Peacetime constraints ditched in the war for economic survival (Larry Elliot)
... The pandemic has highlighted the need to work together for both public health and economic stability reasons. Sadly, the world has rarely looked less prepared to act in concert and that matters, because
this time it is not the banks that need bailing out, it is the people. Some are able to work from home: millions are not. Covid-19 is already a health crisis; it is set to be an economic crisis too.
A month ago, when financial markets belatedly woke up to the threat posed by Covid-19, the assumption was that there would be a painful but relatively short shock. But even if countries have emerged from quarantine by the summer – a very big if – the speed of economic recovery is going to depend on the collateral damage caused in the meantime: how many businesses go bust; whether laid-off workers have reached the limit of their credit cards to pay the regular monthly bills; the time it takes for confidence to return.
Politicians are starting to use the language, and deploying the policies, of wartime. The UK government wants manufacturers to switch production lines to making ventilators in the same way that factories switched from consumer goods to making planes and tanks.
They are also adopting the language and policies of the left: the need for social solidarity, the importance of intervening to help struggling firms, the urgency of bailouts for hard-hit industries. In a battle for economic survival the constraints of peacetime have to be ditched. When the chancellor, Rishi Sunak, said this was not a time for ideology or orthodoxy, what he really meant was that this was not time for free-market ideology or orthodoxy.
Just as in 1940, the size of the budget deficit is seen as irrelevant. All sorts of hitherto taboo policies become possible...
https://www.theguardian.com/world/commentisfree/2020/mar/19/peacetime-constraints-ditched-in-the-war-for-economic-survival