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MBA economists: The overcapacity that still needs to be cut

MBA economists answer: “How much overcapacity was there in the industry for this level of volume, and how much more will be cut?”
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After two record-setting years of mortgage origination volume, the mortgage industry is contracting, sharply. Based on our read of 2021 Home Mortgage Disclosure Act (HMDA) data, we estimate that total originations volume last year was $4.4 trillion. By comparison, we are forecasting total volume of about $2.3 trillion this year, and similar levels over the next two years.

One question that we receive all the time is, “How much overcapacity was there in the industry for this level of volume, and how much more do you think will be cut?” This is a complicated question, but our goal with this column is to provide our thoughts on how one might answer that question.

Source: Mortgage Bankers Association

Of course, the world will never stop providing positive and negative shocks. Think back to all that has happened over the last two and a half years. This estimate is only indicative of the path the industry is likely to take, absent a significant change in the level of volume over the next few years relative to our forecast.

Ultimately, the best measure of whether the industry has too much or too little capacity for the volume being originated is profitability. When lenders are in the midst of a refinance wave, margins tend to widen as its all they can do to close the loans coming in the door. As some say during these refinance periods, “the fish are literally jumping into the boat.”

On the other hand, when volume drops sharply as it has recently, pricing gets more aggressive, and fixed costs are spread over a smaller number of units, leading to tighter margins, or even losses.

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Source: MBA Quarterly Mortgage Bankers Performance Report: www.mba.org/performancereport 

According to MBA’s Quarterly Performance Report (QPR), net production income has averaged 54 basis points since 2008. This production margin reached a record 203 basis points in the third quarter of 2020, as lenders were swamped with refinance volume. In the past three quarters, it has dropped below this historical average. 

At 5 basis points in first-quarter 2022, and at a loss of 5 basis points in second-quarter 2022, the industry is now struggling with the perfect storm of lower volume, lower revenues, and higher costs per loan. The net loss at the industry level this past quarter matches the pattern we saw in 2018, with a run-up in rates and the end of a refi wave. Compared to 2018, the current cycle certainly has been more extreme in terms of the rapid spike in rates over a short period of time.

So, one answer on how much capacity needs to come out of the industry is: “enough to experience gain in revenue or reduction in cost to bring margins back to their historical 54 bp average.” We will know that when we see it. But what our questioners are really asking is, “how fast we will get there?,” not just, “where we will end up?”

If industry profitability is the result of having too much or too little capacity, how can we measure capacity directly? We need to examine both the number of employees and their productivity. During the latest refi boom, the hiring cycle was accentuated by constraints caused by the pandemic. Mortgage employee productivity went through the roof as overtime, retention bonuses, and signing bonuses were predominant methods for adjusting capacity.

Now, lenders are in a position in which they must reduce their workforces, or risk a plummet in productivity or worse, profitability. Looking again at data from MBA’s Quarterly Performance Report, loans closed per production employee[1] per month (in the retail and consumer direct channels combined) ranged from 1.3 to 2.3 in the three years prior to the pandemic.

That changed in 2020, with productivity peaking at 3.1 in the third quarter of 2020. Lenders talked about how difficult it was to hire experienced personnel during the early phase of the pandemic. Moreover, many lender executives worried that their teams were working too much with very heavy overtime costs.

Given that the lockdowns prevented employees from doing much else, this high level of productivity was not going to be sustainable, even if mortgage demand continued at its record-breaking pace. Per the chart, productivity has since dropped rapidly back to more typical levels as the result of both employee fatigue and, more recently, lower mortgage demand.

But this does raise the question – if lenders had so much difficulty hiring during the boom, does that mean there is less capacity to trim, with this year’s drop in volume? Perhaps so, but that may be difficult to see given the magnitude of the decline in volume.

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Source: MBA Quarterly Mortgage Bankers Performance Report: www.mba.org/performancereport 

Layoff announcements are in the news these days and some lenders have chosen to shut their doors. However, to the main question we had asked, how much reduction in employment are we likely to see? 

First, let’s examine various measures of industry employment.

Perhaps the most used and frequently cited metric for mortgage industry employment is from the Current Employment Statistics (CES) program at the U.S. Bureau of Labor Statistics, which collects industry data on nonfarm employment, hours worked, and earnings of workers on payrolls during the data collection period.

The monthly Employment Situation Summary news release based on the CES data is regarded as a key report in gauging the health of the overall job market. The monthly data on payroll counts are broken down by the type of establishment and the occupations within a particular industry. [2]

For mortgage industry employment, the estimates are based on two main industry categories. The first category is real estate credit, which covers most establishments focused on lending with real estate as collateral. Examples of companies within this category include mortgage companies, reverse mortgage lenders, and home equity lenders. The second category is mortgage and non-mortgage brokers, which includes establishments that facilitate lending by bringing borrowers and lenders together.

These broad categories include jobs that involve lending directly or supporting real estate lending, but do not specifically focus on mortgages. For example, within these firms, there are occupations such as loan officers, loan interviewers, title-related occupations, and loan counselors that could apply to both mortgage and non-mortgage lending.

Additionally, mortgage employees at establishments whose primary classification is not real estate credit are omitted from these counts. Specifically, industry categories for depository and non-depository credit intermediation do not fall under real estate credit but are too broad to include in the overall mortgage industry headcount.

These establishments are engaged in the lending of cash and extending credit, which also includes some mortgage companies and mortgage lending operations of depositories, but inclusion of these industry categories would lead to an inflated count. It is also unclear in the BLS data how mortgage loan servicing personnel are categorized. Loan servicing is a key component in the life of a mortgage and accounts for a large segment of industry employment.

The chart below captures real estate credit and mortgage and non-mortgage broker employment counts from the BLS. 

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Source: Bureau of Labor Statistics

Despite shortcomings in what the BLS data capture, the trends line up well with industry origination volume trends. The first chart below compares annual origination volume to the industry headcount number from the BLS and shows that hiring ramps up in periods of increasing volume and declines in times of lower volumes.

The second chart compares monthly headcounts with monthly index data from the MBA Weekly Applications Survey, which tracks the number of mortgage applications made in a given week. The Market Index has a base period of March 16, 1990, when the index value was 100 and it includes both purchase and refinance applications. 

Picture5
Source: Bureau of Labor Statistics, Mortgage Bankers Association  
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Source: Bureau of Labor Statistics, Mortgage Bankers Association  

Mortgage application volume has declined 69% from its recent peak in January 2021, as a combination of factors such a higher rates, lack of housing inventory, affordability challenges, and economic uncertainty weigh on both purchase and refinance activity.

We are forecasting that quarterly origination volume will fall from a  peak of $1.357 billion in the fourth quarter of 2020 to $467 billion in the first quarter of 2023. Thus far, according to the BLS data, industry employment has already fallen by 4% from a peak of 428,000 in January 2022 to 410,000 in June 2022.  And despite the best efforts of the mortgage industry to time their capacity needs perfectly, headcount changes tend to lag volume changes.

A second data source for originator employment that we analyze is the Nationwide Multistate Licensing System (NMLS) owned and operated by the State Regulatory Registry (SRR), which is a subsidiary of the Council of State Bank Supervisors (CSBS). The NMLS was mandated by the SAFE Act following the 2008 financial crisis and is used by non-depositories and depositories for licensing and registration of mortgage loan originators (MLOs)[3].  

As of the first quarter of 2022, there were 210,854 individuals who held at least one state license. In total, these MLOs held 885,661 licenses for an average of 4.2 licenses per unique individual. As lenders utilized more call centers and centralized processing facilities in the past decade, the average number of licenses per MLO has increased steadily from almost two licenses in 2012 to more than 4 licenses in 2022.

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Source: Nationwide Multistate Licensing System

Source: Nationwide Multistate Licensing System

The NMLS also reports how many MLOs are currently active, defined as having originated at least one loan in the quarter. In the first quarter of 2022, there were 115,273 active MLOs, a decline from 122,553 active MLOs in the fourth quarter of 2021, and a peak of 123,479 in the third quarter of 2021. From 2017-2019, the average number of active MLOs was only 87,563. 

Picture8
Source: Nationwide Multistate Licensing System

The NMLS state licensing counts track origination and application trends closely as well, but this too does not account for all the employees within a mortgage operation. There are employees within a mortgage company or mortgage department who are not directly involved with the customer-interfacing loan origination process and thus do not need to be licensed.

While the trends within this data series will be helpful in observing and predicting how hiring might change with industry volume and profitability, we will still need other data sources to supplement our analysis of overall mortgage employment.

A third source we analyze with respect to mortgage industry employment is turning back to the MBA’s Quarterly Performance Report sample of independent mortgage banks (IMBs). We can obtain the total number of employees for those companies, including those involved in production, servicing and corporate admin. The dataset only covers a portion of the industry, but it is a rich sample with over 300 participating companies.

Similar to the NMLS data, while the level of employment captured within this dataset is not for the entire industry, there is still a meaningful relationship between staffing counts and origination volume. The chart below illustrates how these three data sources on mortgage employment compare.   

Picture9
Source: Bureau of Labor Statistics, Nationwide Multistate Licensing System, MBA Quarterly Performance Report

A fourth source of data to measure mortgage industry employment specifically for mortgage servicing is through a combination of other industry benchmarking studies: The MBA and STRATMOR Peer Group Roundtables Program (PGR) as well as the MBA’s Servicing Operations Study and Forum (SOSF). MBA’s industry benchmarking team has estimated industry employment in servicing, utilizing employee head counts relative to volume for large, midsize, and small servicers (both bank and nonbank).

By using the servicing employment levels relative to mortgage debt outstanding per company, then extrapolating to the industry as a whole with historical single family mortgage debt outstanding data, servicing employment headcounts dating back to 1999 were calculated, as pictured in the chart below.

Servicing head counts increased markedly following the Great Recession. During this period of time, more employees were needed to deal with loss mitigation and default tasks as lenders became inundated with seriously delinquent loans. Even after the worst had subsided, sweeping changes in regulatory and compliance requirements and mortgage settlements altered the fundamental ways in which loans were serviced.

As a result, servicing hiring kept increasing even after the height of mortgage defaults. A majority of the growth in hiring was for quality assurance, legal, customer service, default and technology functions to stay abreast of the ever-changing regulatory environment, even as mortgage performance improved and the number of delinquencies and foreclosures declined.   

Productivity declined during the period of 2008-2013, then leveled off, making ever-so-slight improvements from 2015- 2019. Despite some improvement, servicing productivity is a far cry from level achieved prior to the Great Recession and the regulatory changes which followed– meaning that more employees are needed even in benign default environments compared to the past.

Picture10
Source:  MBA’s Servicing Operations Study and Forum (SOSF)

Source:  MBA’s Servicing Operations Study and Forum (SOSF)

This becomes apparent when considering MBA’s servicing employment estimate before and after the Great Recession. Prior to that time, total in-house servicing employment averaged around 50,000 employees per year, but that number more than tripled in a span of five years, with the peak of over 170,000 employees in 2012, even as overall mortgage debt outstanding in the market leveled off.  

Comparing 2021 to 2007, mortgage debt outstanding rebounded, while servicing employment grew at disproportionate levels, because of regulatory complexities even in a relatively low default environment, and despite that fact that servicing loan count would be closer to 2007 levels were it not for higher loan balances that drove up mortgage debt outstanding.

Picture11
Source: MBA’s Servicing Operations Study (SOSF) and Peer Group Program data; Federal Reserve

Based on the MBA’s estimates, servicing employment increased in 2021 relative to 2020, and we can expect that this employment will either hold steady or increase further given the possible slowdown in the economy, increase in unemployment rate from 40-year lows, and in turn, the increase in delinquency rates.

Summing It up

Based on our back-of-the-envelope analysis here, if the industry experiences a 65 percent drop in origination volume from the peak in fourth-quarter 2020 to a trough in first-quarter 2023, per MBA’s forecast, production employment will likely need to be scaled back by 24 to 31%. As of second-quarter 2022, we are only between 2 and 10% there at this point, with the employment data from the QPR showing a bigger drop thus far relative to that from the BLS and NMLS. Servicing employment is likely to be steady or somewhat higher over the next few years, so total industry employment is likely to drop by a smaller percentage.

As noted in the introduction, this is a rough estimate. While another record-setting refi boom is unlikely over the next few years, a recession next year would push rates lower than we are forecasting in our baseline, and likely would push refinance volume up some, which could mitigate the need for some mortgage employee reductions.


[1] Production employee includes sales, fulfillment and production support employees.  Excludes corporate overhead employees.

[2]The CES survey is conducted monthly and based on approximately 131,000 businesses and government agencies representing approximately 670,000 individual worksites throughout the United States. “Each month, BLS collects data on employment, payroll, and paid hours from a sample of establishments. To encourage participation in this voluntary survey, BLS uses a variety of collection techniques, tailored to individual firm preferences. Data collection centers perform initial enrollment of each firm via telephone, collect the data for several months via Computer Assisted Telephone Interviewing (CATI), and where possible transfer respondents to a self-reporting mode such as touch-tone data entry, fax, or web collection. Very large, multi-establishment firms’ ongoing reporting is established via Electronic Data Interchange (EDI). Firms using EDI provide electronic files to BLS that include data from all their worksites.”  https://www.bls.gov/web/empsit/cesfaq.htm

[3] About NMLS (nationwidelicensingsystem.org)

The post MBA economists: The overcapacity that still needs to be cut appeared first on HousingWire.

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Decrease in Japanese children’s ability to balance during movement related to COVID-19 activity restrictions

A team of researchers from Nagoya University in central Japan investigated how restrictions on children’s activities during the COVID-19 pandemic affected…

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A team of researchers from Nagoya University in central Japan investigated how restrictions on children’s activities during the COVID-19 pandemic affected their life habits and their abilities to perform physical activities. By comparing medical examination data before and after the onset of the pandemic, they found that physical functions among adolescents deteriorated, including their dynamic balance. They also found that the children had higher body fat levels and worse life habits. Rather than a lack of exercise time, this may have been because of a lack of quality exercise due to activity restrictions.  

Credit: Credit must be given when image is used

A team of researchers from Nagoya University in central Japan investigated how restrictions on children’s activities during the COVID-19 pandemic affected their life habits and their abilities to perform physical activities. By comparing medical examination data before and after the onset of the pandemic, they found that physical functions among adolescents deteriorated, including their dynamic balance. They also found that the children had higher body fat levels and worse life habits. Rather than a lack of exercise time, this may have been because of a lack of quality exercise due to activity restrictions.  

During the COVID-19 pandemic, in Japan, as in other countries, schools and sports clubs tried to prevent the spread of infection by reducing physical education and restricting outdoor physical activities, club activities, and sports. However, children who are denied opportunities for physical activity with social elements may develop bad habits. During the pandemic, children, like adults, increased the time they spent looking at television, smartphone, and computer screens, exercised less, and slept less. Such changes in lifestyle can harm adolescent bodies, leading to weight gain and health problems. 

Visiting Researcher Tadashi Ito and Professor Hideshi Sugiura from the Department of Biological Functional Science at the Nagoya University Graduate School of Medicine, together with Dr. Yuji Ito from the Department of Pediatrics at Nagoya University Hospital, and  Dr. Nobuhiko Ochi and Dr. Koji Noritake from Aichi Prefectural Mikawa Aoitori Medical and Rehabilitation Center for Developmental Disabilities, conducted a study of Japanese children and students in elementary and junior high schools, aged 9-15, by analyzing data from physical examinations before and during the COVID-19 pandemic. They evaluated the children’s muscle strength, dynamic balance functions, walking speed, body fat percentage, screen time, sleep time, quality of life, and physical activity time.  

The researchers found that after the onset of the pandemic, children were more likely to have decreased balance ability when moving, larger body fat percentage, report spending more time looking at TV, computers or smartphones, and sleep less. Since there were no changes in the time spent on physical activity or the number of meals eaten, Sugiura and his colleagues suggest that the worsening of physical functions was related to the quality of exercise of the children. The researchers reported their findings in the International Journal of Environmental Research and Public Health.  

“Since the outbreak of the novel coronavirus in Japan after April 2020, children have not been able to engage in sufficient physical education, sports activities, and outdoor play at school. It became clear that balance ability during movement was easily affected, lifestyle habits were disrupted, and the percentage of body fat was likely to increase,” explained Ito. “This may have been because of shorter outdoor playtime and club activities, which impeded children’s ability to learn the motor skills necessary to balance during movement.” 

“Limitations on children’s opportunities for physical activity because of the outbreak of the novel coronavirus have had a significant impact on the development of physical function and lifestyle and may cause physical deterioration and health problems in the future,” warned Ito. “Especially, the risk of injury to children may increase because of a reduced dynamic balance function.” 

The results suggest that even after the novel coronavirus becomes endemic, it is important to consider the effects of social restrictions on the body composition of adolescents. Since physical activities with a social element may be important for health, authorities should prioritize preventing the reduction of children’s physical inactivity and actively encourage them to play outdoors and exercise. The group has some recommendations for families worried about the effects of school closings and other coronavirus measures on their children. “It is important for children to practice dynamic balance ability, maintaining balance to avoid falling over while performing movements,” Ito advised. “To improve balance function in children, it is important to incorporate enhanced content, such as short-term exercise programs specifically designed to improve balance functions.” 


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Contradictions, Lies, And “I Don’t Recalls”: The Fauci Deposition

Contradictions, Lies, And "I Don’t Recalls": The Fauci Deposition

Authored by Techno Fog via The Reactionary,

Today, Missouri Attoney General…

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Contradictions, Lies, And "I Don't Recalls": The Fauci Deposition

Authored by Techno Fog via The Reactionary,

Today, Missouri Attoney General Eric Schmitt released the transcript of the testimony of Dr. Anthony Fauci. As you might recall, Fauci was deposed as part of an ongoing federal lawsuit challenging the Biden Administration’s violations of the First Amendment in targeting and suppressing the speech of Americans who challenged the government’s narrative on COVID-19.

Here is the Fauci deposition transcript.

And here are the highlights…

EcoHealth Alliance - the Peter Daszak group - is knee-deep in the Wuhan controversy, having been funded by the Fauci’s NIH for coronavirus and gain of function research in China (and having worked with the Chinese team in Wuhan). What does Fauci say about EcoHealth Alliance? Over two years after the COVID-19 pandemic began, and after millions dead worldwide, he’s “vaguely familiar” with their work.

In early 2020, Fauci was put on notice that his group - NIAID - had funded EcoHealth alliance on bat coronavirus research for the past five years.

This coincided with early reports - directly to Fauci, from Jeremy Ferrar and Christian Anderson - “of the possibility of there being a manipulation of the virus” based on the fact that “it was an unusual virus.”

Fauci conceded that he was specifically made aware by Anderson that “the unusual features of the virus” make it look “potentially engineered.”

Fauci couldn’t recall why he sent an article discussing gain of function research in China to his deputy, Hugh Auchincloss, telling him it was essential that they speak on the phone. He couldn’t recall speaking with Auchincloss via phone that day. But remarkably, Fauci did remember assigning research tasks to Auchincloss

Fauci was evasive on conversations with Francis Collins about whether NIAID may have funded coronavirus-related research in China, eventually stating “I don’t recall.”

The phrase “I don’t recall” was prominent in Fauci’s deposition. He said it a total of 174 times:

For example, Fauci couldn’t remember what anyone said on a call discussing whether the virus originated in a lab:

During that same call, Fauci couldn’t recall whether anyone expressed concern that the lab leak “might discredit scientific funding projects.” He also couldn’t recall whether there was a discussion about a lab leak distracting from the virus response. Fauci did remember, however, that they agreed there needed to be more time to investigate the virus origins - including the lab leak theory.

What else couldn’t Fauci remember? Whether, early into the pandemic, his confidants raised concerns about social media posts about the origins of COVID-19.

Yet Fauci did admit he was concerned about social media posts blaming China for the pandemic. He even admitted the accidental lab leak “certainly is a possibility,” contradicting his prior claims to National Geographic where he said the virus “could not have been artificially or deliberately manipulated.”

Fauci also couldn’t recall whether he had any conversations with Daszak about the origins of COVID-19 in February 2020, but admitted those conversations might have happened: “I told you before that I did not remember any direct conversations with him about the origin, and I said I very well might have had conversations but I don't specifically remember conversations.” And he couldn’t recall telling the media early on during the pandemic that the virus was consistent with a jump “from an animal to a human.”

Fauci said he was in the dark on social media actions to curb speech and suspend accounts that posted COVID-19 information that didn’t fit the mainstream narrative: “I’m not aware of suppression of speech on social media.” Yet it was Fauci’s proclamations of the truth, whether about the origins of COVID-19 to the effectiveness of hydroxychloroquine, that led to social media companies banning discussions of contrary information.

Regarding those removals of content, Fauci had no personal knowledge of a US Government/Social Media effort to curb “misinformation.” But he conceded the possibility numerous times.

Then there’s the issue of masks. In February 2020, Fauci informed an acquaintance that was traveling: “I do not recommend that you wear a mask.” Fauci would later become a vocal proponent of masks only two months later.

I’m near my Substack length limit - posting the excerpts does that - but you can see from Fauci’s testimony that his public statements about COVID-19 origins and the necessity to wear a mask didn’t match his private conversations. This has been known for some time, but it’s finally nice to get him on record.

Again, read it all and subscribe here.

Tyler Durden Mon, 12/05/2022 - 21:40

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The Gall Of Lockdowners Who Support China’s Anti-Lockdown Protests

The Gall Of Lockdowners Who Support China’s Anti-Lockdown Protests

Authored by Michael Senger via ‘The New Normal’ Substack,

If the intent…

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The Gall Of Lockdowners Who Support China's Anti-Lockdown Protests

Authored by Michael Senger via 'The New Normal' Substack,

If the intent was to get western elites to simultaneously support totalitarianism in their own countries while pretending to oppose it in China, then Xi Jinping has certainly made his point...

Across the political spectrum, voices have risen up in support of the Chinese people who’ve launched protests of unprecedented scale against the Chinese Communist Party’s indefinite Covid lockdown measures.

As well they should. Even by Chinese standards, the lockdowns that Xi Jinping pioneered with the onset of Covid are horrific in terms of their scale, their duration, their depravity, and the new totalitarian surveillance measures to which they’ve led. Anyone who participates in a protest in China runs a risk of being subject to cruel and arbitrary punishment. For ordinary Chinese people to brave that risk in defiance of this new form of inhuman medical tyranny is an act of courage worthy of admiration.

There are notable exceptions to the otherwise widespread support the protesters have received. Apple has been silent about the protests, and had the gall to limit the protesters’ use of a communication service called AirDrop in compliance with the CCP’s demands, even as it threatens to remove Twitter from its app store over Elon Musk’s free speech policy. This comes even after Apple has long ignored requests by FCC officials to remove the Chinese-owned app TikTok from its app store over unprecedented national security concerns. So Apple complies with requests by the Chinese government, but not the United States government. Let that sink in…

Apple is, unfortunately, far from alone in its CCP apologism. Anthony Fauci told CNN that China’s totalitarian lockdowns would be fully justified so long as the purpose was to “get all the people vaccinated.”

This kind of apologism for the CCP’s grisly bastardization of “public health” is horrific, especially coming from the man most widely seen as the leader of America’s response to Covid.

But what may be even more galling than this apologism is the widespread support China’s anti-lockdown protesters have received even among those who demonized anti-lockdown protesters in their home countries and wished their lockdowns were more like China’s.

In 2020, the New York Times denounced anti-lockdown protesters as “Anti-Vaxxers, Anticapitalists, Neo-Nazis” and urged the United States to be more like China.

But in 2022, the New York Times admired the bravery of China’s anti-lockdown protesters fighting Xi Jinping’s “unbending approach to the pandemic” that has “hurt businesses and strangled growth.”

In 2020, CNN published an open letter from “over 1,000 health professionals” denouncing anti-lockdown protests as “rooted in white nationalism” while admiring “China’s Covid success compared to Europe.”

But in 2022, CNN admired China’s anti-lockdown protesters as “young people” who “cry for freedom”

In 2020, the Washington Post denounced anti-lockdown protesters as “angry” populists who “deeply distrust elites,” and wished the United States was more like China.

But in 2022, the Washington Post celebrated global “demonstrations of solidarity” with China’s anti-lockdown protests.

In 2020, the New Yorker denounced anti-lockdown protesters as “militias against masks” while marveling at how “China controlled the coronavirus.”

But in 2022, the New Yorker admired the protesters standing up to Xi Jinping.

Earlier this year, Amnesty International issued a statement of concern about Canada’s anti-lockdown Freedom Convoy protests being affiliated with “overtly racist, white supremacist groups,” even as Justin Trudeau invoked the Emergencies Act to crush the protests.

But now, Amnesty International has issued a statement urging the Chinese government not to detain peaceful protesters.

These headlines are, of course, in addition to the hundreds of other commentators, influencers, and health officials, such as NYT journalist Zeynep Tufekci, who used their platforms in 2020 to urge for lockdowns that were even stricter than those their governments imposed, but now join in support for those in China protesting the same policies they were urging their own countries to emulate.

Etymologically, Zeynep’s latter comment makes no sense. Lockdowns had no history in western public health policy and weren’t part of any democratic country’s pandemic plan prior to Xi Jinping’s lockdown of Wuhan in 2020. Though some countries, such as Italy, imposed lockdowns shortly before the United States, their officials too had simply taken the policy from China. Thus, because no other precedent existed, any call for a “real lockdown” or a “full lockdown” in spring 2020 was inherently a call for a Chinese-style lockdown.

Though by “full lockdown” Zeynep may have intended somewhere in between the strictness of lockdowns in the United States and China, there was no way for any reader to know what that medium was; it existed only in her own head. Thus, the reader is left only with a call for a “full lockdown,” and the only example of a “successful” “full lockdown” that then existed was a full Chinese lockdown.

Zeynep’s latter comment further illustrates the efficacy of what was arguably some of the CCP’s most effective lockdown propaganda in early 2020: The ridiculous viral videos of CCP cadres “welding doors shut” so poor Wuhan residents couldn’t escape.

CCP apologists have argued that these videos prove the CCP was not trying to influence the international response to Covid, because they make the CCP look so bad. But on the contrary, the over-the-top inhumanity of the idea of welding residents’ doors shut was precisely the purpose of this propaganda campaign. The idea had to be so absurd that no decent government would ever actually try it. It thus gave the CCP and its apologists an infinite excuse for why lockdowns “worked” in China and nowhere else—because only China had ever had a “real lockdown” in which residents were welded into their homes.

When those with a decent knowledge of geopolitics or a bit of common sense see a graph like this, which looks nothing like that of any other country in the world, from a regime with a long history of faking its data on virtually every topic, the conclusion is obvious: China’s results are fraudulent. But to simple minds, a weld is a strong, durable bond capable of incredible feats, from supporting skyscrapers to spaceships. Surely, if a weld can do all that, then it must be able to stop a ubiquitous respiratory virus?

The entire concept is, of course, utterly asinine. You cannot stop a respiratory virus by indefinitely suspending everyone’s rights. But this idea that lockdowns had worked in China because the CCP had gone so far as to weld people into their homes was invoked over and over again during Covid, creating a limitless “No-True-Scotsman” out for lockdown apologists as to why lockdowns weren’t “working” anywhere except China. Whether COVID-19 cases went up, down, or sideways, the solution would always be the same: “Be more like China.”

The use of this darkly humorous propaganda campaign of welding residents into their homes speaks to two key points as to how Xi Jinping and CCP hawks like him view China’s relationship with the west. The first is that westerners will never respect the CCP; thus, you can make westerners believe anything so long as it confirms westerners’ prior belief that the CCP is barbaric.

Second, Xi Jinping sees the concepts of democracy and human rights as mere propaganda that western elites use to further their own self-interest. So long as they approve of a policy, then it’s not a human rights violation, but if they oppose it, then it is. It remains to be seen whether the response to Covid will, in the long run, ultimately advance Xi’s goal of making the world China. But insofar as the intent was to get western elites to simultaneously support totalitarianism in their own countries while pretending to oppose it in China, then he’s certainly made his point.

*  *  *

Michael P Senger is an attorney and author of Snake Oil: How Xi Jinping Shut Down the World. Want to support my work? Get the book

Tyler Durden Mon, 12/05/2022 - 15:53

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