COVID-19: federal election, and low-interest / high-inflation

COVID-19 messaging and the federal election

The upcoming federal election timing seems to be based on the idea that lockdowns will be over, borders will be reopened, and citizens will be vaccinated.

We're then just waiting to give the government that made this possible a majority mandate so that they can lead us into the genuinely and truly unknown. Really: I don't know, and nor does anyone else.

So, that is the strategy, but they'd better get going on a parallel strategy to bring people onside with the idea that rising case counts are OK in a world where people who wanted to be vaccinated have had the opportunity.

First: the Federal government doesn't control lockdowns to a large extent. That's up to the provinces and PHUs.

In Ontario, we have no date for full reopening, and further reopening is conditional on vaccination targets that may never be met. There is no visible plan beyond the current stage of partial reopening.

The message pushed by the media continues to be that case counts are the primary concern.

Since the vaccine doesn't prevent infection, it's reasonable to expect that case counts will start rising again in September and October like they did last year. However, you'd expect the cases to be mostly non-serious for the vaccinated. It seems clear that this virus is not going away, unless it naturally weakens and goes away on its own.

We haven't yet brought people onside with the idea that high case counts are OK as long as other metrics are under control. To be fair, other countries are struggling to do this as well, but I expect the UK to arrive at a proposal. They have gone full steam ahead on the reopening as of mid-July, removing most if not all restrictions, and are seeing major case count increases but low death rates. They have been about 2 months ahead of us on reopening.

For our messaging, I'd propose focusing entirely on the actual hospitalization and death risk to under-12s and the vaccinated. Everyone who wants both vaccine doses will have had the opportunity very soon, so presumably the unvaccinated are happy to take the risk, and we'll have the healthcare resources to handle them.

This will need to become like the flu, where plenty of people get an uncomfortable case periodically; some people get hospitalized; some people die; but largely it does not affect most people beyond an uncomfortable few days of symptoms.

So, unless they the Federal government gets going on working that messaging through the system, the narrative come Election Day may be "well, they opened the borders to US travellers in August; and then they opened the borders to foreign travellers in September; and look at our case counts! We can't reopen and he wants an election?!". Other countries have had elections during the pandemic, but this one is not mandatory and as a feature of our minority government would need to be instigated.

Low-interest / high-inflation

At some point, I have a feeling that it's going to become obvious (rather than be revealed) that this low-interest / high-inflation world we are growing into is not transitory, but is a new normal to be managed by a stronger state.

I can't say I'm 100% confident about this, but how can anyone be at this point? I just don't think it's a sure thing that "high inflation means we will raise interest rates to bring inflation back on target". That was just what we did yesterday.

Part of the "great reset" narrative is about moving from asset ownership to asset rental, and low interest / high inflation puts assets out of reach for many while providing an opportunity via wage inflation to rent more of what you would otherwise have owned.

Another reason high inflation is wanted is to inflate away the piles of debt that have accumulated during COVID-19. Not only does it inflate away the debt, but it also increases taxes through the back door, because higher receipts and/or higher wages both lead to higher GDP and higher taxes, even if the tax rates stay the same.

It also transfers wealth from savers to debtors. Savers get lower returns on their capital and debtors get higher prices on assets purchased with cheap debt.

The notion that monetary policy is a science where you have rules that you apply consistently to get a result is not true. Monetary policy is bent toward what society needs from the monetary system at any given time. We need something new because the old tools aren't working anymore.

We haven't done inflation targeting forever, so it's perfectly reasonable that we'd change course if it's not doing what we'd want anymore. It will screw up people who are rigidly attached to the old system, however, and anyone that made assumptions based on it (i.e. retirees). I assume Millennials will be fine to let retirees (Boomers) sweat a little bit.

I think many people could have seen this coming. It has been decades in the making. We're just now getting confirmation of what many suspected was the case - that is, that governments and people are far too indebted for significant interest rate hikes to be a reasonable response to excess inflation.

The part that's missing from the picture is the part where governments have to control the flow of capital in other ways. Less "invisible hand" and more "nasty government hand". For example, the stress test on mortgages, which makes you qualify at a higher rate than the market demands in order to borrow to buy a house. Essentially, this is a government-influenced qualification that is higher than the market rate and applies only to houses. This type of thinking would be perfectly in line with the general economic shift away from "one size fits all" systems and toward crafting solutions for specific purposes and use cases.

I didn't say anything about yield curve control, which is presumably a necessary part of this if it is in fact a thing. I don't want to think about that yet.

While politicians regain control of the COVID-19 narrative, a void...

Like a lot of people, I'm confused by the apparent lack of a roadmap for COVID-19 recovery in society. Newspapers float a lot of ideas, but it's increasingly hard to tell which have serious intent behind them and which are just the napkin scribblings of career jockeys that find the notion of recovering through methodical, nose-to-the-grind diligence and hard work increasingly boring and tedious.

At first I perceived this to be an issue with our leaders and a lack of planning or vision. After all, most leaders simply look at what other people are doing and copy it within their own fiefdom. And there's no-one to copy in this situation. But, lately, I'm becoming convinced that this recent void is intentional.

I think what we are seeing is a weeks-long transition from a strategy led by medical advice based on data, testing, and targets, focused solely on virus case management, to one that is led by politicians who are accountable for the longer-term health of the economy of which all other goods (including the healthcare system) depend.

I think it has become increasingly apparent that we can't afford to have the recovery led solely by medical advice. It seemed prudent at the beginning when there was so little information about how the virus would spread, but it's now emerging that their concerns are very solitary and, really, the models were overly pessimistic. This mirrors the public's own reaction - very cautious at the beginning, but increasingly relaxed as they see no or very little impact within their sphere and are emboldened by each inconsequential, tentative step outside The Village.

What we are doing in lockdown isn't "scientific". It's likely good advice, and the advice comes from scientists, but it's not science because it has never been tried before, there are too many variables, and there is a strong cultural component to outcomes. There's no "if you do X then Y will happen". It's a hypothesis that we can't afford to complete controlled tests on at the scale required. Scientists aren't elected, and they don't have to consider the broad variety of concerns that politicians do, yet politicians are the ones that will take fire when the results take too long to materialize.

So, I think what we may be seeing is a void while the deckchairs are reorganized and the politicians regain control of the narrative. I don't think it's a coincidence that we are seeing exposés in the international media of politicians that didn't follow their own advice. Months ago they'd have been expected to resign, but now they are defended. They're just like everyone else, wanting to get on with their lives. Soon, I think we'll start seeing things that go against the medical advice given out weeks ago. We can't afford to follow it. And hopefully people will forget what that advice was... and as long as new cases don't start to surge in any significant way, they will.

This is the way it should be.

Learning to get along with COVID-19 (and possibly take a selfie with it)

Everything I'm seeing tells me that we've painted ourselves into a corner on COVID-19.

To encourage people to take the short-term lockdown seriously, a significant number of people have been put into a panic about the virus. To be sure, it is to be taken seriously, but perhaps not this seriously as long as you are following the rules of social distancing.

The people who are dying in Canada from COVID-19 are dying during a lockdown with many precautions in place, and with full access to ICUs and ventilators. They are not dying because of unavailable critical care. There is no shortage of ICUs and ventilators because of actions taken so far to divert resources to deal with the epidemic - in fact there is a significant excess.

This is good news, but it's only good news for a short period of time. At some point, it begins to look like a misallocation of resources during a time of economic collapse.

So, once we are confident in our ability to consistently help those that can be helped, excess resources need to be reallocated where they will be more likely to save lives. Such as resuming cancer consultations, pre-emptive surgeries, and similar things that have been put deprioritized and put on hold. Putting people back to work is also effective medicine where the unemployed condition involves over-eating, alcohol or drug abuse, depression, and other grotty things that fall under the banner of "idle hands syndrome".

Without a vaccine and/or some other anti-viral therapy that is discovered to improve survival rates, that percentage of susceptible people would still die with or without a lockdown. But without a lockdown, or with a relaxed lockdown, it's now going to be seen by some as the government's fault to some extent if lockdowns are relaxed and people suffer, as they inevitably will.

Unless seasonal weather changes things. Hopefully, but hopefully not - because, if true, then come June it becomes the southern hemisphere's turn to deal with this.

We don't know if you become immune after you've caught it once, and if we suspect that you are then we don't know for how long... but hopes pinned on a vaccine are high.

We don't have the means to know broadly whether someone has already caught it and acquired some immunity.

But, it sounds like mutation of this particular type of virus is a red herring as far as vaccination goes.

Like many others, I can see a way that life gradually returns to normal by gradual easing of the lockdown. I don't know how businesses that were marginally surviving at full capacity would survive at half-capacity. Live events and restaurants that normally need to fill 90% of seats may not survive filling 50% of seats. Airlines won't. Transit won't. But it's better than nothing and perhaps government programs can compensate in part where they are currently compensating in full, which is still a net benefit. At some point it has to end in full because we can't afford to do otherwise, and this is independent of whether or not there is a vaccine.

Even with all sensible measures in place, this doesn't stop a certain % of susceptible people from meeting an early death as restrictions are relaxed, nor does it help governments that have taken full responsibility for the lockdown absolve themselves in the public eye of responsibility for outcomes.

To be clear, I would not hold the government responsible because (a) I don't see any of this as the government's fault and (b) I see relaxing the lockdown as soon as possible as an absolute necessity and accept that mistakes will be made. If that's evil then it is a necessary evil. But that's just me and people that think like me. Click-bait media (most mainstream media) would hold them accountable; political opponents would; and undoubtedly would reddit. Even if those factions didn't believe the government was responsible in their heart, they would still blame and provide encouragement to those looking for a scapegoat.

Here's one communication point that would set the stage: start emphasizing now that the goal is not to prevent everyone from being afflicted by COVID-19, but to ensure that we have all necessary resources available to assist when someone does catch it and needs attention. That has always been the goal, but it is not at all clear.

Proof? Grocery workers, transit workers, and nurses refusing work or agitating over work that they believe mean "it's only a matter of time" until they acquire COVID-19. Well, it's only a matter of time until all of us catch it.

The concern about kids catching this ("...and she has 2 kids at home!") seems particularly misplaced. I'm sure someone has a link they can send me of one child that has died from it. That is beside the point, but it's also part of the irrational hysteria that cohabits with the rational hysteria around COVID-19.

The people I have most affinity toward during these times are those special epidemiologists who say that we can't just be listening to medical professionals on this issue. These people are out there. Medical professionals are not elected and have no accountability to keep society functioning. Nor do the media. Scientists go where their scientific specialty leads them and the media are starved for revenue, with attention being a proxy for revenue. Both have had an overweight say in public policy on this issue until now. Medical professionals very clearly have valuable advice to impart, but we also need the equivalent of "engineers" that are going to put that scientific knowledge to effective use (and I mean real engineers - not software ones).

And with the production pipeline shut down this year, there will be very few new Hollywood movies next year.

Dark skies ahead, but hopefully warmer weather.

Have some self-control: COVID-19 subsidies are for the people that really, really need them

In semi-lockdown like most other people due to COVID-19, I'm a bit disappointed to see people who can well-afford to maintain their lifestyle for the time being trying to apply pressure via social media or elsewhere to get free benefits such as cheaper electricity, increased Internet caps, and other similar things.

Some of these people are even people I know to be on fixed-income. Times like these are when fixed-income is a blessing rather than a curse. Imagine that: someone else is responsible for making sure you get paid when they themselves may be losing!

The impact to the economy of this lockdown will be incredible. I would not be surprised to see a "pandemic tax" come out of this, and for good reason. Subsidies are for the people who will suffer extreme hardship.

The role of anyone who can still afford to pay their bills for the time being is to continue to pay them as promised for the services they chose, and be glad that they are in a position to do that.

And why not donate any money you are saving from driving less, taking fewer transit trips to work, or buying fewer coffees or take-out meals to a local charity that will help people in your community who will soon begin to struggle?

The post on COVID-19 that nobody asked for

The last thing anyone needs is another post on this topic. But, at this point it is therapeutic for me to try and connect and resolve the many conflicting pieces of information I've absorbed from the five sources of quality news that I pay for, together with the highly interesting and insane cross-section of information gleaned from free clickbait sources and back-alley slums of ill-repute like reddit.

Plus, it'll be interesting to look back and see how wrong or naive I was in retrospect.

What have I learned about COVID-19?
The fact that I've learned it doesn't mean it's true, but this is where I think it is at:

• When the virus first appeared in China, efforts were focused on quarantine and elimination of the virus.
• Most people who get the virus are no worse off than if they'd got a cold or the flu. Some people have an extremely serious infection that requires mechanical ventilation and intensive care facilities.
• Mechanical ventilators and intensive care facilities are in short supply around the world. This is reasonable.
• Global efforts are no longer focused toward elimination of the virus, but instead on controlling its inevitable spread so that it doesn't overwhelm healthcare resources such as available ventilators and intensive care units.
• If healthcare resources are overwhelmed, triage will determine who will live and who will die. More people will die than would die if resources were unoccupied. The deceased may include among them people who did not have COVID-19 but had another serious accident or illness at the wrong time - for example, a severe case of regular influenza or an unrelated heart attack that required intensive care facilities.
• Healthcare systems have generally have not been good custodians of the supply chain. Important tools in the pandemic toolkit such as masks and other protective equipment have not been stockpiled. Further, many are produced in China along with certain important medications and these supplies are now quarantined along with a large chunk of the Chinese population.
• With all of the above in mind, reducing the opportunity for all types of illness, injury, and accident while COVID-19 is a clear and present risk makes sense, and to me this is why shutting down events and travel makes sense. If you have a serious car accident travelling to an event when COVID-19 is in full swing, you may be out of luck.

What I don't understand: why not inverse quarantine?

I don't fully understand why we are roping everyone into the cancellations and restrictions that are now becoming widespread. There is a clear profile of the type of person that is vulnerable and they are in the minority: older people with existing health conditions. These are the people who have the most self-interest in protecting themselves, and they are also the reason that everyone else should be trying to avoid catching the virus - not so much for themselves as for someone who is vulnerable that they may pass it on to.

Why wouldn't we get in touch with the most vulnerable people, have those people quarantine themselves with supports to ensure they have what they need for the duration, and let it blow through everyone else as quickly as possible - the vast, vast majority of whom will not suffer greatly though may be contagious for 2 weeks? Perhaps it is too large of an effort to orchestrate reliably and quickly, but it seems that most people are hyper-aware of this issue so the communication would surely not be a problem. If there is a vulnerable person that does not know that they are at risk from this virus by now, I would be extremely surprised.

I can't help think, in the back of my mind, that this has largely become one big exercise to see how quickly and deeply governments can bring people under control should a more serious emergency or outbreak warrant it in future. How often does this opportunity come along with commensurate public support? The largest social experiment ever conducted - so much will be learned from this.

Ontario schools closed for 3 weeks - where do the kids of healthcare workers go?

March Break - an annual week off school in March - was to begin next week. It happens every year and parents plan around it. Parents have now been told that schools will be closed for an additional 2 weeks after March Break to reduce the chances of propagating COVID-19. Fair enough, but I can't help wonder what this does to healthcare workers with children not old enough to stay home alone. A great government support would be to do everything it can to provide free, priority daycare for children of healthcare workers. If this virus kicks off, the last thing you will want is healthcare workers torn and stressed between home and work-life issues.

The logic of closing down schools for 2 weeks after March Break appears to be that children returning from March Break travel to locations where the virus is more prevalent than in Canada will not have a chance to spread the virus among their classmates on their return. After 2 weeks, it'll be clear who does and does not carry the virus but immediately after March Break it will not.

Donald Trump and US Election 2020

It seems to go without saying that Donald Trump's prospects of re-election look worse at the moment than they did at the beginning of the year. I'm not sure they were ever that great - he won in 2016 by an extremely slim margin and lost the popular vote. It's hard to imagine that he has brought more people onto his side in the last 4 years, but there's no accounting for public affinity for an opponent who is older, appears confused a lot of the time, and will not bring out the youth vote... and that is what you have in Joe Biden.

If you look at the core of this COVID-19 issue and the havoc it has wrought in general to the economy and healthcare system so far, you see a fundamental issue of over-dependence on China both in the supply chains of every day products and in medical supplies that are critical to the health of the country. It really does seem feasible at this point that even the US military may not be able to function completely without the Chinese supply chain being intact, which seems unimaginable.

So, all I want to say here is that Donald Trump has made reducing dependency on China a central and highly-visible part of his presidency for the duration. He has been attacked from all angles for doing it, and primarily by his opponents (some of whom had a direct hand in implementing the over-dependencies). There is political gold to be mined for Donald Trump if done in the right way and at the right time, though I'd still have doubts in his ability to sway such a polarized population.

Donald Trump and the ban of EU travel

It was wrong to impose such restrictions without letting his counterparts know it was coming. But the immediate cries of "this won't work!" were really strange. China did it, and was praised for it. Granted, the US will not be able to be so draconian and complete in their shutdown. But how do the EU naysayers know that it won't work, and what position are they in to say so with all of their most prominent countries grappling with this virus more severely than is the US?

The US has some unique healthcare struggles with such an apparent lack of integration or common goal of public good within its fragmented healthcare system, and I have to wonder whether border restrictions may really be the best (if not the perfect) approach for that type of system.

Over-reaction and stockpiling

I went to the supermarket on the evening of March 12th to pick up a few things, but none of them were must-haves. It was worse than the height of Christmas. All aisles packed with shoppers and shopping carts going queued around the perimeter of the store waiting to be checked out. I've never seen anything like it, and I can't imagine what could be so urgent for so many people! I left.

I went back the following morning at 7:00am. Not as bad as March 12th but definitely abnormal - more on the scale of a busy Saturday afternoon, though with very few checkouts open.

India

I am absolutely amazed that this virus hasn't kicked off in India yet. but here you have it - as of today, only 73 cases and 1 death in an extremely crowded country of 1.3 billion people.

But life goes on...

For the most part, people I interact with on a daily basis are going about their day and getting things done. There's such a sharp contrast between portrayals in the media of absolute chaos at every turn and the calmness of every day life.