Wednesday, April 15, 2020

I'm letting our leaders a bit off the hook, but big changes are needed in economic orthodoxy in light of COVID-19

Leaders of our various societies have made quite a few mistakes in this situation with the pandemic that's unprecedented in modern history.

The authoritarian system, in China, had people afraid to sound the warning for fear it would offend higher ups. Some did try to sound an alarm, but were even persecuted. We have similar problems in our US corporations and institutions. There's pressure not to rock the boat.

On the other hand there's the concept of "crying wolf." Alarms are sounded all the time and "business as usual" doesn't stop each time. For instance, some folks are worried about health effects of 5 G cellphone technology. That isn't a worry of mine, but who knows. 20 years from now we may discover a lot of problems that aren't really detectable in today's science. We can't stop for everything, however.

There's another phrase that says, "hindsight is better than foresight." Bad choices were made in the early days of this epidemic that may have not looked as bad at the time. In hindsight these choices look bad. There needed to be more money spent on testing, hospital preparedness and so forth. For the most part, more domestic spending, but there's always worry about busting the budget. Worry about needlessly burdening the taxpayers.

This virus is kind of like the "straw that broke the camel's back;" to bring up another old phrase. It exposed faults in our society and our economy. For instance people having to work so hard to pay inflated rents that they weren't likely to take sick leave. Coming to work slightly ill looks worse today than it did just a few months ago.

We have situations like large numbers of folks who loose their health insurance as soon as they have to cut back on working. A very bad system given this epidemic; employer based health insurance.

We have a society that has trouble taking a break, but now it's learning it must take a break. Most of society has had to slow down to slow the spread of the virus.

Lots of things that normally pay the bills have had to stop temporarily. Big time sports and theater productions, frequent world travel, crowded bars, restaurants and so forth.

Rents are still due and high property values are still needing to be maintained, somehow. That's where a lot of the stimulus checks will go. Money from the government to allow people, and businesses, to tread water, so to speak. Money to hold onto our homes, leases, retirement plans and so forth. Money that's largely printed from thin air, I guess, but money has been printed before.

Ever wonder why fixer upper houses, in cities, like Vancouver, BC, have sold for over one million dollars? Ever wonder how we could afford all those wars and tax cuts at the same time? It must be printed money.

Now we need printed money just to hold our places in the economy. To hold tight. To hang onto our homes, businesses and dreams till the economy can pick up again.

We are having to learn a new form of economics. Something far from past orthodoxies. There are also other challenges, such as climate change, that require us to part with much of our orthodox beliefs in economics as well as other areas of life.

Hopefully adversity becomes the mother of innovation.

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