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Conrad Black: Getting a handle on COVID-19's economic fallout – National Post

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The coronavirus crisis is complicated by the unusual state of panic that has possessed much of the world, and by the somewhat divergent concerns and goals of those addressing the medical questions and those trying to cope with the economic damage. The national American political media, in their hostility to the president in an election year, and before the proportions of the pandemic were clear, fanned the fires of public hysteria. At the same time, the Chinese government and media (the second is a branch of the first) first dissembled and lied about the virus and are now engaged in an immense work of fabricated myth-making. For two or three weeks, the spread of the virus in China appeared to be completely uncontainable and the U.S. administration was trying to damp down concern in a manner that seemed somewhat cavalier.

The American picture has clarified sharply, with a committee of scientific and public health administration experts developing policy under the chairmanship of the vice-president and the sponsorship of the president. It is now clear that partisanship is completely out of fashion and that the country demands unity and action to deal with a crisis that threatens everybody. Everyone seems now to be observing the spirit of the suddenly threatening times and there is a good deal of old-fashioned bi-partisan work between the Congress and the administration. It is refreshing to behold and reminds the venerable and American history buffs of president Franklin Roosevelt’s inspired war-time leadership and presidents Harry Truman and Dwight Eisenhower’s very capable and patient management of the institutions that won the Cold War, almost bloodlessly. Much of this was lost in Vietnam and after president Ronald Reagan led the West out of the bipolar world with the dissolution of the Soviet Union, there haven’t been many crises of this magnitude in the world. The ambience of the past few weeks briefly reminded old-timers like me of the tension of the Cuba Missile Crisis in 1962, when the world seemed on the brink of nuclear war.


A Toronto Stock Exchange ticker is seen in Toronto’s financial district on March 16.

Cole Burston/Bloomberg

It became clear about two weeks ago that doughty South Korea had got the better of the coronavirus and that its spread could be contained, and China has confirmed that, but the government of the people’s republic has been so untrustworthy, no sane person could repose much confidence in anything it said. But foreign observers in China and the renewed output of Chinese manufacturets seem to confirm that the virus has crested there, in the land of its origins. (China was also the fecund source of avian flu and SARS). With these developments and the news that anti-malarial medicine may alleviate the coronavirus, the United States has an opportunity to replicate the path of South Korea, and is moving quickly to develop vaccines and to augment its supplies of emergency equipment and get ahead of anticipated numbers of virus-sufferers. The desperate climate of 10 days ago seemed a mixture of the novelist Nevil Shute’s “On the Beach,” about the extinction of man by nuclear radiation, and the great Dutch tulip mania of 1637, when bulbs of the newly developed tulip fetched astronomical sums. Now there is the purposefulness of a defined objective, not the helplessness of the damned.

Unfortunately, the scientific and epidemiological experts who are creating and executing the public health war plan in the United States, and to some extent their Canadian analogues, take little account of the economic consequences of their recommended actions. Essentially, they want everyone to stay in their homes until everyone who has contracted the virus has recovered.

This would certainly contain the spread of the virus, but at massive economic cost. Some near-normal life could continue even as the virus is brought to heel. Restaurants could be reopened, at a reduced capacity, allowing for distance between patrons. Even theatres and sporting events could be reopened on a similar basis — reduced capacity and, likely, reduced amenities. It would be awkward and rather inadequate, but at least it would not be passivity and surrender, and would sustain some economic activity. There would be some admitted risk for those who went out, but for those who would be prepared to take that risk (of a nasty bout of influenza, not death — if they were in good health to begin with), and there would be many, would raise the morale of the whole society. Small businesses could be operated in the same way, and so could factories, with the same thinning of ranks and precautions. Children are not much affected, not more than by the measles, and some elementary schools could be reopened. The incidence of the coronavirus might be somewhat extended, but the economic consequences and level of public demoralization would be alleviated.


A woman walks her dog past businesses that have closed due to the COVID-19 outbreak, in Washington, D.C., on March 18.

NICHOLAS KAMM/AFP

I fear that our Western governments are attacking the deteriorating economy with the methods of 2008, when the crisis was of financial institutions, with the non-commercial mortgages. The consequences of forcing everyone to self-quarantine could take years to heal. Tax relief won’t work with people and companies who aren’t making any money, and direct payments to the whole population, as is envisioned in the U.S., is a bit of a blunderbuss. All businesses should be deemed to be insured for business interruption, even though most of them are not, and their insurers should be authorized to issue promptly to them, a form of specially printed scrip for approximately half the revenue the businesses appear to have lost from this crisis, by comparison with previous years. This scrip would be mandated to be acceptable as currency for basic needs as long as the government considered the crisis was occurring, and the Ministry of Finance would promise to redeem the scrip after the crisis has passed, with some combination of cash, direct deposits, tax credits and conversion to low-yield preferred shares. It is just and sensible for governments to invest directly in sound corporations in temporarily distressed industries, such as airlines and the energy sector. The United States government was an immense shareholder in the U.S. banks in the mid-1930s as a preferred shareholder, as it was in Chrysler Corporation in the late 1970s. In both cases, the shares were redeemed for future profits. This system will work again, though the present Canadian government will have to abandon its suicidal ambition to eliminate the oil and gas industries.

Just as First World War French leader Georges Clemenceau rightly said that, “War is too important to be left to generals,” pandemics cannot be entirely managed by doctors and scientists. The North American economy was in excellent condition when this tempest fell upon it; it must be carried through and incentivized to regain its pre-viral vigour as quickly as possible. The hysteria was excessive and we must not, in our zeal to “flatten the curve” and suppress the coronavirus, amputate our economic limbs; a tidal wave of small business bankruptcies would take painful years to heal. As for Canada’s official Opposition, it should defer its leadership selection until this crisis has passed. Then, perhaps, Rona Ambrose, John Baird, Jean Charest and Pierre Poilievre would reconsider their decisions not to seek the Conservative leadership.

National Post
cmbletters@gmail.com

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Trump is prioritising the economy over the vulnerable – Al Jazeera English

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It is one thing to provide hope during a crisis – it is quite another to address people’s fears with empty promises. Unfortunately, US President Trump is engaging too much in the latter and not enough in the former as the coronavirus threatens to upend the United States healthcare system.

The latest development in the president’s critically flawed response to the pandemic is the false optimism that he has created by stating that the country “could open for business” by Easter.

What the US needs, right now, is leadership. Politicians who are true leaders in times of crisis provide well-conceived plans that prioritise the most vulnerable, while also issuing clear and calming statements when discussing matters with the public.

Is this what we receive from the White House? No, far from it – when we need clarity, we get confusion, and where facts and research should provide guidance, we are told that the economy takes precedence over everything else, people included.

So, what exactly are the facts?

On this front, many of us are in the dark. To know the actual extent of the coronavirus pandemic requires testing folks who may have it. That way, we would know who is sick and where they are.

Yet, the US lags significantly behind most other countries that have been administering tests, such as South Korea.

It is unclear what the administration’s efforts have been in this regard, for instance, whether the government turned down kits from the World Health Organization (WHO), or simply was slow to get the FDA to approve an alternative.

The result, however, is that the reported number of coronavirus cases is most likely an underestimate.

Yes, we can point fingers all we want, but we cannot change the past. We can plan with whatever information we do have.

We know from existing research that approximately 15 percent of the people who are infected will require hospitalisation. For every 1,000 people who have the virus, this means that about 150 people will need to be admitted to hospital.

We also know that people above the age of 65, individuals with underlying health conditions, such as heart disease or respiratory illnesses, as well as folks with weakened immune systems, are likely to fall seriously ill if they contract coronavirus.

It is also clear that the vast majority of those who catch the virus survive – studies place the death rate at 2 percent, perhaps even lower.

Research also shows that quarantine works. That much, at least according to the United Nations, has been made clear by analysing how China has successfully brought the spread of the virus under control.

Two clear action plans result from this information – first, the government needs to act swiftly and dedicate emergency resources for healthcare. Second, politicians should clearly tell people to stay at home.

Yet, where such steps need to be taken, Trump either drags his feet or misleads.

Consider the government’s slow action with respect to the Defense Production Act of 1950 which gives the president powers to compel businesses to follow orders deemed necessary for national defence. The president signed two decrees authorising the use of this Act which would make private companies prioritise carrying out government orders. However, he took days to issue any specific orders under the Act – only doing so on Friday to compel General Motors to produce ventilators. 

And why did it take so long? According to some reporting, Trump was worried about complaints from big business on how using the act would interfere with the market and private property.

There are others who would also prioritise the economy over everything else – the Lieutenant Governor of Texas, Daniel Patrick. In expressing fear over “economic collapse” and that we are “losing the whole country”, this week, he followed Trump in stating that perhaps in a few weeks people should get back to work.

Yet, it seems that the Lieutenant Governor may not be the best person to consult at times like these. He is a small businessperson – not a doctor or healthcare professional – so let’s listen to them before we open businesses and go back to living as usual.

More importantly, we are receiving mixed messages from across the country as a whole. Individual states, such as California, New York and, more recently, Minnesota, have ordered non-essential workers to stay at home. There is no expiry date set with these orders.

It seems that Trump and Patrick think that they should expire at a certain time, while state governments have a different opinion.

More importantly, what will people do? If the president and some of his supporters think it is ok to resume our typical daily routines in three weeks’ time, why not make it two? Hell, why stay home at all?

With cases rising by the thousands daily across the country, and as something like 30 percent of infected people show no symptoms according to the research, then this seed of doubt concerning the need to stay home could grow into a monster.

In effect, it could render null all attempts to contain the virus, granting the contagion fertile ground to continue to spread globally.

So, will the US be “open for business” by Easter? Is this possible? I cannot say one way or another. But really, opening or closing the US is not the issue. What is necessary is for our leaders to act cautiously, with the information that is available, to create well-thought-out plans that keep the most vulnerable among us safe.

For the sake our friends, families and also for all the other people we do not know who have heart disease, AIDS, cancer or who are our elders, the president needs to act as if their safety is the reason for his actions.

This is what a leader would do – the question is, will Trump?

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

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Global economy has entered a recession amid coronavirus pandemic, says IMF head – Global News

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The head of the International Monetary Fund said Friday it is clear that the global economy has now entered a recession that could be as bad or worse than the 2009 downturn.

IMF Managing Director Kristalina Georgieva said the 189-nation lending agency was forecasting a recovery in 2021, saying it could be a “sizable rebound.” But she said this would only occur if nations succeed in containing the coronavirus and limiting the economic damage.

“A key concern about a long-lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery but erode the fabric of our societies,” she told reporters at a news conference following a telephone conference with finance officials from the 24 nations that make up the IMF’s policy-setting panel.


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She said the IMF was updating its economic outlook now and it would be released in a few weeks, allowing the agency more time to assess the economic impacts of the virus.

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Asked if the United States was now in recession, she noted that Federal Reserve Chairman Jerome Powell had said Thursday that America “ may well be in a recession.” She said she believed not only the United States but many other advanced economies and a number of developing countries had already entered downturns.






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Georgieva said lower income countries were being hit hard by the spreading coronavirus, with 81 nations now seeking support from an IMF emergency financing program being used to provide aid.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

She announced that Kyrgyzstan would receive the first IMF support package of $120.9 million to deal with adverse effects of the virus.

She repeated a pledge that the IMF stood ready to make all $1 trillion of its lending resources available to countries being hit by the virus.


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“We have seen an extraordinary spike in requests for IMF emergency financing,” Georgieva said. “We are being asked by our members to do more, do it better and do it faster than ever before.”

She said to meet the increased demand she would seek to double the emergency financing program and simplify the procedures countries will have to go through to obtain IMF support. She said the IMF was also looking for ways to expand its current lending facilities to provide more help to countries.

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Georgieva said the IMF also wanted to find ways to provide more debt relief to the poorest countries.






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Coronavirus outbreak: Morneau outlines measures feds taking to mitigate economic impact of COVID-19

She said she planned to discuss these issues with the IMF’s executive board with the goal of putting together a package of reforms that could be presented at the IMF’s spring meetings in mid-April. Because of the virus, the spring meetings of both the IMF and its sister lending organization, the World Bank, will be virtual this year instead of meetings in Washington.

“IMF efforts that start to offer debt relief to the poorest countries and that increase financing to help prevent a global financial crisis are really positive and needed steps,” said Eric LeCompte, the executive director Jubilee USA, a group that campaigns for increased assistance for low income countries.

© 2020 The Canadian Press

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IMF says global economy already in recession – The Globe and Mail

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IMF chief Kristalina Georgieva said emerging market countries need at least $2.5 trillion in financial aid.

BRENDAN SMIALOWSKI/AFP/Getty Images

The head of the International Monetary Fund said Friday it is clear that the global economy has now entered a recession that could be as bad or worse than the 2009 downturn.

IMF Managing Director Kristalina Georgieva said the 189-nation lending agency was forecasting a recovery in 2021, saying it could be a “sizable rebound.” But she said this would only occur if nations succeed in containing the coronavirus and limiting the economic damage.

“A key concern about a long-lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery but erode the fabric of our societies,” she told reporters at a news conference following a telephone conference with finance officials from the 24 nations that make up the IMF’s policy-setting panel.

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International Monetary Fund Managing Director Kristalina Georgieva said ‘it is clear’ that world has ‘entered a recession as bad or worse’ than the global financial crisis in 2009. Reuters

She said the IMF was updating its economic outlook now and it would be released in a few weeks, allowing the agency more time to assess the economic impacts of the virus.

Asked if the United States was now in recession, she noted that Federal Reserve Chairman Jerome Powell had said Thursday that America “ may well be in a recession.” She said she believed not only the United States but many other advanced economies and a number of developing countries had already entered downturns.

Georgieva said lower income countries were being hit hard by the spreading coronavirus, with 81 nations now seeking support from an IMF emergency financing program being used to provide aid.

She announced that Kyrgyzstan would receive the first IMF support package of $120.9 million to deal with adverse effects of the virus.

She repeated a pledge that the IMF stood ready to make all $1 trillion of its lending resources available to countries being hit by the virus.

“We have seen an extraordinary spike in requests for IMF emergency financing,” Georgieva said. “We are being asked by our members to do more, do it better and do it faster than ever before.”

She said to meet the increased demand she would seek to double the emergency financing program and simplify the procedures countries will have to go through to obtain IMF support. She said the IMF was also looking for ways to expand its current lending facilities to provide more help to countries.

Story continues below advertisement

Georgieva said the IMF also wanted to find ways to provide more debt relief to the poorest countries.

She said she planned to discuss these issues with the IMF’s executive board with the goal of putting together a package of reforms that could be presented at the IMF’s spring meetings in mid-April. Because of the virus, the spring meetings of both the IMF and its sister lending organization, the World Bank, will be virtual this year instead of meetings in Washington.

“IMF efforts that start to offer debt relief to the poorest countries and that increase financing to help prevent a global financial crisis are really positive and needed steps,” said Eric LeCompte, the executive director Jubilee USA, a group that campaigns for increased assistance for low income countries.

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