wall Street and global bourses have this week fallen through the first key lines of technical support. Masanari Takada from Nomura says global macro hedge funds have changed strategies almost overnight since COVID-19â€™s global break-out, switching to trades that â€œprepare for a global recession.â€� It is the same message from record low yields on 30-year US Treasury bonds and soaring risk spreads on US oil and gas frackers.
Larry Kudlow, the White House economics chief, persists bravely. The US containment of the coronavirus has been â€œpretty close to airtightâ€�. Growth in the US will be unscathed, though â€œChina is going to take awfully big hit.â€�
Has nobody told him that US firms with tight supply chains are fast running down their inventories, or that the full effect of cancelled container shipping from Chinese and East Asian ports has not yet been felt? Little is returning to normal. Chinaâ€™s economy remains closed and there is a critical shortage of workers at ports. Ships cannot even dock.
The Baidu index shows that 72pc of migrant workers have not returned to the big cities since the Lunar New Year. Coal use at major power plants is down 47pc. The longer this goes on, the greater the global economic shock, even if you believe the fairy tale that COVID-19 is a local Chinese virus and wonâ€™t cross the oceans.
Undaunted, the Trump camp is putting out the message through talk radio and in cabinet testimony on the Hill that virus chatter is scaremongering by political opponents, a line also adopted by the insouciant leader of Lombardy in Italy.
Yesterday the head of US homeland security, Chad Wolf, told a stunned Senate committee that the death rate of COVID-19 is akin to normal winter flu. He doubled-down when pressed by a senator who clearly knew that the designated chief of US emergency preparations does not understand the elementary facts of the matter.
Actually the average flu death rate is around 0.1. Tracking data from China shows a 4.0pc mortality rate in Wuhan, 2.8pc in Hubei, and 0.8pc in other regions, but rising. The ratio rockets logarithmically for the late-middle aged and elderly.
Furthermore, only a small fraction of people contract flu each year because the rest are vaccinated or have acquired immunity from past flu infections. There will be no COVID-19 vaccine for months. Nobody has immunity.
Economic Intelligence newsletter in-article
The Trump administration is taking an insane political gamble by pitting itself against the CDC and against the US fraternity of virologists. It will lose this bet. I also suspect that COVID-19 will expose deep failings within the US health-care and insurance system.
Many poor Americans without coverage or Medicaid will try to tough it out at home rather than risk ruinous medical costs. Illegal immigrants will avoid the health surveillance system for fear of being deported. The disease will spread in these distressed pockets - large chunks of society in fact - before sweeping the leafy suburbs.
The only way to slow the internal contagion is to offer free testing and care for anybody with COVID-19, as Singapore is doing in what has become the worldâ€™s gold standard regime for this crisis.
If the CDC is right and a US epidemic is on its way, the unfolding drama and shocking death rate will work to the advantage of Bernie Sanders in the Democratic primaries.
It will shatter Republican claims to competence and could conceivably propel the septuagenarian firebrand into the White House with a majority in both houses of Congress. Just wait until the global macro funds sink their teeth into that prospect.
What are the Dow index and the S&P 500 worth in a global economy facing - potentially - the worst â€˜sudden stopâ€™ since August 1914, and a new America led by a President Sanders with a mandate for socialist upheaval? Letâ€™s be generous and say about half of current levels.