Paul Constant is a writer at Civic Ventures, a cofounder of the Seattle Review of Books, and a frequent cohost of the „Pitchfork Economics“ podcast with Nick Hanauer.
He writes that the Trump administration has done more to try and protect Wall Street from coronavirus than Main Street – where ordinary Americans own businesses and work.
He’s in Seattle, one of the hardest-hit regions, and has seen firsthand how businesses are suffering.
He says a middle-out stimulus that prioritized low- and middle-income Americans would pay for itself.
At this relatively early stage in the coronavirus outbreak, one thing should be abundantly clear to everyone: The Trump administration has done more to try to protect Wall Street from the negative effects of COVID-19 than it has to protect Main Street.
I’ve been thinking a lot about what a good national response to the coronavirus outbreak would look like. Of course, we should institute a healthy wealth tax in order to get our public health and scientific research sectors back up to fighting weight. Other nations have provided testing and public health activity that makes America’s response look pathetic in comparison.
But our workers and our entrepreneurs are suffering right now. Everyday Americans can’t make ends meet, and the businesses that they’ve invested their life savings into are going to die without some sort of intervention.
From here on the ground in Seattle - the hardest-hit region in the American coronavirus outbreak so far – I can tell you that Trump’s top-down economic response has it all backwards. My fellow Seattleites aren’t worried about their 401Ks at the moment: they’re worried about their next paychecks, or whether their small businesses can survive another few weeks of social distancing and self-quarantine.
Many Seattleites aren’t leaving the house except for essential supply runs, and as a result, bookstores and movie theaters and restaurants are empty. I’ve seen multiple local entrepreneurs state on social media in the last week that if the region continues to suffer under the shadow of pandemic for much longer, they might go out of business. (Some silver lining: In other parts of the country, workers aren’t sure how they’re going to pay rent if they can’t get to work, but at least Democratic leadership in Washington State recently passed a good paid sick leave law, so that’s less of an issue here.)
In 2008, when a mortgage bubble imperiled America’s largest banks, the federal government came together in a bipartisan effort to prop up the economy with taxpayer money. The stimulus package is largely considered to have curbed the Great Recession, lessening its impact on everyone. But that stimulus money never really trickled down to the average American. Our wages stayed stagnant in the years after the Great Recession, slowing the recovery down by throttling consumer spending across the economic spectrum.
The coronavirus, then, offers us a unique opportunity – a chance to correct one of the biggest economic errors of the last fifteen years. We can restore the economy, improve our communities, and generate wealth for everyone.
It’s time for a middle-out stimulus that prioritizes Main Street over Wall Street.
We know that the American economy is powered by consumer demand. That’s why communities like Seattle which raised their minimum wage have seen their local economies grow: when more people have more money to spend, it’s good for everyone – that money circulates in the community, from business to business, creating more jobs and more wealth for everyone.
If the coronavirus causes a recession, that could create a negative feedback loop: small businesses around the country will close, laying off workers who will then not have any money to spend in their communities, leading to more business closures. Giant banks have proven that they’re unable or unwilling to generate this kind of small-business growth, and giant employers like Boeing have proven that they’re terrible neighbors.
So it’s time for a stimulus that puts individual Americans first, encouraging growth on Main Street that will buoy the entire economy – including Wall Street. The fantastic thing about a middle-out stimulus is that it’s not an either/or proposition; the markets are largely informed by stability and consumer demand, so a stimulus package for low- and middle-income people would naturally help Wall Street stabilize by building economic stability from the ground up.
I don’t have the policy for a middle-out stimulus in my hand right now. It’s something that we’d need to quickly hash out in the next few weeks. But I can tell you that a few good organizations have been working on relief policies that would help soothe the pain of the coronavirus slowdown.
Congress should infuse money into state workers comp and unemployment funds, especially in the hardest hit states, so that these existing systems can provide benefits to all quarantined workers and those forced to work reduced hours (through short-time compensation). The federal government should also immediately increase funding for food stamps, housing, and utilities assistance, and suspend restrictions on access. A temporary reduction in federal payroll taxes would provide a little extra cash for both workers and businesses.
It’s obvious that we also need to offer low-interest loans and easy-to-access grants for struggling small businesses, as well as make loans available for people looking to start a business in the days after the outbreak.
And I’d also include freelance and gig economy workers in that grouping of small business owners. Here in Seattle, for instance, self-employed artists were dealt a huge blow when the coronavirus shut down the Emerald City Comic Con, which was scheduled for this coming weekend. Shoppers at the four-day convention provided up to a third of those artists‘ annual income – and as self-employed businesspeople, they should enjoy at least the same level of security that the oil and shale industry is demanding from the Trump administration.
And here’s where the wails and gasps and moans chime in: „That kind of a stimulus package would cost billions! How on earth are you going to pay for it?“
First of all, I’m not particularly interested in the answer to that question. While Trump and his administration were trying to sell their corporate tax cuts to the American people, they promised that the cuts would pay for themselves. The benefits of the cuts would trickle down to the American people, they promised, in the form of higher wages and better jobs.
None of that happened. The corporate tax cuts didn’t create jobs. They didn’t pay for themselves. Instead, corporations and wealthy Americans kept all the money.
A Main Street Stimulus Package, though, would absolutely pay for itself. With more money in their pockets, people would spend that money in their local communities. Business owners would invest in improvements. Competitors would open businesses to get a share of that increased consumer demand. And profits would trickle up the supply chain to the same corporations who failed to share their tax-cut wealth with us three years ago. Everyone benefits.
But as it happens, I do have an elegant solution for How We’ll Pay for It: Just ask Congress to revoke the Trump tax cuts, and then devote the increased tax revenue to employers of small businesses and entrepreneurs. We could be talking about trillions of dollars in stimulus money, depending on how long the program lasts.
The important thing is that we can’t allow the Trump White House to pull off a second tax scam – or, worse, a wholesale gift of billions in taxpayer dollars to the same people who squandered stimulus money last time. Instead, we need to treat this outbreak as an opportunity – a chance to give the American people a shot to rebuild this country from the ground up. Wall Street had their shot at fixing the economy. Now it’s Main Street’s turn.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
