It is the end of May and the world is still in the grip of the coronavirus crisis. In a strange way the ‘crisis’ has become a type of ‘normal.
Unfortunately, this does not mean that things are getting better across the board. There are places, including Australia and other countries, where the health problems have stabilised. In other countries, including the US and the UK the health problems are still significant. There are countries like Brazil and Russia, where the health problems are getting worse.
Another issue that is emerging is the ‘knock on’ effects of the health crisis. The most obvious of these is the impact that measures such as ‘lockdowns’, ‘social distancing rules’, border closures and travel restrictions are having on economies. These are significant in every country, including Australia.
What is probably more of a worry is the next phase of these ‘knock on’ effects. These include social and political unrest and tensions, both within countries and between countries. These are not necessarily ‘directly’ related to the virus. However, the virus has certainly exacerbated problems and tensions that already existed and will certainly do so into the future.
But first:
The Numbers
Australia continues to see very few new cases. Typically, there are less than 20 new cases a day per day on a notional basis. The majority of cases and new infections are NSW and Victoria. The overwhelming majority of infections are related to people who have travelled from overseas.
Globally, the USA continues to be firmly at the top of leader board both in terms of the number of cases and deaths. Brazil has moved into second place, followed by Russia and the UK. The countries with populist ‘dickheads’ for leaders are certainly suffering.
Easing of Restrictions but Borders Still Closed
All of the Australian jurisdictions are in the process of easing restrictions. Children are returning to school, cafés and restaurants are opening, albeit with restricted numbers of patrons and people are returning to their workplaces.
There has also been further easing of restrictions on travel with the States. For example, people in ‘outback’ Queensland can now travel 500 kilometres.
However, one thing that hasn’t changed is that Queensland, South Australia, Western Australia and the Northern Territory have kept their borders closed. As I noted in my last post this has upset the NSW Premier more than most people. She likes Port Douglas.
It has also upset the ‘potato head’, Peter Dutton and Pauline Hanson. The Federal Tourism Minister, Simon Birmingham also weighed into the argument. He is normally sensible. He was particularly critical of the Queensland Premier. Her response was simple: she pointed out that Birmingham is from South Australia and that he should talk to the Liberal Party Premier of that state before lecturing her.
I suspect that this issue will go the same way as the ‘arguments’ over the opening of the schools in each state. The opening of the borders will happen when it is sensible to do so.
Embarrassment over Job Keeper
The Friday before last it was announced that the number of people on the ‘Job Keeper’ program was about half than was previously reported. It also turned out that this number was also half of what Treasury had estimated the number would be when the program was announced.
This of course sent that media and commentators into a frenzy.
It turned out to be a bit of the ‘storm in a teacup’.
Taking the estimate first, it is not surprising that the estimate was wrong. As everyone has been saying this health crisis is ‘unprecedent’. It would be extremely difficult to estimate how many people would be forced not work because of the lockdowns. Clearly, Treasury erred on side of the worst-case scenario.
As the scheme progressed, it was up to employers to complete forms to claim the job seeker payments that they would then pass on to the employees that had ceased working because of the lockdowns. These forms were sent to the Australian Taxation Office (ATO) for processing.
As the forms were processed, the numbers of claims for assistance appeared to closely track the estimates. It needs to be noted that the claims were processed by computer. The system was obviously developed in haste as it had never been required before.
When the ATO finally had time to look at the claims, in readiness to start the payments, it was noticed that many of the forms had been incorrect completed by the employers. In the box where they had to enter the number of employees for which they were making a claim, say 1 or 2, they had entered the number say 1,500 or 3,000, which was the dollars they were claiming. This resulted on the substantial overstatement of the claims.
While this was embarrassing for the government it was understandable.
As noted above the estimate by Treasury was made in very uncertain times. The initial claims to the ATO appeared to match the estimate, which would have seemed to conform it was about right. The claims were processed by the computer system that was, by necessity, developed in haste. Reliance was placed on employers to complete a simple form. Clearly some employers are not very smart.
It should also be noted that the LNP government has been slashing staff numbers at both the ATO and Treasury for years. Both institutions have been forced to rely on outside contractors, who are often far less skilled than permanent public servants who otherwise would have been working in those roles.
It is interesting to note that the criticism of the government over this matter has been somewhat muted, particularly in the Murdoch media. It can be imagined what they would have said if a Labor government was in power.
The LNP Government Learning Economics 101
On the broader issue of economic management, the LNP government continues to embrace government spending to address the economic impact of the coronavirus. This is somewhat remarkable given their past rhetoric on the evils of ‘debt and deficit’.
One of the Australia’s best economics commentators, Ross Gittins wrote an excellent piece in the Sydney Morning Herald (SMH) earlier this week on the role of government expenditure in addressing economic crises. Refer to the link below.
He noted that “the only way out of a recession is to spend your way out. It sounds wrong-headed, but it’s not. It’s just, as economists say, counter-intuitive”.
He goes on to explain why governments are different to households when it comes to ‘debt and deficit. This is something that, Australia’s leading dickhead, Tony Abbott didn’t understand. He trotted out the nonsense that ‘debt and deficit’ is always bad.
Fortunately, the current government is listening to the experts in Treasury and the Reserve Bank – at least for the moment.
The ‘waffling twit defends ‘fuckweasel’
For the past week, a great deal of focus has been given to the behaviour of the UK’s Prime Minister’s chief advisor Dominic Cummings.
Cummings was the architect of the Brexit campaign and is generally thought to be the ‘brains’ behind the ‘waffling twit, Boris Johnson.
Cummings played a leading role in the development of the UK’s ‘stay at home’ policy designed to curb the spread of the coronavirus.
Bizarrely, Cummings didn’t follow the policy and guidelines he helped to write.
When he and his wife started to show signs of having the virus, he drove from London to Durham county where his parents have an estate. The pretext for doing this was that he was looking for “childcare for his four-year-old son”.
When he was in Durham, he and his family were spotted in the market town of Barnard Castle which is 45 kilometres from his parent’s estate.
When this was revealed, he claimed that he took the drive to “test his eyesight” prior to attempting the drive back to London.
I could spend time explaining why Cummings’s claims are arrant nonsense, but wont bother. The upshot is that most of the UK citizens are pissed off with him and the fact that the ‘waffling twit’ has supported him. These included a significant number of Conservative members of parliament and Cabinet members.
The whole episode is probably best summed up by the author J K Rowling in her tweet on the subject. The tweet can be found here.
A Quick note About Sweden
In previous posts I have talked about Sweden’s approach to the coronavirus crisis. They have not gone for a serious lockdowns and appear to be wanting to achieve ‘herd immunity’ by letting the virus spread.
It is still too early to say whether this will be a successful strategy. What can be said is that the case rates and deaths in Sweden are far higher than those in its Scandinavian neighbours. The country is also going to be excluded from a proposed ‘bubble’ which will allow movement between Denmark, Norway and Finland.
Brazil and other South American Countries
I have also mentioned Brazil in past posts.
Unfortunately, it now appears that the case and death rates in Brazil and out of control. The blame for this can largely be levelled at its moronic president who is in complete denial as far as the severity of the virus.
It would also appear that the coronavirus is spreading rapidly in Peru and other South American countries.
As I noted above, what is probably more of a worry regarding the impact of the virus is the next phase, is the ‘knock on’ effects. These include social and political unrest and tensions, both within countries and between countries.
One of the these ‘knock on’ effects is the growing tension between China and the USA and other countries including Australia. This issue is not going to go away anytime soon and is certain to escalate.
The ‘failed state that is the USA?
As I finish this post there are riots taking place in over 25 cities across the USA. The riots are in responsible to the killing of black man by police in the city of Minneapolis.
These are reminiscent of riots that took place in Los Angels in 1992 following the acquittal of police that had been charged following the killing of a black man in their custody some months earlier. I remember that well as I was flying from Sydney to Dalla via Los Angeles on the day that the riots started.
The current riots are far worse and of much greater significance.
Obviously, the death of the black man was not caused by the coronavirus. He was killed by white policeman. However, many of the people involved in the unrest have lost their jobs as a result of the lockdowns related to the coronavirus. Sadly, many of their family members have died of convid-19.
And there is Trump:
He has proven to be totally incapable of providing positive input to management of the crisis, apart from the belated ban of movements from China at the end of January. Trump is now blaming everyone other than himself for the ‘crisis’.
Many people involved in the riots and unrest are at ‘rock bottom’. They literally have nothing to lose.
They know that Trump and his administration don’t care about them. They know that very few Republican mayors or governors care about them.
For these people, total anarchy is no worse than partial anarchy.
This state of affairs is what you see in a ‘failed state’.
It is difficult to predict how far and wide these riots will spread in the USA.
One thing is certain.
Trump is not the man to solve the crisis
Links
Ross Gittins Piece 26th of May
The Swedish Experiment
Riots in the USA
billrider2013 