Of Central Bankers & HHS Secretaries

The witch's brew of easy money and pandemic "countermeasures."

By John Leake

As a percentage of GDP, federal debt held by the public spiked during World War II, and then tapered off during the post war years. During the Financial Crisis of 2008, all fiscal discipline went by the board, and it’s been an orgy of Federal Reserve money creation over since. If you are wondering why we seem to lurch from one gigantic mess to the next—with our political class always acting surprised by each turn of distressing events—consider that a “CRISIS” is an extremely profitable thing for the financial and industrial interests who have positioned themselves to “COUNTER” it.

Historically (as was the case in World War II) a crisis typically arose in the form of an aggressive foreign power. James Madison observed that the trouble with an established military interest is that, because it accrues its wealth, power, glory, and prestige from waging war, it is necessarily interested in waging wars instead of averting them.

The same can now be said of emerging infectious diseases. Instead of armed soldiers threatening us, we are menaced by invisible pathogens. Instead of Lockheed Martin and Raytheon receiving the federal money gravy train, it’s Pfizer, Moderna, and the rest of the Bio-Pharmaceutical Complex that has been positioning itself for the next (“certain to emerge”) infectious disease.

The legal framework for this bonanza was established by the PREP Act (Public Readiness and Emergency Preparedness) of 2005. This authorized the Secretary of Health and Human Services to deploy a wide array of “Emergency Countermeasures” in the event of an infectious disease outbreak. When invoked by the HHS Secretary, the PREP Act provides immunity for the “manufacture, testing, development, distribution, administration, and use of covered countermeasures.” On February 4, 2020, HHS Secretary Alex Azar declared COVID-19 an emergency and invoked the PREP Act.

Pursuant to the PREP Act, the CARES Act of March 27, 2020—passed within the context of a “public health emergency”—created $2 trillion with the stroke of a keyboard. These funds were disbursed to a host of companies, individuals, and institutions in the business of infectious disease “countermeasures.” The Act was reminiscent of the Emergency Economic Stabilization Act of 2008 for bailing out Wall Street.

Because the mRNA vaccines fall under the PREP Act definition of “emergency countermeasures,” their production is not subjected to the same testing and quality control regulations as licensed pharmaceutical products. Their production and deployment resemble that of military products during World War II. For example, many aircraft hastily designed and manufactured for that cataclysm were so dangerous and unreliable that far more servicemen were killed in training and routine flight accidents than in combat. The fabled Vought F4U Corsair was known as the “Ensign Eliminator” because its dreadful stall characteristics killed so many young airman.

“Desperate times call for desperate measures” as the.old saying goes. However, with our central bankers ever poised to open the money floodgates, and with the Bio-Pharmaceutical Complex ever poised to receive the gusher, the U.S. citizenry should be gravely concerned by the specter of perverse incentives. Far from dreading infectious disease outbreaks, it now appears that the Bio-Pharmaceutical Complex welcomes them.