We aren’t restarting the economy. We’re climbing a mountain GlobeDebate
Mike Moffatt is an assistant professor at the Ivey Business School at Western University and senior director at the Smart Prosperity Institute. John McNally is a research associate at Smart Prosperity.
When dealing with the coronavirus, policy discussions have focused mostly on either weathering the short-term crisis or investing in the long-term recovery. However, the hardest problems that COVID-19 brings in the coming months will occur in the space between the two.Governments have been calling this in-between phase “the restart.” That implies getting back to normal is like flipping a switch. It isn’t. Public-health restrictions will remain until we have an available vaccine.
The biggest risks during the climb will vary for each business. Large companies with problematically high debt levels will be more vulnerable. New debt on balance sheets will also make it harder to borrow and will dent credit ratings. That will slow investment and hiring. Those impacts will ripple through supply chains.
This will not stop the forces of creative destruction. E-commerce now makes up 27 per cent of total retail sales in the United States after sitting at 16 per cent only eight weeks ago. Consumers and markets are adapting fast. Some of these changes won’t be reversed when this is over. This will hit sectors such as commercial real estate, services and entertainment especially hard, deepening their pain.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
NHLPA executive okays league plan to start with 24-team playoffs if season resumesNHLPA executive okays league plan to start with 24-team playoffs if season resumes Globe_Sports
Read more »
B.C. employers worry about safety, cash flow, second wave in COVID-19 restartThe British Columbia government lifted operating restrictions placed on restaurants, pubs and some personal and health services, including hair stylists and dentists, on May 19
Read more »
Hong Kong’s pro-Beijing politicians claim controversial national security law good for businessHong Kong’s pro-Beijing politicians claim controversial national security law good for business GlobeBusiness
Read more »
John Ivison: Canada avoided a COVID-19 food shortage, but the shockwaves aren’t over yetIt is a timely reminder that, for all our sophistication, all that lies between us and ruin is six inches of topsoil and a farmer
Read more »
Trump's pitch to voters: Trust me, economy will soar in 2021As the American economy faces a once-in-a-century recession, with more than 38 million people out of work, U.S. President Donald Trump is increasingly talking up a future recovery that probably won't materialize until after the November election.
Read more »
Putin’s outward disinterest in COVID-19 dents his image as Russians reconsider how bad their pandemic could getThe Russian strongman’s popularity is at historic lows as local governments grapple with outbreaks, uncertainty about official death tolls and anxiety that the Kremlin won’t spend enough to revive the economy
Read more »