Economic recovery and coronavirus… you can’t have one with the other

And so the reopening has been put on… hold. Sort of.

Ireland will not progress to Phase 4 of the roadmap on reopening as planned next week, the Taoiseach has said.

Micheál Martin said that Cabinet has agreed that current health measures on Covid-19 should remain in place until 10 August.

Moreover further measures are being introduced.

Face coverings must be worn in all shops and retail settings and shopping centres. Retail staff will also be required to wear them unless there is a partition in place or there is a space of 2 metres between them and customers.

Pubs, bars, hotel bars, nightclubs and casinos will remain closed until 10 August. Pubs currently serving food can remain open.

Social visits to people’s homes should be limited to a max of ten people from no more than four different households.

Current restrictions of 50 people in indoor gatherings, 200 at outdoor gatherings is being extended until 10 August.

It is continuing to advise against all non-essential travel.

So much of this is entirely sensible, not least given the R number is now above 1. Talking to people this last week it is clear that social distancing has actually collapsed in the state in the last two or three weeks. And the consequence of that has been hardly unpredictable.

Hardly surprisingly there is this:

The Licensed Vintners Association (LVA) has said the decision to postpone the reopening of pubs was a “hammer blow”.

In a statement, it said that businesses are “now required to go 40% of the year without trading” and that “compensation and support is now essential” if the sector is to survive.

As it happens support is reasonable. What isn’t has been the rush to reopen and the push from business interests to do so. And it has been driven largely by a fallacy about what is happening.

Jordan Weissman, Slate.com’s economics and business writer was interviewed in a piece on that site this last week and made a point that I think is crucial to understanding both the nature of the problem we face and a reality that has to be dealt with. Noting the record number unemployed, and ‘record’ numbers returning to employment in the US:

There is an important point to make here, which is that back in March, economists were talking about unemployment rates at 20 percent. So if you’re looking at unemployment, that’s half of that—that does seem positive.

We did not get the worst-case scenario. We do have 31 million people on the unemployment rolls right now. It’s not good. These stats that we’re looking at and that Donald Trump is celebrating are very backward-looking. Basically what they said is that between the middle of May and the middle of June, we created about 4.8 million jobs on net. The problem is that by the middle of June and then toward the end of June, things started to really tail off.

And…

And then Texas shut down.

All these states had these massive flare-ups said, Oh, crap, we have to reclose things. And so, what we saw in this jobs report was that, yes, if you completely ignore public health, you can rehire a bunch of people and try to restart the economy. But eventually the virus becomes this natural barrier to recovery. A lot of people warned this was going to happen. It should be crystal clear at this point to everybody that life is not going to go back to normal. And as a result, the economy is not going back to normal, no matter how hard Republicans wish it would.

It is this simple truth that seems for many to be near impossible to grasp. You can want to reopen an economy, you can want matters to return to normal, but short of quashing the virus the former is actually near impossible. It will continue to return and spike requiring the economy to close down again – because it is impossible to run an economy to its full extent during a pandemic, the effects on health-care are so appalling, and of course people, workers, themselves resile from being forced into risk-laden situations.

Moreover even relatively minor restrictions to prevent the virus, necessary as they are, force matters in certain directions. To take a small example, consider that I, and many of us, are currently working from home, precisely because the transportation systems cannot take the full capacity of workers due to social distancing that they ‘normally’ would. Or what about screens in shops and workplaces. Or what about bars and restaurants where those working must wear masks, or take various sensible precautions. All the rhetoric about how we can’t stay locked down for ever, or matters have to go back to ‘normal’ is pointless in the face of this reality. None of that is normal. It’s nowhere close to normal.

Yet some persist in the illusion that this is possible. For example, Mark Paul in the Irish Times continues a run of arguably ill-informed commentary (and a telling line in anti-public sector rhetoric) by adding to it with a piece on tourism here. It’s not that he’s wrong about the support needed for the tourist industry, rather it is that his solution is to essentially ignore the reality of the pandemic and the implications of same. For example he writes;

Here is the big, unanswered question for those who want Ireland to seal off its borders and to hell with the wider economic damage: what then? What is the exit strategy from this isolationist policy? How does Ireland climb down off that limb in the absence of a vaccine?
In the meantime, the tourism industry is reduced to ashes. It deserves attention and proper help.

There is no ‘what then’. Until the virus is suppressed elsewhere there’s going to be no normality, there is going to be next to no international tourist industry.

Where does Paul think these tourists from abroad are going to come from? Hardly the US. Likely not much of Europe. Already this week we’ve seen a section of the Spanish tourist industry close again because tourists from other parts of the UK were, quite literally, uncontrollable.

Unfortunately for Paul who made great play of arguing recently that other states such as Israel where spikes occurred weren’t going back into lockdowns, the fact is that across a range of states, including Israel, they have had to reimpose measures and constraints because of the tenacity of the virus. Much economic and social activity has been halted yet again. Because, again, societies are unable to function in the face of those spikes.

Paul argues that:

Travel and tourism is too often seen by the public and by opinion formers as a frivolous pastime rather than a serious industry. There is ample evidence for this in the way the industry has been blithely offered up as an economic sacrifice for a travel quarantining strategy that is unique in the European Union.

There’s a lot to find implausible about that. As one comment BTL on his piece notes that industry was able to advance pub reopening by recourse to absurdities about serving food. But an actual survey of the situation in relation to the quarantining strategy suggests it is not quite as unique as he likes to propose. For example the Czech Republic demands those from the UK and Sweden quarantine, likewise Estonia which demands self-isolation of those from countries with an high infection rate, similarly Romania and so on.

Pretending that Ireland is an outlier or a laggard, unwilling to open up when others have is to ignore what is happening in Catalonia and other places in Europe. It is, worse, to argue on the side of taking risks and losing the hard fought gains that have us where we are. The truly strange irony of this is that with solid constraints on our borders – even accepting issues relating to exposure to Britain, we could be reasonably certain that the virus was contained to a degree that would allow a much greater opening up.

I can’t quite work that one out. Is it fatigue on the part of people or is it the wish to go for reopening and getting businesses moving again and sort of crossing fingers and hoping for the best that a second lockdown isn’t imposed. If so that seems terribly short-sighted.

I’ve suggested this before, as have others. Why is there no political will to go for a real reopening, one that will naturally be constrained internationally, because internationally there are huge obstacles to a return to normality, but one that here on the island would be as expansive as possible? One that would in tandem with the North offer the prospect of schools, places of work and entertainment moving back to something perhaps a little short of normality, but close enough.

Perhaps as the implications sink in, as has been noted here on the site by various of us in posts and comments, and elsewhere too,that this isn’t going to be wished away, that political will will begin to manifest itself.

For a start the willingness of the government to at least defer the reopening Phase 4 is something. Maybe, just maybe, they’ll be able to build on that to progress matters in a more positive direction. Perhaps it is time to take a leaf out of the Australian approach:

“The time for warnings, the time for cutting people slack is over,” Victoria state premier Daniel Andrews said.
“Where we are is in a very serious and deadly position.”

That’s a hard truth. But faced up to it perhaps allows for that positive direction.