Sunday, April 05, 2020

Sunday Afternoon Links

This and that for your Sunday reading.

- Jim Stanford writes about the need for a new Marshall Plan to rebuild once we've won the fight against COVID-19:
For many years to come, Canada’s economy will rely on public service, public investment and public entrepreneurship as the main drivers of growth. They will lead us in recovering from the immediate downturn, preparing for future health and environmental crises and addressing the desperate conditions in our communities. The chronic weakness of private business capital spending in recent years was already indicating a growing need for public investment to lead the way. After COVID-19, it is impossible to imagine that private capital spending could somehow lead the reconstruction of a shattered national economy.

What form will this public-led reconstruction plan take? There are many priorities for public resources and economic leadership. Any and all of them would create needed jobs, provide essential services and rebuild our capacity to work, produce and spend:
  • Healthcare services and facilities. Canada’s public health infrastructure has responded courageously to the demands of COVID-19, but the crisis highlights long-standing weaknesses in our health system. We will need to invest tens of billions in repairing and improving health facilities (including related services like aged care and community health), training and employing more healthcare workers — and being better prepared for the next pandemic.
  • Transportation. Airlines and other public transportation providers have been among the hardest hit by the pandemic. They will need injections of public capital and other direct measures to recover and rebuild.
  • Public infrastructure. Underinvestment in public infrastructure since the 1980s has badly undermined Canadian productivity and well-being. This is the time to commit to a sustained public investment program: increasing public capital spending by at least half (from under 4 percent of GDP today to 6 percent or higher).
  • Other public services. All attention is on healthcare services at present, for good reason. But other public services are also in need of investment and expansion: including aged care, early childhood education, disability services and vocational training. As the post-pandemic economy works off an enormous overhang of underutilized labour, expanded public services will be an engine of growth, not just a “cost.”
  • Energy and climate transitions. With the price of Western Canada Select oil falling to close to zero (and no reason to expect any sustained rebound to levels that would justify new investment), it is clear that fossil fuel developments will never lead Canadian growth again. Politicians and their “war rooms” can rage at this state of affairs, but they can’t change it: they might as well pray for a revival in prices for beaver pelts or other bygone Canadian staple exports. However, the other side of this gloomy coin is the enormous investment and employment opportunity associated with building out renewable energy systems and networks (which are now the cheapest energy option anyway). This effort must be led by forceful, consistent government policy, including direct regulation and public investment (in addition to carbon pricing). Another big job creator, already identified by Ottawa and Alberta, will be investment in remediation of former petroleum and mining sites.
In short, there’s no shortage of urgent rebuilding tasks in our economy and our communities. The case for mobilizing resources to meet those needs, under the leadership of governments and other public institutions, is compelling. We can put people to work, repair the damage of this crisis (and better prepare for the next one) and deliver essential and valuable services. All we need is a different model of organizing and leading economic activity — and some modern-day C.D. Howes – to help us imagine and implement that vision.
- David Suzuki takes note of the opportunity to change the way we live for the better. And the Financial Times' editorial board recognizes the need for more public planning and investment in the new economy.

- Meanwhile, Geoff Dembicki calls out Jason Kenney's foolhardy bet on a dying fossil fuel industry.

- Andrew Jackson discusses our options to finance the relief and recovery efforts, with emphasis on both the need to get past any obsession with deficits now and the importance of looking to wealth taxes rather than austerity once we've moved past that stage. And Camille Landais, Emmanuel Saez and Gabriel Zucman comment on the need for a wealth tax in particular.

- Cam Holmstrom is rightly outraged at the Trump administration's order that 3M and other U.S. suppliers renege on their contracts to provide personal protective equipment to Canada and other purchasers. 

- Finally, Nicholas Casey discusses how COVID-19 has exposed the glaring inequalities underlying the seeming uniformity of college life. And Branko Milanovic examines the possible impact of the pandemic on inequality.

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