Perspectives of Public Investment
Inaction creates inertia. Assertive action is the required leadership trait in times of crisis. Business does not naturally seek direction but in the case of this pandemic they have remained patient and obedient. As we inch to a new recovery phase, business seeks assistance to self-initiate.
Meandering through proscribed economic recovery, absent any directed guidance from the Premiers phantom “Economic-council”, business is doing all it can to adapt and induce customer investment.
Perhaps not less than 90 per cent of our Island businesses will be challenged through this restart, a restart that will take years to fully recover. Emerging first movers, are the responsive ones who either proactively moved to an ecommerce platform or have pivoted to adapt quickly.
Our local economy will be led by the online tools and fitness providers, home education supports, gamming and delivery services. Small businesses not even on the economic radar a quarter ago.
Government struggles to understand the supports required, then react as best they can. Federal programming creativity have touched every special interest group with the exception of “those intending to be born in the next 24-months” or “middle-aged, overweight, underemployed stay-at-home dads” (the latter group I identify with). There is something for everyone, suspectedly mapped to election timing.
Those burdened with servicing this debt accumulation, are largely unaware of consequences from the hundreds of millions in provincial public investment. From long term public debt financing to public sector contraction, the impacts will be sweeping – but is this degree of spending necessary.
Sadly, I feel it is. Businesses can’t restart in this environment. The economy did not suffer an economic crisis; it was a health-fear externally impacted by government intervention. So government needs to fuel the kick start.
The economic consequence of not investing to restart the economy are far worse than the future cost of economic stimulation. Stephen Poloz likened the current situation to a “natural disaster” and anticipates a rebound being rapid and robust. The future focused stock market would seem to agree as markets have rebounded very well (although a continued pullback is highly likely during coming periods).
The parliamentary budget officer has raised alarms about Federal spending, even our Premier has proactively invited the auditor general to evaluate the response in recognition of future criticism.
The unfortunate truth is that the public does need to aid the economy. We need coordinated supports for business and support for spenders. The broad-based public contributions are a good stimulant. It makes people feel confident they have money and there are few options for this money other than spend it in the local market. It is good Keynesian economic policy, trickle up spending.
We are a week from a phase II business expansion. Business is struggling. Support local services, restaurateurs, and retailers. Business will not make money in this environment, but they might keep your neighbors employed and this is all part of the economic cycle. Chose local and be patient. If you are fortunate to have a job, public supports or a rainy-day fund; many business owners do not. They operate, serve clients and like everyone else were caught off-guard by the speed of this crisis.