Government-mandated policies of self-isolation will cripple the American economy, and the draconian measures taken to contain the pandemic are not necessary, this according to Steve Hanke, professor of applied economics at Johns Hopkins University.
“With the economy shutting down, the cost is going to be absolutely phenomenal,” Hanke told Kitco News.
Hanke likened the response to the virus from the U.S. and many Western European nations to a “sledgehammer.”
“The sledgehammer approach being used in most European countries and the United States is turning out into a very costly mistake. And what I mean by sledgehammer is they haven’t planned anything, they just have a blanket program where we’re all locked in our condos or houses and can’t move, and the economy shuts down,” he said.
Instead, governments should take the model that Sweden has set, Hanke said.
“If you look at some place like Sweden, Sweden has a very laissez-faire, very targeted approach, and they’re doing very well. The kindergartens are still open, the grade schools are still open, most factories are still open in Sweden. They are not imposing this sledgehammer and essentially wiping out the economy,” he said.
“The places that have done well in controlling and counting properly the victims of this pandemic are countries that have small, efficient governments, and free market economies. You look at Singapore, Hong Kong, they’re right up there,” he said.
Additionally, these nations have all practiced the “five P’s”: prior preparation prevents poor performance, Hanke said.
The U.S. is now the country with the highest number of COVID-19 cases in the world, and the majority of the country has not yet been tested.
“Wherever the five P’s have not been applied, you have a disaster,” he said.
NWT says its economy is weathering Covid-19 better than others – Cabin Radio
The NWT’s economy will come out of Covid-19’s initial months damaged but in better shape than other parts of Canada, the territory said on Friday.
The territorial government is forecasting a 3.3-percent contraction in its economy this year, which it says is “significantly less than the national average of 8.2 percent forecast by the Conference Board of Canada,” an economic think-tank.
Despite steep declines in the tourism and transportation industries, the territory said “steps taken to keep the diamond mines and the public sector active” had softened the pandemic’s blow.
Mining and government are by far the territory’s largest employers. The Ekati mine has suspended activities but the Gahcho Kué and Diavik mines remain fully operational.
The private sector is in worse shape. A GNWT-commissioned survey of businesses showed that 81 percent of NWT companies had experienced a “significant decrease” in revenues.
Tourism and transportation industries were the hardest-hit, telling the government they saw revenues drop by an average of 71 percent.
On the other hand, more than 90 percent of businesses surveyed by the territory in April and May reported they expected to make it through the pandemic.
Consumer spending and small business spending has rebounded since May, the territory said, and 71 percent of NWT residents surveyed were planning to travel within the territory in the next six months.
The Department of Industry, Tourism, and Investment said the results of third survey – carried out in June to examine the impact on consumer demand – is coming soon.
According to the territory, the various surveys are “part of … ongoing work to better understand the effects of Covid-19 on the NWT and how best to respond to them.”
Saskatchewan economy adds 30,000 jobs in June as businesses open up again: Statistics Canada – CBC.ca
Saskatchewan added more than 30,000 new jobs in June as businesses began to open back up from the COVID-19 pandemic.
Saskatchewan’s unemployment rate dipped to 11.6 per cent in June from a high in May of 12.5 per cent, according to a Statistics Canada report on Friday.
At the national level Canada added almost one million jobs in June.
The national jobless rate fell to 12.3 per cent, down from the record-high of 13.7 in May. There are still 1.8 million fewer jobs in Canada today than there were in February.
Jason Childs, an associate professor of economics at the U of R, said he was pleasantly surprised by the employment gains.
“To be gaining 30,000 jobs provincially and nearly a million jobs nationally is some unexpected good news, which is nice for a change,” he said.
The growth in Saskatchewan was split between 22,000 full-time jobs and 10,000 part-time jobs.
Childs cautioned that the jobless rate in the province is still more than six per cent higher than it was at this time last year, when it was 5.2 per cent, and there still about 40,0000 fewer jobs than before the pandemic.
“[Some people] don’t appreciate how deep the hole we’re in is and this is not a hole we’re going to get out of quickly,” Childs said. “[Unemployment] has more than doubled from this time last year.”
All those job losses have not been evenly distributed throughout the population.
Young workers are taking the brunt of the job losses in the province.
One in five people 15 to 24 years old are without a job, compared to 8.6 per cent of workers over the age of 25.
Unemployment among First Nations is 18.4 per cent and the Métis jobless rate is 17.3 per cent.
Childs said both those groups already have higher unemployment and they will have a harder time getting back in the workforce.
“People looking for that first job are going to have a really tough time right now because anything that opens up you’re probably going to be competing with somebody who’s got a lot more experience,” he said.
The one sector hit hardest by the pandemic is food and accommodation, where an estimated 400,000 workers across the country are still without a job.
Childs said those jobs are dependent on consumer spending and tourism, and that people’s financial habits have changed during the pandemic.
“I still think we’re going to see a drag [on the economy] as we get what’s called the Paradox of Thrift,” Childs said.
“As people begin to save for their own protection we may see that drag on economic activity as consumption falls off.”
He said people are beginning to cut back on ‘luxuries’ like going out to eat or grabbing a cup of coffee.
“That’s a place where you can cut back fairly easy,” he said.
“People are dealing with a massive amount of uncertainty right now and uncertainty breeds caution and doesn’t breed spending.”
Childs said no amount of fiscal stimulus is going to solve this crisis without consumer confidence.
“You need to get people back to a place where they feel comfortable and safe spending in order to return to the previous level of economic activity,” he said. “Or we’re just gonna have to get used to this.”
Jason Kenney sees supply shortage in oil and gas when global economy rebounds from COVID-19 – Edmonton Journal
COVID-19 has put Canada in a “deep fiscal hole,” and the only way to get out of it is to spark the oil and gas sector, Premier Jason Kenney said Friday.
Noting the federal government’s announcement Wednesday it expected to post a $343-billion deficit, Kenney expressed optimism that demand for oil would bolster Alberta’s recovery.
“When the global economy comes back from COVID, when demand returns for oil and gas, we are going to see something of a supply shortage, because of the upstream exploration that has been cancelled,” he said at a Friday news conference.
“So we’ll see prices go up, and that will be a great opportunity for Alberta especially as we make progress on pipelines,” Kenney said.
At Friday’s market close, West Texas Intermediate crude was priced at just over US$40.
TC Energy’s Keystone XL pipeline, which the government of Alberta has committed $7 billion in financial support, faced a legal hurdle this week when the U.S. Supreme Court refused to let construction begin on the project.
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