The coronavirus health crisis seems to be over. But the economic and constitutional crises continue.
National-level data show that the number of new COVID-19 cases peaked on April 4. Since then, they have declined 22 percent. In New York, the worst of the virus hot spots, the net change in total hospitalizations began to decline April 2 and, by April 13, more people were leaving hospitals than entering them. In addition, the predicted overload of New York’s hospital bed space never happened.
To put things further into perspective, there are currently about 526,000 active diagnosed cases of coronavirus among 329 million Americans. That is, 99.85 percent of the population do not have the virus. This is nowhere near the tens of hundreds of millions of cases some experts predicted only recently.
Some might argue these radically lower numbers are evidence of the success of the social lockdown measures the government has imposed on us. But even the Centers for Disease Control and Prevention (CDC) cannot claim convincingly that “social distancing” is effective in slowing the spread of this ill-understood virus. In fact, a new study out of Israel shows that the coronavirus timeline is the same across countries whether they locked down or not.
We have not seen death and other data for Americans denied access to “elective” medical care due to the effective shutdown of the health care system. There are no models that show the ongoing destruction of health care jobs.
The bigger issue is that we can’t have adequate health care without a strong economy. While only a small percentage of Americans have caught the virus, almost everybody has been affected by the government’s response to the pandemic. Tens of millions are out of work. Businesses are shutting down.
This pain is not spread evenly. Have any “non-essential” federal workers been laid off? Or is just the private sector supposed to go through all the economic “inconvenience” of the coronavirus shutdown? The problem, of course, is that millions of unemployed, small and medium-sized business owners and families have too few advocates in the government or the media.
The consequences of this national shutdown, apart from any pandemic, are dire and will not be materially alleviated by government spending. Budget-busting federal stimulus packages may offer temporary relief, but the best stimulus is opening America back up for business.
The Constitution also is under threat, thanks to shutdown orders by governors. People are being fined for attending worship services, detained for running on empty beaches, and arrested for not wearing masks in public. Meanwhile, some in the media promote on your neighbors for supposed violations, seeking to make us into a nation of informants.
The political left has used the pandemic to push its fanciful concept of a “mail-in” 2020 election, which would open the process to unprecedented fraud. Under its plan, ballots would be mailed to everyone whether requested or not; unlicensed ballot harvesters would collect and drop off ballots in bulk; voter ID would be nonexistent.
And many in the media seem to have zero interest in coverage that might lead to reopening the economy. Instead, they are pushing the shutdown drama narrative, ignoring positive statistics and encouraging states to resist federal advice to reopen. Common-sense outbreaks such as in South Dakota are mischaracterized as irresponsible and dangerous. And every effort by the Trump administration to move toward or even discuss reopening the country, in whole or in part, is criticized as a dire threat to public safety, regardless of the economic consequences of maintaining the lockdown.
We can’t wait until May to reopen, which would mean tens of millions more unemployed, further erosion of our liberties, and untold destruction to our national fabric. The president should push back on governors resisting efforts to reopen the economy and who continue to suppress Americans’ constitutional rights.
The national coronavirus response has been a radical experiment on the American people that destroyed our economy and harmed our liberty. We’ve got to get the country moving again — because, when it comes to the nation’s long-term public health, a strong economy is the best insurance. It doesn’t mean you can’t take significant steps, continue reasonable restrictions to secure the public health, whether at the border or internally, and focus on treating new COVID-19 outbreaks as needed. But we’ve got to get people back to work, back to school, in a regular, organized way while balancing the public health risk. We can’t let the cure kill the patient.
Tom Fitton is president of Judicial Watch, a conservative nonprofit educational and government-watchdog foundation.
Swiss Economy Slumps the Most in Decades – Yahoo Canada Finance
(Bloomberg) — Switzerland’s economy slumped the most in at least four decades as a result of the coronavirus pandemic, with private consumption and investment plummeting.
First-quarter gross domestic product plunged 2.6%, data from the State Secretariat for Economic Affairs showed. That’s worse than the 2.1% hit forecast by economists in a Bloomberg survey and the biggest three-month contraction since the start of the time series in 1980.
Like neighboring France, Italy and Germany, Switzerland responded to the pandemic by winding down much of public life. The hotel and restaurant sector experienced a 23.4% drop in output, according to the data on Wednesday.
Although the Swiss economy fared slightly worse than Germany’s in the first quarter, the contractions in France and Italy were far more severe.
Swiss government subsidies have kept a lid on unemployment and helped companies avoid a cash crunch, but the SECO still expects the economy to shrink 6.7% this year before staging a slow recovery in 2021.
Machine industry group Swissmem said that 80% of its member companies were forced to apply for short-time work, and that the full impact of the pandemic wouldn’t be felt by the sector until the second or third quarter of this year.
To prevent the rallying haven franc from hurting the economy still further, the Swiss National Bank has stepped up the pace of its currency interventions. Its deposit rate is already at a record low of -0.75%.
(Updates detail on hospitality sector in 3rd paragraph)
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Australia Economy Contracts as End to Recession-Free Run Looms – BNNBloomberg.ca
(Bloomberg) — Australia’s economy contracted in the first three months of the year, setting up an end to the nearly 29-year run without a recession as an even deeper slowdown looms for the current quarter.
Gross domestic product fell 0.3% from the final three months of 2019, the first quarterly drop since 2011, compared with a forecast 0.4% decline, statistics bureau data showed in Sydney Wednesday. From a year earlier, it expanded 1.4%, matching estimate
The result sets up an end to Australia’s record run of avoiding two consecutive quarters of negative GDP, having dodged recessions during the 1997 Asian Financial Crisis, the Dot Com Bubble and the 2008 global financial crisis. The current quarter will see a deep contraction, with almost 600,000 jobs lost in April alone and much of the economy in lockdown to contain the coronavirus.
Fiscal and monetary policy are working in tandem to rebuild the economy. The Reserve Bank of Australia has taken the cash rate near zero and lowering the cost of borrowing with its 0.25% bond yield target. The government has injected tens of billions of dollars into the economy to help tide businesses and households through the lockdown.
With the containment of the health crisis allowing activity to resume, how quickly businesses can get back on their feet, workers regain employment and households resume spending is the critical question.
“The rate of new infections has declined significantly and some restrictions have been eased earlier than was previously thought likely,” RBA Governor Philip Lowe said Tuesday after keeping borrowing costs unchanged.
“However, the outlook, including the nature and speed of the expected recovery, remains highly uncertain and the pandemic is likely to have long-lasting effects on the economy,” he said. “In the period immediately ahead, much will depend on the confidence that people and businesses have about the health situation and their own finances.”
©2020 Bloomberg L.P.
Australia’s Economy Contracts, Ending Three-Decade Expansion – Yahoo Canada Finance
(Bloomberg) — Australia’s economy contracted in the first three months of the year, setting up an end to a nearly 29-year run without a recession as an even deeper slowdown looms for the current quarter.
Gross domestic product fell 0.3% from the final three months of 2019, the first quarterly drop since 2011, brought down by a collapse in household spending, statistics bureau data showed in Sydney Wednesday. Economists had forecast a 0.4% drop. From a year earlier, the economy expanded 1.4%, matching estimates.
The Australian dollar edged a little lower after the release, and traded at 69.32 U.S. cents at 1:06 p.m. in Sydney.
The result sets up an end to Australia’s record run of avoiding two consecutive quarters of shrinking GDP, having dodged recessions during the 1997 Asian Financial Crisis, the Dot Com Bubble and the 2008 global financial crisis. The current quarter will see a deep contraction, with almost 600,000 jobs lost in April alone and much of the economy in lockdown to contain the coronavirus.
Treasurer Josh Frydenberg, speaking after the release, accepted this fate when asked directly whether the economy is now in recession.
“The answer to that is yes,” he told reporters. “That is on the basis of the advice that I have from the Treasury Department about where the June quarter is expected to be.”
Fiscal and monetary policy are working in tandem to rebuild the economy. The Reserve Bank of Australia has taken the cash rate near zero and lowered the cost of borrowing with its 0.25% bond yield target. The government has injected tens of billions of dollars into the economy to help tide businesses and households through the lockdown.
With the containment of the health crisis allowing activity to resume, the critical question is how quickly businesses can get back on their feet, workers regain employment and households resume spending.
“Growth should resume in the September quarter, but the impact of COVID-19 will surely cast a long and lingering shadow over the global economy and Australia’s recovery,” said Callam Pickering, an economist at global jobs website Indeed Inc. who previously worked at the central bank. “Continued support from fiscal and monetary policy will be necessary throughout 2020 and beyond.”
Today’s report showed:
Household spending tumbled 1.1%, shaving 0.6 percentage point off GDP, driven by a 2.4% drop in services expenditure. Restrictions particularity impacted spending on travel, hotels, cafes and restaurantsGovernment spending jumped 1.8%, adding 0.3 percentage point. Payments to provide support during the pandemic are expected to rise in the current quarterThe savings ratio advanced to 5.5% from a downwardly revised 3.5% in the fourth quarterDwelling construction fell 1.7%, reflecting continued weakness in approvalsNon-mining business investment fell 1.7%, while mining investment rose 3.6% as miners invest in new technologies and automation
Rising commodity prices are boosting miners’ profitability, with the terms of trade 2.9% higher in the first three months of 2020, pushing the current account surplus to a record A$8.4 billion ($5.8 billion). Yet, miners will be keeping a watchful eye on the nation’s currency, which has surged almost 20% in the past two-and-a-half months.
What Bloomberg’s Economists Say
“Typically backward looking national accounts releases contain an array of hidden trends that are often overlooked. Mining investment has climbed to a 7-year high, Australia’s terms of trade have risen and exploration intentions are elevated. This bodes well for the recovery.”
James McIntyre, economist
The economic outlook is improving as the restrictions are lifted, but will continue to be constrained by closed borders that are hitting tourism and education exports. The government is discussing a fresh round of fiscal stimulus to try to put residential construction back on its feet.
(Updates with Treasurer and economist comments)
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