Covid-19 global consequences

This week on Facebook: Perhaps the worst consequence to the global pandemic introduced by Covid-19, is that  having spent all that inflationary money to combat the pandemic it ends not with a bang but with a whimper. The pandemic has produced, for the most part, common political solutions involving inflationary measures to boost their economies. As I remarked in my post last week (Global Covid-19), there will be a recovery from this pandemic (for some of us) leading to a global scramble for growth. This recovery will lead to the internal economic measures (a euphemism for austerity) and external beggar thy neighbour policies introduced by the pubic administration.

For those of you who are self isolating and may be getting a little stressed out over Covid-19, perhaps even spending too much time on the social-media, the following may help relieve your worries, while still keeping you and your family safe. However, if you have assumed that any consequence will be just political and economic and as being something that you can learn to live with without going down a coronavirus anxiety spiral — then skip the next link.

Many people are sharing their worries online; there’s a whole sub-reddit devoted to coping with these feelings. Experts say overloading on information about events like the coronavirus outbreak can make you particularly anxious, especially if you’re stuck inside with little to do but keep scrolling on Twitter and Facebook. Don’t Go Down a Coronavirus Anxiety Spiral

For my part I believe that Covid-19 is grist for the mill  to every politician and economist believing that they have the solution to the Covid-19 pandemic. It would also appear that most politicians and economist’s believe, or have the optimistic hope, that the solution to this pandemic lies in quantitative easing (QE) and even Bernie Sanders in the USA is being advised on the economic theory of MMT.  Modern Monetary Theory (MMT) is seen as providing the answers all their economic woes and internally it would appear to do so. I remember the remarks of Thatcher and Brown’s Golden Rule  —  “You can’t buck the market” (Thatcher) and “Sustainable Investment’ (Brown). Covid-19 has made these economic woes more than simply domestic solutions that can be dealt with by QE and MMT, although politicians find themselves having to deal with them as such. 

Do I hope for an end to fiat money — I’m not sure! I certainly would like to see global government economic policy being more than loosely based on something other than doing whatever it takes (whatever that is supposed to mean). My wish is for politicians and economists to have a better understanding of the consequences of actually doing whatever it takes using quantitative easing (by printing more fiat money) and having a better understanding on how a business is run. Remarks to the consequences of any solution are prolific on the web (whatever the political or economic view held) and here are a few of them:

• Change seems inevitable. The question is whether it will be benign or malign. The possible policy shifts outlined in this piece could bolster economic and social stability. And a better balance between globalisation and the nation state could strengthen multilateralism, as was the case under the Bretton Woods agreement in the post-war period. Will this crisis bring about a new economic settlement?
• Politicians are there to take difficult decisions, by weighing up all the expert advice and choosing a policy with the least worst outcome depending on the options available. But in the current crisis over coronavirus, the damaging impact of drastic interference in our civil liberties has apparently barely been considered at all. Freedom is on the line in this lockdown
• What we have yet to experience (although it may only be a matter of time) is that the government through the imposition of martial law could pose a greater threat to our safety (and our freedoms) than any virus. How a Police State Will Deal With the COVID-19 Pandemic
• An outbreak like the coronavirus reveals the priorities and values of a society, and how long it can cope without the freedoms it’s accustomed to. The Coronavirus Is More Than Just a Health Crisis
• Another preparedness-minded connection of mine has been openly skeptical of the COVID-19 “hysteria” and recently warned those of us who follow him on Facebook that any politician who orders businesses closed is a “closet communist.” Here’s why some preppers are still dismissing COVID-19 as “media hype”

If I were an economist or even a prepper (neither of which I am) and do not regard myself as a closet communist, then I guess that I would take more than my cynical view on such matters, although I share Sonny Paluso’s views on wanting to die (given the circumstances). One certain consequence is that human rights¹ are being subordinated to political responses regarding Covid-19², some of which may be justified but it is unlikely that most of the human rights suspended will ever be recovered (1) — read  Freedom is on the line in this lockdown.  Economic changes see the EU waiving its State subsidy rules (2), which some States have already done, and what is happening to whistleblowers in China (3). Just how much money is being pledged globally to combat Covid-19 (4) and are the introductions of new fiscal policies enough for the global protection of all people (5)?

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1. With COVID-19, That Which Is Not Forbidden Is Mandatory—and Subsidised: Whatever your feelings about the right response to the COVID-19 pandemic, chances are that what you’re actually doing was dictated to you by government officials at one level or another. It’s equally likely that you have no idea what costs you’ll ultimately face as a result of those mandates from above or because of promised subsidies and economic interventions.

2. EU may waive state-subsidy rules to bolster virus-hit economy: European Union officials are considering temporarily suspending its rules on state subsidies and financial support to economic segments hit hardest by the coronavirus outbreak, an official said on Friday. In addition to measures adopted by EU states to safeguard growth, the EU is considering targeted measures for sectors most in need, which include tourism, transport and carmakers.

3. Coronavirus whistleblowers disappear in China As Chinese authorities struggle to contain the COVID-19 coronavirus, they’re also working to silence the growing number of critics of the government’s crisis plans. Censors have been erasing critical social media sites. At least two outspoken citizen journalists have disappeared. Chen Qiushi and Fang Bin are among those whose whereabouts are unknown. And citizens were outraged at the death of Wuhan Doctor Li Wenliang, who raised the alarm about the virus.

4. Here’s How Much Money Countries Have Pledged for Virus Relief: Some governments have allocated new money for cash handouts and medical care, while several are planning targeted measures like tax breaks and loan support. Bank guarantees have started to take up an increasing share of the aid.

5. Fiscal Policies to Protect People During the Coronavirus Outbreak: A key role of government is to protect the well-being of its people—most crucially and visibly during emergencies such as the recent outbreak of the coronavirus. The IMF has $50 billion available in rapid-disbursing emergency financing to help countries suffering from the virus. As Managing Director Kristalina Georgieva said, what we want is to guarantee that people are not going to die because of a lack of money.

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Referenced Articles Books & Definitions:

• A bold text subscript above and preceding a title below (¹·²·³), refers to a book, pdf, podcast, video, slide show and a download url that is usually free.
• Brackets containing a number e.g. (1) reference a particular included article (1-5).
• A link (url), which usually includes the title, are to an included source.
• The intended context of words, idioms, phrases, have their links in italics.
• A long read url* (when used below) is followed by a superscript asterisk.
• Occasionally Open University (OU) free courses are cited.
• JSTOR lets you set up a free account allowing you to have 6 (interchangeable) books stored that you can read online.

¹Human Rights Dimensions of COVID-19 Response (url*): An overview of human rights concerns posed by the coronavirus outbreak, drawing on examples of government responses to date, and recommends ways governments and other actors can respect human rights in their response.

²Oxford Covid-19 Government Response Tracker (Url/download): Governments are taking a wide range of measures in response to the COVID-19 outbreak. The Oxford COVID-19 Government Response Tracker (OxCGRT) aims to record these unfolding responses in a rigorous, consistent way across countries and across time.