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No, Trump Can’t Revive the Economy Through Human Sacrifice – New York Magazine

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The tree of prosperity must be refreshed from time to time with the blood of geriatrics?
Photo: Drew Angerer/Getty Images

The economists had tried everything. They’d fiddled around with interest rates, raised taxes and then lowered them. But no matter what policy cocktail they served up, their forecasting model regurgitated the same sorry result: The recession would persist.

Their boss wasn’t satisfied. Suspecting that there were policy options his number crunchers had failed to test, he asked them a simple question: “Have you tried ‘kill all the poor’?”

The economists took offense.

“I’m not saying do it,” the boss clarified. “I’m just saying run it through the computer — see if it would work.”

“Of course it wouldn’t help; that’s why we’re not doing it,” one of the economists protested.

That’s why we’re not doing it?” the boss spat back, eyes widening in horror. “That’s the only reason we’re not doing it? Bloody hell, now I’m offended.”

Hilarity ensued.

The animating absurdity of Mitchell and Webb’s “Kill the Poor” sketch lies in the boss character’s obsession with discerning the technocratic viability of a homicidal policy that he himself regards as morally unthinkable.

The American right’s budding consensus on coronavirus policy is absurd in a similar — if more sociopathic — respect: Trumpists are eagerly endorsing the moral permissibility of reviving the economy through mass manslaughter, even as they evince little interest in the question of whether such a policy would even work.

Take the Republican lieutenant governor of Texas. On Monday night, Dan Patrick called for the swift suspension of efforts to slow the spread of COVID-19 through social distancing, on the grounds that putting senior citizens in mortal peril was a small price to pay for economic revival.

“No one reached out to me and said, as a senior citizen, ‘Are you willing to take a chance on your survival in exchange for keeping the America that all America loves for your children and grandchildren?’” Patrick told Fox News host Tucker Carlson. “And if that’s the exchange, I’m all in … I just think there’s lots of grandparents out there in this country like me — I have six grandchildren — that what we all care about and what we love more than anything are those children. I want to live smart and see through this. But I don’t want the whole country to be sacrificed and that’s what I see.”

Patrick’s analysis is morally odious in many respects. To name just one, it is unseemly for the lieutenant governor to frame his policy preference as a heroic sacrifice of his personal security to the common good. An unconstrained COVID-19 outbreak wouldn’t just kill seniors by ravaging their lungs past the point where modern medicine can be of use; it would also kill them by overwhelming hospital capacity, thus forcing health professionals to leave some treatable elderly COVID-19 patients to die. The chances that a Texas hospital would deny Dan Patrick a ventilator in his moment of need are nil. Thus, the suspension of social distancing would pose a far greater threat to the median senior than it would to the lieutenant governor. The life he is volunteering to jeopardize is not his own.

But the more fundamental problem is that Patrick provides no evidence that the grisly trade-off he endorses is even an option. Granted, it is hard to know precisely what he even means by “keeping the America that all America loves.” Presuming he means averting a recession, however, it is unclear what basis he has for believing that relaxing social-distancing protocols — before we’ve expanded the capacity of our hospitals to safely treat large numbers of COVID-19 patients, or the ability of our public health agencies to test and monitor the infected — would redound to the economy’s benefit.

And yet, Patrick is not alone. Many (though, blessedly, not all) conservative commentators, policy wonks, and politicians — including the president himself — have spent the past 48 hours announcing their willingness to trade the lives of their core constituents for green arrows on their stock tickers, despite lacking any coherent argument for why this would work.

“WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF,” the president tweeted Sunday, before implying that he would end his rhetorical support for social distancing by April 12. Trump tacitly reiterated this position Tuesday, tweeting, “Our people want to return to work. They will practice Social Distancing and all else, and Seniors will be watched over protectively & lovingly. We can do two things together. THE CURE CANNOT BE WORSE (by far) THAN THE PROBLEM!” Some Trump supporters are already taking the president’s cue; on Tuesday, Jerry Falwell Jr. announced that Liberty University will be reopening this week.

Now, to give the Trumpists their due: If it were actually the case that the U.S. government faced a choice between saving 1 million (disproportionately elderly) Americans from premature deaths and averting a global depression, then the morally superior option might well be the latter. Although Trump appears principally concerned with the impact a protracted recession will have on his reelection odds and his fellow plutocrats’ portfolios, economic downturns also have dire implications for the meager incomes of the global poor. American consumer demand remains the engine of global economic growth. If U.S. unemployment is indeed headed for 20 percent, this recession is going to indirectly kill a lot of people — both in our country and in developing nations whose economies depend on commodity exports.

But that is not actually the choice we face. After all, Trump did not acquiesce to the recommendations of public health officials this month because he realized the health of the old and infirm was more important than that of the S&P 500. Rather, he adopted Dr. Anthony Fauci’s proposals only after the president’s repeated attempts to bluff his way past the pandemic failed to keep the Dow Jones aloft. Which is to say: He belatedly recognized that prioritizing public health was a precondition for restoring economic growth.

The billionaire’s inveterate impatience (and incompetent economic advisers) are now leading him to abandon that insight.

In truth, there is no reason to believe that Trump would derive any political or economic benefit from disavowing social distancing by Easter. This is true for three distinct (though related) reasons:

1) Suspending efforts to decelerate the spread of coronavirus — before the government has built up the capacities necessary to prevent the outbreak from overwhelming ICUs and killing hundreds of thousands — will not restore the pre-pandemic economy. Consumer demand for restaurants, concerts, and other services that require congregating in crowded public spaces will not return to normal levels while a lethal virus is still spreading exponentially, no matter what message the president preaches from the bully pulpit. People aren’t going to want to go out when their friends are routinely dying as a result of having gone out.

2) Trump does not actually have the authority to suspend the most sweeping and legally binding social-distancing measures, which have been mandated by state and municipal officials.

3) Voters have actually rewarded Trump for acting as though his No. 1 priority is preventing them from dying. According to multiple polls, a majority of Americans approve of the president’s handling of the pandemic thus far, including a significant minority of Democrats. Trump’s overall job approval numbers have also inched up since the onset of the crisis. It is true (and important) that Trump has seen a smaller “rally around the flag” effect than the leaders of other afflicted countries have enjoyed. But he’s on the upswing politically, nevertheless. And there’s reason to believe that this is precisely because he has demonstrated a commitment to taking coronavirus seriously. In a Navigator Research poll released Tuesday, 56 percent of respondents said Trump “did not take coronavirus seriously enough” when the bug first began spreading, but now a majority (52 percent) say he is handling the crisis correctly. The survey also found Americans saying they were more worried about the health of their friends and families than they were about their finances.

None of this means that it would be politically or substantively wise for Trump to keep America on lockdown for the next 18 months (or however long it takes for a vaccine to be approved and distributed). The way for Trump to do “two things together,” in the sense of promoting public health and economic recovery, is to do everything in his power to increase hospital capacity, health-care staffing, testing availability, and medical equipment manufacturing as rapidly as possible. Without taking such actions, there will be no way for the White House to formulate an alternative to mass lockdowns that would actually deliver on even the most myopic and amoral of the president’s priorities. In the meantime, Trump and his allies can keep the U.S. economy on life support through massive, recurring fiscal support to workers, states, cities, and small businesses.

Such an agenda would require Republicans to make an extended break with their plutocratic economic orthodoxies and an extensive demonstration of the state’s capacity to shape economic outcomes. Which might well be what some conservatives fear most. But however much Republicans may wish otherwise, the tree of prosperity cannot be refreshed with the blood of geriatrics.

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$71B wage subsidy 'appropriate' to keep economy afloat: Morneau – BNNBloomberg.ca

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Finance Minister Bill Morneau said the ballooning cost of federal measures being promised to workers impacted by COVID-19 is essential to keeping the Canadian economy afloat.

“I’m worried about the size of the investment, always,” Morneau told BNN Bloomberg in an interview on Wednesday. “I’m also worried about not only the numerator, but the denominator: The size of the economy. That economy is what we’re focused on at the end.”

“These are some of the biggest expenditures that have ever been done in Canadian history. We recognize that. But it’s the appropriate thing to do at this time, and once we’re through this, we will have to make sure that we get ourselves back on an appropriate track.”

Feds ‘clearly learning’ from 2008 crisis with wage subsidy: CIBC’s Tal

CIBC Capital Markets deputy chief economist Benjamin Tal praised the federal government’s $71-billion wage subsidy details announced on Wednesday, but warned that many small businesses could go under without help paying rent.

Morneau unveiled some crucial details about the federal government’s emergency wage subsidy on Wednesday, pegging the cost of the program that’s meant to cushion the blow from COVID-19 at $71 billion.

In a press conference earlier on Wednesday, Morneau said he expects funds will begin to flow in approximately six weeks, and that employers that apply will have to show their revenue fell at least 30 per cent compared to the same month last year. He confirmed that funds will be sent to employers via direct deposit from the Canada Revenue Agency.

A senior government official said during a technical briefing call that the funds could be delivered as early as three weeks, but it depends on how quick the CRA can launch the system for businesses to apply for the subsidy. 

The official added that the CRA will offer some “flexibility” to high-growth businesses that don’t have a full year of operations in place to compare a year’s worth of revenue, suggesting prior monthly sales figures could be used instead. 

Morneau said the government’s focus now has to be offering a lifeline to Canadians and Canadian businesses as soon as possible.

“I have been very focused during my time as finance minister to manage our fiscal position, to make sure we reduce our debt as a function of our economy. Well, that’s not where we are today,” he said.

“Where we are today is: I am focused on making sure people have enough money to pay for their groceries and their rent. I’m trying to make sure that we have a process that will get that money out to people rapidly.”

The revised wage subsidy program was unveiled by Prime Minister Justin Trudeau on Mar. 27 and will subsidize 75 per cent of wages for qualifying businesses up to a period of three months. It will be retroactive to March 15 and will cover the first $58,700 of salary up to a maximum of $847 per week. 

The federal government had initially planned a subsidy of 10 per cent, which was quickly panned by small business leaders as insufficient. Nonetheless, the government confirmed Wednesday that the 10 per cent subsidy will still be available to employers that don’t qualify for the 75 per cent subsidy.

Morneau added that there will be “severe penalties” for anyone who seeks to use the funds fraudulently. However, specifics on how businesses will be penalized were not announced on Wednesday. 

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China's economy may not grow at all in 2020. That hasn't happened in 44 years – CNN

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GDP growth this year in the world’s second biggest economy could sink to just 1% or 2%, down from 6.1% in 2019, according to recent estimates by analysts, including a Chinese government economist. In a worst case scenario, the $14 trillion economy may not grow at all, the World Bank warned earlier this week.
That would be its weakest performance in 44 years, worse even than the troughs hit during the 2008-2009 global recession and in 1990, when the West imposed sanctions on China after the Tiananmen Square massacre.
China is trying to revive its economy without risking more lives. The world is watching
Analysts from UBS and Goldman Sachs recently slashed their estimates for China’s growth this year to 1.5% and 3% respectively.
Even Chinese officials, who have set annual GDP targets every year since 1985, are wary of making predictions. A policymaker at the People’s Bank of China (PBOC) said this week that the government should not set a target for 2020.
“It’s difficult to even realize growth of between 4% and 5%. Many have predicted growth to fall to just 1% or 2% [this year]. These circumstances are all possible,” Ma Jun, a member of the monetary policy committee at the Chinese central bank told the state-owned Economic Daily.
Given the huge uncertainties in the outlook, China is finding it hard to determine how much fiscal and monetary stimulus to unleash, Ma said. An “unrealistic” growth target may encourage local governments to splurge on infrastructure investments, which do little to ease unemployment or improve people’s livelihoods in the short term, he added.

More help needed

Still, an official survey this week showing an anemic recovery in China’s vast manufacturing industry last month, following a collapse in activity in February, was followed by news of more stimulus measures.
China’s cabinet on Tuesday announced more than 3 trillion yuan ($423 billion) in extra financial support for small businesses.
The PBOC will provide an additional 1 trillion yuan ($141 billion) to small and medium-sized banks, and cut the amount of cash they must hold as reserves. Both measures are aimed at boosting lending to small and medium-sized enterprises (SMEs).
Previously, the central bank had injected liquidity or allocated additional lending worth more than 1.65 trillion yuan ($232 billion). The government had also allocated at least 116.9 billion yuan ($16.4 billion) in financial relief and stimulus aimed at fighting the virus.
The coronavirus pandemic could push 11 million people in Asia into poverty, World Bank warnsThe coronavirus pandemic could push 11 million people in Asia into poverty, World Bank warns
Tuesday’s announcement included a promise from the government to double “temporary cash handouts” to low-income families and the unemployed from March to June. The government didn’t specify how much it would give out, but said the move is estimated to benefit more than 67 million people.
“We believe ramping up financial relief for enterprises (especially SMEs) and households inflicted by the pandemic should be the best economic and social policies at the moment,” Ting Lu, chief China economist for Nomura, said in a note on Wednesday.
Beijing is also trying to revive the automotive industry after sales plunged 42% in January and February. The government will extend subsidies and tax breaks on electric vehicles by two years, while cutting sales tax on used cars from May through the end of 2023.
A private survey published Wednesday showed that China’s manufacturing activity expanded ever so slightly in March, as factories reopened following the easing of widespread shutdowns and travel restrictions.
The Caixin/Markit manufacturing Purchasing Managers’ Index rose to 50.1 last month from a record low of 40.3 in February. A reading above 50 indicates expansion, below 50 contraction.
The PMI data suggest the contraction in activity has bottomed out, but the economy has not recovered yet, analysts for Capital Economics said in a note on Wednesday.
China boasts massive car and aviation markets. Both collapsed in FebruaryChina boasts massive car and aviation markets. Both collapsed in February
“The [Caixin] survey suggests that just over half of firms saw conditions improve last month — implying that activity improved marginally relative to February’s dismal showing but remains very weak,” they wrote.
“The slow pace of improvement implied by last month’s PMIs is consistent with our view that China faces a drawn out recovery from the Covid-19 outbreak,” they said.

Tens of millions of jobs at risk

Capital Economics has one of the most bearish forecasts for China’s economy this year. It estimates GDP shrank by as much as 16% in the first quarter, and predicts a contraction of 3% for 2020 as a whole.
China faces two major headwinds as it tries to get back on its feet — weakening foreign demand due to the global pandemic and a potential second wave of coronavirus cases.
Nomura estimates China’s economy will grow by only 1% in 2020, causing millions of job losses.
“We estimate that slumping exports alone could lead to a loss of 18 million jobs in [the second quarter],” Lu wrote on Tuesday.
Caixin will publish its survey of activity in China’s services industry — which accounts for roughly 60% of GDP — on Friday. Whatever it shows, analysts expect the government will have to provide more help for the economy.
Tao Wang, chief China economist for UBS, said Beijing is likely to announce more support for individuals, the labor market and health care systems, more infrastructure investment, and additional cuts in interest rates.
“Moreover, we expect the government to either lower this year’s GDP growth target significantly or … [focus it] instead on coronavirus control, work resumption, poverty reduction and supporting labour market,” she said.

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‘There could be a rapid bounce back’: Experts believe economy can recover fast after pandemic – CityNews Vancouver

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VANCOUVER (NEWS 1130) – While there’s a lot of financial uncertainty for many people in the fallout from the COVID-19 pandemic, there may be reason for optimism.

At least two economists believe Canada’s economy can bounce back quickly, once the pandemic ends.

“The good news is that if the coronavirus public health issue gets resolved, I think there will be a fast recovery,” says James Brander, Professor at the Sauder School of Business at UBC. “I think the governments are doing the right things to keep in place the possibility of a fast recovery, so there’s no reason why we can’t bounce back quickly.”

The main question, of course, is when that will happen.

“There’s some reason for optimism that there could be a sharp expansion but that depends very much on the public health situation and that of course is very uncertain,” adds Brander.

Mark Thompson, professor emeritus of Industrial Relations at the Sauder School of Business at UBC agrees a fast recovery is possible.

“I mean, the economy was in pretty good shape when this all happened and I think the demand is still there and the industries that have been forced to close can reopen,” he says. “In the past, recessions we’ve had tended to be sharp but not long lasting and I think that’s what’s going to happen here.”

However, despite the glimmer of hope, both economists admit the current situation is bleak, and there will still be struggles ahead before we’re able to bounce back.

“We’re seeing a sharper downturn than we’ve seen probably since the 1930s,” says Brander. “For the past week there will be in Canada approximately 1 million jobless claims. That’s approximately double the previous record.”

Brander adds financial help coming from the federal government will help people stay afloat.

“There’s enough in place for people to survive. Not feel good, but survive for a few months and we hope that things are looking better after two or three months,” he says.

Thompson also believes help coming from some provinces and Ottawa is a good start, but thinks more will be necessary depending on how long the pandemic lasts.

“The government, I think, is acting fairly vigorously and the focus on the employees who are losing their jobs and the small businesses who may collapse if this goes on is all very good,” he says. “I don’t think anybody believes that these measures are sufficient or that there won’t be more measures required in the future.”

Thompson adds a lot of what happens in the next few months will depend on the length and severity of the crisis.

“I guess if I knew that, I would make a lot of money in the stock market or something, if I could predict the future,” Thompson says.

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