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.
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.
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.
No comments:
Post a Comment