All The Perfumes Of Arabia . . .

When historians write about the Trump Era, they will have to confront his impeachment. And they will no doubt conclude that Congress's failure to remove him from office was a catastrophic mistake. Barry Berke, the Special Counsel to  the House Judiciary Committee writes:

Mr. Trump was impeached because when confronted with an urgent crisis that threatened the security of our country — Russia’s hostile invasion of Ukraine — he put his personal and political interests over the interests of the country. He refused to protect the American people by releasing previously approved and desperately needed military aid for our vital ally unless that country agreed to help his re-election by announcing an investigation of his political rival Joe Biden.

Now, in the midst of the Coronavirus Holocaust, "the parallels are striking and, as with all recidivists, are particularly important for what they reveal about the president’s motives, intent and modus operandi."

In considering President Trump’s motives, there is little doubt that he warned that he might withhold desperately needed equipment from states whose governors did not express appreciation for his efforts, such as Gov. Gretchen Whitmer of Michigan, to force these vulnerable leaders to act in his political interests. Of course, that is exactly the same card he played in response to Ukraine’s request.

The reason the president has made blatantly false claims about the availability of testing, the unmet needs of states for ventilators and masks, and the potential of unproven cures is again to advance his political standing by embellishing the success of his efforts. The reason he dismissed early pronouncements of the dangers of the virus by the health experts in his administration, and denied their validity, is because he cared more about the stock market falling and potentially harming his re-election prospects.

There can be little doubt that the president acted knowingly and intentionally in putting his personal and political interests over the health and safety of the American people by delaying the measures recommended by his advisers. Reports over the past few days reveal that he was warned in late January and early February of the costs of not acting quickly by his most senior advisers, including his health and human services secretary, Alex Azar, and his principal trade adviser, Peter Navarro.

And last weekend, Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases and the administration’s top infectious disease expert, appeared to confirm that he and his colleagues warned of the need for social distancing in mid-February, following a New York Times report detailing the delays. But President Trump nevertheless dismissed those warnings, and delayed announcing the need for social distancing and other actions recommended by his experts.

As the death toll rises in the United States, it's clear that Trump has a lot of blood on his hands. And those who refused to remove him -- when they could have -- also have blood on their hands. They will discover  -- like Lady Macbeth -- that they will never be able to wash that stain away.

Image: Tips From Chip

The New World

At the moment, we are battling the coronavirus. It looks like that battle will last at least 18 months. But, when the battle is over, we will face a new world -- a world which will be riddled with the harvest of our past mistakes. Glen Pearson writes:

In his Sunday television program, Fareed Zakaria spoke about life in the next few years: “We are in the early stages of what is going to become a series of cascading events, reverberating throughout the world.  Economic paralysis is sure to follow … these problems demand global coordination.”

We can be forgiven for fixating on our own domestic travails, but what is about to hit the developing world will be far worse.  Venezuela, India, Brazil and a score of African nations will be ill-prepared for the economic chaos about to hit them and richer developed nations will be hard-pressed to find the resources to assist the world’s poorest when they are attempting to restart their own economies.  Regardless of the coronavirus effects on such poorer regions, the economic aftershock will have devastating consequences on them and millions could perish.

It should be clear by now that the global lack of public investment in both rich and poor nations has left us deeply vulnerable.  We have always known that pandemics were possible, as were escalating climate disasters, the loss of good jobs, decline in public services, and an increasingly ineffective politics, but little was done to avert any of these.  In some cases, they grew worse.

Instability will be the hallmark of this new world:

Increasingly unequal societies are also increasingly unstable.  And since we’ve been underfunding the public sectors for years, we shouldn’t be surprised that so many lie vulnerable to the corona crisis.  The governments that are suddenly there with crisis funding weren’t sufficiently diligent in the years preceding this pandemic.  While economies raged ahead on corporate partnerships and stock market records, the reality was that they were ironically cutting back on the very public services we now require and which have remained in a deficit predicament for years.  That lack of investment has now caught up with us, leaving governments embarrassed at their own lack of capacity to adapt.

And you can bet that the pressure to claw back the money that governments have spent during this crisis will be extreme:

One thing is certain: there will be massive pressure on governments and regulatory agencies to plow funds back into the financial sector as opposed to the public one.  We know all too well what happened when that transpired following the Great Recession of 2008 – the public cupboard was stripped bare in order that the private markets could be stocked.  And not much changed in the years following, leaving many to observe that little was learned in the process.

Should we go down that same route, then societies will go down as well.  If we pump up the financial sector in hopes of bringing the economy back to normal, we will only repeat the fallacies of the past.  Climate change will continue its destructive force.  The labour market will remain volatile.  Poverty will continue to be endemic, made obvious by more vulnerable citizens on the streets.  Public health and education will increasingly rise in cost.  Programs will be cut back or done away with altogether.

Unless the public educates itself on the nature of this crisis, we face our own destruction. At the beginning of the last century, H.G. Wells wrote, "Civilization is a race between education and disaster."

That statement is as true today as when Wells wrote it.

Image: fivebooks.com

Politics At Its Core

We like to think that, in times such as these, we suspend politics and move to another planet. But David Runciman writes that, in times like these, we get to see how politics really work:

In a democracy we tend to think of politics as a contest between different parties for our support. We focus on the who and the what of political life: who is after our votes, what they are offering us, who stands to benefit. We see elections as the way to settle these arguments. But the bigger questions in any democracy are always about the how: how will governments exercise the extraordinary powers we give them? And how will we respond when they do?

These are the questions that have always preoccupied political theorists. But now they are not so theoretical. As the current crisis shows, the primary fact that underpins political existence is that some people get to tell others what to do. At the heart of all modern politics is a trade-off between personal liberty and collective choice. This is the Faustian bargain identified by the philosopher Thomas Hobbes in the middle of the 17th century, when the country was being torn apart by a real civil war.

Hobbes' world was very dark. Life in his world was nasty, brutish and short. But Hobbes understood the true nature of power. Democracies tend to dress up brute force in a lot of platitudes:

The government is doing all it can to dress up its decisions in the language of commonsense advice. It says it is still trusting individuals to show sound judgment. But as the experience of other European countries shows, as the crisis deepens the stark realities become clearer. Just watch the footage of Italian mayors screaming at their constituents to stay at home. “Vote for me or the other lot get in” is routine democratic politics. “Do this or else” is raw democratic politics. At that point it doesn’t look so different from politics of any other kind.

But we are now being reminded of some hard truths:

National governments really matter, and it really matters which one you happen to find yourself under. Though the pandemic is a global phenomenon, and is being experienced similarly in many different places, the impact of the disease is greatly shaped by decisions taken by individual governments. Different views about when to act and how far to go still mean that no two nations are having the same experience. At the end of it all we may get to see who was right and what was wrong. But for now, we are at the mercy of our national leaders. That is something else Hobbes warned about: there is no avoiding the element of arbitrariness at the heart of all politics. It is the arbitrariness of individual political judgment.

In the end, the individual political judgment of our leaders can make the difference between life and death.

Image: You Tube

A Crisis Of Character

Yesterday was a sobering day for Ontarians. The news was grim. Martin Regg Cohn writes:

On Friday, for the first time, Ontario’s top public health experts not only predicted how many people may die by month’s end. More importantly, they also estimated how many have been saved to date and will be spared in the days to come.

Yes, 1,600 are likely to die by April 30 on current trends. But if society can maintain vigilance and social distancing, the latest modelling suggests we would be saving — sparing — 4,400 lives that would otherwise be included in the grim tally of 6,000 total deaths projected in Ontario’s business-as-usual scenario.

In other words, and in precise numbers, we are on track to reduce the death toll by 73 per cent. That is a remarkable force multiplier and life saver, if only we stay the course. (Indeed, in a best-case scenario, we could reduce the death toll as low as 200 with even stronger measures, some of which were added Friday.)

It is also a powerful message of hope. But it also requires belief anchored in evidence and buttressed by resolve.

We're in a grim situation. But it could be grimmer. What -- or who -- will make the difference is us. That's the message from yesterday. We face a health and an economic crisis. But, most of all, we face a crisis of character.

Image: Google Sites

Back To The Centre

For the past thirty years, Canada has been decentralizing. The coronavirus has halted that trend. Our central government is now where the action is. John Ibbitson writes:

Decades of decentralization have been reversed in a matter of weeks. Provincial governments are in desperate straits. Newfoundland and Labrador, the weakest of the lot, teetered on bankruptcy last month, unable to find anyone willing to lend it money.

Our province has run out of time,” Premier Dwight Ball told Prime Minister Justin Trudeau in a letter first reported by CBC. The province, he said, faces an “immediate and urgent financial crisis.”

The coronavirus pandemic “is a major disaster for the provinces,” Philip Cross, a senior fellow at the Macdonald-Laurier Institute, an Ottawa think tank, said in an interview. “They don’t have the fiscal capacity to absorb a shock like this.” In the weeks and months ahead, Ottawa will be paying everyone’s bill. And whoever pays the bill calls the tune.

As was the case during the Great Depression, only the government in Ottawa has the resources to deal with this crisis:

In normal times, provincial governments are dominant players on the federal scene, responsible for the things that matter most in people’s lives: schools, hospitals, highways, welfare. But in times of crisis, the normally weak federal government takes centre stage, because of its greater ability to borrow money and levy taxes.

In the economic emergency caused by the pandemic, Ottawa is using its spending power to protect workers and businesses and to help out provinces as they struggle to develop the capacity to treat patients.

“In past crises, we’ve had major changes in the way we collaborate as a federation," Pedro Antunes, chief economist at the Conference Board of Canada, told me. “And this crisis might also result in changes.”

It's all about which governments can afford to take on mountains of debt:

The biggest immediate challenge for provincial governments could be finding lenders to finance the staggering increases in the cost of health care and other emergency measures, even as revenues collapse, especially because many provinces are already carrying high levels of debt.

In such an environment, said William Robson, president and chief executive officer of the C.D. Howe Institute, a think tank, Ottawa could help the provinces out in three ways.

One would be for the federal government, which has plenty of room to borrow, to raise funds and transfer them to the provinces. But in the past that has led to finger-pointing and a lack of accountability.

“You’re diluting the ability of the citizen to know who’s responsible if they’re unhappy with the quality of their health care," Mr. Robson observed.

Another approach would be for Ottawa to guarantee a provincial bond issue. The third approach, and for Mr. Robson, the preferred one, is for the Bank of Canada to temporarily buy up provincial debt, which is exactly what the bank has started doing, through its Provincial Money Market Purchase program. With the bank’s help, Newfoundland and Labrador should be able to finance its operations.

These monetary moves have been supplemented by the federal government’s efforts to support businesses, workers and the unemployed.

For thirty years, conservatives have been railing at the levels of federal debt. But they may be forced to reconsider their position -- particularly in the aftermath of this crisis.

Image: National Post

Trust

At a moment like this, Trust is the coin of the realm. Last week, the Trudeau government came close to destroying that trust. Robin Sears writes:

The Trudeau government should probably be saying a quiet thank you to Andrew Scheer and Jagmeet Singh for pulling them back from the brink in their shaky handling of the emergency relief legislation. Inexplicably, the government sought the power to tax and spend, with no Parliamentary oversight, until the end of next year. It was unwise, unnecessary and fed directly into Liberal opponents’ favourite meme about the governing party as sneaky and power hungry.

They deserve credit for quickly moving to mend the self-inflicted damage. All parties, with the exception of some predictable showboat backbenchers, deserve credit for mostly foregoing the usual partisan hyperventilating, leaving the tough talk to private negotiations.

One may hope there were voices on the government side who said, “Wait a minute! This will destroy trust in us to govern fairly, openly and competently. Lose that trust and we lose the country!” I think we may be confident that all the political players will understand how essential it will be to avoid another such potentially disastrous moment.

However, this moment will last for quite a while. And, when the virus subsides, we will truly be faced with the problem of trust:

Discussion will soon have to turn to issues of recovery and payback. As the medical crisis crests and begins to come under control, the economic crisis will continue to deepen.

It is at that moment, perhaps over the summer in Canada, that trust in our politicians and business leaders will become invaluable. They will need to triage economic assistance, making some who get pushed down the list, even more frightened and angry.

Business leaders will need to be seen to be “doing the right thing” by their employees, customers and community. Those who now turn to making ventilators and PPE products for free or at cost for front line workers will have built a reservoir of trust that will help carry them through their own priority-setting nightmares.

COVID-19 is testing our national character. Let's hope we can pass the test.

Image: Facebook

COVID-19 In Australia

Brigid Delaney writes that COVID-19 is ravaging Australia:

By Monday an estimated 88,000 people lost their jobs in the hospitality industry alone and tried to file for unemployment. The system crashed under the demand.

Black Monday brought waves upon waves of frightening news (record job losses, NRL season over, Olympics won’t go ahead, Queensland to shut borders, 3,000 Australians stranded on cruise ships; pubs, cafe, licensed premises, gyms etc all shut at midday). There were heartbreaking sights: the streets all across the country empty, except for thousands and thousands of people queuing at a mandated social distance for Centrelink. The next day people started lining up at 4:30am.

The virus is invisible – but the economic devastation is a tragedy you could see. Each job loss represents a seismic explosion in an individual’s world. By the end of Monday at least 15% of people I know had lost a substantial portion of their income, or their jobs or businesses they had spent decades building up.

Suddenly jobless in my circle were yoga teachers, barmen, baristas, cafe owners, a university support worker, university cleaner, personal trainers, roadies, two tour managers for bands, freelance journalists, friends in PR and regional journalism, playwrights, coffee cart owners, sound engineers, winery owners, chefs, cinema operators, kitchen hands, film production crew, ushers at theatres, stage hands, driving instructors, those doing contract work for financial services, event organisers, florists and professional MCs.

Around the world, the virus leaves upheaval and fear in its wake:

Fear is everywhere this week. You can see it in people’s eyes and hear it in their voices. It even leeches out of text messages – as if the virus had the power to distort even the most disembodied form of communication.

The fear is not just the mortal fear of contracting what could be a deadly virus, the fear is losing your job and having no money, the fear is being evicted and made homeless, the fear is foreclosure, the fear is being separated from your family – whether interstate or overseas (or in my case, a town two hours away), the fear is bankruptcy and sacking your staff, the fear is your debt, the fear is for the education and anxiety of your children, the fear is for the health of your elderly parents, the fear is for your immunocompromised friends. It goes on.

These are very trying times -- all over the world.

Image: BBC

What We Have Learned About Ourselves

The coronavirus provides us with a societal mirror in which we can see our flaws. In the United States, the flaws are glaring. Bruce Arthur writes:

In the United States the country’s fundamental sicknesses have not been put aside for the pandemic, and the structural weaknesses of the superpower — the bluff of a tilted economy, for-profit health care, the failed state of the Republican Party, and the irredeemable black hole of narcissism and ignorance from its president — have not budged.

Donald Trump trumpets unproven cures, promises empty solutions, and argues with scientists on live TV to cover his failures. He is pushing the idea that the economy is more important than a health system crushed, and perhaps millions dead, as Senate Republicans fight things like paid sick leave.

In America, the mirror shows something like the days before the French Revolution, but with fewer wigs. Trust and information levels between political parties are a chasm. It is a daily tragedy.

In Canada, we've done better. But we've been slow to recognize the danger:

Several public health authorities, including Ontario, are still limiting gatherings to 50, which doesn’t make any scientific sense epidemiologically, or when the message is stay six feet apart. (Quebec has limited public gatherings to two.) Especially given the testing gaps in the system, especially in Ontario, which has us still a little blind. Several doctors who do front-line testing in Toronto are apoplectic about the public health standards for who gets a test.

We’ve been too slow. Governments have been too trusting in establishing restrictions, and Canadians have not had enough societal discipline to listen to governments or responsible media. If you played beer pong in Vancouver or anywhere this weekend, your posterior should be paddled in public by someone standing six feet away.

This is a test for our society. It will take a while before we can grade ourselves. But the mirror tells us that we can still do better.

Image: Facebook

We Can't Go Home Again

Robin Sears writes that we are facing a challenging future:

Now we see the emergence of heroes and misfits. Beach partygoers versus nurses working 18-hour shifts. Most media are trying to celebrate the heroes more, while also castigating the selfish. The world’s most famous cellist, Yo-Yo Ma, has launched a campaign to bring art and music from ordinary citizens to the world. It has already produced thousands of uplifting moments (#songsofcomfort). Choir masters and artists are stepping up with similar projects offering respite from another bleak day.

Next will come a peak in recrimination and criticism of the speed, effectiveness, fairness and impact of government responses and the stupidity of some chiselling corporations. The unreachable embassy, the collapsing phone banks, those airlines and credit card companies treating their clients cruelly.

We've made a fairly good start. But we are really going to be tested:

Our health system is being tested as never before. Those who hold it together need to know how much we respect and honour them for their heroic struggles not to allow it to collapse.

But a bigger challenge lies just over the horizon: taking the steps to prevent a repeat pandemic.

Changing the way we live will be part of that. China has inflicted three medical crises on the world in less than two decades. The world has every right now to say, “Stop the bizarre and unacceptable practice of hunting, selling in open markets and eating toxic wild animals. Now.”

Greenhouse gas emissions have collapsed in the hardest-hit countries. Maybe we can find ways of avoiding the 2009 5 per cent bump up we hit on recovery. Corporations that replace carbon-based systems with green technology should receive more support than those who don’t.

It is much easier to declare bankruptcy than to fight back from it. It easier to build a wall than a bridge. But ongoing barriers to trade and community will only lengthen the social and economic pain. Some of the emergency measures now rolling out should be assessed in a few months for what worked and what should stay. Why not have a guarantee of sick pay for every worker? Why not have a form of EI for the millions of Canadians who are self-employed?

Lots of questions. We should take them seriously -- because the world has changed, and we can't go home again.

Image: 365 Days In Aspen

The New Normal

For years now, the gig economy has been morphing into our new economic model. Martin Regg Cohn writes that the coronavirus has made gig workers of us all:

If you think these are tough times, spare a thought for those already living it, and likely to experience it for the rest of their working lives. Who are these people?

Today these people are us, cooped up at home. But in recent years, it has been a lot of “other” people — from the millennial children of boomers who have never known anything but the gig economy, to new immigrants lacking local experience, to older workers lacking retraining.

Bouncing from part-time job to contract job to temporary job. Waiting at home to get a gig offering free food samples to shoppers; or on call to deliver your Amazon parcels; or checking the part-time roster at Tim Hortons for an unscheduled shift.

The new world of work long predates the novel coronavirus. And long after the pandemic disappears, the gig economy will keep growing — and going viral — with all the uncertainty, insecurity and disruption you feel in your bones today.

And when the virus subsides, the gig economy will be stronger than ever. We need to develop policies to deal with it:

Now that we have your attention and rumination, consider the solution. Like infectious diseases, insecurity is nothing new — it keeps coming back in one form or another.

We all hope there will one day be a vaccine for the pandemic.

But we already have the antidote to precarity: security — income security.

Income security sounds like something abstract or complicated, but nothing could be more tangible and understandable: If you lose income, you make itI up with a guaranteed minimum; if you gain or regain income, you give up your supplement (it’s taxed back).

Consider the current patchwork of social welfare programs for those in need, in economic distress, or without employment income:

Ontario Works and the Ontario Disability Support Program. There’s also EI, OAS, GIS and ODB — short for Employment Insurance, Old Age Security, Guaranteed Income Supplement and Ontario Drug Benefit.

There are many more, but you get the idea. Yet did you truly know — before the pandemic hit and emergency aid magically appeared from Ottawa — that less than one-third of unemployed Ontarians were eligible for jobless benefits?

And that's the problem. What is available to one-third of us should be available to all of us. That should be the new normal.

Image: SlidePlayer

Required Policy

Scott Clark and Peter DeVries write that we are headed for a very large deficit. But it's manageable:

It won’t be long before people will start asking about what all this will do to the deficit. The December 2019 Economic and Fiscal Update (Update) forecast a deficit of $28.1 billion for the current fiscal year.  That was before COVID-19 and the sharp decline in oil prices. This has now been increased by $27.4 billion to $55.5 billion, assuming only $27.4 billion will be required and the economy rebounds quickly after one quarter. But it could be much higher if the ERP [Economic Recovery Plan] is in place for nine months, rising to $110 billion (4% of GDP).

But this ignores the impact of shutting down the economy. Right now no one knows. Private-sector economists are all over the map as to what could happen over the next 12 months.  Some are forecasting a decline in real GDP for one quarter only, others for three quarters. Some expect only a marginal decline in GDP, while others expect double-digit quarterly declines.

The government would be wise not to table a budget or even an Economic and Fiscal Update at this time. This would be prudent and quite understandable in the current circumstances.  We are living in a world of complete uncertainty both globally and domestically.  The current health and economic environments are intertwined and extremely volatile. Quarterly economic data for the first quarter will not be available until May and for the second quarter until August, although monthly data published in the interim will provide an indication of what is happening.

Recent history provides a little perspective:

During the 2008/2009 financial crisis, the deficit in 2009/10 reached $56.4 billion of which $18 billion was attributable to the stimulus measures, meaning that economic developments amounted to $38.4 billion of the deficit outcome. Real economic growth declined for three consecutive quarters, by 1.2 per cent, 2.3 per cent and 1.1 per cent, respectively.

If the economic impacts were similar, this would result in a deficit of $93.9 billion for 2020-21. However, GDP is much larger now than in 2009.  In addition, the impact of COVID-19 on the economy is likely to be much greater than that of the financial crisis. Finally it is very likely the government will have to extend the policies announced to date to the second half of 2020-21. This could add another $55 billion to the deficit. A deficit of $150 billion (6% of GDP) or higher is very possible.

But people shouldn't panic when they see big numbers:

This is a manageable deficit. It is a cyclical deficit, not a structural deficit. It can be eliminated relatively quickly once the COVID-19 is halted in Canada and other countries, the global economy and domestic economy begin to recover and temporary anti-virus policies are removed.

There are times when going into debt is simply required policy.

Image: Investopedia

Remaking the World

The COVID-19 pandemic is forcing the Trudeau government to rebuild the Unemployment System we once had. Tom Walkom writes:

In 1995, Jean Chrétien’s Liberal government effectively gutted what it by then was calling Employment Insurance, reducing payouts and making it much more difficult for the jobless to qualify for benefits. In one blow, the federal government rendered irrelevant one of Canada’s premier social programs. That irrelevance only grew as governments across the country allowed businesses to avoid payroll taxes by treating their workers as self-employed, independent contractors ineligible for EI.

By last December, only 39 per cent of the unemployed qualified for EI. But jobless rates were low anyway and no one much cared. Until the coronavirus epidemic struck.

Now workers are once again losing income. The reasons differ from the experience of the 1930s. People are staying away from work for health rather than economic reasons. But the effects are the same. Through no fault of their own, large numbers of Canadians are effectively unemployed.

The feds have added additional programs to the old one:

The Emergency Care Benefit will provide up to $450 a week for up to 15 weeks to those required to stay home from work who don’t qualify for either paid sick leave or EI.

The Emergency Support Benefit will provide an as-yet-unspecified amount of money to those facing unemployment who don’t qualify for EI.

In effect, the Liberal government is reinventing an unemployment insurance scheme that will actually cover the unemployed.

Bill Morneau claims that these are temporary measures. But they will have to become entrenched -- for at least two reasons:

First, there is no guarantee that this epidemic will be over soon. Even the eternally optimistic Trudeau says this emergency could last months.

Second, we will almost certainly face more emergencies. Some will be epidemics like this one. Some will result from climate change. Some will stem from the financial and economic contradictions in world markets.

The world is being remade.

Image: ResearchGate

A Brave New World

While he applauds the federal government's support package, Jim Stanford writes that it should be larger -- and it will have to be larger -- because there are bigger shoes to drop:

Clearly, this terrible situation is going to get worse before it gets better. Expect the April labour force data (to be published in early May … assuming Statistics Canada staff are able to work!) to show a sudden decline in employment of 300,000 or more -- by far the biggest one-month drop in Canadian history. That would push the unemployment rate quickly up toward 7 per cent, with more to come. (The March data, based on a phone survey conducted last week, before school closures and other emergency measures were implemented, will capture only the beginning of the downturn.) Knock-on effects from the initial lay-offs (experienced through shocked consumer spending, disrupted supply chains, bankruptcies or closures) will cause those losses to cascade in subsequent months. Assuming the lock-down is extended for some weeks, expect a hit to annualized second-quarter GDP in the order of 10 per cent or potentially more, and unemployment to rise to 12-15 per cent.

It's been quite a while since we've seen unemployment numbers like these. And a lot of the unemployed will be people who have never been covered by EI. The federal government is the only institution that has the tools to deal with this crisis:

There is no doubt, then, that more immediate support will be required in many areas, as this crisis continues to unfold. All three leaders today indicated their understanding of this, and their willingness to act, which is encouraging. And apart from a few gratuitous boasts by Mr. Morneau about how Canada's "strong fiscal position" allows his government to act powerfully, there is almost no discussion of "how will we pay for it." Of course, no matter how big Canada's public debt was today, there is still no limit on the federal government's ability to create purchasing power and mobilize resources. This idea, once heretical, has now been widely accepted, even in polite mainstream company. Even Governor Poloz agreed today that quantitative easing is now a "standard part of the central bank toolkit." Progressives can push hard to make sure the full capacity of government and the central bank is used ambitiously and fairly -- and that it isn't replaced by knee-jerk austerity once the immediate crisis is over.

And, when this crisis is over, the federal government is going to have to be restructured to deal with the brave new world this virus represents.

Image: Big Think

We Need A Paradigm Shift

Andrew Nikiforuk writes that COVID-19 is a wildfire:

A pandemic is like a wildfire. The more fuel it finds, the hotter it burns and before you know it is running out of control, and there are not enough resources to put it out.

COVID-19 is a fire burning through human communities. We can slow this fire and perhaps even manage its spread by purposely reducing the fuel load. That means breaking the chain of infection by closing public places, eliminating travel and avoiding crowds, and washing hands.

But inertia is the general response to things that cannot be seen, such as multiplying viruses in asymptomatic carriers. Canada did not restrict travel from infected areas fast enough. It did not test and contain enough. Now that community spread is well established in B.C., Alberta and Ontario, things will get ugly before they will get better.

But community action can still determine how bad things become and how fast we recover from this biological invasion.

We long ago stopped acting as citizens and started thinking of ourselves as consumers. But acting like a consumer will not stop this virus:

COVID-19 is a stealth virus and an entirely new one. It can breeze through a community much like the flu, but is ten times deadlier.

It is highly contagious and could have an infection rate between 35 per cent and 70 per cent in Canada. That means if one infected person mingles in a crowd of 50 people and shakes hands and sneezes, between 15 and 35 people will become infected. 

By the time health officials reported three deaths from COVID-19, as many as 1,500 infections have already passed through the community, reports University of Toronto epidemiologist David Fisman. How can that be when the reported death rate in other countries is far higher than three out of 1,500? Because we are at a moment when the virus is being spread quickly and widely but quietly because so many aren’t yet showing symptoms. The curve is almost certainly sharply steepening; we just can’t see it yet.

Dr. Michael Warner, an intensive care doctor at Michael Garron Hospital, elucidates on the math: There are 14.5 million Canadians in Ontario. Thirty per cent could contract COVID-19. Of those infected, five per cent will require time in intensive care. That’s 217,500 patients. But there are only 400 ICU physicians in Ontario who normally care for 12 to 16 patients. 

“Soon everyone in Canada will know someone with #COVID-19. Do we have to wait for this to occur to acknowledge it is completely irresponsible for the government to deem safe gatherings of (less than) 50 people?” he recently asked on Twitter.

“If you wait until it’s a crisis and then say we’re going to respond to this crisis by implementing drastic public health measures, they will work, they will work predictably, but you’ve already missed the boat,” Fisman has warned repeatedly.

“The time to intervene,” he said on CBC, “was before it got bad because you knew it was going to get bad, you knew that when it was quiet was the time for you to intervene.”

Given the math, the path is clear. It's time to become citizens again. The lives of thousands of Canadians depend on a paradigm shift.

Image: System 100

Society The Enabler

Today Ontario declared a state of emergency. It joins PEI and Quebec in doing so. This really is crunch time and we all have to act responsibly. Andre Picard writes:

The only way to slow this pandemic is for all of us to become helpers, to embrace the now-familiar concepts of social distancing and self-isolation. In these extraordinary times, we are being asked to take extraordinary actions.

Work from home. Avoid social gatherings. Stop all travel. If you’ve returned from travel, self-isolate – meaning no contact with anyone for 14 days. Schools are being closed. Our sources of entertainment, from pro sports to theatres, are being shut down. Soon, so too will restaurants, bars, malls and all other non-essential services. Grocery stores and pharmacies will remain open.

These are sacrifices. They will last for a while. But we’ve survived much worse.

In times of crisis, it is always the most vulnerable who suffer most – the frail elderly, people with disabilities, the working poor, the homeless.

Social solidarity is needed now more than ever, and one senses that it is building.

For fifty years, we have been on a hyper-individualism sugar high, egged on by Maggie Thatcher's declaration that "there is no such thing as society." Obviously, the Iron Lady was dead wrong. It is society that enables us to survive.

Image: Opening Gates

The Economic Consequences Of COVID 19

The economic consequences of the COVID 19 pandemic will be far-reaching. Jim Stanford writes:

It is increasingly clear that the economic fallout from the pandemic is also going to constitute an emergency. And it requires government to respond as urgently and powerfully in the economic sphere, as they are attempting for public health.

What needs to be done? Stanford suggests several interventions:

1. Immediate Mobilization of Resources to Protect Health: Obviously governments and health authorities must now throw every possible real resource into protecting health, as much as they can, including:

More staff at health facilities.
Alternate off-site or mobile testing capacities.
Home support for people quarantined or recovering at home.
Quick expansion of capital equipment (including buildings and equipment), as much as possible.

2. Income Protection for Workers: The pandemic has exposed a frightening and dangerous aspect of the new precarious labour market. Only about half of employed people now work in a "standard" full-time permanent job with benefits -- like sick leave. So when people are instructed to stay home from work to avoid spreading the virus, many incur a major and immediate financial loss. Unfortunately, that will compel some to ignore the health advice and keep working -- with catastrophic health consequences. This pandemic is reminding us that the wellbeing of everyone, depends on the wellbeing of everyone else. The short-sighted responses of some business leaders, complaining about the cost of sick leave and that workers "whine" or "fake" their conditions, is as morally repugnant as it is clinically destructive. (For a despicable example, see Howard Levitt's comments about workers imagining illness on CBC's The Current).

3. Debt Relief: Morneau and his colleagues moved quickly today to assure businesses that they can continue to access credit to maintain operations and stave off bankruptcy. There will likely be a need for more hands-on support for firms in many industries (including airlines and other transportation and tourism providers). It makes sense to keep businesses from going bankrupt at a time when unemployment is rising anyway, but those interventions need to learn from the mistakes of past rescues. Conditions must be attached to protect employees at these firms right through the crisis (like no layoffs), and to ensure that rescued companies are held to long-term performance requirements (including future Canadian production and employment). The memory of major banks and automakers that were bailed out at the public's expense in 2009, and then quickly returned to their bad old ways (speculative lending and industrial disinvestment, respectively) reminds us to leverage our support during times of crisis into long-run influence over their subsequent activities. The best approach in that regard is to take public equity stakes in these businesses as a condition of financial support (as some European countries did with banks and other major bailed-out businesses).

But, most importantly -- when this is over -- the economy will have to be reconstructed. And that presents an opportunity:

The traditional tools of stabilization (monetary and fiscal adjustments) are clearly not capable of addressing the scale of the problem. Monetary policy, indeed, has already lost most of its effectiveness: with interest rates near zero, and borrowers scared deeply about what lies ahead, the emergency interest rates cuts announced by the Bank of Canada this week will have virtually no impact on real economic activity in the coming year or longer. (It probably won't even reignite house price inflation, which has been its dominant "achievement" of late.)

And fiscal interventions will need to go far beyond counter-cyclical stabilization. Canada's economy will need to rely on public service, public investment and public entrepreneurship as its main "engines" of growth, to recover from the coming downturn, prepare for future health and environmental crises, and improve conditions in our communities. The abysmal failure of private business capital spending in recent years -- which has fallen by one-third as a share of GDP since the turn of the century, despite hugely expensive corporate tax cuts -- was already indicating a growing role for public investment to lead the way. Now, in this moment, it is laughable to imagine that private capital spending or exports will somehow lead the reconstruction of a national economy that will experience an unprecedented and scarring shock.

There is no shortage of urgent rebuilding required in our economy and our communities: sustainable transit, green energy, non-market housing, expanded public services (including aged care and early child education) and any number of other urgent priorities. The case for mobilizing those resources, under the leadership of governments and other public institutions, is compelling. We can put people to work, repair the damage of this crisis (and better prepare for the next one), and deliver valuable services. All we need is the willingness to imagine a different model of organizing and leading economic activity.

We are in a very trying situation. But, if we think carefully, we might make our nation better -- much better.

Image: Diply

Modernity On Trial

Andrew Coyne writes that modernity itself is now on trial:

The whole project of modernity, and of the nation-state that was its creation, was to relieve individuals and communities of certain risks, against which they had previously had to protect themselves. Cities are no longer ringed by walls that protect against marauding bands; nor are property owners obliged to cower behind stone fortifications, surrounded by moats. We move about with an ease and freedom from fear that would astonish all but the past few generations; exchange millions on a handshake; and so on, all the many ways in which we have been allowed, as it were, to let down our guard.

Until lately, the trend had been toward greater integration. Competition, itself intensified by integration, drives a relentless search for greater efficiency, in ways that imply ever tighter integration: just-in-time delivery, global supply chains, e-commerce. But with that tighter integration comes an increasing fragility. The more connected we become, the more productive; the more productive, the more dependent on those connections; the more dependent, the more vulnerable to their disruption.

In an increasingly integrated world, trust is the coin of the realm. And these days, trust -- the foundation of modernity -- is under attack:

One of the things in which we trust, for example, is that our dealings with others will not leave us killed or crippled by a communicable disease. 

Until as late as the previous century, this would have been a dangerous bet. For most of human history, plagues of one kind or another were regular visitors, wiping out a third or more of their host populations, only to do the same or worse in succeeding centuries.

Over the last fifty years, the political right has been dedicated to destroying the institutions we established to promote trust. We have now reaped what we have sown.

Image: inc.com