Mexican President Andrés Manuel López Obrador is one of the most powerful left-wingers in the world – a long-time champion of the poor who delivered harsh charges against neoliberalism and the global elite.
But his approach to government spending – even in the face of the COVID-19 pandemic and its economic collapse – may be better than the conservative icons Ronald Reagan and Margaret Thatcher.
López Obrador has abolished all government departments, cut officials’ salaries and canceled year-end bonuses. Cost-cutting measures come on top of steep cuts imposed from the start in his administration that targets everything from the country’s Olympic training program to public hospitals.
At the same time, López Obrador has rejected bailouts, tax breaks and debt relief, making Mexico the only major country in the Western Hemisphere that has not yet announced an economic stimulus package to counter the economic impact of the pandemic.
“We have to look for savings and only consume what we need,” he told a press conference Wednesday where he urged Mexicans to save their money. “If we already have shoes, why buy more?”
Economists across the ideological spectrum warn that austerity in the midst of a crisis pushes the nation towards disaster.
The economy is expected to shrink at least 7% this year – hammered by a deadly combination of falling oil prices, reduced demand for manufactured goods, less money transfers and a collapse in the tourism industry.
In March and April alone, Mexico lost more than 700,000 jobs in the formal economy. The Inter-American Development Bank estimates that at the end of the year 2 million more people will lose their jobs.
The National Council for Evaluation of Social Development Policy predicts the crisis could push as many as 10.7 million people – around 8.5% of the population – into extreme poverty, which is defined as having a monthly income of less than $ 67 in cities or $ 60 in regions the countryside.
Recent Catholic leaders urgent the president to divert money from some of his favorite infrastructure projects – including the construction of a $ 8 billion oil refinery – to provide cash payments to families, warning that in a country without unemployment insurance, many are already starving.
Some presidential policymakers themselves have pushed for stimulus measures. Gerardo Esquivel, a left-wing academic nominated by López Obrador to the central bank’s board, has called for a new spending program that will provide checks to unemployed people and tax breaks for small businesses.
Nearly all economists agree that the government should run a budget deficit during a recession, Finance Minister Arturo Herrera Gutiérrez wrote in a policy document late last year.
López Obrador has held fast.
Although he campaigned with promises to help lift the poor out of poverty, he also vowed to drastically cut government spending, waste, and corruption.
Much of his popular appeal comes from the savings he practices in his own life. He had avoided the presidential palace for the sake of a simple apartment in the building where he worked and only flew with commercial airlines – and always with coaches.
López Obrador also seems to be guided by haunting memories of past economic disasters, including a government bailout of banks after the fall of the 1994 currency, where taxpayers were stuck covering up bad loans given to friends and family members of bank executives.
“Throughout his political career he has spoken out against this,” said Genaro Lozano, a political scientist at Iberoamerica University in Mexico City. “One of the reasons he got to the presidency relates to the fact that people are very angry about using public money for frivolity.”
Instead of going through economic stimulus measures, López Obrador took what he considered a more direct approach to solving the financial crisis: pushing to reopen the economy.
On Wednesday, nearly two months after he ordered a halt to all unnecessary trade, he said businesses and schools in hundreds of countries where coronavirus infections had not been reported could be reopened starting May 18, with the rest of the economy gradually starting to return on June 1.
He also said he had given the green light to the three main industries to be resumed next week – construction, mining and manufacturing of cars and auto parts. “There is light at the end of the tunnel,” said Lopez Obrador.
Later that day, Deputy Health Secretary Hugo López-Gatell said the car, construction and mining industries would not actually be allowed to reopen until June 1.
News of the factory reopening was welcomed by many US businesses that depend on cross-border trade and have lobbied to lift restrictions, said Michael Camuñez, president of consulting firm Monarch Global Strategies and former assistant secretary of the US Department of Commerce.
The economies of Mexico, Canada, and the United States are increasingly integrated, but each country has issued its own guidelines on which businesses can continue to operate and which should be closed.
“That creates a lot of heartburn on both sides of the border,” said Camuñez.
But others worry that Mexico is moving too fast, increasing the risk for another wave of transmission.
The governor of the state of Puebla, which is home to a large Volkswagen factory and dozens of parts manufacturers that supply it, criticized the decision by federal officials, saying it would erase the hard-earned profits after weeks of keeping social distance.
“They will ruin everything,” said Governor Miguel Barbosa, who is a member of Morena López Obrador’s party. “And we are talking about this happening in the midst of the most critical pandemic moment.”
On Tuesday, Mexico recorded 353 deaths from the new corona virus – the highest number in a day – and on Wednesday it confirmed a total of 4,220 deaths. Authorities say the actual number of deaths is almost certainly higher because relatively few COVID-19 tests have been carried out.
At the end of April, Mexico had conducted only 0.4 tests for every 1,000 residents, according to the Organization for Economic Cooperation and Development. That’s the lowest level among 37 organization countries and about 1/40 level in the United States.
“Considering what is not reported … returning to normal activities in two or three weeks seems impossible,” political analyst Ezra Shabot wrote on Twitter. Others cite recent outbreaks in factories along the northern border where some work deemed important continues.
Jose Carlos Moreno-Brid, an economist at the National Autonomous University of Mexico, said the pressure to lift restrictions is very high because only 20% of Mexican workers do work that can be done at home.
“We must reopen the economy at some point,” he said. “But I’m not sure now is the time.”
Moreno-Brid chose López Obrador in 2018, moved by his offer to the poor and his promise to fight corruption. But he said he had lost confidence in the president, partly because of a stubborn refusal to increase spending.
“The main lesson from the Great Depression is that the government should not follow the austerity during difficult times,” he said. “All savings are made to extend the recession.
“His discourse is very good,” Moreno-Brid said of the president. “But the real way is a disaster.”
Cecilia Sánchez at The Times ’Bureau of Mexico City contributed to this report.
Starting grid and race preview for Styrian Grand Prix
A dramatic start to the Formula One season looks poised to continue with the Styrian Grand Prix at the Red Bull Ring on Sunday.
Torrential rain had qualifying in doubt on Saturday, but fans were rewarded for their patience with a thrilling session in troublesome track conditions once the action began after a delay.
The second of two consecutive races in Spielberg will see Lewis Hamilton and Max Verstappen, two men looking to bounce back from disappointing outings at the Austrian Grand Prix, occupy the front row.
Hamilton has not won in his last four attempts at this circuit and, while the weather may be better on race day, there is potential for another lively grand prix after last week’s entertaining start.
WHAT HAPPENED IN QUALIFYING
A magnificent late effort in the rain saw Hamilton knock Verstappen off the top of the standings in the final stages of Q3, ultimately finishing 1.216 seconds ahead of the Dutchman.
Carlos Sainz claimed an excellent third for a McLaren team who have momentum, with Valtteri Bottas – the winner last time out – having to settle for fourth ahead of Esteban Ocon. Alex Albon qualified seventh but will start sixth after a grid penalty for Lando Norris.
Ferrari had another difficult qualifying, with Sebastian Vettel and Charles Leclerc coming 10th and 11th respectively, before it got worse when the Monegasque dropped to 14th when he received a penalty for impeding Daniil Kvyat.
THE STARTING GRID
1. Lewis Hamilton (Mercedes) 2. Max Verstappen (Red Bull)
3. Carlos Sainz (McLaren) 4. Valtteri Bottas (Mercedes)
5. Esteban Ocon (Renault) 6. Alex Albon (Red Bull)
7. Pierre Gasly (Alpha Tauri) 8. Daniel Ricciardo (Renault)
9. Lando Norris (McLaren) 10. Sebastian Vettel (Ferrari)
11. George Russell (Williams) 12. Lance Stroll (Racing Point)
13. Daniil Kvyat (Alpha Tauri) 14. Charles Leclerc (Ferrari)
15. Kevin Magnussen (Haas) 16. Kimi Raikkonen (Alfa Romeo)
17. Sergio Perez (Racing Point) 18. Nicholas Latifi (Williams)
19. Antonio Giovinazzi (Alfa Romeo) 20. Romain Grosjean (Haas)
STYRIAN GRAND PRIX TALKING POINTS
Red Bull have a score to settle with Mercedes after last week and will hope Verstappen can take the fight to Hamilton at their home circuit, where the Dutchman won in 2019.
Verstappen was denied what looked to be a certain podium and a possible challenge to the two Mercedes when he retired last week, while Alex Albon’s late charge for victory was derailed when he was knocked off track by Hamilton, who received a time penalty.
Red Bull are therefore desperate for points, as is Hamilton, who will be glad to see team-mate Bottas begin three places behind him as he looks to halt the Finn’s early momentum. Sainz, meanwhile, will look to give McLaren consecutive podiums for the first time in eight years.
The race pace of Ferrari, who have not won at this circuit since 2003, will again be under the spotlight. Leclerc’s second-place last week masked serious issues with their car, and while they have brought upgrades to round two, the Scuderia start in an unenviable position.
WHAT THE DRIVERS SAID
Lewis Hamilton (pole): “That last lap for me was really as close to perfect as I could really get it in those conditions. I don’t know how it comes across on the cameras, but it is the hardest conditions that we ever drive in. I still have to do the job and these guys are no pushovers, so it is going to require a perfect job from myself and the team.”
Max Verstappen (2nd): “My final lap could have been a little better and I had a four-wheel drift over the last kerb but still it would not have been good enough to beat Lewis. [Sunday] in the dry will be a different day and hopefully we will be quick enough to fight for the win. Starting on the front row gives us a good opportunity to collect some good points and hopefully we can give Mercedes a hard time.”
Carlos Sainz (3rd): “The car was better than it was last year in the wet. I am starting P3, so there will be opportunities hopefully and maybe we can grab another podium. But it will be difficult – we finished P3 last weekend because Hamilton and Albon collided – what is important is that this year with this car, if the others fail, we are a bit closer to the podium.”
Valtteri Bottas (4th): “My front-right brake was glazing throughout the qualifying so I couldn’t really maximise the potential of the car under braking, which is really important for the confidence in the wet conditions. That made it quite tricky and it was disappointing. We haven’t done a race distance, obviously, in practice [but] we know the car is quick so I’m looking forward to it.”
Sebastian Vettel (10th): “Unfortunately we didn’t have the speed, we had a lot of aquaplaning in the car, struggled to get the tyres to work, in particular the front, so it wasn’t easy to judge. We had a lot of front locking, a lot of aquaplaning down the straight. In the last lap, I tried to do a bit more and risk everything and it didn’t work. I had to try, but not great, obviously.”
George Russell (11th): “It felt incredible. It was a real buzz driving – I was giving it everything I had. If somebody said we’d have been a tenth away from the Ferraris [to get] into Q3, there is no way I would have believed it. It’s not our true pace but it was great and a real boost for the hard work of the whole team. I’m really happy. Let’s see what we can do on Sunday.”
1. Valtteri Bottas (Mercedes) – 25
2. Charles Leclerc (Ferrari) – 18
3. Lando Norris (McLaren) – 16
4. Lewis Hamilton (Mercedes) – 12
5. Carlos Sainz (McLaren) – 10
1. Mercedes – 37
2. McLaren – 26
3. Ferrari – 19
4. Racing Point – 8
5. Alpha Tauri – 6
Tesla Model Y Price Drops — New Cost of Ownership vs. Lexus RX
Published on July 11th, 2020 |
by Zachary Shahan
July 11th, 2020 by Zachary Shahan
Tesla has dropped the price of the Model Y by a few thousand dollars, with the starting price now at $49,990*. Meanwhile, the Performance trim is down to $59,990 and has more features included by default as well as 11 miles more range.
$50,000 is a lot of money for a vehicle (unless you’re rich enough that it’s not), but what’s most notable with the Model Y is how much better it is than anything else in its class with regards to performance (both its 0–60 mph time or 0–30 mph time and its handling), infotainment (Tesla’s infotainment system is second to none, and it’s not even close), driver-assist features (Tesla Autopilot is second to none, and it’s not even close), and cost of operation.
This Model Y price drop provides an opportunity to get to something I haven’t done yet — cost of ownership analyses for the Model Y compared to its closest competitors (even though, as I noted above, there really are no close competitors on the market right now).
To start with, here’s a look at 5-year cost of ownership forecasts for the Tesla Model Y versus the Lexus RX:
As always, assumptions are a big deal in a cost of ownership analysis. People have widely different lifestyles and prices of several inputs vary by region. Furthermore, you may have a different estimate of what you expect in the next 5 years with regards to gas prices, your personal electricity/charging prices, the resale values of these SUVs, and maintenance costs. As always, I encourage you to steal my sheet (copy it) and put in the numbers that fit best for your life and your expectations about the future.
According to my best guess on some averages, the Tesla Model Y Long Range is absurdly cheaper than the Lexus RX and even the Model Y Performance is cheaper — despite having more cargo capacity, better acceleration, a better passenger experience, better infotainment, and greater safety. Why would anyone buy a new Lexus RX in 2020? I have no clue. Actually, I take that back — people still buy this and other models because of inertia. Most people have never sat in a Tesla. Most people have never driven a Tesla. Most people have never compared the specs and costs of a Tesla Model Y and a Lexus RX. They go back to Lexus because they’re familiar with Lexus. They have a notion in their heads about Lexus being a great brand that they acquired years ago, without the taste of Tesla to put it in context. Now, as for anyone who goes and test drives a Tesla Model Y and a Lexus RX and chooses a Lexus RX — that person, if they exist, baffles me.
As a final note, keep in mind that Tesla still isn’t selling the lowest cost version of the Model Y, the Model Y Standard Range Plus, which may start around $40,000 once available. Ooo, baby!
Standard Range+ — $38,000
Long Range — $47,000
Performance — $55,000
Standard Range+ — $40,000
Long Range — $50,000
Performance — $60,000
— Whole Mars Catalog (@WholeMarsBlog) July 11, 2020
*Interestingly, I think it’s worth noting finally that someone got a hold of CEO Elon Musk at some point and made him change his policy on pricing. He used to prefer rounding the price up or down to the closest thousand or at least even hundred, and noted at least once that he found pricing like this annoying. I agree — just make the price an even $50,000. Though, dropping $10 off the price somehow moves minds — everyone knows it, but it still works — and sometime back Tesla decided to play the game and do pricing like $49,990. Frankly, perhaps more than anything else, this makes me think that even Tesla gets concerned about demand to some degree. Dropping the price by $3,000 passes along the same implication.
Want to buy a Tesla Model 3, Y, S, or X? Feel free to use my referral code to get some free Supercharging miles with your purchase: https://ts.la/zachary63404. No pressure. You can also get a $250 discount on Tesla solar with that code.
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Britain is the worst-hit country outside of the US and Brazil. It STILL won’t wear masks
This despite the UK being one of the world’s worst-hit countries by coronavirus — it stands third behind Brazil and the United States — with almost 45,000 fatalities.
And in the United States, a new study showed that one of the main drivers of cases now could be “silent spreaders,” or people who are asymptomatic or presymptomatic.
The report, published in the Proceedings of the National Academy of Sciences, found that asymptomatic or presymptomatic hosts could be responsible for half of cases, highlighting how masks could be useful in preventing the spread of the virus.
“We have now identified convincing decades-old and apparently forgotten evidence, from the time when surgical masks were made of cloth and were reusable, showing that they help to prevent transmission of airborne infectious agents. There is now even some evidence that masks might directly benefit the wearer,” its author, Paul Edelstein, Emeritus Professor of Pathology and Laboratory Medicine at the University of Pennsylvania, said.
Edlestein explained: “There are people without symptoms going about their daily business who are unknowingly breathing out droplets that are carrying the virus. If they had their faces covered the majority of those droplets would be caught before they can infect other people. Wearing face coverings can help save lives and prevent disabling illnesses.”
So if the basics are “simple to understand,” as Edlestein put it, why is Britain so reluctant to latch onto masks?
Becoming an outlier
It found that in late April in the UK around 25% of people wore face masks or coverings in public places. This is staggeringly low compared to 83.4% in Italy and 63.8% in Spain in the same period.
“I don’t regret that,” Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said during congressional testimony last week. “At that time, there was a paucity of equipment that our health care providers needed… we did not want to divert masks and PPE away from them.”
“People may rightly ask why you have to wear a mask on a train but not in a shop. If guidance is inconsistent people will follow their own preferences,” Ramakrishnan said. He argued British people might “not really understand the benefits or are not convinced of them.”
There have also been cracks in a UK-wide approach on masks, with the devolved nations having the power to decide their own coronavirus measures. Northern Ireland is in line with England in mandating masks on public transport but not shops. Scotland has gone one step further and made it mandatory to wear face coverings in shops from July 10. In Wales, masks are not mandatory in shops or on public transport.
In Parliament on Tuesday, UK Health Secretary Matt Hancock said the government will review guidance for whether the public should wear face masks in supermarkets and retail shops in England.
When asked for a review timeframe, a government spokesperson at the Department of Health told CNN: “As we ease lockdown measures, face coverings can help us protect each other and reduce the spread of the disease if people are suffering from coronavirus, but not showing symptoms. We continue to advise individuals to wear face coverings in enclosed public spaces where social distancing is not possible.
“Everyone should maintain a 2-meter distance wherever possible. Where this is not possible wearing a face covering is one of the ways people can manage risk at a 1-meter distance.”
Although the uptake of face masks or coverings may have increased in the UK since late April, the Set-C report highlights how many countries implemented a policy requiring the general public to wear face masks and coverings in all public places much earlier, by mid-March 2020.
Taiwan, South Korea and mainland China, all places with widespread mask use, have seen greater success in preventing major outbreaks or reining them in once they begin.
As second and third waves begin to emerge in countries that have eased up coronavirus restrictions, mask wearing has up until this week been shunned and even ridiculed by the leaders of the worst hit countries — the US and Brazil — as they struggle to escape a devastating first wave of the pandemic.
President Donald Trump had refused to wear a mask in public for months until a visit to Walter Reed National Medical Center on Saturday. The photo opportunity came after some of the President’s aides practically begged him to agree. It is hoped it will encourage skeptical Trump supporters to do the same. Meanwhile, President Jair Bolsonaro is being sued for removing his mask during an interview in which he announced that he has the coronavirus.
The University of Washington’s Institute for Health Metrics and Evaluation (IHME) gives two versions of forecasts for the US: one in which everyone wears masks, and one in which they don’t. This week the IHME model projected as many 208,000 American coronavirus deaths by November 1, but just under 163,000 if most people wear a face mask to help contain the spread of the virus.
Why the resistance?
“To understand why people don’t wear face coverings it is essential to examine behavioural factors such as the public’s understanding about masks and how to wear and re-use cloth coverings,” said Melinda Mills, Director of the Leverhulme Centre for Demographic Science at the University of Oxford and lead author on the SET-C report.
“What is clear is that it isn’t the public’s fault for not wearing masks in the UK. Rather, consistent policies and effective public messaging is vital, which have even differed across England, Scotland and Wales,” Mills argued.
Notably, UK Prime Minister Boris Johnson — who was hospitalized in intensive care with the virus — had not, until Friday, worn a mask in public, yet Scottish First Minister Nicola Sturgeon had.
Mills said people in countries like Italy and Spain, without a previous history of mask wearing, have “rapidly adopted face coverings during the Covid-19 period largely because the authorities provided them with a consistent policy and clear guidelines to understand why they should wear them.”
Spain, for example, which has recorded more than 28,000 deaths, has legally required everyone over the age of six to wear face masks indoors and outdoors in public spaces when a minimum two-meter distance is not possible since May 21. In June, the country’s Prime Minister Pedro Sanchez ordered that this remain the case even after the country’s state of emergency ended on June 21.
The Set-C report, which states consistent and effective public messaging is “vital” to public adherence to wearing face masks and coverings, highlights a UK government tweet on June 27. The report said the “face coverings make the shop safer” message in the tweet was good for its “altruism” message but bad because it focused only on protecting others and not self protection. The campaign image featured an older woman, who the report says is already in the vulnerable group and less likely to break the face covering advice.
The report also concludes that a lack of uptake of face masks and coverings in the UK may also be attributed to factors such as an “over-reliance on an evidence-based medicine approach,” “inconsistent and changing advice from supranational organizations (WHO, European Center for Disease Prevention and Control),” and “supply concerns of PPE shortages of surgical face masks.”
It’s not too late
Since then, the consultant in infectious diseases at Cambridge University hospitals in England and professor at the Tsinghua University School of Medicine in Beijing has moved to the US to take up a new post as associate professor of experimental medicine at the University of California San Francisco. He’s noticed masks are “much more visible” in the US than the UK, and he puts that down to the “establishment” unifying around masks early on in the pandemic.
In the US “many shops here have not hesitated in mandating masks if you want to go and use their store… shops don’t seem to be suffering as a result,” he said in a phone interview with CNN.
Javid believes the UK has indeed become somewhat of a mask experiment “control group,” “certainly compared with most European countries,” although he points out the Netherlands and the Nordic countries also have very low uptake of face mask use. There are confounders, he said, “because of the UK’s very long lockdown and… because the UK was hit very hard… case counts are really dramatically falling in the UK now, so it’s hard to disentangle.”
“I think there is reasonably compelling evidence that states that mandated masks earlier cut down their transmission rates more quickly in the upswing phase of the outbreak,” he added.
Javid thinks the UK government’s attempt to make the mask mandate as loose as possible has meant “a very muddled and fairly watered-down message.”
“They were so worried about securing PPE supplies, so then the focus shifted to face coverings and the reality is not all face coverings are created equal. That’s just the bare bones truth, a loose scarf is always going to be less effective than a well-fitted, well-made cloth mask,” Javid argued.
“If you are going to have a lowest common denominator message that any face covering will do it’s then hard to hand on your heart and say this is going to protect you. Whereas, actually, a well made cloth mask will protect you. I think that’s incontrovertible.”
He said “in terms of economics masks are one of the most cost-effective interventions we can have” in the fight to stop the spread of coronavirus. He is not in favor of “perpetual lockdown” and believes masks are one way of trying to get out of lockdown quicker but they are not the beginning and the end of the pandemic. “This isn’t a simple solution, it’s just one part of a package.”
After a deadly first wave of the virus, Javid believes “it’s not too late” for the UK. “Now is a great time to increase our mask usage because it might allow us to open up even more and more safely.” This is a claim echoed by Royal Society President Ramakrishnan, who said: “The virus has not been eliminated, so as we lift lockdown and people increasingly interact with each other we need to use every tool we have to reduce the risk of a second wave of infection.”
Will we ever see Brits wearing masks in pubs? “The reason why pubs and clubs are higher risk activities is because you are much more likely to be engaging in speech and we know that speech is associated with transmission,” Javid said. “Realistically how many people will wear a mask, take it off for a quick sip of their pint and then put it back on again straight away? I just can’t see that happening.”
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