Keeping the Dance Party Rolling 

Doug Noland


While ebullient markets have briskly moved on, I’m not done with Archegos. 

The thesis holds that speculative leverage evolved into an integral source of liquidity throughout historic global market Bubbles. 

The spectacular collapse of Archegos marks a significant inflection point, ushering in a tightening of lending conditions at the “margin” for increasingly vulnerable Bubbles.

April 8 – Bloomberg (Erik Schatzker and Sonali Basak): 

“Credit Suisse Group AG is tightening the financing terms it gives hedge funds and family offices, in a potential harbinger of new industry practices after the Archegos Capital Management blowup cost the Swiss bank $4.7 billion. 

Credit Suisse has been calling clients to change margin requirements in swap agreements so they match the more restrictive terms of its prime-brokerage agreements… 

Specifically, Credit Suisse is shifting from static margining to dynamic margining, which may force clients to post more collateral and could reduce the profitability of some trades… 

Swaps are the derivatives trader Bill Hwang used to take highly leveraged positions in stocks at Archegos… 

When his positions suddenly lost value the week of March 22, Archegos blew through its margin and equity, and Hwang lost $20 billion in just a few days.”

I drew comparisons last week to the June 2007 collapse of two Bear Stearns structured Credit mutual funds. 

Below is a Reuters article from the day of the initial bailout. 

June 22, 2007 – Reuters (Dan Wilchins): 

“Bear Stearns… on Friday said it would provide up to $3.2 billion in financing for a struggling hedge fund it manages, raising concern about other funds that invested in bonds linked to subprime mortgages. 

The biggest bailout since Wall Street’s 1998 rescue of Long-Term Capital Management signaled that the funds’ main investments -- a type of bond known as a collateralized debt obligation (CDO) -- may be riskier than previously reckoned. 

‘The big worry is: Are there other funds like this out there? 

Are whole markets going to seize up?’ said James Ellman, president of financial services hedge fund Seacliff Capital, adding that he thought concerns were overblown. 

Analysts said in the worst-case scenario, the stock market could broadly decline as companies could face higher borrowing costs and leveraged buyouts could grow less attractive.”

The S&P500 was trading near record highs and pulled back only about 3% on the initial Bear Stearns saga – before promptly rallying almost 5% to new record highs by mid-July. 

It was during this rally (July 9th) that Citigroup CEO Chuck Prince bestowed market historians with his infamous remark: “When the music stops, in terms of liquidity, things will be complicated. 

But as long as the music is playing, you’ve got to get up and dance. 

We’re still dancing.”

After a five-year boom, where the S&P500 almost doubled from 2002 lows while Credit market conditions turned extraordinarily loose, bullishness was well-entrenched. 

It was easy to dismiss the relevance of a couple smallish mutual funds. 

Sure, post-2008 collapse, it was as if the Bubble had been rather obvious all along. 

But in early-summer 2007 – at the pinnacle of Bubble excess - few recognized the scope of the Bubble, and even fewer appreciated the ramifications of the Bear Stearns fund collapses. Subprime was a relatively small issue and clearly not systemic. 

Yet in less than two months, crisis dynamics were in full force. 

Key markets had turned illiquid. 

In particular, liquidity for high-risk mortgage loans and securities had all but evaporated. 

Institutions – including the highly-levered hedge funds, securities firms and insurance companies – were unable to accurately value holdings. 

Scores of mortgage companies had lost access to new borrowings and were failing. 

Even lending behemoths Countrywide and Washington Mutual were facing funding market disruptions. CDS prices were spiking higher. 

Lenders, certainly including Countrywide, were rapidly tightening lending standards and trying to slash subprime exposures. 

The marketplace began questioning the viability of the entire mortgage insurance industry (Radian and MGIC, in particular) – whose guarantees were fundamental to “AAA” ratings for pools of hundreds of billions of less-than-pristine Credits. 

Then, on August 15th, Countrywide Financial sank 13% after liquidity and solvency concerns prompted a “sell” rating from Merrill Lynch. 

Market disarray brought comparisons to the 1998 “LTCM” crisis, as deleveraging and illiquidity contagion propagated across the Credit market. 

The so-called “subprime” crisis had engulfed “Alt-A” mortgages along with corporate Credit and LBO finance. 

After trading at a near-record 1,555 on July 19th, the S&P500 had sunk to an intraday low of 1,371 less than a month later on August 16th. 

When the Bear Stearns Credit funds faltered, 10-year Treasury yields were hovering above 5.0%. 

Fed funds were at 5.25%. 

The Fed had ample room to operate. 

They slashed the discount rate 50 bps during an unscheduled August 16th meeting, with the financial media referring to Ben Bernanke (having been appointed Fed chair the previous year) as a “rock star” and “the new maestro.” 

Fed funds were reduced 50 bps to 4.75% in a surprise move on September 18th. 

Rates were down to 4.25% by December 11th. 

Ten-year Treasury yields had sunk to about 4.0% by year-end – on their way to a March low of 3.34%.

Even during mid-August 2007 market tumult, there was still a lack of understanding with regard to myriad risks posed to financial and economic stability. 

St. Louis Fed president William Poole captured the general complacency: “It’s premature to say this upset in the market is changing the course of the economy in any fundamental way.” 

And, for a while, this complacency appeared justified. 

From August 16th lows, the S&P500 rallied 15% to a record high 1,576 on October 11th. 

The Bernanke Fed had seemingly saved the day – and the mighty bull market. 

GDP expanded 2.5% during the fourth quarter, the strongest growth in a year.

Almost everyone was blindsided by the scope of the 2008 financial crash and subsequent economic downturn. 

Somehow, policymakers remained oblivious to how mortgage Credit had come to dominate both financial and economic spheres. 

The unprecedented expansion of speculative leverage had become key to financing the housing Bubble, with the tsunami of “Bubble finance” fostering systemic distortions and maladjustment. 

When risk aversion eventually took hold, the dramatic tightening of market liquidity conditions forced deleveraging and an abrupt reassessment of lending terms. 

Mortgage Credit tightened, home prices began to sink, and prices of trillions of dollars of securities were increasingly detached from the harsh unfolding reality. 

Each cycle is different, with its individual characteristics and analytical nuance. 

The mortgage finance Bubble was chiefly fueled by an unprecedented expansion of risky mortgage Credit, much of it intermediated through money-like “AAA” securities and derivatives. 

Over the course of the Bubble, the global leveraged speculating community accumulated enormous amounts of highly levered holdings (securities and derivatives). 

The raging Bubble ensured the entire system was increasingly vulnerable to any unwind of speculative leverage and resulting illiquidity and Credit slowdown; the proverbial ticking time-bomb.

The world is now more than a decade into the historic “global government finance Bubble.” 

In contrast to the previous Bubble period, government “money” (sovereign bonds and central bank Credit) has been a principal Bubble fuel. 

Policymakers have enjoyed incredible latitude to inflate government finance, a unique dynamic that has worked (magically) to prolong this incredible cycle. 

Consistent with the mortgage finance Bubble, speculative leverage has expanded momentously over the course of this cycle – to the point where it has greatly exceeded previous cycle peaks. 

I am convinced it has ballooned exponentially over recent years, as the incredible lengths policymakers repeatedly emboldened the speculator community were willing to go to sustain the boom. 

April 7 – Wall Street Journal (Alexander Osipovich and David Benoit): 

“Investors are borrowing huge sums of money to buy stocks. Is that a problem? 

The ‘everything rally’ that started in stocks last year has been boosted by investors betting money they have borrowed. That includes both small players like the day traders on Robinhood Markets Inc. and heavyweights like Archegos Capital Management… As of late February, investors had borrowed a record $814 billion against their portfolios, according to data from the Financial Industry Regulatory Authority, Wall Street’s self-regulatory arm. That was up 49% from one year earlier, the fastest annual increase since 2007, during the frothy period before the 2008 financial crisis.”

We know equities margin borrowings have inflated parabolically (almost 50%!) over the past year to a record level. 

I assume a similar trajectory for levered holdings throughout the global leverage speculating community, a view supported by the egregious leverage exposed at Archegos. 

A guesstimate of tens of Trillions of speculative leverage having accumulated globally over this extraordinary cycle is not preposterous. 

Markets, understandably, at this point are content to fixate on the stability of government monetary inflation as ensuring an irrepressible boom. 

At this point, “whatever it takes” central banking is a proven commodity. 

And now markets have grown comfortable with the notion that no amount of government debt is too large to be financed by the marketplace at low yields. 

This new and phenomenally powerful financial structure has demonstrated itself as robust and, to this point, essentially bulletproof. 

In this context, markets view Archegos and its de-leveraging as inconsequential. 

According to CNBC, Morgan Stanley (with the permission of Archegos) liquidated $5bn of Archegos positions on Thursday, March 25, a day ahead of Goldman Sachs’ block trades, “to a small group of hedge funds.” 

Morgan Stanley and Goldman’s quick move to dump shares left others, including Credit Suisse and Nomura, holding the bag (full of big losses). 

Once word got out, the entangled stocks tanked. 

The hedge funds that bought shares were none too pleased Morgan Stanley offloaded positions they surely knew would soon be hit by large forced sales from Archegos’ other prime brokers. 

As CNBC (Hugh Son) put it, “…Morgan Stanley isn’t likely to lose them [the hedge funds] over the Archegos episode… 

That’s because the funds want access to shares of hot initial public offerings that Morgan Stanley, as the top banker to the U.S. tech industry, can dole out.” 

And while Morgan Stanley’s hedge fund clients may recover (Archegos-related) trading losses through some choice IPO allocations, Credit Suisse and Nomura won’t enjoy such a luxury. 

Prime brokerage risks that were easily dismissed can no longer be ignored. 

April 9 – Bloomberg (Ambereen Choudhury and Patrick Winters): 

“Credit Suisse Group AG is planning a sweeping overhaul of the hedge fund business at the center of the Archegos Capital blow up, as the drama forces Wall Street banks to reconsider how they finance some of their most lucrative clients. 

The Swiss bank is weighing significant cuts to its prime brokerage arm in coming months, people familiar with the plan said. 

The lender has already moved to tighten financing terms with some funds, and hopes changes to the unit can allow it to forgo major cuts to other parts of the investment bank, which just had a banner quarter…”

It may not be immediately discernible, especially with markets towering new heights, but conditions will be tightening in leveraged securities and derivatives finance. 

Rising asset markets essentially create their own self-reinforcing liquidity. 

Yet Illiquidity Lies in Wait. 

It’s when markets are in retreat that liquidity issues come to the fore. 

It’s worth noting, however, recent underperformance by the small cap stocks, a sector especially susceptible to shifting liquidity dynamics. 

It also appears the game has changed for the SPAC Bubble, a sector directly financed by the leveraged speculator/prime brokerage nexus. 

April 9 – Financial Times (Ortenca Aliaj and Aziza Kasumov): 

“A crucial source of funding for blank-cheque company deals is drying up, pointing to a slowdown for one of Wall Street’s hottest products after a record-breaking quarter. 

Advisers to special purpose acquisition companies… say they are struggling to find so-called Pipe financing to complete their planned acquisitions. 

Pipe is short for private investment in public equity. Institutional investors such as Fidelity and Wellington Management have ploughed billions of dollars into Pipe deals since the Spac boom emerged last year, providing a route to the public markets for businesses ranging from established software and entertainment companies to speculative developers of flying taxis and electric vehicle technology.”

Yet “global government finance Bubble” vulnerability goes much beyond a tightening of conditions in leveraged speculation.

April 6 – Bloomberg: 

“China’s central bank asked the nation’s major lenders to curtail loan growth for the rest of this year after a surge in the first two months stoked bubble risks, according to people familiar with the matter. 

At a meeting with the People’s Bank of China on March 22, banks were told to keep new advances in 2021 at roughly the same level as last year… 

Some foreign banks were also urged to rein in additional lending through so-called window guidance recently after ramping up their balance sheets in 2020… 

The comments give further detail to what the central bank stated publicly after the meeting, when it said it asked representatives of 24 major banks to keep loan growth stable and reasonable. In 2020, banks doled out a record 19.6 trillion yuan ($3 trillion) of credit…”

Markets, at this point, have a difficult time taking Beijing “tightening” talk seriously. 

They’ve talked tough too many times - only to timidly backtrack. 

But I believe Chinese leadership is today more determined - and markets too complacent. 

Especially after last year’s Credit melee, the entire Chinese system is acutely fragile. 

And it’s this fragility that has markets so convinced Beijing won’t dare risk bursting the Chinese Bubble. 

Still, I believe Chinese officials have come to believe the risk of not reining in the Bubble has grown too great not to act. 

April 9 – Bloomberg: 

“China’s producer prices climbed in March by the most since July 2018 on surging commodity costs, adding to worries over rising global inflation as the pandemic recedes. 

The producer price index rose 4.4% from a year earlier after gaining 1.7% in February…, higher than the 3.6% median estimate… 

‘Our research has found that China’s PPI has a high positive correlation with CPI in the U.S.,’ said Raymond Yeung, chief economist for Greater China at Australia and New Zealand Banking Group Ltd. 

‘The higher-than-expected PPI data could impact people’s judgment of inflation pressure in the U.S. and globally, and this impact shouldn’t be underestimated.’”

U.S. Producer Prices surged a full 1.0% in March, double the estimate. 

This pushed y-o-y Producer Price Inflation to 4.2%, the strongest advance since 2011. 

The ISM Non-Manufacturing (services) Index surged to a record high 63.7, with all 18 industry groups reporting they’re paying higher prices (up from 67% in December). 

The Prices Index jumped to 74, the high going back to July 2008.

Mounting inflationary pressures are a global phenomenon. 

While the Fed has been dismissive, the prospect of an overheating U.S. economy seems clearer by the week. 

The Federal Reserve should begin contemplating when to signal an approaching QE tapering. 

Such unparalleled government monetary inflation has stoked myriad inflated price levels and distortions throughout the asset markets and real economy. 

Accordingly, we should expect any attempt to ween the system off QE will at this point prove highly destabilizing.

April 9 – Reuters (Thyagaraju Adinarayan, Sujata Rao and Julien Ponthus): 

“Equity funds have attracted more than half a trillion dollars in the past five months, exceeding inflows recorded over the previous 12 years, according to data from BofA, which has likened the stampede to a ‘melt-up’ in markets. 

The flows are also raising fears of a pullback from record highs, given valuations are at the highest since the dotcom bubble of the late 1990s, with the S&P 500 trading at nearly 22 times forward earnings.”

“Melt-up,” indeed. 

It all reeks of a historic market topping process. 

A tightening of conditions throughout speculative finance has commenced. 

Global bond yields have been rising. 

China has begun a tightening cycle fraught with extreme risk. 

Vulnerable emerging markets have sustained the first round of de-risking/deleveraging. 

And the global central bank community is facing a confluence of runaway speculative manias and mounting inflationary pressures. 

The risk of market liquidity accidents is highly elevated – and rising. 

Those that dispute this analysis should ponder the scenario where the leveraged speculating community and public race to the exits simultaneously: panicked speculator deleveraging and a run on the ETF complex (kind of like March 2020 but bigger). 

It’s not farfetched. 

At this point, with the Bubble inflating so late-cycle crazily, it’s not clear how such a scenario is to be avoided. 

And while Archegos has started the clock ticking, inebriated markets are hell-bent on Keeping the Dance Party Rolling. 

The viral universe

Viruses have big impacts on ecology and evolution as well as human health

They are ubiquitous, diverse and very powerful


I

The outsiders inside

Humans are lucky to live a hundred years. 

Oak trees may live a thousand; mayflies, in their adult form, a single day. 

But they are all alive in the same way. 

They are made up of cells which embody flows of energy and stores of information. 

Their metabolisms make use of that energy, be it from sunlight or food, to build new molecules and break down old ones, using mechanisms described in the genes they inherited and may, or may not, pass on.

It is this endlessly repeated, never quite perfect reproduction which explains why oak trees, humans, and every other plant, fungus or single-celled organism you have ever seen or felt the presence of are all alive in the same way. 

It is the most fundamental of all family resemblances. 

Go far enough up any creature’s family tree and you will find an ancestor that sits in your family tree, too. 

Travel further and you will find what scientists call the last universal common ancestor, luca. 

It was not the first living thing. 

But it was the one which set the template for the life that exists today.

And then there are viruses. 

In viruses the link between metabolism and genes that binds together all life to which you are related, from bacteria to blue whales, is broken. 

Viral genes have no cells, no bodies, no metabolism of their own. 

The tiny particles, “virions”, in which those genes come packaged—the dot-studded disks of coronaviruses, the sinister, sinuous windings of Ebola, the bacteriophages with their science-fiction landing-legs that prey on microbes—are entirely inanimate. 

An individual animal, or plant, embodies and maintains the restless metabolism that made it. 

A virion is just an arrangement of matter.

The virus is not the virion. 

The virus is a process, not a thing. 

It is truly alive only in the cells of others, a virtual organism running on borrowed hardware to produce more copies of its genome. 

Some bide their time, letting the cell they share the life of live on. 

Others immediately set about producing enough virions to split their hosts from stem to stern.

The virus has no plan or desire. 

The simplest purposes of the simplest life—to maintain the difference between what is inside the cell and what is outside, to move towards one chemical or away from another—are entirely beyond it. 

It copies itself in whatever way it does simply because it has copied itself that way before, in other cells, in other hosts.

That is why, asked whether viruses are alive, Eckard Wimmer, a chemist and biologist who works at the State University of New York, Stony Brook, offers a yes-and-no. Viruses, he says, “alternate between nonliving and living phases”. 

He should know. 

In 2002 he became the first person in the world to take an array of nonliving chemicals and build a virion from scratch—a virion which was then able to get itself reproduced by infecting cells.

The fact that viruses have only a tenuous claim to being alive, though, hardly reduces their impact on things which are indubitably so. 

No other biological entities are as ubiquitous, and few as consequential. 

The number of copies of their genes to be found on Earth is beyond astronomical. 

There are hundreds of billions of stars in the Milky Way galaxy and a couple of trillion galaxies in the observable universe. 

The virions in the surface waters of any smallish sea handily outnumber all the stars in all the skies that science could ever speak of.

Back on Earth, viruses kill more living things than any other type of predator. 

They shape the balance of species in ecosystems ranging from those of the open ocean to that of the human bowel. 

They spur evolution, driving natural selection and allowing the swapping of genes.

They may have been responsible for some of the most important events in the history of life, from the appearance of complex multicellular organisms to the emergence of dna as a preferred genetic material. 

The legacy they have left in the human genome helps produce placentas and may shape the development of the brain. 

For scientists seeking to understand life’s origin, they offer a route into the past separate from the one mapped by humans, oak trees and their kin. 

For scientists wanting to reprogram cells and mend metabolisms they offer inspiration—and powerful tools.

II

A lifestyle for genes

The idea of a last universal common ancestor provides a plausible and helpful, if incomplete, answer to where humans, oak trees and their ilk come from. 

There is no such answer for viruses. 

Being a virus is not something which provides you with a place in a vast, coherent family tree. 

It is more like a lifestyle—a way of being which different genes have discovered independently at different times. 

Some viral lineages seem to have begun quite recently. Others have roots that comfortably predate luca itself.

Disparate origins are matched by disparate architectures for information storage and retrieval. 

In eukaryotes—creatures, like humans, mushrooms and kelp, with complex cells—as in their simpler relatives, the bacteria and archaea, the genes that describe proteins are written in double-stranded dna. 

When a particular protein is to be made, the dna sequence of the relevant gene acts as a template for the creation of a complementary molecule made from another nucleic acid, rna. 

This messenger rna (mrna) is what the cellular machinery tasked with translating genetic information into proteins uses in order to do so.

Because they, too, need to have proteins made to their specifications, viruses also need to produce mrnas. 

But they are not restricted to using double-stranded dna as a template. 

Viruses store their genes in a number of different ways, all of which require a different mechanism to produce mrnas. 

In the early 1970s David Baltimore, one of the great figures of molecular biology, used these different approaches to divide the realm of viruses into seven separate classes (see diagram).


In four of these seven classes the viruses store their genes not in dna but in rna. 

Those of Baltimore group three use double strands of rna. 

In Baltimore groups four and five the rna is single-stranded; in group four the genome can be used directly as an mrna; in group five it is the template from which mrna must be made. 

In group six—the retroviruses, which include hiv—the viral rna is copied into dna, which then provides a template for mrnas.

Because uninfected cells only ever make rna on the basis of a dna template, rna-based viruses need distinctive molecular mechanisms those cells lack. 

Those mechanisms provide medicine with targets for antiviral attacks. 

Many drugs against hiv take aim at the system that makes dna copies of rna templates. 

Remdesivir (Veklury), a drug which stymies the mechanism that the simpler rna viruses use to recreate their rna genomes, was originally developed to treat hepatitis C (group four) and subsequently tried against the Ebola virus (group five). 

It is now being used against sars-cov-2 (group four), the covid-19 virus.

Studies of the gene for that rna-copying mechanism, rdrp, reveal just how confusing virus genealogy can be. 

Some viruses in groups three, four and five seem, on the basis of their rdrp-gene sequence, more closely related to members of one of the other groups than they are to all the other members of their own group. 

This may mean that quite closely related viruses can differ in the way they store their genomes; it may mean that the viruses concerned have swapped their rdrp genes. 

When two viruses infect the same cell at the same time such swaps are more or less compulsory. 

They are, among other things, one of the mechanisms by which viruses native to one species become able to infect another.

How do genes take on the viral lifestyle in the first place? 

There are two plausible mechanisms. 

Previously free-living creatures could give up metabolising and become parasitic, using other creatures’ cells as their reproductive stage. 

Alternatively genes allowed a certain amount of independence within one creature could have evolved the means to get into other creatures.

Living creatures contain various apparently independent bits of nucleic acid with an interest in reproducing themselves. 

The smallest, found exclusively in plants, are tiny rings of rna called viroids, just a few hundred genetic letters long. 

Viroids replicate by hijacking a host enzyme that normally makes mrnas. 

Once attached to a viroid ring, the enzyme whizzes round and round it, unable to stop, turning out a new copy of the viroid with each lap.

Viroids describe no proteins and do no good. 

Plasmids—somewhat larger loops of nucleic acid found in bacteria—do contain genes, and the proteins they describe can be useful to their hosts. 

Plasmids are sometimes, therefore, regarded as detached parts of a bacteria’s genome. 

But that detachment provides a degree of autonomy. 

Plasmids can migrate between bacterial cells, not always of the same species. 

When they do so they can take genetic traits such as antibiotic resistance from their old host to their new one.

Recently, some plasmids have been implicated in what looks like a progression to true virus-hood. 

A genetic analysis by Mart Krupovic of the Pasteur Institute suggests that the Circular Rep-Encoding Single-Strand-dna (cress-dna) viruses, which infect bacteria, evolved from plasmids. 

He thinks that a dna copy of the genes that another virus uses to create its virions, copied into a plasmid by chance, provided it with a way out of the cell. 

The analysis strongly suggests that cress-dna viruses, previously seen as a pretty closely related group, have arisen from plasmids this way on three different occasions.

Such jailbreaks have probably been going on since very early on in the history of life. 

As soon as they began to metabolise, the first proto-organisms would have constituted a niche in which other parasitic creatures could have lived. 

And biology abhors a vacuum. 

No niche goes unfilled if it is fillable.

It is widely believed that much of the evolutionary period between the origin of life and the advent of luca was spent in an “rna world”—one in which that versatile substance both stored information, as dna now does, and catalysed chemical reactions, as proteins now do. 

Set alongside the fact that some viruses use rna as a storage medium today, this strongly suggests that the first to adopt the viral lifestyle did so too. 

Patrick Forterre, an evolutionary biologist at the Pasteur Institute with a particular interest in viruses (and the man who first popularised the term luca) thinks that the “rna world” was not just rife with viruses. 

He also thinks they may have brought about its end.

The difference between dna and rna is not large: just a small change to one of the “letters” used to store genetic information and a minor modification to the backbone to which these letters are stuck. 

And dna is a more stable molecule in which to store lots of information. But that is in part because dna is inert. 

An rna-world organism which rewrote its genes into dna would cripple its metabolism, because to do so would be to lose the catalytic properties its rna provided.

An rna-world virus, having no metabolism of its own to undermine, would have had no such constraints if shifting to dna offered an advantage. 

Dr Forterre suggests that this advantage may have lain in dna’s imperviousness to attack. 

Host organisms today have all sorts of mechanisms for cutting up viral nucleic acids they don’t like the look of—mechanisms which biotechnologists have been borrowing since the 1970s, most recently in the form of tools based on a bacterial defence called crispr. 

There is no reason to imagine that the rna-world predecessors of today’s cells did not have similar shears at their disposal. 

And a virus that made the leap to dna would have been impervious to their blades.

Genes and the mechanisms they describe pass between viruses and hosts, as between viruses and viruses, all the time. 

Once some viruses had evolved ways of writing and copying dna, their hosts would have been able to purloin them in order to make back-up copies of their rna molecules. 

And so what began as a way of protecting viral genomes would have become the way life stores all its genes—except for those of some recalcitrant, contrary viruses.


III

The scythes of the seas

It is a general principle in biology that, although in terms of individual numbers herbivores outnumber carnivores, in terms of the number of species carnivores outnumber herbivores. 

Viruses, however, outnumber everything else in every way possible.

This makes sense. 

Though viruses can induce host behaviours that help them spread—such as coughing—an inert virion boasts no behaviour of its own that helps it stalk its prey. 

It infects only that which it comes into contact with. 

This is a clear invitation to flood the zone. 

In 1999 Roger Hendrix, a virologist, suggested that a good rule of thumb might be ten virions for every living individual creature (the overwhelming majority of which are single-celled bacteria and archaea). 

Estimates of the number of such creatures on the planet come out in the region of 1029-1030. 

If the whole Earth were broken up into pebbles, and each of those pebbles smashed into tens of thousands of specks of grit, you would still have fewer pieces of grit than the world has virions. 

Measurements, as opposed to estimates, produce numbers almost as arresting. 

A litre of seawater may contain more than 100bn virions; a kilogram of dried soil perhaps a trillion.

Metagenomics, a part of biology that looks at all the nucleic acid in a given sample to get a sense of the range of life forms within it, reveals that these tiny throngs are highly diverse. 

A metagenomic analysis of two surveys of ocean life, the Tara Oceans and Malaspina missions, by Ahmed Zayed of Ohio State University, found evidence of 200,000 different species of virus. 

These diverse species play an enormous role in the ecology of the oceans.

A litre of seawater may contain 100bn virions; a kilogram of dried soil perhaps a trillion

On land, most of the photosynthesis which provides the biomass and energy needed for life takes place in plants. 

In the oceans, it is overwhelmingly the business of various sorts of bacteria and algae collectively known as phytoplankton. 

These creatures reproduce at a terrific rate, and viruses kill them at a terrific rate, too. 

According to work by Curtis Suttle of the University of British Columbia, bacterial phytoplankton typically last less than a week before being killed by viruses.

This increases the overall productivity of the oceans by helping bacteria recycle organic matter (it is easier for one cell to use the contents of another if a virus helpfully lets them free). 

It also goes some way towards explaining what the great mid-20th-century ecologist G. Evelyn Hutchinson called “the paradox of the plankton”. 

Given the limited nature of the resources that single-celled plankton need, you would expect a few species particularly well adapted to their use to dominate the ecosystem. 

Instead, the plankton display great variety. 

This may well be because whenever a particular form of plankton becomes dominant, its viruses expand with it, gnawing away at its comparative success.

It is also possible that this endless dance of death between viruses and microbes sets the stage for one of evolution’s great leaps forward. 

Many forms of single-celled plankton have molecular mechanisms that allow them to kill themselves. 

They are presumably used when one cell’s sacrifice allows its sister cells—which are genetically identical—to survive. 

One circumstance in which such sacrifice seems to make sense is when a cell is attacked by a virus. 

If the infected cell can kill itself quickly (a process called apoptosis) it can limit the number of virions the virus is able to make. 

This lessens the chances that other related cells nearby will die. 

Some bacteria have been shown to use this strategy; many other microbes are suspected of it.

There is another situation where self-sacrifice is becoming conduct for a cell: when it is part of a multicellular organism. 

As such organisms grow, cells that were once useful to them become redundant; they have to be got rid of. 

Eugene Koonin of America’s National Institutes of Health and his colleagues have explored the idea that virus-thwarting self-sacrifice and complexity-permitting self-sacrifice may be related, with the latter descended from the former. 

Dr Koonin’s model also suggests that the closer the cells are clustered together, the more likely this act of self-sacrifice is to have beneficial consequences.

For such profound propinquity, move from the free-flowing oceans to the more structured world of soil, where potential self-sacrificers can nestle next to each other. 

Its structure makes soil harder to sift for genes than water is. 

But last year Mary Firestone of the University of California, Berkeley, and her colleagues used metagenomics to count 3,884 new viral species in a patch of Californian grassland. 

That is undoubtedly an underestimate of the total diversity; their technique could see only viruses with rna genomes, thus missing, among other things, most bacteriophages.

Metagenomics can also be applied to biological samples, such as bat guano in which it picks up viruses from both the bats and their food. 

But for the most part the finding of animal viruses requires more specific sampling. 

Over the course of the 2010s predict, an American-government project aimed at finding animal viruses, gathered over 160,000 animal and human tissue samples from 35 countries and discovered 949 novel viruses.

The people who put together predict now have grander plans. 

They want a Global Virome Project to track down all the viruses native to the world’s 7,400 species of mammals and waterfowl—the reservoirs most likely to harbour viruses capable of making the leap into human beings. 

In accordance with the more-predator-species-than-prey rule they expect such an effort would find about 1.5m viruses, of which around 700,000 might be able to infect humans. 

A planning meeting in 2018 suggested that such an undertaking might take ten years and cost $4bn. It looked like a lot of money then. 

Today those arguing for a system that can provide advance warning of the next pandemic make it sound pretty cheap.

IV

Leaving their mark

The toll which viruses have exacted throughout history suggests that they have left their mark on the human genome: things that kill people off in large numbers are powerful agents of natural selection. 

In 2016 David Enard, then at Stanford University and now at the University of Arizona, made a stab at showing just how much of the genome had been thus affected.

He and his colleagues started by identifying almost 10,000 proteins that seemed to be produced in all the mammals that had had their genomes sequenced up to that point. 

They then made a painstaking search of the scientific literature looking for proteins that had been shown to interact with viruses in some way or other. 

About 1,300 of the 10,000 turned up. 

About one in five of these proteins was connected to the immune system, and thus could be seen as having a professional interest in viral interaction. 

The others appeared to be proteins which the virus made use of in its attack on the host. 

The two cell-surface proteins that sars-cov-2 uses to make contact with its target cells and inveigle its way into them would fit into this category.

The researchers then compared the human versions of the genes for their 10,000 proteins with those in other mammals, and applied a statistical technique that distinguishes changes that have no real impact from the sort of changes which natural selection finds helpful and thus tries to keep. 

Genes for virus-associated proteins turned out to be evolutionary hotspots: 30% of all the adaptive change was seen in the genes for the 13% of the proteins which interacted with viruses. 

As quickly as viruses learn to recognise and subvert such proteins, hosts must learn to modify them.

A couple of years later, working with Dmitri Petrov at Stanford, Dr Enard showed that modern humans have borrowed some of these evolutionary responses to viruses from their nearest relatives. 

Around 2-3% of the dna in an average European genome has Neanderthal origins, a result of interbreeding 50,000 to 30,000 years ago. 

For these genes to have persisted they must be doing something useful—otherwise natural selection would have removed them. 

Dr Enard and Dr Petrov found that a disproportionate number described virus-interacting proteins; of the bequests humans received from their now vanished relatives, ways to stay ahead of viruses seem to have been among the most important.

Viruses do not just shape the human genome through natural selection, though. 

They also insert themselves into it. 

At least a twelfth of the dna in the human genome is derived from viruses; by some measures the total could be as high as a quarter.

Retroviruses like hiv are called retro because they do things backwards. 

Where cellular organisms make their rna from dna templates, retroviruses do the reverse, making dna copies of their rna genomes. 

The host cell obligingly makes these copies into double-stranded dna which can be stitched into its own genome. 

If this happens in a cell destined to give rise to eggs or sperm, the viral genes are passed from parent to offspring, and on down the generations. 

Such integrated viral sequences, known as endogenous retroviruses (ervs), account for 8% of the human genome.

This is another example of the way the same viral trick can be discovered a number of times. 

Many bacteriophages are also able to stitch copies of their genome into their host’s dna, staying dormant, or “temperate”, for generations. 

If the cell is doing well and reproducing regularly, this quiescence is a good way for the viral genes to make more copies of themselves. 

When a virus senses that its easy ride may be coming to an end, though—for example, if the cell it is in shows signs of stress—it will abandon ship. 

What was latent becomes “lytic” as the viral genes produce a sufficient number of virions to tear the host apart.

Though some of their genes are associated with cancers, in humans ervs do not burst back into action in later generations. 

Instead they have proved useful resources of genetic novelty. 

In the most celebrated example, at least ten different mammalian lineages make use of a retroviral gene for one of their most distinctively mammalian activities: building a placenta.

The placenta is a unique organ because it requires cells from the mother and the fetus to work together in order to pass oxygen and sustenance in one direction and carbon dioxide and waste in the other. 

One way this intimacy is achieved safely is through the creation of a tissue in which the membranes between cells are broken down to form a continuous sheet of cellular material.

The protein that allows new cells to merge themselves with this layer, syncytin-1, was originally used by retroviruses to join the external membranes of their virions to the external membranes of cells, thus gaining entry for the viral proteins and nucleic acids. 

Not only have different sorts of mammals co-opted this membrane-merging trick—other creatures have made use of it, too. 

The mabuya, a long-tailed skink which unusually for a lizard nurtures its young within its body, employs a retroviral syncytin protein to produce a mammalian-looking placenta. 

The most recent shared ancestor of mabuyas and mammals died out 80m years before the first dinosaur saw the light of day, but both have found the same way to make use of the viral gene.

You put your line-1 in, you take your line-1 out

This is not the only way that animals make use of their ervs. 

Evidence has begun to accumulate that genetic sequences derived from ervs are quite frequently used to regulate the activity of genes of more conventional origin. 

In particular, rna molecules transcribed from an erv called herv-k play a crucial role in providing the stem cells found in embryos with their “pluripotency”—the ability to create specialised daughter cells of various different types. 

Unfortunately, when expressed in adults herv-k can also be responsible for cancers of the testes.

As well as containing lots of semi-decrepit retroviruses that can be stripped for parts, the human genome also holds a great many copies of a “retrotransposon” called line-1. 

This a piece of dna with a surprisingly virus-like way of life; it is thought by some biologists to have, like ervs, a viral origin. 

In its full form, line-1 is a 6,000-letter sequence of dna which describes a “reverse transcriptase” of the sort that retroviruses use to make dna from their rna genomes. 

When line-1 is transcribed into an mrna and that mrna subsequently translated to make proteins, the reverse transcriptase thus created immediately sets to work on the mrna used to create it, using it as the template for a new piece of dna which is then inserted back into the genome. 

That new piece of dna is in principle identical to the piece that acted as the mrna’s original template. 

The line-1 element has made a copy of itself.

In the 100m years or so that this has been going on in humans and the species from which they are descended the line-1 element has managed to pepper the genome with a staggering 500,000 copies of itself. 


All told, 17% of the human genome is taken up by these copies—twice as much as by the ervs.

Most of the copies are severely truncated and incapable of copying themselves further. 

But some still have the knack, and this capability may be being put to good use. 

Fred Gage and his colleagues at the Salk Institute for Biological Studies, in San Diego, argue that line-1 elements have an important role in the development of the brain. 

In 2005 Dr Gage discovered that in mouse embryos—specifically, in the brains of those embryos—about 3,000 line-1 elements are still able to operate as retrotransposons, putting new copies of themselves into the genome of a cell and thus of all its descendants.

Brains develop through proliferation followed by pruning. 

First, nerve cells multiply pell-mell; then the cell-suicide process that makes complex life possible prunes them back in a way that looks a lot like natural selection. 

Dr Gage suspects that the movement of line-1 transposons provides the variety in the cell population needed for this selection process. 

Choosing between cells with line-1 in different places, he thinks, could be a key part of the process from which the eventual neural architecture emerges. 

What is true in mice is, as he showed in 2009, true in humans, too. 

He is currently developing a technique for looking at the process in detail by comparing, post mortem, the genomes of different brain cells from single individuals to see if their line-1 patterns vary in the ways that his theory would predict.

V

Promised lands

Human evolution may have used viral genes to make big-brained live-born life possible; but viral evolution has used them to kill off those big brains on a scale that is easily forgotten. 

Compare the toll to that of war. In the 20th century, the bloodiest in human history, somewhere between 100m and 200m people died as a result of warfare. 

The number killed by measles was somewhere in the same range; the number who died of influenza probably towards the top of it; and the number killed by smallpox—300m-500m—well beyond it. 

That is why the eradication of smallpox from the wild, achieved in 1979 by a globally co-ordinated set of vaccination campaigns, stands as one of the all-time-great humanitarian triumphs.

Other eradications should eventually follow. 

Even in their absence, vaccination has led to a steep decline in viral deaths. 

But viruses against which there is no vaccine, either because they are very new, like sars-cov-2, or peculiarly sneaky, like hiv, can still kill millions.

Reducing those tolls is a vital aim both for research and for public-health policy. 

Understandably, a far lower priority is put on the benefits that viruses can bring. 

This is mostly because they are as yet much less dramatic. 

They are also much less well understood.

The viruses most prevalent in the human body are not those which infect human cells. 

They are those which infect the bacteria that live on the body’s surfaces, internal and external. 

The average human “microbiome” harbours perhaps 100trn of these bacteria. 

And where there are bacteria, there are bacteriophages shaping their population.

The microbiome is vital for good health; when it goes wrong it can mess up a lot else. 

Gut bacteria seem to have a role in maintaining, and possibly also causing, obesity in the well-fed and, conversely, in tipping the poorly fed into a form of malnutrition called kwashiorkor. 

Ill-regulated gut bacteria have also been linked, if not always conclusively, with diabetes, heart disease, cancers, depression and autism. 

In light of all this, the question “who guards the bacterial guardians?” is starting to be asked.

The viruses that prey on the bacteria are an obvious answer. 

Because the health of their host’s host—the possessor of the gut they find themselves in—matters to these phages, they have an interest in keeping the microbiome balanced. 

Unbalanced microbiomes allow pathogens to get a foothold. 

This may explain a curious detail of a therapy now being used as a treatment of last resort against Clostridium difficile, a bacterium that causes life-threatening dysentery. 

The therapy in question uses a transfusion of faecal matter, with its attendant microbes, from a healthy individual to reboot the patient’s microbiome. 

Such transplants, it appears, are more likely to succeed if their phage population is particularly diverse.

Medicine is a very long way from being able to use phages to fine-tune the microbiome. 

But if a way of doing so is found, it will not in itself be a revolution. 

Attempts to use phages to promote human health go back to their discovery in 1917, by Félix d’Hérelle, a French microbiologist, though those early attempts at therapy were not looking to restore balance and harmony. 

On the basis that the enemy of my enemy is my friend, doctors simply treated bacterial infections with phages thought likely to kill the bacteria.

The arrival of antibiotics saw phage therapy abandoned in most places, though it persisted in the Soviet Union and its satellites. 

Various biotechnology companies think they may now be able to revive the tradition—and make it more effective. 

One option is to remove the bits of the viral genome that let phages settle down to a temperate life in a bacterial genome, leaving them no option but to keep on killing. 

Another is to write their genes in ways that avoid the defences with which bacteria slice up foreign dna.

The hope is that phage therapy will become a backup in difficult cases, such as infection with antibiotic-resistant bugs. 

There have been a couple of well-publicised one-off successes outside phage therapy’s post-Soviet homelands. 

In 2016 Tom Patterson, a researcher at the University of California, San Diego, was successfully treated for an antibiotic-resistant bacterial infection with specially selected (but un-engineered) phages. 

In 2018 Graham Hatfull of the University of Pittsburgh used a mixture of phages, some engineered so as to be incapable of temperance, to treat a 16-year-old British girl who had a bad bacterial infection after a lung transplant. 

Clinical trials are now getting under way for phage treatments aimed at urinary-tract infections caused by Escherichia coli, Staphylococcus aureus infections that can lead to sepsis and Pseudomonas aeruginosa infections that cause complications in people who have cystic fibrosis.

Viruses which attack bacteria are not the only ones genetic engineers have their eyes on. 

Engineered viruses are of increasing interest to vaccine-makers, to cancer researchers and to those who want to treat diseases by either adding new genes to the genome or disabling faulty ones. 

If you want to get a gene into a specific type of cell, a virion that recognises something about such cells may often prove a good tool.

The vaccine used to contain the Ebola outbreak in the Democratic Republic of Congo over the past two years was made by engineering Indiana vesiculovirus, which infects humans but cannot reproduce in them, so that it expresses a protein found on the surface of the Ebola virus; thus primed, the immune system responds to Ebola much more effectively. 

The World Health Organisation’s current list of 29 covid-19 vaccines in clinical trials features six versions of other viruses engineered to look a bit like sars-cov-2. one is based on a strain of measles that has long been used as a vaccine against that disease.

Viruses engineered to engender immunity against pathogens, to kill cancer cells or to encourage the immune system to attack them, or to deliver needed genes to faulty cells all seem likely to find their way into health care. 

Other engineered viruses are more worrying. 

One way to understand how viruses spread and kill is to try and make particularly virulent ones. 

In 2005, for example, Terrence Tumpey of America’s Centres for Disease Control and Prevention and his colleagues tried to understand the deadliness of the influenza virus responsible for the pandemic of 1918-20 by taking a more benign strain, adding what seemed to be distinctive about the deadlier one and trying out the result on mice. 

It was every bit as deadly as the original, wholly natural version had been.

The use of engineered pathogens as weapons of war is of dubious utility, completely illegal and repugnant to almost all

Because such “gain of function” research could, if ill-conceived or poorly implemented, do terrible damage, it requires careful monitoring. 

And although the use of engineered pathogens as weapons of war is of dubious utility—such weapons are hard to aim and hard to stand down, and it is not easy to know how much damage they have done—as well as being completely illegal and repugnant to almost all, such possibilities will and should remain a matter of global concern.

Information which, for billions of years, has only ever come into its own within infected cells can now be inspected on computer screens and rewritten at will. 

The power that brings is sobering. 

It marks a change in the history of both viruses and people—a change which is perhaps as important as any of those made by modern biology. 

It is constraining a small part of the viral world in a way which, so far, has been to people’s benefit. 

It is revealing that world’s further reaches in a way which cannot but engender awe.  

A second cold war is tracking the first

US-led western alliance is once again squaring up to Russia and China

Gideon Rachman

President Joe Biden attends the virtual EU Leaders’ Summit chaired by Charles Michel, president of the European Council, in Brussels last week © EU Council/Anadolu Agency/Getty


In Washington, Beijing and Moscow, officials all say that they want to avoid a new cold war. 

A recent piece in the New York Times suggests they have little reason for concern. 

It argued that “superpower rivalries today bear little resemblance to the past”. 

The article pointed to Russia’s relative weakness and China’s technological prowess to underline how things have changed since the late 1940s.

Those differences exist, of course. But to me, the parallels between today’s events and the early years of the cold war look increasingly convincing, even eerie.

Once again you have a Russia-China axis arrayed against a western alliance, led from Washington. 

Last week, Joe Biden, the US president, addressed an EU summit — while Antony Blinken, his secretary of state, gave a speech at Nato calling for western unity in deterring China’s military ambitions and Russian “aggression”. 

Meanwhile, Sergei Lavrov, Russia’s foreign minister, was in China, calling for Beijing and Moscow to push back against US power.

The tensions between the two sides are heightening. 

The Chinese air force has just staged its largest ever incursion into Taiwanese airspace. 

Last week, China also imposed sanctions on EU and British politicians, who had spoken out about human rights in Xinjiang. 

This month, Russia pulled its ambassador out of Washington in protest at what it called unprecedented actions from the US. 

The first meeting between top officials from the Biden administration and the Chinese government degenerated into a public row.

The line from Beijing is that the current surge in tensions is caused by Washington’s inability to come to terms with the rise of China. 

There is an element of truth in the idea that the US is hooked on hegemony.

But the Beijing narrative ignores the extent to which changes within China itself have driven the shift in American and European attitudes. 

Increased repression, the personality cult around President Xi Jinping and the flexing of Chinese military muscle have made hawkish views about China much easier to sell in the US and Europe.

As in the early days of the first cold war, a few key events have crystallised the growing unease in western capitals. 

In 1945-46, the Soviet Union’s imposition of satellite regimes in eastern Europe led to a fundamental reappraisal of Moscow’s intentions.

Over the past year, the crushing of the pro-democracy movement in Hong Kong and more detailed revelations about the persecution of the Uyghurs by the Chinese authorities — now labelled a genocide by the US government — have performed a similar role in shifting western attitudes. 

The increasing shrillness of Chinese “wolf warrior” diplomacy is also sounding alarm bells, playing a similar role to a series of anti-western speeches emanating from the USSR in the forties.

Until recently, it seemed that western Europe might try to remain nonaligned in a new cold war. 

The EU’s decision to sign a trade and investment deal with China suggested that Beijing had succeeded in prising open a gap between Washington and Brussels. 

But China’s imposition of sanctions on leading members of the European parliament makes it increasingly unlikely that the EU will ratify the China trade deal.

European efforts to secure a rapprochement with Russia, pushed hard by President Emmanuel Macron of France, have also gone nowhere. 

The increasing climate of repression inside Russia, exemplified by the imprisonment of the opposition activist Alexei Navalny, is narrowing the gap between the European and American views of Russia.

In this second cold war — as in the first — there are regional flashpoints where the conflict could heat up. 

In Asia, some of these are actually unresolved issues left over from the first cold war, namely the status of the Korean peninsula and of Taiwan. 

In Europe, the front lines have moved east. 

It is now Ukraine, rather than Berlin, that is the focus of tensions between Moscow and the west.

During the Trump administration, the emerging rivalry between the US and China often lacked the ideological dimension of the first cold war. 

Donald Trump was a transactional president who was focused above all on the US trade deficit with China. 

According to John Bolton, his former national security adviser, Trump even privately encouraged Xi Jinping to pursue his policy of mass internment in Xinjiang.

With the advent of the Biden administration, however, ideological competition is back. 

Biden has said that he wants to convene a summit of democracy and is clearly intent on reasserting the US claim to be the “leader of the free world”. 

Like Harry Truman, who was president as the first cold war took shape, Biden is a former vice-president and Democratic senator, once looked down upon by the intellectual elite of his party, who finds himself unexpectedly in charge at a turning point in history.

Technological rivalries are once again at the heart of superpower rivalry. 

In the first cold war, it was nuclear technology and the space race. 

Today’s superpower rivalries are focused on 5G telecoms and artificial intelligence.

But the technological clash is taking place in a different context. 

Forty years of globalisation have ensured the deep integration of the economies of China and the west. 

Whether that integration can survive the intensification of great-power rivalries is the biggest open question about the new cold war.

The Decline of Republican Demonization

Why has opposition to Biden’s plans been so low energy?

By Paul Krugman

     Jeremy Hogan/SOPA Images and LightRocket, via Getty Images



The American Rescue Plan, President Biden’s $1.9 trillion relief effort, is law. 

But it’s only a short-term measure, mainly designed to deal with the Covid-19 pandemic and its immediate aftermath. 

The long-term stuff — which is expected to combine large-scale infrastructure spending with tax increases on the rich — is still being formulated. 

And everyone says that turning those longer-term plans into law will be much harder than passing the ARP.

But what if everyone is wrong?

Just about every analyst I follow asserted, almost until the last moment, that $1.9 trillion was an opening bid for the rescue plan and that the eventual bill would be substantially smaller. 

Instead, Democrats — who, by standard media convention, are always supposed to be in “disarray” — held together and did virtually everything they had promised. 

How did that happen?

Much of the post-stimulus commentary emphasizes the lessons Democrats learned from the Obama years, when softening policies in an attempt to win bipartisan support achieved nothing but a weaker-than-needed economic recovery. 

But my sense is that this is only part of the story. 

There has also been a change on the other side of the aisle: namely, Republicans have lost their knack for demonizing progressive policies.

Notice that I said “policies.” 

There’s certainly plenty of demonization out there: Vast numbers of Republican voters believe that Biden is president thanks only to invisible vote fraud, and some even buy the story that it was masterminded by a global conspiracy of pedophiles. 

But the G.O.P. has been spectacularly unsuccessful in convincing voters that they’ll be hurt by Biden’s spending and taxing plans.

In fact, polling on the rescue plan is so positive as to seem almost surreal for those of us who remember the policy debates of the Obama years: Something like three-quarters of voters, including a majority of Republicans, support the plan. 

For comparison, only a slight majority of voters supported President Barack Obama’s 2009 economic stimulus, even though Obama personally still had very high approval ratings.

Why the difference? 

Part of the answer, surely, is that this time around Republican politicians and pundits have been remarkably low energy in criticizing Biden’s policies. 

Where are the bloodcurdling warnings about runaway inflation and currency debasement, not to mention death panels? (Concerns about inflation, such as they are, seem to be mainly coming from some Democratic-leaning economists.)

True, every once in a while some G.O.P. legislator mumbles one of the usual catchphrases — “job-killing left-wing policies,” “budget-busting,” “socialism.” 

But there has been no concerted effort to get the message out. In fact, the partisan policy critique has been so muted that almost a third of the Republican rank and file believe that the party supports the plan, even though it didn’t receive a single Republican vote in Congress.

But why this somnolence? 

Republicans may realize that an attempt to revive Obama-era critiques would expose them to ridicule over their record of hypocrisy: After declaring deficits an existential threat under Obama, then dropping the issue the minute Donald Trump took office, it’s hard to pull off another 180-degree turn.

They may also be inhibited by the utter failure of their past predictions, whether of inflation under Obama or a vast investment boom unleashed by the Trump tax cut, to come true — although inconvenient facts haven’t bothered them much in the past.

And at a deeper level, Republicans may simply have lost the ability to take policy seriously.

Jonathan Cohn, author of “The Ten Year War: Obamacare and the Unfinished Crusade for Universal Coverage,” argues that the most important reason Trump failed to repeal the Affordable Care Act was that Republicans have largely forgotten how to govern. 

They no longer know how to think through hard choices, make the compromises necessary to build alliances and get things done.

That same loss of seriousness, I’d suggest, inhibited their ability to effectively oppose Biden’s rescue plan. 

They couldn’t do the hard thinking required to settle on a plausible line of attack. 

So while Democrats were pushing through tax credits that will cut child poverty nearly in half and subsidies that will make health insurance more affordable, Republicans were focused on cancel culture and Dr. Seuss.

And looking forward, why should we expect the G.O.P. to do any better in opposing Biden’s longer-term initiatives?

Bear in mind that both infrastructure spending and raising taxes on the rich are very popular. 

Democrats seem united on at least the principle of an invest-and-tax plan — and these days they seem pretty good at turning agreement in principle into actual legislation.

To block this push, Republicans will have to come up with something beyond boilerplate denunciations of socialists killing jobs. 

Will they? 

Probably not.

In short, the prospects for a big spend-and-tax bill are quite good, because Democrats know what they want to achieve and are willing to put in the work to make it happen — while Republicans don’t and aren’t.