Triple Crisis: Economic Crisis Was Foreshadowed Before the Coronavirus [feedly]

Economic Crisis Was Foreshadowed Before the Coronavirus
http://triplecrisis.com/economic-crisis-was-foreshadowed-before-the-coronavirus/

By Alejandro Nadal

Republished from La Jornada, March 11, 2020, with permission.

It is with great sadness that we announce that Alejandro Nadal, an economist, lawyer, professor at the  Centro de Estudios Económicos (CEE) of the Colegio de México, and a longtime contributor to Triple Crisis blog, passed away on March 17 after a short time with fast-moving cancer. As former D&S co-editor and former Triple Crisis administrator Timothy A. Wise put it, "A great loss for us all, far too young and otherwise healthy and vibrant. Like Frank Ackerman. Tough times, just when we need those clear, critical minds most."  This article was his last for the Mexico City daily newspaper La Jornada, where he was a columnist. It was submitted on March 10 and published on March 11, just six days before he died. Even though he wrote it almost two weeks ago and the news is moving so quickly, it still seems to capture powerfully the current moment and the economic context of the pandemic. The journal Sin Permiso, on whose editorial board Nadal served, has posted an obituary and tribute here, and has made available a pdf compiling some of his articles.  —Eds. 

Cycles and crises in capitalism can happen in an irregular way. This is part of the anomalous movement of an economy that is inherently unstable. The great crisis of 2008 was the result of such processes. And to bring an economy that has fallen into imbalance back to life, you need to inject it with liquidity in good quantities. For example, the monetary easing policy measures implemented by the Federal Reserve were felt before the crisis and their speculative effects began to spread throughout the economy from 2009–2010. Astronomical amounts went into the pension funds and treasury departments of large corporations, where they served to fuel global speculation. But what they did not do was promote investment and employment.

The recovery process has been widely publicized, but the reality is that if by recovery we mean a more or less prolonged period of growth, then that has manifested itself. But, on the other hand, if that growth has been very slow and job creation has been weak, then the recovery can be characterized as a long recession. Even before this major recession broke out, it was clear that quantitative easing schemes in monetary policy were not working to promote the real economy. All they had achieved was to promote share buybacks, carry trades, in which large corporations took speculation to all ends of the earth, in territories where lower yields prevailed.

Faced with this picture of fragility, with a lazy U.S. economy creating poor-quality jobs, a reluctant Europe and the Chinese and Indian economies falling into recession, the specter of a trade war with all its implications, very marked imbalances in the entire world economy and the specter of a global crisis, is becoming clearer.

And in the face of the widespread threat of a recession looming over the world economy, things are getting confused. And the first thing that needs to be clearly observed is the prospect of a crisis that is intensifying. The new coronavirus encourages people to stay home and avoid travel, cutting demand for air travel and hotel services significantly. Production cuts in China and elsewhere have disrupted value chains. This process, in turn, has triggered a steady stream of alarm warnings about how the now infamous virus will affect the rest of the economy.

For the U.S. economy, the longer the pandemic lasts and the more intense the efforts to counteract it—although for the moment the situation remains very uncertain because so many places are affected and so many people have been harmed—the severity of the situation has not been able to be accurately assessed.

For an economy that was already in a state of semi-stagnation, the situation has become very complicated. To begin with, with China everything depends on the speed with which the global epidemic can be brought under control, the prospects for curbing it and the process of massive restrictions and quarantines never before seen. That country is suffering its first economic contraction since 1971 and the consequences will be felt throughout the global economy. If these procedures do not work, recession will be inevitable.

Several analysts predict falls of 2% and even 3% in the world's GDP if the recession is declared and extended further. But let no one be fooled in this context. The tremors that have been predicted have been present for months and the remedies that were supposedly designed to ease the pain have intensified them. The contradictions of capitalism have been felt since the crisis of 2008 and the remedies do not signify that we have overcome these problems. In any case, those most vulnerable to the crisis of the pandemic remain the poorest and most exploited by the capitalist system. Under capitalism, this will continue to be the history and the fate of the exploited of the earth.

Translated with www.DeepL.com/Translator (free version).

Alejandro Nadal was a professor at the Centro de Estudios Económicos (CEE) of the Colegio de México

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Drivers Say Uber and Lyft Are Blocking Unemployment Pay [feedly]

Drivers Say Uber and Lyft Are Blocking Unemployment Pay
https://www.nytimes.com/2020/03/24/business/economy/coronavirus-uber-lyft-drivers-unemployment.html

text only:

In a typical week, Jerome Gage, a Lyft driver in Los Angeles, makes $900 to $1,000 before expenses during roughly 50 hours on the road. This week, with most of the state holed up and demand for rides evaporating, he expects to work even longer to make far less than half that amount.

Given the option, Mr. Gage said, he would stop wasting his time and risking his health and file for unemployment benefits. But unlike workers employed by restaurants, hotels and retail establishments, gig workers like Uber and Lyft drivers typically have not been able to collect unemployment benefits or take paid sick leave.

In a call with analysts last week, the Uber chief executive, Dara Khosrowshahi, alluded to the problem, suggesting that his hands were tied because Uber drivers are independent contractors. "This situation certainly demonstrates the downside of attaching basic protections to W-2 employment," he said.

And in a letter to President Trump on Monday, Mr. Khosrowshahi asked that any economic stimulus or coronavirus-related legislation provide "protections and benefits for independent workers," along with "the opportunity to legally provide them with a real safety net going forward." A Lyft spokeswoman said her company was also pushing to extend any forthcoming stimulus to drivers, and said, "The vast majority of drivers on the Lyft platform use it to earn supplemental income," rather than as a primary job.

But for many drivers, the problem is not a legal void. It is that the companies they work for have not complied with existing laws or agency rulings.

The highest-profile case is in California, which passed a law last year requiring companies to classify workers as employees if the companies control how they do the work, or if they hire workers to perform a job central to the business.

The bill's author has said she intended the law to apply to Uber and Lyft drivers, which would make them eligible for unemployment benefits and state-mandated sick leave. Legal experts have agreed with this interpretation. But Uber launched a legal challenge to the law late last year, and the two ride-hailing companies are investing tens of millions of dollars in a November ballot initiative that would effectively exempt them from it.

A LOOK AT THE LAWA guide to who qualifies for paid leave under the new coronavirus law.

In the meantime, the companies have chosen not to report drivers' income to the state, as is required of employers. While the companies' legal challenges play out, the state is failing to approve many unemployment claims from drivers, potentially leaving thousands in the lurch as their earning power collapses.

Loree Levy, a spokeswoman for the California Employment Development Department, which oversees unemployment benefits, said by email that applicants who were not eligible for benefits because the state lacked their wage information could follow up, and that the department would investigate, awarding benefits if it deems them misclassified. She said the department investigated many such cases even without a follow-up, but declined to say whether it was working to require Uber and Lyft to report drivers' wages.
Employers are obligated to contribute to a state unemployment insurance fund, but the companies' failure to do so does not disqualify workers from receiving benefits. The state can pursue unmet payroll-tax obligations later.

Uber and Lyft declined to comment on the situation in California, but both companies have announced that they would provide pay to drivers nationwide who were diagnosed with Covid-19 or were asked by a public health authority to isolate themselves.

The stalemate has set up a showdown with increasingly desperate drivers. On March 11, Shannon Liss-Riordan, a Boston-based plaintiff's lawyer who has won rulings against Uber and Lyft over the employment status of drivers, filed complaints seeking to force the companies to follow the state's new law immediately, giving drivers access to unemployment benefits and sick days.

"It is very unfortunate that such a crisis may be necessary to prompt these companies into actually complying with the law and extending employment protections to their drivers," Ms. Liss-Riordan said in an email.

Her complaints are pending in federal court.

While the cases play out, drivers around the state have stepped up efforts to demand that Uber and Lyft provide them with employment protections. A union-backed group called Mobile Workers Alliance, which Mr. Gage is involved with, began circulating a petition Friday demanding that the gig companies abide by the state's new law deeming them employees. The petition has collected more than 6,000 signatures.

Lisa Opper, a Lyft driver involved with a group called Rideshare Drivers United, which held demonstrations on Thursday in San Diego, Los Angeles and San Francisco, said she typically worked 40 to 50 hours per week and made $900 to $1,000 before expenses. She made $226 the week before last, after which she stopped driving out of concern for her health.

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"I won't risk it," Ms. Opper, who is 60 and diabetic, said on Friday. "The virus is airborne, and I had three or four people last week coughing." She said she had been driving with a blue surgical mask but didn't have access to the N95 mask that experts say is most effective at stopping the spread of the illness.

Ms. Opper said she planned to file for unemployment insurance and hoped to get benefits, at least on appeal. "I just believe Uber and Lyft are ignoring the law," she said.

California is not the only state where many Uber and Lyft drivers have not received the employment protections to which they appear to be entitled. In 2018, New York's unemployment insurance appeal board, its highest executive branch authority on such questions, ruled that three Uber drivers were eligible for unemployment benefits, along with all "similarly situated" drivers.

But New York State has yet to require Uber, Lyft and other gig economy companies to contribute to its unemployment insurance fund on workers' behalf — a sum that would likely be worth at least tens of millions of dollars — while it identifies which drivers are "similarly situated" to those in the appeal board's ruling.

The companies have so far declined to report drivers' wages to the state, forcing drivers to undertake a monthslong bureaucratic process to prove their employment status and secure unemployment benefits. An Uber official said the company had received a request from the state for driver wage information over the weekend and was "likely" to comply.

Still, an Uber spokesman said the company believed the appeal board's 2018 ruling "uniquely applies to the three claimants" because Uber has changed many of its policies affecting drivers in recent years.

But Nicole Salk, senior staff attorney at Legal Services NYC, who has represented drivers seeking unemployment benefits, said she was personally aware of dozens of drivers who had been deemed employees by the state in the past few years.

The problem, Ms. Salk said, is that many other drivers have abandoned the process when faced with bureaucratic hurdles. "There are at least three additional questionnaires," after the initial application, she said. "It takes months and months." Ms. Salk said she represented a driver who applied for benefits during the third week of December and had yet to complete the process.

Last year, the federal Department of Labor and the National Labor Relations Board issued findings contending that gig workers are contractors, not employees, but those findings are not binding on state agencies that oversee unemployment benefits.

A spokesman for Gov. Andrew M. Cuomo of New York said the state had requested disaster unemployment assistance from the White House that could make benefits available to drivers and other gig workers. Congress, for its part, is working on a stimulus bill well in excess of $1 trillion that could make such benefits available nationally.

But even if the contractor benefits are enacted, they may not apply to drivers in states where they have been deemed employees, according to Zubin Soleimany, a lawyer for the New York Taxi Workers Alliance, a driver advocacy group.

Mr. Soleimany's group is pushing for New York to expedite the application process for those seeking routine unemployment benefits so that drivers can receive them promptly, like other workers. "It's a completely unacceptable outcome now," he said.


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Summers: Trump is missing the big picture on the economy [feedly]

Trump is missing the big picture on the economy
http://larrysummers.com/2020/03/25/trump-is-missing-the-big-picture-on-the-economy/

Larry Summers

As an economist, I am normally enthusiastic when presidents or other political leaders emphasize the economic aspect of public policy issues. I am all for economic growth, cost benefit analyses, trade agreements, more flexible markets and prudent deregulation. Yet I am appalled by President Trump's invocation of economic arguments as a basis for overriding the judgments of public health experts about battling the coronavirus pandemic.

In fact, as a matter of pure economics — even leaving aside moral considerations that should be taken into account — the president's arguments are flatly wrong. When Trump tweets and says things like "we cannot let the cure be worse than the problem itself" or "you can destroy a country by closing it down" and raises the prospect of reversing measures taken to promote social distancing, he misunderstands the fundamental economic problem posed by the pandemic, as well as the most rational, economically sensible way to address it. In the end, economic growth and well-being would be harmed, not helped, by the course he is advocating.

It is an elementary confusion to believe that lost growth and lost jobs are primarily a consequence of social-distancing measures rather than the pandemic itself. There are currently more than 50,000 diagnosed cases in the United States; the number is doubling every few days. Perhaps some people would be traveling, shopping and eating out as usual if there were no prohibitions. But does anyone believe that ordinary life will continue if millions of Americans have the virus and our hospitals are overflowing? This is where we surely will be in a few weeks if we abandon social distancing.

I recovered over the past year from ruptured quadriceps tendon. At a certain point, sick of the braces that kept my knees rigid, I pressed my physicians to take them off. They responded by pointing out that taking them off prematurely would put at risk all the progress I had made. If I ruptured the tendons again, they said, I would have to start the whole process over — and from a worse starting point. Fortunately, I saw their point, managed my impatience and am doing well today.

The same logic applies to social-distancing policies. Prematurely abandoning or relaxing social distancing will be disastrous on both economic and health grounds. If restrictions are lifted prematurely, the result will be a follow-on pandemic surge. More people will die. What will the policy choice be then? If it is a return to restriction, starting from a much less favorable point and much more disease spread, then the cumulative economic loss will be greatly magnified. The costs we have already borne will have been totally in vain.

Indeed, as a matter of logic, overly temporary social distancing represents the worst of all policy alternatives. In the view of almost all experts, it would be a grave mistake to accept the full and rapid spread of coronavirus as inevitable. But if this is to be our strategy, there is no reason not to get on with it, rather than suffer the additional burden of temporary distancing.

Ending restrictions too soon and allowing a further disease spike carry a range of collateral risks and costs. When it is safe to take up old habits, will the public trust the advice of authorities who misled them? What extra uncertainty cost will be baked into all financial markets when it becomes clear that the federal government has offered false assurances on safety? Will other countries be willing to buy our goods when the United States has turned itself unnecessarily and against the advice of experts into an exporter of products?

The president has compared the challenge of pandemic to the challenge of war. But Americans do not fight wars for our freedom saying we can only keep going for another few weeks and then we will give up. Elevating temporary economic expedience over the long run health of the citizenry is a dangerous strategy. And we deserve better from our business community than demands to go back to selling when disease counts are still rising.

The president and the business leaders who urge him to abandon a public health orientation to pandemic policy are nonetheless correct to want to move through the current difficult period rapidly as possible. The right focus is not on false hopes. It is on realistic strategies that permit a targeted approach to reducing transmission. That means more testing, more contact tracing, and more and better facilities for those who need to be separated from others or treated.

There will come a time when we can gradually let up on current restrictions and help the economy in the process. It will be the moment when new case counts are no longer accelerating; when we have adequate measures in place to quickly catch and contain new outbreaks; and when we are confident that we are not endangering hard-won progress by impetuous actions.

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The Securitization of COVID-19: Three Political Dilemmas [feedly]

Dilemma indeed

The Securitization of COVID-19: Three Political Dilemmas
https://www.globalpolicyjournal.com/blog/25/03/2020/securitization-covid-19-three-political-dilemmas

Nathan Alexander Sears wonders whether the explosion of state power in response to CORVID-19 will abate or become a feature of our lives.

The COVID-19 virus has now spread to 168 countries, with well-over 400,000 confirmed cases and nearly 20,000 deaths. Not surprisingly, policy responses to the global pandemic increasingly reflect the politics of security — or, rather, securitization. The process of securitization follows a familiar logic: an issue is framed as an existential threat to some referent object, which justifies extraordinary measures for protection. According to Buzan, Waever, and de Wilde,

Security is the move that takes politics beyond the established rules of the game and frames the issue… as an existential threat, requiring emergency measures and justifying actions outside the normal bounds of political procedure.

The global response to COVID-19 contains all the critical elements of securitization: referent object(s), threat, audiences, securitizing acts and actors, and emergency measures. However, the politics of securitization is neither simple nor unproblematic. The analysis here points to three political dilemmas behind the securitization of COVID-19, which involve the referent object(s), securitizing acts, and emergency measures.

The Referent Object: Security for Whom?

Since the World Health Organization (WHO) characterized COVID-19 as a "pandemic" on March 11th, two opposing discourses have shaped the politics of securitization. On the one hand, the pandemic is framed as a common threat to the "citizens of the world", which requires international cooperation between governments and global coordination of policy responses. For instance, United Nations Secretary-General, António Guterres, has stated that "all of us face a common threat" and that "no one country can address it alone." Similarly, WHO Director-General, Dr. Tedros, has said that COVID-19 represents an "an unprecedented threat, but it's also an unprecedented opportunity to come together as one against a common enemy — an enemy against humanity."

On the other hand, the pandemic is framed as a threat to "national security", whereby nation-states seek to protect their citizens and institutions. Notably, U.S. President, Donald J. Trump, has declared COVID-19 a "national emergency" and threat to "national security" by Executive Order, and employed the metaphor of the United Stated being "at war" and himself as a "war-time president". Importantly, national security generally perceives other countries as the sources of threat, which is reflected in the language that describes COVID-19 as the "Chinese Virus" (or "Wuhan Virus"), and the practice of unilaterally closing borders to other countries.

There is, of course, a practical explanation for this divergence in how policy-makers frame the security threat of COVID-19: the former are representatives of international institutions and so their message speaks to — and for — the "international community"; the latter are political leaders of particular countries and speak for national communities. Yet the inconsistencies between how policy-makers frame the pandemic illustrates a deeper political tension between two referent objects: "humanity" and "nation". The political struggle over the narrative of COVID-19 is, to a large extent, a question of identity: i.e., security for whom?

The basic protagonists in this story reflect a political tension in international politics driven by globalization. While the nation-state has proven highly resilient to a variety of challenges—e.g., world wars, nuclear weapons, economic interdependence, global recessions, transnational terrorism, and global communications technologies—the growing scope and speed of material changes in technology and the environment are driving a growing spectrum of global catastrophic risks. A global pandemic is but one example. The securitization of COVID-19 in terms of two distinct "referent objects" reflects the political tension between the nation-state in international politics and the changing material circumstances that affect the security of human beings all around the world.

(De-)Securitizing Moves: A Catastrophic Threat?

As the COVID-19 pandemic spreads around the world, news headlines—and social media feeds—track the numbers of confirmed cases and deaths from the virus. Images of the lockdown in China, or bodybags in Italy illustrate the human costs of political action and inaction. Conversely, the "low" mortality rates—especially for the "young and healthy"—fuel claims that the risks are "exaggerated", and encourage individuals to flout public health recommendations—and government orders—and flock to groceries stores and beaches. Historic comparisons are made to both less-than-catastrophic outbreaks (e.g., SARS), and truly catastrophic pandemics (e.g., H1N1 Influenza, or "Spanish Flu").

The politics of (de-)securitization is a process of contestation. For COVID-19 this entails "securitizing" moves that frame the pandemic as a catastrophic threat, and "de-securitizing" moves that frame it as a manageable situation amenable to public policy interventions. This process of (de-)securitization not only plays out in the news and social media, but also scientific debates between experts. For example, a report by the Imperial College COVID-19 Response Team begins by stating that "The global impact of COVID-19 has been profound, and the public health threat it represents is the most serious seen in a respiratory virus since the 1918 H1N1 influenza pandemic." The authors predict repeat outbreaks to quickly rebound once mitigation measures are relaxed, and conclude that "suppression" will require a combination of measures (minimally, social distancing of the entire population, home isolation of cases, and household quarantine of their family members), which "will need to be maintained until a vaccine becomes available (potentially 18 months or more)".

Source: Neil M. Ferguson, et al. (2020, March 16th) "Impact of non-pharmaceutical interventions (NPIs) to reduce COVID-19 mortality and healthcare demand. Imperial College COVID-19 Response Team.

In a critical response to the Imperial College report, Shen, Taleb and Bar-Yam argue that "their conclusions that there will be resurgent outbreaks are wrong… The outbreak can be stopped completely with no resurgence as in China." Public policy interventions like lockdowns can result in "exponentially decreasing numbers of cases", which makes it possible to "achieve pathogen extinction, after which relaxing restriction can be done without resurgence."

Laypersons may wonder how scientists could disagree so much on such an important matter. Since developing models to predict outbreaks from COVID-19 entails making certain assumptions and abstractions, the validity of the results drawn from them may be questioned and criticized by other scientists. Science, too, is a social process of contestation. In the case of COVID-19, the process of scientific debate is embedded within the political process of (de-)securitization. Therefore, scientific debates become political debates about (de-)securitization.

Emergency Measures: To Securitize, or Not to Securitize?

Security always has a cost. This is because "security" as something that we value faces tradeoffs against other values, such as "liberty" or "wealth". The tradeoff, say, between security and wealth is clear from how the pursuit of security from COVID-19 comes at the economic cost of probable recession. Securitization therefore implies a form of societal calculation about the acceptable gains and costs of security. For instance, many people may be willing to accept economic losses at the individual or household-level if it means reducing the loss of life from a pandemic.

Securitization also implies political costs from the acceptance of extraordinary measures. Indeed, the political risks of securitization—such as the increase in state power at the expense individual liberties—was the principal reason that Buzan, Waever, and de Wilde maintained a general normative preference for de-securitization. What political risks do societies face from the securitization of COVID-19?

For liberal-democratic societies, the political risks of securitization are the sacrifice of individual liberties. This is perhaps nowhere clearer than in a quarantine, whereby the state enforces restrictions on the movement of peoples for the purposes of security. The quarantine implies the sacrifice of individual liberty—and perhaps life—for the security of society as a whole. Of course, society may accept this as a perfectly legitimate emergency measure to contain and suppress a pandemic.

Yet it is salient for our present times that Michel Foucault should describe the sociological phenomenon of the quarantine for his discussion of "panopticism" in Discipline and Punish.

First, a strict spatial partitioning… Each street is placed under the authority of a syndic, who keeps it under surveillance; if he leaves the street, he will be condemned to death.… This surveillance is based on a system of permanent registration: reports from the syndics to the intendants, from the intendants to the magistrates or mayor. At the beginning of the 'lock up', the role of each of the inhabitants present in the town is laid down, one by one; this document bears 'the name, age, sex of everyone, notwithstanding his condition': a copy is sent to the intendant of the quarter, another to the office of the town hall, another to enable the syndic to make his daily roll call. Everything that may be observed during the course of the visits—deaths, illnesses, complaints, irregularities is noted down and transmitted to the intendants and magistrates. The magistrates have complete control over medical treatment; they have appointed a physician in charge; no other practitioner may treat, no apothecary prepare medicine, no confessor visit a sick person without having received from him a written note 'to prevent anyone from concealing and dealing with those sick of the contagion, unknown to the magistrates'. The registration of the pathological must be constantly centralized. The relation of each individual to his disease and to his death passes through the representatives of power, the registration they make of it, the decisions they take on it.

The use of surveillance technology—such as cell-phone detection data and digital check-points—is one extraordinary measure that some states are employing with an incredible degree of sophistication and success—often combined with the threat of punishment—to contain and suppress COVID-19. Again, society may willingly accept such measures.

The political question is whether this expansion of state biopower—or the "explosion of numerous and diverse techniques for achieving the subjugations of bodies and the control of populations"—will be an "emergency measure" that withers away as the threat of the pandemic subsides, or if it will become an enduring feature of a new biopolitics for the purposes of "security". This tension between security and liberty is just one of the political dilemmas that surround the securitization of COVID-19.

 

 

Nathan Alexander Sears is a PhD Candidate in Political Science at The University of Toronto. He is also a Trudeau Fellow in Peace, Conflict and Justice at the Munk School of Global Affairs; and 2019-20 Cadieux-Léger Fellow at Global Affairs Canada.

Photo by Korhan Erdol from Pexels

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Not Just Your local store: Countries Are Starting to Hoard Food, Threatening Global Trade [feedly]

Countries Are Starting to Hoard Food, Threatening Global Trade
https://www.bloomberg.com/news/articles/2020-03-24/countries-are-starting-to-hoard-food-threatening-global-trade

We're tracking the latest on the coronavirus outbreak and the global response. Sign up here for our daily newsletter on what you need to know.

It's not just grocery shoppers who are hoarding pantry staples. Some governments are moving to secure domestic food supplies during the conoravirus pandemic.

Kazakhstan, one of the world's biggest shippers of wheat flour, banned exports of that product along with others, including carrots, sugar and potatoes. Vietnam temporarily suspended new rice export contracts. Serbia has stopped the flow of its sunflower oil and other goods, while Russia is leaving the door open to shipment bans and said it's assessing the situation weekly.

To be perfectly clear, there have been just a handful of moves and no sure signs that much more is on the horizon. Still, what's been happening has raised a question: Is this the start of a wave of food nationalism that will further disrupt supply chains and trade flows?

Shoppers wait on the street for the general opening of the store, during a time set aside for elderly and vulnerable members of the community to shop, at an Iceland Foods store in London on March 18.

Photographer: Simon Dawson/Bloomberg

"We're starting to see this happening already -- and all we can see is that the lockdown is going to get worse," said Tim Benton, research director in emerging risks at think tank Chatham House in London.

Though food supplies are ample, logistical hurdles are making it harder to get products where they need to be as the coronavirus unleashes unprecedented measures, panic buying and the threat of labor crunches.

Consumers across the globe are still loading their pantries -- and the economic fallout from the virus is just starting. The specter of more trade restrictions is stirring memories of how protectionism can often end up causing more harm than good. That adage rings especially true now as the moves would be driven by anxiety and not made in response to crop failures or other supply problems.

As it is, many governments have employed extreme measures, setting curfews and limits on crowds or even on people venturing out for anything but to acquire essentials. That could spill over to food policy, said Ann Berg, an independent consultant and veteran agricultural trader who started her career at Louis Dreyfus Co. in 1974.

"You could see wartime rationing, price controls and domestic stockpiling," she said.

Some nations are adding to their strategic reserves. China, the biggest rice grower and consumer, pledged to buy more than ever before from its domestic harvest, even though the government already holds massive stockpiles of rice and wheat, enough for one year of consumption.

Key wheat importers including Algeria and Turkey have also issued new tenders, and Morocco said a suspension on wheat-import duties would last through mid-June.

Food Dependence

Trade as a share of domestic food supply

Source: UN's Food & Agriculture Organization Global Perspectives Studies

As governments take nationalistic approaches, they risk disrupting an international system that has become increasingly interconnected in recent decades.

Kazakhstan had already stopped exports of other food staples, like buckwheat and onions, before the move this week to cut off wheat-flour shipments. That latest action was a much bigger step, with the potential to affect companies around the world that rely on the supplies to make bread.

For some commodities, a handful of countries, or even fewer, make up the bulk of exportable supplies. Disruptions to those shipments would have major global ramifications. Take, for example, Russia, which has emerged as the world's top wheat exporter and a key supplier to North Africa. Vietnam is the third-largest rice exporter, sending many of its cargoes to the Philippines.

"If governments are not working collectively and cooperatively to ensure there is a global supply, if they're just putting their nations first, you can end up in a situation where things get worse," said Benton of Chatham House.

He warned that frenzied shopping coupled with protectionist policies could eventually lead to higher food prices -- a cycle that could end up perpetuating itself.

"If you're panic buying on the market for next year's harvest, then prices will go up, and as prices go up, policy makers will panic more," he said.

And higher grocery bills can have major ramifications. Bread costs have a long history of kick-starting unrest and political instability. During the food price spikes of 2011 and 2008, there were food riots in more than 30 nations across Africa, Asia and the Middle East.

"Without the food supply, societies just totally break," Benton said.

Unlike previous periods of rampant food inflation, global inventories of staple crops like corn, wheat, soybeans and rice are plentiful, said Dan Kowalski, vice president of research at CoBank, a $145 billion lender to the agriculture industry, adding he doesn't expect "dramatic" gains for prices now.

While the spikes of the last decade were initially caused by climate problems for crops, policies exacerbated the consequences. In 2010, Russia experienced a record heat wave that damaged the wheat crop. The government responded by banning exports to make sure domestic consumers had enough.

The United Nations' measure of global food prices reached a record high by February 2011.

"Given the problem that we are facing now, it's not the moment to put these types of policies into place," said Maximo Torero, chief economist at the UN's Food and Agriculture Organization. "On the contrary, it's the moment to cooperate and coordinate."

READ MORE ON FOOD ISSUES IN VIRUS ERA:
There's Plenty of Food in the World, Just Not Where It's Needed Americans Drop Kale and Quinoa to Lock Down With Chips and Oreos Cargill Says China Offers Hope for Meat Markets Hit by Virus Kazakhstan Bans Flour Exports to Protect Food Supply Food Giants Pay Worker Bonuses to Keep Churning Out Meat Threat of Sick Workers at U.S. Meat Plants Forces Policy Changes

Of course, the few bans in place may not last, and signs of a return to normal could prevent countries from taking drastic measures. Once consumers start to see more products on shelves, they may stop hoarding, in turn allowing governments to back off. X5 Retail, Russia's biggest grocer, said demand for staple foods is starting to stabilize. In the U.S., major stores like Walmart Inc. have cut store hours to allow workers to restock.

In the meantime, some food prices have already started going up because of the spike in buying.

Wheat futures in Chicago, the global benchmark, have climbed more than 6% in March as consumers buy up flour. U.S. wholesale beef has shot up to the highest since 2015, and egg prices are higher.

At the same time, the U.S. dollar is surging against a host of emerging-market currencies. That reduces purchasing power for countries that ship in commodities, which are usually priced in greenbacks.

In the end, whenever there's a disruption for whatever reason, Berg said, "it's the least-developed countries with weak currencies that get hurt the most."

— With assistance by Yuliya Fedorinova, and Anatoly Medetsky

(Adds Vietnam suspending new rice export contracts in second paragraph.)

 -- via my feedly newsfeed

Bloomberg: What Would It Take to Lift Coronavirus Restrictions? Experts Weigh In [feedly]

What Would It Take to Lift Coronavirus Restrictions? Experts Weigh In
https://www.bloomberg.com/news/articles/2020-03-25/what-would-it-take-to-lift-coronavirus-restrictions-experts-weigh-in

U.S. coronavirus infections have passed 50,000. The death toll, while still well below the worst-hit countries, is expected to rise. Personal protective gear has run short at hospitals, and many patients with mild symptoms still can't get tested.

The U.S. isn't yet close to having its Covid-19 outbreak under control. But with markets in turmoil and jobs being lost across the country, President Donald Trump has begun laying the groundwork for state and local governments to lift personal restrictions and shutdowns of businesses that have devastated local economies.

"THE CURE CANNOT BE WORSE (by far) THAN THE PROBLEM!" Trump tweeted Tuesday. In a Fox News town hall appearance later that day, Trump suggested the country might reopen by mid-April. "I would love to have the country opened up and just raring to go by Easter," Trump said.

"We need to absorb the pain now," says Larry W. Chang, an infectious disease doctor and researcher at Johns Hopkins University School of Medicine. "If you lift restrictions early, the number of infected people will skyrocket. Hospitals will be overwhelmed." That might cause state and local governments to impose even more draconian restrictions, extending  economic damage. 

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Many medical experts think the U.S. won't be ready to lift restrictions for weeks or months. "Before considering big changes to social distancing measures now, we should as quickly as possible get to strongest possible position for COVID response – we're no where near that now," Tom Inglesby, director of the Johns Hopkins Center for Health Security, said on Twitter Monday.

But even the most hard-core epidemiologists don't want to sit inside forever. 

The global pandemic is still new and poorly understood, with debates about how deadly it is, how many people are infected, and who's most at risk. "We are flying the airplane while we are building it," said Gregory Poland, who heads the vaccine research group at the Mayo Clinic in Rochester, Minnesota.

Bloomberg News spoke to several experts on public health and outbreaks about what would need to happen for the U.S. to start easing some restrictions, what it would take for people to get back to work, and what the consequences of getting it wrong could be. 

Buy Time

Authorities can't start lifting restrictions until the outbreak is better under control. Even with reduced transmission as people stay home, it will likely be many weeks, or more likely months, before that happens. That means, in the short term, harsher measures. 

"You shut everything down now except for essential services," said Poland. "The safest thing to do is watch and wait until there are either no or very few additional cases," and ideally a few weeks after that. Then governments could start lifting restrictions, with younger and healthier people going first.

In Wuhan, China, where much more restrictive measures on personal movement were implemented, authorities are only now starting to re-open the city — two full months after it was sealed off from the world.

So far in the U.S. some states have enacted heavy restrictions, closing businesses and telling people not to leave their homes, and others haven't. A more complete U.S. shutdown, even a few weeks, could buy time to learn more about stopping the virus, either with drugs under testing or with better knowledge about who's most at risk.

Lots of Testing

Countries like South Korea have done a much better job at identifying and isolating cases early on, and tracing all their contacts. As a result, the restrictions they've implemented have been far looser. If the U.S. wants people back to work, it needs to find out who's sick and who they might have spread the coronavirus to, said Saad Omer, director of the Yale Institute for Global Health. 

"This is how you stamp out these fires, and we haven't been doing this at all," said Omer.

To do that, the U.S. has to test people. Lots of people. But at present, limits on the availability of tests have meant that mostly moderate-to-severe patients are getting diagnosed, while milder cases are told to stay home.

"We need to take the magnitude of this seriously if we are serious about saving the economy," Omer said. "There are no shortcuts."

That means everything from drive-through testing to broad availability at doctors' offices and clinics to test anyone who might have had contact with a Covid-19 patient. It also means getting them the results quickly. A positive test gives mildly ill people more reason to stay home and take precautions, said former Food and Drug Administration Commissioner Scott Gottlieb. "People are much more likely to self isolate with a positive result," Gottlieb said on Twitter Sunday. 

To test more, the U.S. also needs to ramp up access to protective gear for doctors and nurses. When ICUs treating desperately ill Covid-19 patients don't have enough masks for their nurses, it's impossible to spare protective equipment for testing patients with minimal symptoms. If the testers can't protect themselves from sick patients, it's harder to get them in the field to do the work. Or they can become vectors of transmission themselves.

Track Cases, Stop Infections

Testing people only matters if you do something about it.

The U.S. will likely need thousands more workers to do the contact tracing, since overwhelmed state and public health agencies don't have enough people to do it on their own. 

"We are going to need to hire a new work force to do a lot of these things," says Chang of Hopkins. To stimulate the economy, federal or state governments could hire unemployed workers from hard hit service industries, and shift them into Covid-19 tracking and isolation, he said. Or the National Guard could be called into action to help.

It's also important to stop people from spreading the virus to relatives. Despite all the worry about getting Covid-19 on a subway or at the grocery store, a hallmark of Covid-19 in China and elsewhere is that much of the spread is within families.

"Another thing we need to do is focus on reducing transmission at the household level," said Yale's Omer.

Families who have to deal with an infected relative will need a ready supply of masks, both for patients and designated caregivers, and hotlines they can call for advice on keeping their home disinfected. They may also need places to safely isolate sick  loved ones who are ill, but not sick enough to take up a valuable hospital bed.

Find Out Who's Immune

Once a person has been sick with a virus, their immune system remembers it. Antibodies in the blood indicate that a person was previously infected — and is unlikely to get sick again. That can be checked with a blood test.

"If you make effective antibody, you shouldn't get re-infected," said Deborah Birx, a State Department health official who is part of the White House coronavirus task force, said Tuesday.

Epidemiologists believe that there are likely many thousands of Americans who already have been infected with the virus, but don't know it because their symptoms were mild or nonexistent and they were never tested.  A reliable blood test would allow doctors to identify people who have been exposed and already have antibodies to the virus, and should be able to safely go back to work or school. This could be particularly helpful for health workers and other front-line responders who face more risk of being exposed.

"As the epidemic proceeds, we will want to do serological tests (by drawing blood) on as many people as possible to identify people who have recovered and are highly likely to be immune," said Nicholas Christakis, a social scientist and physician at Yale University, in a March 19 tweet. "This should be a national priority."

 -- via my feedly newsfeed