Politicians, Direct Answers and The Malaise of Our Times

Steve Paikin had an excellent post recently asking whether it was too much to ask for a direct answer to a direct question? His main point was how several leaders in Canada had developed the habit of not dealing with simple straight forward questions and instead were embarking on long, meandering non-responses often prompting journalists to ask the same question again.  This meandering approach to answering simple questions with relatively simple answers – he provides some examples in his post – risks eroding a lot of the capital our politicians have built up during the recent crisis. As he concludes: “these leaders are inviting a flattening of their popularity curves if they continue to obfuscate, rather than doing what the public has richly rewarded them for doing in the past: just answering a straight question with a straight answer.”

My original thoughts on this issue posted in a comment were that “I agree Steve but am not surprised. It remains that politics is dominated by communications staffers rather than people who can « do things ». It’s only during a crisis that expertise and ability become important, otherwise it’s simply about the message and old habits die hard.” Indeed, the constant desire of politicians and their staffers to manage situations and message has led to an odd twist on a societal level borrowing a bit from the Marshall McLuhan phrase: "The medium is the message" - its only the medium, there is no message.  In our politics and work lives, what matters is not the content at all but how it is communicated with more emphasis on how things are said than what is said.  In the hands of skilled practitioners of this art, you can have both the content and very skilled messaging.  In lesser hands, well …. you get long meandering responses with many turns of phrase and empathic expressions designed to sound clever or comforting but which really say absolutely nothing and may mean the responder is hiding something ranging anywhere from a hidden agenda to their ignorance and lack of ability.

In the best-case scenario, you can get nothing but words and platitudes from leaders but life goes on because the issue does not matter and you can tune out.  During times of a full belly, you can indulge nattering politicians and bureaucrats who like to hear their own voices and promote agendas based on the aspirations and the lobbying activities of their friends and connections.  In times of crisis, this is a problem and may lead to opportunities for plain speaking leaders who can get things done but once the crisis is over, they are often dumped – think of Winston Churchill at the end of the Second World War.  However, the worst-case scenario occurs – and believe me there is always a worst-case scenario – when the focus on communication and the message becomes a means of stifling debate and dissent and can become a fundamentally undemocratic force that prevents new ideas from coming to the fore.

My best example of this is a meeting many years ago when after making several points in plain and direct language, I was told that I was making everyone uncomfortable. Foolish me, rather than simply saying “Sorry,” I instead directly asked why everyone was uncomfortable?  After all, I was presenting evidence on the matter under discussion in careful and measured language.  After a pause, I was told that it was not what I said but how I said it. Apparently, a polite laying out of a list of facts that contradicts the direction based on wishful thinking that everyone else wanted to go made everyone uncomfortable.  This was not about how I said it, it was indeed what I said and in the absence of being able to muster empirical evidence or facts against the position I had taken, the response was designed to shut off discussion by making it about how the message was communicated.

The long-term response has been a corrosive effect on our society and institutions that has indeed paved the way for populism.  The railing against the lack of evidence and mindlessness of populist policy is being led by the same masters of obfuscation who got us here in the first place. They are at their wits end because their communication is not having an effect against another communication.  After all, if it is how you say something rather than the logic or evidence underpinning it that matters, then what does it matter what the facts are?  If reason and evidence are just window dressing to hang a message on, then how can one combat fake news or simple policies not based on evidence?  If all the focus is simply on optics, spin, communications and messaging, then what you are telling everyone is that facts and evidence do not matter.  If its all about appearance and presentation, then is it any surprise the world is in the state it is in?
 

Ontario's Covid 19 Progress to Date: Not Quite There Yet

As of May 16th, 2020 Ontario is reporting 22,313 confirmed cases of Covid-19 and 1,858 deaths.  The good news is that 75 percent of cases are resolved and the active number of cases is trending down.  There have been some data glitches in reporting the last few days and while the number of new cases is trending down, it remains that the number of new cases is still what I would term a smouldering burn with the potential for re-ignition.  This is of course a concern given that Ontario is beginning to resume activity with an acceleration of openings on Tuesday.

To be fair, this is a disease whose transmission can be prevented by avoiding crowds and long-term presence in confined spaces, spending more time in outdoor well ventilated areas, practicing social distancing and practicing good hand hygiene. At the same time, this requires a fair amount of self-discipline and given that our daily case numbers are still bouncing between 300 and 400 for a week now, it means a chunk of the population still believes the rules do not apply to them and do not understand the concept of negative externalities.  These are probably the same types of people who let their barking dogs out in the middle of the night or throw cigarette butts and fast food wrappers out the window as they drive.

The figure below shows the number of daily cases with a LOWESS smoothing trend fitted for the period January 25th to May 16th.  The trend shows the number of daily cases peaked on Day 92 - circa April 25th - have have been trending downward since but the decline has been slowing and there may even be a slight upward tick.



Of course, it is not the number of new cases per day but the growth rate of total cases that is even more important and the goal should be to get it below 1 percent (and ultimately zero).  Italy, for example, is now seeing the growth rate of its total Covid-19 confirmed cases at about 0.4 percent.  But then despite initial stumbles, it has been following a stricter lock-down because it was hit much harder than other places.  Why is 1 percent important?  Well, at one percent growth it would take 72 days for the total number of cases to double.  At 20 percent daily growth - which was where Ontario was in late March - the total number of cases would double in just over three days.  If you want to get the pandemic under full control and have new cases not reignite a major spike that overwhelms the health care system, then you need that growth rate below 1 percent.  Ontario at present has seen the growth rate fall below 2 percent but the last few days have not seen it below 1.5 percent.  That is not good enough.

Ontario also appears to have a number of distinct regional pandemics under way as the next figure illustrates.  When the cases are sorted by public health units in terms of total confirmed cases per million and a two-unit moving average applied, here is what the picture looks like.
 

The highest rates of infection have been in Toronto and  Peel at 3,023 and 2,466 cases per million respectively.  There is then a drop off to a second tier in terms of severity and these health unit areas are Leeds-Grenville & Lanark (Eastern Ontario), Windsor-Essex, Durham. Ottawa, Haldimand-Norfolk, Waterloo, York and Lambton and they range from a high of 1,932 to a low of 1,713.  There is then another drop-off to a third tier consisting of the remainder going from a high of 1,291 cases per million in Niagara Region to a low of 150 cases per million in Algoma.  Note, that some of these regions are nowhere near 1 million people in population.  Thunder Bay District, for example, clocks in at 520 cases per million population but there are only about 140,000 people in the District so do the math and you can see the absolute numbers are quite small.

So, what is the long and short of this?  To date, the province has been pursuing a one-size fits all policy in dealing with the epidemic which was fine in dealing with the start of the first phases of the pandemic. However,  a one size fits all policy for re-opening given that some people are already slacking off on precautions is a bit of a concern especially in the parts of the province with higher case densities.  So, if we are going to open things up up at the same rate everywhere, everyone everywhere needs to continue exhibiting common sense and exercising personal caution and distancing measures.

Canada must tailor trade practises for post-COVID world

The effects of COVID-19 will transform the international world order and affect Canada’s role in it.
First, the meteoric rise of China, with its aspirations of world leadership and greater respect, will come to a crashing halt. Despite the importance of China’s market to the world economy, there will be an increase in transactions and transport costs as the hyper-globalized pre-COVID world takes a pause given concerns about virus transmission.
There will still be global trade and travel but there will be new rules and precautions operating as a form of non-tariff barrier with resulting losses for producers and ultimately consumers. For Canada, trade with China will continue given the importance of our resource inputs to their economy. But they will eventually need us more than we need them and this should shape our trade policy accordingly.
Of course, there’s also the long-term fallout from the Chinese government’s delay in alerting the world to the seriousness of COVID-19 while simultaneously scouring the planet for PPEs. The Chinese government’s desire to be treated like a superpower runs counter to the leadership and stewardship we’ve seen over the last few months. With great power comes great responsibility, and perhaps the best example of it during the 20th century was the American assistance for European recovery. While self-interested, the Marshall Plan nevertheless helped former foes and allies alike rebuild their economies after the Second World War. Notwithstanding its later efforts, the Chinese government’s behaviour during the early phases of the pandemic has eroded trust. For Canada, the new rule in its international dealings with China should be trust but verify.
Second, the abdication of global leadership and retreat by the United States is nearly complete, reinforced by its chaotic handling of its own public health situation. While the U.S. has been far from perfect, during the 20th century it was a leader for free markets, international trade and humanitarian efforts to help bring about a better world. The last four years have seen a populist-fuelled retreat from this vision of America in the world and we will all be poorer for it. The COVID debacle in the U.S., due to a lack of coordination and response, sends a distressing message to its trade partners and allies. For Canada, there can be no retreat from dealing with the U.S. given its importance to our economy. But we can no longer assume that all American interests are automatically our own.
Third, given what has transpired with both China and the U.S., the Europeans and the United Kingdom will ultimately assert new leadership, engagement and involvement in world affairs though they will not always sing with one voice. The retreat of the U.S., the Chinese government’s lack of transparency and not-so-subtle bullying—combined with the ever-present Russian behemoth on their doorstep—means they will need to do more for themselves in terms of security and trade, and will need to reach out and strengthen their trade relationships around the world. Here, Canada has taken the first steps with the Comprehensive Economic and Trade Agreement but it must actively pursue opportunity and build further relationships. Trade agreements are not enough, you must work to implement them.
The ultimate result from all this uncertainty will likely be an even more competitive and multilateral world order with Russia, Saudi Arabia, India and Brazil constituting additional elements of change and disruption. Yet this world will also be a source of opportunity for a resource rich and diverse outward looking country such as Canada.
We can benefit, but we must be nimble and adaptable in this changing world. Canada must actively engage with all players, but on its own terms, and must seek like-minded allies who are also small trade-dependent economies with stable, democratic and market-oriented institutions. Canada, Australia, New Zealand, Taiwan and the Scandinavian countries can serve as champions of small open economies in this emerging and more competitive world order. A league of small open economies may seem naïve, but one should not underestimate the powerful effects of mice that roar.

This first appeared on the Fraser Institute Blog, May 12 2020.

COVID-19 and Employment Effects Across Canadian CMAs (Check out Barrie!)

The April 2020 labour force numbers are out from Statistics Canada and the numbers are indeed grim.   Employment dropped by one million in March, and fell by nearly two million in April, bringing the total employment decline since the beginning of the COVID-19 economic shutdown to over three million.  In addition, the number of people who were employed but worked less than half of their usual hours for reasons related to COVID-19 increased by 2.5 million from February to April.

Statistics Canada noted - and this was picked by by the media - that the size  of the decline in employment since February (-15.7%) far exceeds declines observed in the 1981-1982 recession which resulted in a total employment decline of 612,000 (-5.4%) over approximately 17 months.  However, the national unemployment rate in April 2020 is what the unemployment was like at the peak of the 1981-82 recession - at 13 percent.  Employment and the labour force have grown substantially over the last 40 years making such comparisons of absolute numbers problematic.  Nevertheless, the increase in unemployment rates and the percentage declines in employment are dramatic given that declines in previous recession were spread out over months while this one has happened in 30 days.

A comparison across CMAs is quite interesting.  All of Canada's 35 CMAs saw an increase in their unemployment rates (3 month moving average) with the highest unemployment rates currently in Saguenay(13.1 percent), Windsor and Calgary.  The lowest are in Victoria, Ottawa, and Abbostford-Mission (6.2 percent).  Thunder Bay clocks in the middle of all this at  9.2 percent with Sudbury much lower at 8.9 percent.


As for employment declines in percentage terms, everyone saw their total employment decline relative to April 2019 - except for Barrie of all places.  Even with the March to April drop of 6400 jobs,  Barrie has been growing so robustly that its April 2020 total employment is still 5 percent higher than April 2019.  However, the employment drops are quite steep especially for Peterborough and Windsor which saw their employment drop 17.7 and 15.8 percent respectively.  Relatively unscathed - along with Barrie - are London, the Ontario portion of Ottawa-Gatineau, Trois Rivieres and Moncton. Thunder Bay is again close to the middle in terms of employment declines at -6.3 percent while Sudbury was -8.9 percent.


So, there you have it.  The numbers will probably get worse before they get better.  The numbers for May - which will come out in June - will probably show an increase in the unemployment rate as well as a further decline in employment.  However, the additional declines should be substantially less.  One can start to expect to see improvements in the employment numbers in June which will be reflected in July's release.