Wednesday, April 8, 2020
“The economy”—pandemic edition
https://rwer.wordpress.com/2020/04/08/the-economy-pandemic-edition/
from David Ruccio
We’re back at it again: “the economy” has broken down and we’re all being enlisted into the effort to get it back up and working again. As soon as possible.
The Congressional Budget Office has announced that it expects the U.S. economy will contract sharply during the second quarter of 2020:
Gross domestic product is expected to decline by more than 7 percent during the second quarter. If that happened, the decline in the annualized growth rate reported by the Bureau of Economic Analysis would be about four times larger and would exceed 28 percent. Those declines could be much larger, however.
The unemployment rate is expected to exceed 10 percent during the second quarter, in part reflecting the 3.3 million new unemployment insurance claims reported on March 26 and the 6.6 million new claims reported this morning. (The number of new claims was about 10 times larger this morning than it had been in any single week during the recession from 2007 to 2009.)
Just as in the aftermath of the spectacular crash of 2007-08, the supposedly shared goal is to do whatever is necessary to engineer a recovery so that the economy can start operating normally again.
That presumes, of course, that we were satisfied with the normal workings of the economy before, and that such a state of normality is what we all desire moving forward.
But before I attempt to address that issue, it’s important that we stop and think a bit more about what we mean when we refer to this thing called “the economy.” In a fascinating recent interview, Anat Shenker-Osorio [ht: ja], argues that the economy is often portrayed as an all-powerful, personified entity.*
Previously, we would hear politicians admonish that we can’t pass X policy because it will “hurt the economy” — as if it were a being to which we owe our efforts and loyalties. And now, all the more brazenly, Republicans tell us we must sacrifice ourselves or perhaps our elders to the economy.
Another oft-used metaphor for the economy is the human body.
Conservatives, aided and abetted by progressives who also unwittingly employ the metaphor, tend to talk about the economy as a body. You can hear this expressed in language like “it’s suffering” or “the economy is thriving.” We have a “recovery bill” to get the economy “off life support” and “restore it to health.” What this metaphor suggests is that in grave cases, we must “resuscitate the patient” (perhaps with a stimulus bill.)
It seems to me, there’s a third common metaphor for the economy: a machine. Often, especially in conservative political discourse and neoclassical economic theory, the economy-as-machine is said to be functioning on its own, in a technical manner, with all its parts combining to produce the best possible outcome.** Unless, of course, there’s some kind of monkey wrench thrown into the works, such as a government intervention or natural disaster. However, according to liberal politics and Keynesian economics, the economic machine by itself tends to break down and needs to be regulated and guided, through some kind of government policy or program, so that it gets back to working properly.
As Shenker-Osorio correctly observes, the metaphor of “the economy” that is shared by both sides of mainstream political and economic discourse puts progressives at a distinct disadvantage:
we see progressives attempt to make arguments about how social welfare programs will “grow the economy” in the hopes of sounding like the reasonable adults in the room. This tacitly reaffirms the toxic idea that our purpose ought to be to serve the economy — that the correct evaluation of policy is how it affects the GDP
Much the same argument is made in favor of other liberal or progressive programs: raising minimum wages, extending health insurance, anti-poverty programs, education and job training, and so on. All are justified as contributing to making the economic machine work better, more productively, by including everyone.
So, what’s the alternative? One possibility, which Shenker-Osorio offers, is to reject the existing metaphors and refuse to continue to debate “who loves the economy best” and, instead, force “the far more relevant discussion: What is best for people.”
I don’t disagree with Shenker-Osorio’s goal but I wonder if there might not be another way of proceeding, by teasing out the implications of thinking about the economy as a machine.
If we continue with the machine metaphor then, first, we can demonstrate that the existing machine, in the midst of the novel coronavirus pandemic, is simply not working. It is an unproductive machine. For example, the U.S. economy-as-machine hasn’t been able to protect people’s health, for example, by providing adequate personal protective equipment for nurses and doctors, ventilators for patients, and masks for everyone else. Even more, it has put many people’s health at additional risk, by forcing many workers to continue to labor in unsafe workplaces and to commute to those jobs using perilous public transportation. Finally, it has expelled tens of millions of American workers, through furloughs and layoffs, and thus deprived them of wages and health insurance precisely when they need them most.
Second, we can read the decisions of the Trump administration—both its months-long delay in responding to the pandemic and then its refusal to enact a nationwide shutdown when it finally did admit a health emergency—as precisely enacting the general logic of the economic machine: that nothing should get in the way of production, circulation, and finance. It fell then to individual states to decide whether and when to shutdown parts of the economic machine and to distinguish between “essential” and “nonessential” sectors.
Finally, we can interpret the repeated calls to reopen the economy—not only by Trump and his advisors, but also by a wide variety of others, from Lloyd Blankfein, the billionaire former CEO of Goldman Sachs, to Republican Sen. Ron Johnson of Wisconsin—as a rational but unconvincing gesture, based on no other reason than that the machine needs to keep operating. It expresses the rational irrationality of the existing economy-machine.
All of which leaves us where? It seems to me, their continued reference to the economy as a machine creates the possibility of our demanding, in the first place, that the machine should remain closed down—for health reasons. People’s health should not be put under any further stress as long as the pandemic continues to ravage individual lives and entire communities.
And in second place, it becomes possible to imagine and invent other assemblages of the existing economy-machine, and even other machines, instead of obeying the logic of the current way of organizing economic and social life in the United States. In fact, while many of the changes to people’s lives have been designed to keep the existing machine functioning (for example, by working at home), it is also possible that people are taking advantage of the opportunity to experiment with how they work and live and creating new spaces and activities in their lives.***
If the common refrain these days is that “nothing will be the same” after the pandemic, perhaps one of the outcomes is that the economy-machine will finally be seen as an empty signifier, unmoored from the reality of people’s lives and incapable of organizing their desires.****
Then, maybe, the existing economy-machine will stop functioning. Before it kills any more of us.
*As in the episode of South Park, “Margaritaville” (the third episode in the thirteenth season, broadcast in March 2009), which Shenker-Osorio discusses in her 2012 book, Don’t Buy It: The Trouble with Talking Nonsense about the Economy.
**There is also, of course, an ethics of the economy-as-machine. As I explained back in 2018,
According to neoclassical economists, the capitalist distribution of income is fundamentally fair. If every factor of production (e.g., capital and labor) is remunerated according to its marginal contribution to production, and each individual sells to firms the amount of each factor they desire (because of utility-maximization), the resulting distribution represents “just deserts.” It’s fair on an individual level and it represents justice for society as a whole. Let free markets operate, without any external intervention (e.g., by the state), and the result will be both fair and just.
For Keynesian economists, the machine can be made to operate fairly, and therefore in an ethical manner, when the state can step in (e.g., via fiscal and monetary policy) to create full employment.
***I understand, some of those changes may be experienced as losses—of laboring alongside fellow workers, of certain leisure activities, and so on. But people are inventing all kinds of new ways, even at a physical distance, of provisioning, socializing, and much else.
****And, yes, for those who are interested, as I prepared to write this post, I did go back and reread some of the works of Gilles Deleuze and Félix Guattari, including Anti–Oedipus: Capitalism and Schizophrenia.
Coronavirus: ‘Situation is going to get worse before it gets better,’ health group says
JACQUELINE CHARLES. Miami Herald. April 7, 2020
The informal economy is the lifeblood of Latin America. Now it's under threat by the coronavirus.
The coronavirus pandemic is rapidly accelerating in Latin America and the Caribbean, where the number of new cases and virus-related deaths are rising., the director of the World Health Organization’s regional office for the Americas said.
“The situation is going to get worse before it gets better,” Dr. Carissa Etienne, director of the Pan American Health Organization, said Tuesday during the health group’s weekly video press briefing on the situation of the global pandemic in Latin America and the Caribbean.
In the past seven days, the number of infections and deaths from the coronavirus, which causes the COVID-19 respiratory disease, have more than doubled, Etienne said. As of Tuesday, there were more than 385,000 positive cases and 11,270 deaths.
This includes six reported cases in Nicaragua, where PAHO is questioning the reporting and said it is concerned about leader Daniel Ortega government’s treatment of the pandemic. The Nicaraguan government, which has done almost nothing to try to stop the spread of the virus, has said the risks are overrated and encouraged citizens to go about their everyday lives.
“PAHO has been concerned about the response to COVID-19 as seen in Nicaragua,” Etienne said. “We have concerns for the lack of social distancing, the convening of mass gatherings. We have concerns about the testing, contact tracing, the reporting of cases. We also have concerns about what we see as inadequate infection prevention and control.”
The Central American nation, Etienne said, has received the same guidelines that every one of its member states has received, as well as personal protective equipment for healthcare workers, testing kits, technical support and guidelines.
“Formally and informally we have raised those concerns with the national authorities of Nicaragua,” she added. “But let me say that Nicaragua is a sovereign country. The government makes decisions for its people and decides what and how its response will be structured.”
Over the past few weeks, PAHO member states have ramped up testing, expanded curfews and even tightened quarantine measures by moving to 24-hour lockdowns, with residents in smaller island-nations only allowed to leave their homes for the grocery stores and gas stations on particular days based on their last names. Also following the lead of the Centers for Disease Control and Prevention, governments have revised guidelines on the use of face masks and are recommending that citizens cover their faces with cloth in public settings.
‘It is essential that we reserve professional grade, protective equipment and especially face masks for the health workers that need them most,” said Etienne, noting that Tuesday was World Health Day.
Etienne said while it’s difficult to forecast when the peak will happen for the region, the next three to six weeks are expected to be difficult. She urged regional governments “to respond and prepare” for COVID-19 at the same speed new cases of the respiratory disease were emerging.
“Many of our countries will begin to see an increase in their number of cases and some of our countries will begin to experience an overwhelming of their health systems and we would also see an increased number of cases,” Etienne said. “Of course all of this depends on how well our member states execute their social distancing... and whether we have sufficient [intensive care unit] beds to manage critically ill patients and whether we have something as basic as ventilators and [personal protective equipment].”
With difficult weeks ahead, Etienne said “solidarity and coordination” among countries will be essential to ensure that nations make the most of the limited supplies available. And while not singling out any particular nation, she did address an emerging concern in the region as ventilators, respiratory masks and other protective medical equipment become scarce and vulnerable nations find themselves blocked from accessing them amid the high demand.
“Now is not the time to hoard or stockpile. It is the time for easing export restrictions and embracing flexible regulations that enable access in the places that will be hardest hit in the next few weeks,” she said. “It is essential we reserve professional grade, protective equipment especially face masks for the health workers that need them most.”
In Communist-run Cuba, the private sector helps the needy as coronavirus spreads
Sarah Marsh, Rodrigo Gutierrez. Reuters. April 3, 2020
HAVANA (Reuters) - Upmarket restaurants are delivering free meals to the elderly, while a fashion firm donates face masks. A business consultancy calls on its clients to donate hygiene products and artisanal soap shops gift their wares to low income households.
In Communist-run Cuba, the fledging private sector is rushing to set up solidarity initiatives for those most vulnerable to the coronavirus outbreak, demonstrating the state no longer has a monopoly on helping the neediest.
Sometimes the two are even joining forces to combat the common invisible enemy.
Saverio Grisell, the Italian co-owner of restaurant Bella Ciao, which usually teems with expats, tourists and affluent Cubans, says he discussed how he could help with the local Committee for the Defense of the Revolution (CDR).
“The president of my CDR gave me a list of 29 elderly people and I decided to give them a meal for free every day,” he said.
Cuba, which has so far confirmed 269 cases of the new virus, has one of the oldest populations in Latin America. The virus appears to be particularly deadly for the elderly, who throughout are the world are seeking ways to stay safely at home rather than go outside and risk contagion.
The CDR now helps Bella Ciao deliver its pizzas and pastas directly to the homes of the elderly.
“It’s a small gesture of solidarity,” Grisell said, noting that it paled in comparison with the help Cuba sent to his home country of Italy last month in the form of medical staff.
Cuba has also long provided subsidized food at eateries for the elderly nationwide, and is now dishing out free meals for those on low incomes.
“It’s admirable,” said Ines Perez, 75, digging into a plate of donated Bella Ciao spaghetti. “Let’s hope everyone comes onboard and cooperates in the same way to overcome this difficult moment.”
SOLIDARITY: A CUBAN VALUE AND GOOD POLITICS
Private restaurants, bed-and-breakfasts, beauty salons, gyms and shops have flourished in Cuba since former President Raul Castro started inching open the economy with market style reforms a decade ago.
However, fears those reforms went too far and have fostered too much inequality have prompted a crackdown in recent years on the sector, which now employs around 600,000 people.
As such, Cuban private businesses likely demonstrate more solidarity than elsewhere not just because it is a value embedded in the culture but also “because it is good politics to exhibit a ‘socialist’ or ‘cooperative’ orientation,” according to Cuba expert Ted Henken at Baruch College in New York.
Whatever their motivation, the solidarity initiatives are going down well - state-run website Cubadebate even did an article on the Bella Ciao project - and show no sign of abating as the number of coronavirus cases slowly mounts.
These days, for example, fashion brand Dador is putting its sewing machines to an altogether different task than their usual one of conjuring up limited edition garments for the runway and its Old Havana store.
Now they are making face masks out of colorful and often patterned cloth.
Co-founder Lauren Fajardo said they had already collaborated with one group that provides assistance to the elderly, donating 160 masks.
“We’d like to focus on getting people masks who need them most,” she added. “Elderly people for example, people in neighborhoods that are very crowded and those who don’t have the option to just stay home because they have to work or find food.”
Brazil Minister Fires Analyst Who Opposed Unauthorized Wood Exports
Reuters. April 6, 2020
BRASILIA — Brazil's Environment Minister Ricardo Salles has dismissed a government analyst who opposed relaxing environmental review of wood exports, an official notice said on Monday, after thousands of shipments from the Amazon bypassed required approvals over the past year.
Reuters reported last month that Brazil had exported thousands of shipments of wood from an Amazonian port over the past year without authorization from the federal environment agency Ibama.
After the issue was discovered, amid heightened controversy over deforestation of the Amazon rainforest under far-right President Jair Bolsonaro, Ibama's chief rescinded a rule requiring the agency authorize all wood cargoes.
Lifting the rule flew in the face of a group of analysts led by Andre Socrates de Almeida Teixeira, coordinator-general for monitoring biodiversity use and foreign trade, who had pushed for it to be upheld.
According to notices in the official gazette, Salles removed Teixeira from his post and replaced him with Rafael Freire de Macêdo, who was already working in a related area.
Teixeira declined to comment and Macêdo did not immediately respond to request for comment.
Ibama said it was a routine change made within applicable rules, without elaborating. The environment ministry did not respond to request for comment.
A source familiar with the matter told Reuters that Teixeira's firing was in retaliation for his dissent.
"It was more of a political change to appoint someone who is more flexible ... to ease controls and facilitate wood exports," the source said.
Ibama had previously stated that wood cargoes must get export clearance from the federal Revenue Service, which is only granted after cross referencing with the country's system for overseeing wood to verify that it is of legitimate origin.
As such, Ibama is still able to make spot inspections of wood cargoes bound for export.
The Amazon is the world's largest rainforest and its preservation is seen as vital to curbing climate change because of the vast amount of greenhouse gas that it absorbs.
Destruction of the Amazon surged last year, provoking a global outcry, with some foreign leaders and environmentalists blaming the policies of Bolsonaro for emboldening illegal loggers, ranchers and land speculators.
Bolsonaro says poverty in the Amazon is to blame and that he has been unfairly demonized.
China outraged after Brazil minister suggests Covid-19 is part of 'plan for world domination'
AFP. April 6, 2020
China has demanded an explanation from Brazil after the far-right government’s education minister linked the coronavirus pandemic to Beijing’s “plan for world domination”, in a tweet imitating a Chinese accent.
In the latest incident to strain ties between the two nations, minister Abraham Weintraub insinuated China was behind the global health crisis.
“Geopolitically, who will come out stronger from this global crisis?” he wrote on Twitter Saturday. “Who in Brazil is allied with this infallible plan for world domination?”
In the original Portuguese, his tweet substituted the letter “r” with capital “L” - “BLazil” instead of “Brazil,” for example - in a style commonly used to mock a Chinese accent.
China’s embassy in Brazil condemned Weintraub’s “absurd and despicable” tweet, calling it “highly racist”. “The Chinese government expects an official explanation from Brazil,” tweeted ambassador Yang Wanming.
The row comes as Brazil, like many countries, is hoping to source more medical equipment from China to deal with Covid-19.
Weintraub said in an interview he stood by his tweet and called on China to do more to help fight the pandemic. “If they [China] sell us 1,000 ventilators, I’ll get down on my knees in front of the embassy, apologise and say I was an idiot,” he told Radio Bandeirantes.
Health minister Luiz Henrique Mandetta said last week Brazil was struggling to source ventilators and other vital health supplies from China, saying some of its orders were cancelled without explanation.
The issue erupted online on Monday. The top trend on Twitter in Brazil was the hashtag #TradeBlockadeOnChinaNow.
Brazil, whose biggest trading partner is China, is the Latin American country hit hardest by the new coronavirus, with nearly 500 deaths and more than 11,000 confirmed cases so far.
Since the pandemic emerged, Brazil-China ties have been strained, notably by a series of tweets by President Jair Bolsonaro’s son Eduardo, a federal lawmaker. Eduardo Bolsonaro criticised the Chinese “dictatorship” for its handling of the outbreak in March.
Last week, he tweeted about the “Chinese virus”, a phrase that infuriates Beijing and that the World Health Organization has advised against. It has also been used by US president Donald Trump.
That prompted China’s consul general in Rio de Janeiro, Li Yang, to ask Eduardo Bolsonaro in an opinion column in Brazilian newspaper O Globo: “Are you really that naive and ignorant?”
Brazil's health minister holds job in clash with Bolsonaro
Reuters. April 7, 2020
BRASILIA (Reuters) - Brazilian Health Minister Luiz Henrique Mandetta said on Monday he will continue in his post after overcoming a disagreement with President Jair Bolsonaro over the need for social distancing to stop the spread of coronavirus.
“A doctor does not abandon his patient. We will continue,” he said at a news conference at the end of a day of speculation over whether Bolsonaro would fire him in the midst of an escalating public health crisis.
“The government is taking a new position and it will be more focused” on the epidemic, Mandetta said, confirming he had won an arm-wrestle with the president over the need for isolation.
Mandetta, a doctor by training, has openly contradicted the far-right president who has minimized the danger of the epidemic and opposed lockdowns that are stalling the economy.
The minister’s stance, however, received widespread support, which irked Bolsonaro and led him to say last week: “Nobody should forget that I’m the president.”
Bolsonaro’s denial of the need to reinforce social distancing led to a split in his cabinet, with top military officers in the government opposing him and siding with Mandetta, including his Presidential Chief of Staff Walter Braga, an active duty Army general.
Mandetta told reporters he was not able to get much work done on Monday, with uncertainty over his future reaching the point where he emptied out his desk.
The minister said he was just a spokesman for Brazil’s health system whose workers are battling to cope with the advance of coronavirus in Brazil, where confirmed cases have doubled in the last six days to 12,056, with 553 related deaths.
“We are not ready for the escalation of cases in our biggest cities,” he warned, saying that Brazil must nail down purchases of medical supplies from China and then send for them by plane.
Mandetta said social interaction will inevitably spread the virus to the most vulnerable sectors of Brazil’s population of 211 million people, such as the teeming slums or favelas of its big cities.
Subscribe to:
Comments (Atom)