Will a Shift in 'the Science' Give Trudeau a Way Out?

Let us start with a few charts. The first tracks the number of hospitalised patients for Covid per million citizens in four countries:

France, where restrictions remained fairly stringent through the Covid crisis.
The U.S., one of the first countries to re-open.
Sweden who never really shut down in the first place.
Israel, where the fourth booster dose has now been distributed to all over 60 years old for weeks.

Unfortunately, and in spite of vaccines, outside of Sweden (maybe Sweden has built up herd immunity?), new Covid-linked hospitalisations once again broke new record highs this winter (see above).

And unsurprisingly, as hospitalisations climbed, so did deaths. In January, Covid deaths turned out to be higher than anyone would have hoped.

Looking at the charts above, and at the risk of sounding callous, it is hard to avoid the conclusion of ‘all this for that?’. After all, the above four countries followed dramatically different confinement policies, travel restrictions, vaccine policies, etc., and yet, by and large, ended up delivering broadly the same outcomes, at roughly the same times, when it comes to either hospitalisations or deaths (number of cases are a bogus comparison as so much depends on individual countries’ testing, and reporting, protocols). Perhaps this is the conclusion that the Canadian truckers came to? After all, after months of lockdowns, and after vaccine mandates which pushed some 90% of Canadian to take the needle, this winter is seeing roughly as many Canadian Covid deaths as last winter.

These similar outcomes may help explain why ‘the Science’ that policymakers have professed to follow this whole time has now suddenly shifted. Because let’s face it: Covid today seems just as deadly as it did last winter (and this in spite of the vaccines), at least in the U.S., Israel, France (or almost any country that actively prevented its population from developing herd immunity) and yet, all of a sudden, Covid restrictions are melting away faster than morals at a bachelor party. In recent days we have seen:

The New York, New Jersey and four other Democratic state Governors go against CDC recommendations and abandon mask mandates.
Saskatchewan, Alberta and Quebec abandon almost all Covid related restrictions – which means that if the Conservative Premier of Ontario follows suit, Justin Trudeau will look very isolated – and that’s before one goes into the fact that some of his own MPs are starting to actively distance themselves from his handling of the trucker demonstration.
The Canadian Conservative Party defenestrate its leader for not being forceful enough in the defence of individual liberties and being as badly ‘missing in action’ as the Canadian Prime Minister when it came to discussing with the demonstrating truckers.
Denmark, Sweden and Switzerland begin to abandon all Covid related measures.

So why the above sudden policy shift? Given that ‘the Science’ hasn’t yet been given an opportunity to change, the answer has to be that the less tin-eared Western politicians (probably anyone outside of Justin Trudeau, Emmanuel Macron, Nicola Sturgeon, and perhaps Joe Biden) have sensed the profound shifts in political winds and have little appetite to find themselves in Justin Trudeau’s shoes, namely on the other side of thousands of trucks blowing their horns at all times of day and night. In short, after two years of running roughshod over centuries-old rights and customs, policy-makers may all of sudden be scared of their populations.

Justin Trudeau deciding what pair of shoes to wear

Which, needless to say, is a bullish development. After all, if the world is to tackle the current supply-side issues, the more states, provinces and nations punt the various Covid restrictions into the dustbin of history, the better. Otherwise, one does not need to be a card-carrying member of the Marxist Historian Society to fear that rapidly rising costs for energy, utilities, foodstuffs and other basic necessities could well be the fodder of future riots and revolutions. All of which brings us to the following questions:

Q1: How will Trudeau dig himself out of the hole he has dug? Beyond Canadian politics (a topic that not even Canadians care much about), this question is actually important since the closure of an increasing number of US-Canada border posts is putting pressure on already stretched supply chains. And here, the auto industry once again seems to be on the front line. Ford’s Windsor, Ontario plant shut down on Wednesday while GM cancelled shifts at its Lansing, Michigan factory. Toyota also said that three of its plants in Ontario and one in Kentucky closed because of parts shortages. In short, the economic costs to Trudeau’s virtue-signalling and name-calling of Canada’s truckers are starting to mount. Which means that either a) Trudeau will have to fold, b) Trudeau will become increasingly isolated and eventually be sacrificed by his own party, or c) Trudeau will have to be saved by President Biden abandoning all Covid restrictions (i.e., ‘the Science’ will have changed yet again). Of these three possibilities, a U.S. presidential decision which would allow Trudeau to give truckers their main request, namely the end of vaccine mandates to cross the US-Canada border, might seem like the best face-saving compromise. The problem for Trudeau is that the U.S. political calendar would dictate that such a measure would most likely occur in early March, at the next ‘State of the Union’ speech. That is still a long time away with the possibility of more trade disruption at a time when neither the U.S., nor Canadian economies can afford this, whether economically, or politically.

Q2: Will other countries learn from Trudeau’s mistake? As mentioned above, periods of rising food and energy prices are not the optimal time to test a population’s patience. The risk is to find out that the patience is wearing rather thin. Unfortunately, a number of countries seem to not have received this particular memo yet. France, Italy, Germany, Austria continue to double down on vaccine mandates that remain deeply unpopular with a strong, and increasingly vocal, ‘fringe minority’. And that’s before we go into Hong Kong and China’s continued Covid restrictions. Nonetheless, the longer the Ottawa protest continues, the more policymakers will be forced to second guess tough Covid policies. Failing that, the upcoming spring could see some serious demonstrations and even riots across Western Europe (unlike the sturdy Canadians who somehow pick January and February, and minus-20 degrees Celsius weather, to occupy the streets of their cities, we effete Europeans tend to concentrate our rioting in the spring or the autumn, the summer obviously being busy with holidays). This would cast a cloud on upcoming French and Italian elections.

Q3: Is the truckers’ strike a sign that the pendulum has now swung meaningfully back towards labour? Growing up in Britain, one of my very first memories as a young child were the images of the violent clashes between the English police and the coalminers unfolding on the evening news every night. Of course, I did not know it at the time, but the U.K. miners’ strike (along with the air controller strike in the U.S.) would mark the apex of unionised and organised labor. From that point onwards, across the Western world, the rewards of economic progress would start to accumulate far more rapidly towards capital than towards workers. And simultaneously, Left-wing parties would gradually abandon the working class for more fashionable causes. Bringing us to today when the working class truckers are not only condemned by Canada’s Left-wing politicians, but openly insulted and defamed by Canada’s Liberal Prime Minister, while simultaneously embraced by the more Right-wing members of the Canadian Conservative Party. So in just my lifetime (which is hopefully still just half a lifetime at present) things seem to have gone full circle. And as they have, the truckers’ new-found political clout does imply that, over the coming years, labour should get a bigger piece of the economic pie. A swing back towards labour which, all else being equal, should fuel the Western world’s growing inflationary winds.