Saturday’s good reading and listening for the weekend

Economy, Politics

Saturday’s good reading and listening for the weekend

Aug 29, 2020

What people in other forums are saying about public policy

The pandemic’s process

Around the world

Below are the country curves, updated by three weeks. The daily infection rate in the USA has peaked and is on the way down. It may have peaked in Brazil as well. Note that even this lower rate in the USA is still about twice the EU’s early peak, and at 130 daily new cases per million is well above Australia’s second wave peak (around 28). If we were to consider Melbourne as a nation, its daily rate, at its short-lived peak, would have been about 140 new cases a day per million.

It is notable that cases in the EU are rising. Much of this is explained by high rates in France, Spain and Romania. Rates in Germany and other northern countries are lower – in the order of 10 to 25 new cases a day per million.

There have been some morbid comparisons about which countries have the highest death rates. Death rates are clearly important indicators, although they do not capture the profile of deaths (aged or young?), and we can be sure that for every death there are others left with serious chronic conditions.

Trump and his supporters claim that the US has done much better than those European countries with high death rates, and as shown on the graph below that is the case. But the important point is that while deaths in Europe are stabilizing, they are still rising steeply in America.

Australia is not shown on the graph because it would simply be a line crawling along the x-axis. With the Victorian outbreak our deaths are now 21 per million. Most east Asian countries have even lower rates, of 5 to 10 deaths per million.

Victoria

Victoria is making slow progress. Just as growth was exponential, so too is decline. That means as numbers fall the rate of improvement will probably become frustratingly slower, until all cases can be traced – still some weeks off.

New South Wales

New South Wales figures hardly register on the above graph. They are shown below, with a smaller y-axis.

The numbers are small, but cases are popping up in many locations. Victoria’s figures for early June, when the virus had started its new resurgence of exponential growth, were very similar to those in New South Wales at present.

Why have Asian countries done so well?

When researchers look over the way different countries have handled the pandemic, the comparative success of east Asian countries will surely stand out. Writing in International Viewpoint, Pierre Rousset considers different ways Asian countries have managed – Covid-19: Asian contrasts and lessons. Countries that have done well were those that responded quickly, had intact public health systems (uncorrupted by neoliberal policies), restricted movements, and had a strong sense of solidarity.

Vaccine ethics

When we consider the ethical issues around developing new drugs and therapies, we generally have in mind the instrumental use of humans in double-blind experiments and challenge trials, and the justice in distributing the products ultimately developed.

But there’s more. Senior clerics from Australian mainstream Christian religions – Catholic, Anglican and Orthodox – have raised ethical questions about the vaccine developed by Oxford University and AstraZeneca, for which the Australian Government has expressed an intent to purchase. That vaccine uses cell lines that trace back to an aborted foetus.

These concerns bring to the surface once again questions of the church-state relationship. Writing in Dædalus– Democracy, religion & public reason – Samuel Freeman of the University of Pennsylvania outlines the different notions of “the good” underpinning the ideas of liberal democracies and as seen by religious followers. In modern democracies there is a large degree of convergence between liberal secularist and religious moral views: both Kantian and Christian moralists hold to the idea of a natural law, for example. But there are areas of difference. He writes:

For government to enforce or even endorse the imperatives or ends of religion violates individuals’ freedom and equality: it encroaches upon their liberty of conscience and freedom to pursue their conceptions of the good; impairs their equal civic status; and undermines their equal political rights as free and equal citizens.

Freeman’s article, based on his contribution to a conference in Rome organised by the Australian Catholic University, is in a general context – it makes no mention of pharmaceuticals for example. Rather it is a wide-ranging survey of the moral perspectives of traditional liberal philosophies, contrasting them with religion-based moral philosophies.

Sources

Sources of generally reliable information on Covid-19 are on a separate web page.

The Australian economy

The costs of Covid-19

In dealing with Covid-19 Australia is doing well in comparison with other countries. We have contained the health and economic impacts of the pandemic. But we need an exit strategy: how will we deal with the fiscal consequences; will firms be able to wean themselves off payroll and debt support; how will key industries such as tourism and education recover; how will we handle our relationship with China; can we benefit from the fact that the pandemic has been comparatively light in the east Asian region? We must also realise that before the pandemic Australia was already facing problems of weakening productivity and high personal debt.

John Edwards puts these questions in an essay published by the Lowy Institute – The costs of Covid: Australia’s economic prospects in a wounded world. His viewpoint is from a conservative economic perspective, but he stresses that it would be unwise for our government to be guided by an obsession to reduce the fiscal deficit:

The government can cut its deficit only if its tax revenue increases faster than its spending, subtracting from total demand in the economy. If the government is to subtract from total demand, it needs to be confident that rising private sector demand alone will be sufficient to grow the economy at a rate necessary to prevent an accumulation of long-term unemployment.

A long, slow recovery

The Parliamentary Budget Office has produced its Updated medium-term fiscal scenarios: impact of COVID-19 pandemic and response, showing its estimates for Commonwealth fiscal outcomes for the next ten years as influenced by the pandemic.

Fiscal blow-outs seem to attract front-page media attention only when Labor is in office, and our attention so far has been mainly about government outlays, such as “Jobkeeper”. But as in other downturns, what really opens up the deficit is a fall in revenue, and this document shows estimates for revenue loss. Its baseline projection is for a $60 million fall in receipts for 2021, half of which is due to a fall in personal income tax collected.

Although the document is short it does not make for easy reading. Greg Jericho, writing in The Guardian, has a set of graphs drawn from the document’s data (available on the PBO site as a set of Excel files) – After Covid, there’s no getting excited about budget predictions. Jericho’s article shows that, according to the PBO’s assumptions, even ten years from now our GDP will still be below what it would have been had we not been hit with the pandemic.

What will our economy look like at the other end?

Writing in The Guardian, Greg Jericho warns that the Morrison government is trying to lock in a less equitable economy for years to come. If the Morrison economic path is followed what will emerge is a “less equitable and clean economy”, as a result of the government’s emphasis on labour market flexibility (for employers), cuts in education, and a general ideology of small government.

We’re loading the pandemic’s costs on the most vulnerable

When we look around the world to see how other countries have handled the pandemic, Australians can become smug – smug about our health system, and smug about the idea that we have all been in this together. Images of the disaster unfolding in the USA reinforce this smugness.

Stephen Duckett brings some harsh reality to our situation: Waves of inequity in the coronavirus pandemic. The burden of this second wave has been much less evenly-distributed than it was in the initial wave. Both the economic and health impacts have fallen disproportionately on the most vulnerable.

Duckett is critical of the “suppression” approach, advocated by those who naively seek some “balance“ between “health” and “the economy” – a false and dangerously misleading dichotomy. He writes:

Victoria’s current six-week lockdown is just one example of the yo-yoing that suppression involves: lift restrictions, reimpose them, lift them again, reimpose them ad infinitum. It is probable that a suppression strategy will mean more total days of lockdown than an elimination strategy, with more damage to business confidence and the economy.

Our debt problem – not the government’s but our households’

Under successive Coalition governments (and meekly endorsed by Labor in its brief periods in office), there has been an obsession with government debt, while household debt has grown to be among the world’s highest.

The Reserve Bank has published a research paper How risky is Australian household debt? The authors point out that high home ownership, high incomes, high bank lending standards, and low interest rates, all provide some buffer to cope with debt. But they warn that “a large but plausible fall in asset prices could lead to a substantial fall in consumption and that the increase in indebtedness over the past decade has slightly increased the potential loss of consumption during periods of financial stress”.

Health and ageing policy

Private health insurance – still falling

On Tuesday APRA released the latest private health insurance statistics, for the June quarter this year. The number of Australians with hospital cover has been falling for four years. This quarter’s fall was a little steeper than usual, in spite of a lower than usual premium increase. This is probably because people realise that elective surgery may not be available during the pandemic. Also, some people may have realised that when things get serious, such as Covid-19, private health insurance has little going for it.

The graph above shows absolute numbers, but the population is growing. As a proportion of the population, hospital cover has fallen from a peak of 47.4 per cent in 2015 to 43.6 per cent now.

The more concerning figure for the health insurance industry is its loss of younger members. Over the last three years it has lost about 120 000 people with hospital cover, but this is a net figure . It has lost 320 000 people under 60 (the age at which, on average, people switch from contributors to drawers) while gaining 200 000 older people.

There would be no loss to the country if this high-cost financial intermediary could make a graceful exit.

Those who follow political drama will have enjoyed a little Schadenfreude watching Aged Care Minister Colbeck stumbling before a Senate committee hearing when he couldn’t give an estimate of the number of nursing-home residents who have contracted or died from Covid-19.

The Commonwealth’s performance in protecting nursing-home residents has indeed been disgraceful, but too sharp a focus on the proximate problems, first in New South Wales and now in Victoria, can distract us from the broader policy issues.

Writing in The Conversation, Joseph Ibrahim of Monash University’s Department of Forensic Medicine calls for a properly-articulated plan for managing Covid-19 in the aged care sector, with a clear assignment of responsibility. Any such plan must deal with ways to ensure that the sector is served by a well-trained, well-respected and stable workforce.

The Commission into aged care quality and safety has released two research papers.

One concerns our deficit in monitoring and reporting the performance of aged care, in comparison with other countries. The Commission’s press release, which includes a link to the study, points out that “currently the Australian Government has no care quality outcome reporting for home care and reports on only three indicators for residential care”.

The other research paper is about funding, with an estimate of the cost to bring the quality of aged care up to the standard of the best 11 per cent of homes – those that “met all accreditation standards, had lower use of high-risk medicines, had lower issues and complaints, and had a higher customer experience rating”. A link to the study is on the Commission’s press release.

Michelle Grattan, writing in The Conversation – The role of “profit” is the elephant in the aged care room – finds disquiet even within Coalition ranks about the privatised for-profit model of aged care. She quotes former Coalition federal minister Peter Baume: “Private providers who operate for profit too often have scarce regard for the welfare and needs of old people.” Even closer to the centre of present Coalition power, Liberal MP Russell Broadbent, in an interview with The Guardian’s Katherine Murphy has said “Successive governments over 30 years have handed the care of people into the private sector, and that has been a mistake … Profit became more important than care. This was a disaster waiting to happen.”

We should remember that the root of the problem is not just privatisation: it’s also the use of corporatised governance and management models, which are used in both government and not-for-profit entities for service delivery. From the perspective of people paying dearly for poor service, it doesn’t make much difference whether they are getting ripped off by a corporation over-rewarding its shareholders or by a not-for-profit entity subsidising other activities. On Thursday The Age revealed that the Greek Orthodox Church has received $15 million rent over the last five years from St Basil’s aged care home (the scene of Victoria’s most deadly outbreak) – a rent way above any market valuation of the property. This surely calls into question the Commonwealth’s commitment to financial supervision, and the constitutional legality of what looks like an arrangement to launder Commonwealth support for a religious institution through its aged care program.

Other Australian politics and policy

It’s only a few weeks before the bushfire season starts again

Why do we have such catastrophically destructive fires when there were people on this land with 60 000 years of expertise in fire management? Why has that expertise largely been lost?

A Pearls and Irritations reader has reminded us of the work of the Emergency Leaders for Climate Action, and their report Australian Bushfire and Climate Plan, developed in a series of seven consultations in June and July with experts with a wide range of experience – traditional owners, fire fighters, economists, ecologists and others.

Its recommendations cover:

preparedness – climate change is with us;
use of traditional forest management techniques;
local involvement in forest management, fire suppression, and disaster recovery;
adequate public funding for all these activities;
above all, the need for our government to address the root cause of catastrophic fires – climate change.

The link above takes you to the report and to two 70-minute video clips, one of the project’s launch and the other of its final recommendations.

Homelessness and idiocy

Because we’re spending less time in public spaces we may have forgotten that the first week of August was Homeless week.

Andrew Hamilton, editor of Eureka Street, writes how a chance encounter while he was out on his hour of permitted exercise inspired him to write a short essay An age of communal and civic responsibility?. Do we become concerned about homelessness, living conditions of the poor, and care for the aged only while the pandemic rages? What has happened to our sense of solidarity? The root of our neglect “lies in the idiocy of governments” he writes, while explaining the appropriateness of the word “idiot” for our time – a time when anti-social and self-absorbed behaviour seems to be so prevalent.

A case for child care

The Grattan Institute puts the case for a significant boost in government funding for child care: Cheaper childcare: a practical plan to boost female workforce participation. As the name suggests it is about the immediate economic benefits of increasing women’s participation in paid employment, rather than the longer-term benefits of early childhood development (which it mentions only in passing and inconclusively). It shows how our present tax and transfer policies provide powerful disincentives for mothers to work full-time, which is one reason why Australia’s rate of part-time work for women is among the highest of all “developed” countries. It also points out that in comparison with other countries our parental leave provisions are rather stingy.

We won’t get yesterday’s jobs back: we need to invest in the human capital for new jobs

The Morrison Government seems to believe that the pathway out of this recession involves restoring the jobs that have been lost, but as in most recessions, many of the old jobs won’t come back.

The Committee for Sydney warns that Australia is falling behind on research and development, and that in general we are under-investing in our human capital. “Australia needs to come up with new things to sell to the rest of the world”. They urge the Government to spend a modest $11 million annually restoring R&D tax incentives, and investing in universities and in the CSIRO.

Mathematics and the public purpose

On the ABC program One on One, Eddie Woo talks to Kurt Fearnley about teaching. The first half of the 29-minute program is largely about teaching mathematics: from then he has some sound advice on public policy. (Spoiler – he doesn’t call for more statements from politicians about the importance of STEM, but he does have some sound advice on providing a good motivational environment for teachers.)

Mathematics teachers are underpaid, but better pay, in itself, is not the only way to motivate good teachers. They need to be respected, as does the public education system within which people like Woo work. There is an earlier ABC Conversations program in a long (52 minute) discussion with Woo. It’s largely about his personal life, and in the last 5 minutes you can hear why he has chosen to stay as a teacher employed by the New South Wales Education Department, rather than being lured away to much better paid work in a private school.

Over the other side of the Pacific

Is America a failed state?

Wade Davis of the University of British Columbia, like so many observers of America’s troubles, takes no joy in seeing that country destroy itself with gun violence, and drug addiction, its failure to deal with the legacy of slavery, its widening inequality, and now its failure to deal with Covid-19. In his essay in Rolling Stone – The unravelling of America – he writes

COVID-19 didn’t lay America low; it simply revealed what had long been forsaken. As the crisis unfolded, with another American dying every minute of every day, a country that once turned out fighter planes by the hour could not manage to produce the paper masks or cotton swabs essential for tracking the disease. The nation that defeated smallpox and polio, and led the world for generations in medical innovation and discovery, was reduced to a laughing stock as a buffoon of a president advocated the use of household disinfectants as a treatment for a disease that intellectually he could not begin to understand.

He acknowledges that Trump lives “to cultivate resentments, demonize his opponents and validate hatred”, but he sees Trump less as a cause of America’s decline than as a product of its decline. “As they stare into the mirror and perceive only the myth of their exceptionalism, Americans remain almost bizarrely incapable of seeing what has actually become of their country.”

He writes in praise of social democracy. In fact, he writes, postwar America had much in common with European social democracies. But increasingly American politicians have dismissed European-style social democracy as “creeping socialism, communism lite, something that would never work in the United States”, even though “social democracies are successful precisely because they foment dynamic capitalist economies that just happen to benefit every tier of society”.

On the ABC’s Late Night Live, Phillip Adams interviews Wade Davis, mainly covering the same ground as the Rolling Stone article. Adams and Davis agree that America is at least a failing state, and may be a failed state. The question seems to be whether it is capable of redemption. (52 minutes)

How to rig an election: let me count the ways

We have heard about how Trump may be able to use the postal service as a way to block potentially unfavourable postal votes. In a short Q&A article in the Harvard Gazette writer Christina Pazzanese interviews Professor of Government Daniel Carpenter on How to change an election. Carpenter takes us through ways state governors, sympathetic to Trump, could manipulate the Electoral College vote, for example. (The Republicans’ electoral advisors make Crosby Textor look like amateurs.)

What has happened to America’s oil industry?

It wasn’t long ago, when oil prices were between $US50 and $US80 a barrel, that the US saw itself on a path to oil self-sufficiency, through exploitation of shale oil (“tight oil”). An editorial article in the Monthly Reviewdescribes how low oil prices have devastated America’s “tight oil” industry, and have forced America to accept its dependence on countries such as Venezuela and Iran.

Let’s not forget Europe

Has the pandemic roused Europe from its slumbers?

In Australia we may be preoccupied with US-China hegemonic competition, but we should not forget Europe, which, if considered as one, is the world’s largest economy.

“The COVID-19 pandemic appears to have awakened the continent from its decades-long economic and political slumber and reinvigorated the EU integration project in ways that were unimaginable just six months ago” writes Max Bergmann of the Center for American Progress in Foreign Affairs – Europe’s Geopolitical Awakening: The Pandemic Rouses a Sleeping Giant. While America has been embroiled in racial tension and a catastrophic handling of the pandemic, Europe, led by the Franco-German alliance, has quietly attended to its internal fiscal imbalances and has been asserting its interests independently from the US.

Surveys and elections

The top end goes to the polls

Last Saturday night the eyes of the world were on the Northern Territory election. Would this herald the emergence of a new political order?

You won’t find much mention of the election in in Der Spiegel or The New York Times, however. As at Thursday night only 72 per cent of the votes have been counted, and 5 of the 25 seats were still in doubt, as reported on the ABC election website. Labor will return to government, with 13 seats secured.

At this stage, according to the Northern Territory Electoral Commission Labor has about 39 per cent of the primary vote, the CLP about 31 per cent, the Territory Alliance 13 per cent and the Greens 4 per cent.

We will have to wait until next week for any informed analysis. At this stage it seems that the CLP has made a comeback at the expense of the Territory Alliance and that Labor has drawn its strongest support in Darwin’s suburbs. Also it seems that turnout in the inland areas may have been very low.

Essential – keep the controls up

The Essential Report published on Tuesday is mainly about governments’ responses to Covid-19. To put it simply we’re becoming a little less supportive of our governments, federal and state, but we’re still giving them high ratings. The “good” ratings range from 84 percent for Western Australia, down to 47 per cent for Victoria, with the Commonwealth at 61 per cent.

When asked who is responsible for the aged care outbreaks, we split the blame between the Commonwealth, the states and the aged care providers.

About half of respondents understand that funding and regulation of aged care is a Commonwealth responsibility. Seventy per cent of respondents agree with the statement “The impact of Covid-19 in aged care facilities has been worsened by long- term underfunding of the aged care sector.”

Any idea that we’re weary of government controls is dismissed by a set of questions on support for controls. We support closure of international borders (65 per cent), and 60 per cent of us agree with the statement “Any person diagnosed with Covid-19 must wear a tracking bracelet while self-isolating to ensure they don’t leave their home”.

The implications for public policy are reasonably clear. Even if the Coalition may be ideologically inclined to yield to business lobbies calling for lighter controls, public opinion is not on their side.

The same poll has a set of questions on use of taxpayer funds to fund gas pipelines in Australia. “Unsure” and “neither support nor oppose” dominate. The only possibly significant finding is that there are strong partisan differences along predictable lines: Coalition supporters seem to be much more in favour of government subsidies for gas pipelines than Labor and Green supporters. (Here at Pearls and Irritations, we’re still getting used to the idea that the Coalition is much more inclined to central planning and interference in markets than Labor.)

Poll Bludger – the Coalition is pulling ahead of Labor

William Bowe’s Poll Bludger reports on a Roy Morgan poll, showing the Coalition’s TPP lead over Labor is now 54:46. Labor’s primary vote is 32.5 per cent (33.3 per cent at last year’s election) and the Coalition’s is 46.0 per cent (41.4per cent at last year’s election). Bowe provides an onward link to the poll – which has a well-annotated graph of survey results over time. It appears that the Coalition’s lead is solidifying.

Don’t forget the contact-tracing app

The Commonwealth Deputy Chief Medical Officer reminds us that so far almost seven million Australians have downloaded the COVIDSafe app. It is of most use when there are small numbers of hard-to-trace community transmission, as is occurring in New South Wales and Queensland, and as we hope will become the case in Victoria. It has attracted criticism on privacy grounds, but by any reasonable standards people most affected by the virus – those subject to police checks on isolation and public housing tenants in Melbourne – are enduring far stronger intrusions on privacy, for the common good.