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Economy

It’s Not the Economy. It’s the Pandemic

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America is in a funk, and no one seems to know why. Unemployment rates are lower than they’ve been in half a century and the stock market is sky-high, but poll after poll shows that voters are disgruntled. President Joe Biden’s approval rating has been hovering in the high 30s. Americans’ satisfaction with their personal lives—a measure that usually dips in times of economic uncertainty—is at a near-record low, according to Gallup polling. And nearly half of Americans surveyed in January said they were worse off than three years prior.

Experts have struggled to find a convincing explanation for this era of bad feelings. Maybe it’s the spate of inflation over the past couple of years, the immigration crisis at the border, or the brutal wars in Ukraine and Gaza. But even the people who claim to make sense of the political world acknowledge that these rational factors can’t fully account for America’s national malaise. We believe that’s because they’re overlooking a crucial factor.

Four years ago, the country was brought to its knees by a world-historic disaster. COVID-19 hospitalized nearly 7 million Americans and killed more than a million; it’s still killing hundreds each week. It shut down schools and forced people into social isolation. Almost overnight, most of the country was thrown into a state of high anxiety—then, soon enough, grief and mourning. But the country has not come together to sufficiently acknowledge the tragedy it endured. As clinical psychiatrists, we see the effects of such emotional turmoil every day, and we know that when it’s not properly processed, it can result in a general sense of unhappiness and anger—exactly the negative emotional state that might lead a nation to misperceive its fortunes.

The pressure to simply move on from the horrors of 2020 is strong. Who wouldn’t love to awaken from that nightmare and pretend it never happened? Besides, humans have a knack for sanitizing our most painful memories. In a 2009 study, participants did a remarkably poor job of remembering how they felt in the days after the 9/11 attacks, likely because those memories were filtered through their current emotional state. Likewise, a study published in Nature last year found that people’s recall of the severity of the 2020 COVID threat was biased by their attitudes toward vaccines months or years later.

When faced with an overwhelming and painful reality like COVID, forgetting can be useful—even, to a degree, healthy. It allows people to temporarily put aside their fear and distress, and focus on the pleasures and demands of everyday life, which restores a sense of control. That way, their losses do not define them, but instead become manageable.

But consigning painful memories to the River Lethe also has clear drawbacks, especially as the months and years go by. Ignoring such experiences robs one of the opportunity to learn from them. In addition, negating painful memories and trying to proceed as if everything is normal contorts one’s emotional life and results in untoward effects. Researchers and clinicians working with combat veterans have shown how avoiding thinking or talking about an overwhelming and painful event can lead to free-floating sadness and anger, all of which can become attached to present circumstances. For example, if you met your old friend, a war veteran, at a café and accidentally knocked his coffee over, then he turned red and screamed at you, you’d understand that the mishap alone couldn’t be the reason for his outburst. No one could be that upset about spilled coffee—the real root of such rage must lie elsewhere. In this case, it might be untreated PTSD, which is characterized by a strong startle response and heightened emotional reactivity.

We are not suggesting that the entire country has PTSD from COVID. In fact, the majority of people who are exposed to trauma do not go on to exhibit the symptoms of PTSD. But that doesn’t mean they aren’t deeply affected. In our lifetime, COVID posed an unprecedented threat in both its overwhelming scope and severity; it left most Americans unable to protect themselves and, at times, at a loss to comprehend what was happening. That meets the clinical definition of trauma: an overwhelming experience in which you are threatened with serious physical or psychological harm.

Traumatic memories are notable for how they alter the ways people recall the past and consider the future. A recent brain-imaging study showed that when people with a history of trauma were prompted to return to those horrific events, a part of the brain was activated that is normally employed when one thinks about oneself in the present. In other words, the study suggests that the traumatic memory, when retrieved, came forth as if it were being relived during the study. Traumatic memory doesn’t feel like a historical event, but returns in an eternal present, disconnected from its origin, leaving its bearer searching for an explanation. And right on cue, everyday life offers plenty of unpleasant things to blame for those feelings—errant friends, the price of groceries, or the leadership of the country.

To come to terms with a traumatic experience, as clinicians know, you need to do more than ignore or simply recall it. Rather, you must rework the disconnected memory into a context, and thereby move it firmly into the past. It helps to have a narrative that makes sense of when, how, and why something transpired. For example, if you were mugged on a dark street and became fearful of the night, your therapist might suggest that you connect your general dread with the specifics of your assault. Then your terror would make sense and be restricted to that limited situation. Afterward, the more you ventured out in the dark, perhaps avoiding the dangerous block where you were jumped, the more you would form new, safe memories that would then serve to mitigate your anxiety.

Many people don’t regularly recall the details of the early pandemic—how walking down a crowded street inspired terror, how sirens wailed like clockwork in cities, or how one had to worry about inadvertently killing grandparents when visiting them. But the feelings that that experience ignited are still very much alive. This can make it difficult to rationally assess the state of our lives and our country.

One remedy is for leaders to encourage remembrance while providing accurate and trustworthy information about both the past and the present. In the early days of the pandemic, President Donald Trump mishandled the crisis and peddled misinformation about COVID. But with 2020 a traumatic blur, Trump seems to have become the beneficiary of our collective amnesia, and Biden the repository for lingering emotional discontent. Some of that misattribution could be addressed by returning to the shattering events of the past four years and remembering what Americans went through. This process of recall is emotionally cathartic, and if it’s done right, it can even help to replace distorted memories with more accurate ones.

President Biden invited the nation to grieve together in 2021, when American death counts reached 500,000, and again in 2022, when they surpassed 1 million. In his 2022 State of the Union address, he rightly acknowledged that “we meet tonight in an America that has lived through two of the hardest years this nation has ever faced,” before urging Americans to “move forward safely.” But in the past two years, he, like almost everyone else, has largely tried to proceed as if everyone is back to normal. Meanwhile, American minds and hearts simply aren’t ready—whether we realize it or not.

Perhaps Biden and his advisers fear that reminding voters of such a dark time would create more trouble for his presidency. And yet, our work leads us to believe that the effect would be exactly the opposite. Rituals of mourning and remembrance help people come together and share in their grief so that they can return more clear-eyed to face daily life. By prompting Americans to remember what we endured together, paradoxically, Biden could help free all of us to more fully experience the present.

George Makari is the director of the DeWitt Wallace Institute of Psychiatry at Weill Cornell Medical College. He is the author of Of Fear and Strangers: A History of Xenophobia.
Richard A. Friedman is a professor of clinical psychiatry and the director of the psychopharmacology clinic at Weill Cornell Medical College. He has written about mental health and neuroscience for The Atlantic, The New York Times, and The New England Journal of Medicine.

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

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Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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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.

The Canadian Press. All rights reserved.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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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.

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