By JAMES FORTIN
Now that the COVID-19 contagion has spread to the 4 corners of the globe, the unpreparedness of the capitalist state, and the outright disregard by the ruling class for the fate of the working people of the United States, has come into full view. Underlying a perfect-storm scenario is the certain emerging global capitalist recession and the pain it will inflict on the working class.
From the very first U.S. confirmed case of coronavirus infection announced in Washington State on January 21 to March 24, little more than a 60-day period, the pandemic numbers have grown to 44,183 total infections and 544 deaths. The U.S. is on track to have the worst public health disaster in its history, and perhaps an economic catastrophe mirroring the Great Depression.
When the coronavirus epidemic was almost wholly found in China the smugness of reporting from the New York Times, Washington Post and others was unreserved (See March. 2020 Socialist Action). China was backward for having a virus in the first place, you see. The Chinese were unprepared as evidenced by insufficient medical gloves, gowns and masks. The Chinese government’s quarantine response was brutal; they’re communist you know. Now the shoe is on the other foot and the ruling class is prepared to give up lives – certainly not theirs – to protect their system.
As of this writing (March 24) Trump has refused to implement the Defense Production Act which he activated on March 18. The law would give the government the authority to order any list of private companies to produce the protective items desperately needed by the doctors, nurses and others on the pandemic front lines. Instead, Trump says the private sector will voluntarily produce these items, and he has no need to act, providing absolutely no evidence that this is the case. This has left state governments, notably California and New York, but also others, to approach manufacturers in their states and to find out if any can re-tool, manufacture and ship before the health institutions and personnel in their states collapse. Doctors and nurses, state health officials, and governors all have been pleasing for an emergency effort on the part of the federal government only to encounter a criminal, deadly intransigence on the part of Trump.
Perhaps even more ominous is Trump’s now-repeated public statement that he soon will re-evaluate the need for social distancing. This is the last remaining social tool available to slow the pandemic’s spread and is promoted uniformly as effective by the entire U.S. medical world. “WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF,” tweeted Trump. “AT THE END OF THE 15 DAY PERIOD , WE WILL MAKE A DESCISION AS TO WHICH WAY WE WANT TO GO.”
According to the Washington Post, Trump’s behavior, contrary to the advice of his own medical advisors including Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, is being fed by his close friends, conservative media pundits, and some members of Congress. They argue that the steps being taken to contain the virus are too damaging to the economy. This behavior is nothing less than a brutal, public rendition of profits before people by the most reactionary mouthpieces of American capitalism, from whom Trump continuously seeks advice and approval. Whether Trump follows through with his threat to impale the American working class with the staff of profit and disease remains to be seen – in just 15 days, he says.
Early signs of trouble ignored.
In addition to these most recent instances that defy common sense, earlier responses to the virus’ spread in the U.S. have been laden with deadly error under Trump’s watch. Federal health employees without training, protective gear or experience in epidemics were dispatched in late February to 2 military locations in California where quarantined evacuees from overseas were being processed. The responders moved freely on and off base, and some of them were later allowed to leave without self-testing for the virus, possibly spreading the infection.
Even more disturbing was the outbreak at a 190-bed nursing facility at about the same time in Kirkland, Washington, a suburb of Seattle. The nursing home in question had long been the subject of reprimands from state health officials for unacceptable performance in the area of infection control. State inspectors noted in a report written 9 months earlier that they found an oxygen mask, tubing and nebulizer jumbled up with a bed cover sheet and patients socks in one instance. In another, they observed a registered nurse entering an infected patient’s room without protective equipment despite notices prominently displayed requiring masks, gloves and gowns. Additional violations of state and federal regulations were numerous.
Physicians who were beginning to suspect a possible coronavirus outbreak at the facility were unable to confirm it. They had no dependable test kits, only kits that had been improperly manufactured by the CDC. At about the same time emergency responders who had been to the facility, numbering a quarter of the suburb’s firefighters, ended up in quarantine after it was determined the flu-like outbreak at the Kirkland home was indeed the coronavirus. As COVID-19 started its spread, likewise, the outpouring of half-truths and misinformation from Donald Trump commenced.
Not knowing what to do and mostly concerned for his own image and political standing , Donald Trump at first asserted that the number of COVID-19 cases in the U.S. is “going very substantially down, not up,” a position reinforced by his economic advisor Larry Kudlow who chimed in, “We have contained this,” and “It’s pretty close to airtight.” A short time later the corona virus had become a “hoax” perpetrated by his political enemies. And then within days Trump went on to appoint a task force consisting of a few talented experts encased by political appointees to oversee his newly-found U.S. viral problem. Mike Pence – who botched the response to the HIV epidemic in his home state of Indiana – would lead it.
Sweeping facts under the rug.
Underlying Trump’s assurances to the public was a perverse motive more recently substantiated, although widely suspected. During a meeting at the World Health Organization in early 2018 a special work group of scientists and epidemiological experts had been convened. Based on their extensive knowledge and study they concurred that the next pandemic, Disease X, would be the result of a yet to be discovered, novel pathogen that had not yet entered the human population.
According to Michael Roberts who reported on this predicted outbreak, Disease X “would likely result from a virus originating in animals and would emerge somewhere on the planet where economic development drives people and wildlife together… Disease X would “spread quickly and silently; exploiting networks of human travel and trade, it would reach multiple countries and thwart containment … have a mortality rate higher than a seasonal flu but would spread as easily as the flu. It would shake financial markets even before it achieved pandemic status. In a nutshell, Covid-19 is Disease X.” The Trump Administration had been made aware of this possibility in 2018 by none other than Dr. Anthony Fauci,
More recently it was disclosed by the Washington Post that U.S. intelligence officials had been advising the White House since early January, 2020, of the threat of the corona virus in China. By the end of January their warnings, now more worrisome, were being issued in most daily briefings given to the President’s circle of advisors. According to White House staffers, Trump was dismissive of the reports and played down the significance of a spreading disease, for fear of a negative impact on the stock market and his chances for re-election in the fall.
While the coronavirus outbreak expanded Trump proclaimed on Feb. 19, “I think it is going to work out fine. I think that when we get into April, in the warmer weather, that has a very negative effect on that and that type of virus.” And again on Feb. 24, in a tweet, “The Coronavirus is very much under control in the U.S.A. Stock Market starting to look very good to me.”
Loyalty to the rich, not working people.
During these early signs of trouble Trump did little to nothing. Trump continued on with his tweets, arrogance and blaming others. He still was feeling minimum pressure from either the class he represents and protects, or from the broad public. Now that he had barred Chinese from entering the country, that coronavirus thing would just blow by, he publicly exclaimed.
Truly, Trump was not to be diverted from doing a great job – but for the ruling rich. In his first 3 years of office he had provided them with a $1 trillion tax cut which they promptly spent on stock buybacks, dividends, and salaries. The 1% enjoyed skyrocketing stock market performance, fueled by government-driven low-interest rate borrowing, that drove their speculative holdings to ever-higher plateaus. And modest, mostly ineffectual financial safeguards for the 99% put into place by prior administrations were rolled back.
Any request from Big Oil, the fracking interests of the upper Great Plains, or the pipeline landscape despoilers in Alaska would have a receptive ear with the likes of a Trump in office. Modest advances in protection of the environment were to be discarded, socially utilized and protected public lands would be turned over to capitalist private interests, and Ryan Zinke, an ardent supporter of the oil, gas and coal industries would be put in charge of the Department of the Interior to oversee the effort. As climate change denial and inaction became the rule, Trump’s class chalked up some remarkable achievements.
Objectively, Trump does play a role in the scheme of things. His fan base and close associates include scores of billionaires and millionaires who want him to do his job, that is, to help them. They range from Geoff Palmer who develops luxury buildings with skywalks that allow residents to avoid encountering homeless people on the city streets of Los Angeles, to Charles Schwab whose brokerage firm wants investor-protection standards weakened, to Randal Perkins who runs a Florida debris-hauling company accused of price gouging that has been hired repeatedly by the U.S. Army Corps of Engineers to respond to hurricanes, floods and wildfires.
Trump is the current protector of their interests, that being one of several wings of the capitalist class – its overtly reactionary wing (another wing represented by the Democratic Party, and more subtly reactionary, lost in 2016). And as long as he produces the desired results, his wing of the ruling class can easily overlook his ego-driven, revolting, even illegal, personal behavior. They might even share in it, such as Michael Lindell, the millionaire TV foam pillow guy who calls Trump the “best president this country has ever had.” He should know, as Trump never flinched when Lindell was eviscerated by the public for supporting Laura Ingraham and her mocking of a survivor of the Parkland High school shooting.
But then the pandemic hit American shores…
Deadly failures by the CDC.
There is no doubt the communal spread of the corona virus in the U.S. was exacerbated through one mistake after another by the Centers of Disease Control and Prevention (CDC) over a 6-week period.
The CDC’s first attempt to mass produce a diagnostic test kit failed to perform, after hundreds of the kits already had been sent to state laboratories for use. Several more weeks elapsed before replacement kits were provided, but the CDC imposed narrow and stringent criteria on who could be tested, thereby limiting the numbers who actually were tested but needed to be. The CDC declined to purchase kits that did function properly because they were of German manufacture and only a “made in USA” product would do. By this point scientists acknowledge that the virus probably had spread significantly yet undetectably.
Not just in Kirkland, other nursing homes were becoming incubators for coronavirus transmission. The Kirkland facility became the first epicenter for the coronavirus but 10 other nursing homes in Washington State quickly followed suit, and as of this writing there are 129 cases in at least 73 facilities around the country. As quarantines expand and mortality rates go up, the 2.5 million nursing home and assisted living residents in the U.S. live in incarcerated terror of what awaits them.
Facing an uproar from doctors, patients suffering corona-like symptoms, state and local health officials, and hospitals and clinics, the government retreated on all fronts. It would now allow others to produce the test kits, it would no longer prohibit the use of kits produced by foreign governments, and a mass production schedule of kits was announced, though not executed as of this writing. A Harvard epidemiologist commented: “The incompetence has really exceeded what anyone would expect with the C.D.C.” Referring to the faulty test kits, “This is not a difficult problem to solve in the world of viruses.”
Rollback of public health programs by Trump, Congress.
The context in which these failures have occurred is frighteningly telling. Under Trump’s administration an anti-science, anti-foreign schema of ignorance and inaction rules the day. CDC leadership has been shriveled, a hiring freeze imposed at the CDC has resulted in hundreds of unfilled vacancies, and the Executive Branch’s entire pandemic response team was eliminated in 2018. CDC budget cut requests have become annual events — 19% in 2020, and 10% each in 2019 and 2018. This included a Trump proposal to cut $100 million from federal spending on zoonotic infectious diseases such as COVID-19.
Pre-dating the current COVID-19 crisis, Trump proposed a 16% cut to the CDC’s finances for 2021 as well as another $65 million cut, representing 40% of its current obligation, to the U.S. contribution to the World Health Organization.
Trump’s proposals, while debilitating in nature, follow a decades-long pattern of underfunding the public health system by both Republican and Democratic administrations. Relying heavily on federal funds, state public health departments have lost more than 55,000 staff since 2008 together with an overall funding decline. Ongoing efforts to privatize the health delivery system has resulted in the loss of thousands of hospital beds across the country, and with that, a reduced ability to accept a surge of patients in the present crisis. Simon Haeder, a professor and health policy expert at Penn State University estimated there could be only 1 hospital bed for every six seriously ill patients, and possibly only 1 for every 17 if the pandemic reaches worst case proportions. Fiscal cuts to public health programs are nothing more than the generalized subordination of health care to the profits of health industry conglomerates, insurance companies and pharmaceutical behemoths.
Feeling the intense heat of overwhelming public, medical and scientific disapproval Congress passed on March 6 an emergency bi-partisan funding bill of $8.3 billion for federal health agencies to fight the pandemic – a welcome sum but not in time to keep the virus significantly contained. The genie was out of the bottle.
Real time events now horribly demonstrate that the U.S. health care system is not ready for the coronavirus crisis. As deaths spike among the general population also evident is the toll being taken on health care workers. Assuming that the outbreak in the United States at all resembles what has occurred in other highly-impacted countries, it is assured that large numbers of people will be hospitalized, situating health care workers in a concentrated setting of the infected – a primary reason for the large number of Chinese health care workers who became infected with the virus themselves.
If all of this were not bad enough, repeated delays in testing for the disease, primarily caused by the repeated bungled roll-outs of testing kits at the CDC, has put health care workers in the unsafe position of not knowing who is infected and who it not. At the University of California, Davis, 24 nurses and staff had to be quarantined as a result of a patient who had not been tested later exposed them to the virus.
Newspapers and TV report almost daily pleas from medical personnel for critical items they are soon to run out of — items such as gloves, masks & gowns. Not a single state has adequate numbers of ventilators.
The roll-back of public funds for public health is also shamefully displayed by the lack of ongoing, current training of nurses. A survey recently was conducted by National Nurses United, the largest organization of registered nurses in the U.S., in which 6,500 nurses participated. Among many other shortcomings is was reported that only 44% of their employers had provided them information about novel coronavirus and how to recognize and respond to possible cases. Only 30% reported that their employer has sufficient personal protective equipment (PPE) stock on hand to protect staff if there is a rapid surge in patients with possible coronavirus infections, and a mere 29% report that there is a plan in place to isolate a patient with a possible CIOVID-19 infection. As many hospitals are already near capacity with influenza patients, these same institutions are already at capacity and will certainly be overwhelmed as a result of the coming surge in coronavirus patients.
Sensing the intensifying public outrage for his poor performance in curtailing the crisis, Trump thought to control the information provided to the public about the coronavirus, giving news the spin he wanted. Although the CDC has written guidelines on how the agency should communicate during a health crisis, which includes sharing scientific information “in an open, timely, and appropriate way,” the official communiques regarding the developing COVID-19 epidemic were to be handled by Vice President Pence. Pence’s office was to provide “clearance” before release of information from CDC scientists. In one instance Dr. Anthony Fauci, whom the public has grown to trust, had to cancel a number of television appearances when his comments had not been pre-approved by the vice president. This blatant attempt to stifle public access to the facts was massively ridiculed and questioned, resulting in the group news conference format now presented daily, including presidential-correcting comments by the ever-candid Dr. Fauci.
It’s never good to have hundreds of people dying on your watch, especially if you want to be re-elected to your post. It’s even worse if you are a President who has repeatedly claimed the soaring success of the stock market to be about yourself, and that has now tanked by 10,000 points. Trump’s recent appearances on TV, ostensibly to show he is leading the fight against COVID-19, at first revealed a removed and unknowing teleprompt reader, fearful even. Given a little more practice his rambling daily “briefings” have become a bit more combative, Trump trying again to bully his way out of his mess. He likely is a growing disappointment to that wing of the American capitalist class that supported him the last presidential election, not for his public health failures, but for allowing the stock market to crash and by permitting the economy to circle into a tailspin. Something needed to be done so Trump gave himself a new title, COVID-19 “War President”. The viruses are laughing already.
Perhaps, just maybe, the millionaires and billionaires of the other wing of the ruling class through their party, the Democrats, will de-throne him. That’s what Trump’s narcissism and dangerous unregulated ego really fear.
Unable to deny the facts that a horrible pandemic was about to consume the nation, Republicans in Congress began breaking with Trump’s ongoing denials. Trump himself finally acknowledged there was a problem, declared an emergency and even speculated that the county might enter into a recession. March 6 brought an easy bi-partisan Congressional $8.3 billion for the federal health agencies, followed by a $100 billion for jobless assistance, limited paid leave, health care assistance and free coronavirus testing. But would this be enough?
Working class takes the big hit.
Beyond the human health tragedy of the COVID-19 pandemic the working class stands to take the biggest hit. For starters, 74% of working people in the U.S., working paycheck to paycheck, have inadequate savings to see them through a crisis where they get much advice from the likes of Trump and the mouthpieces of the ruling class, but virtually no help. And while any assistance from Congress is better than none, the current bailout package coming from Washington is closer to none than better. Stipends to the working class in sums not greater than $1,200 might slightly deflect the impact of the crisis but would not ward off the overall devastation. “It’s nice and it’s needed, but it’s just a Band-Aid,” admits Beth Ann Bovino, chief U.S. economist at S&P Global, a research and analytics provider to institutional investors and commercial banks. The payment would not stretch very far in the budgets of most working people, she added.
Likewise, tinkering with paid sick leave and needed care for those coming down with COVID-19, would leave out vast swaths of the working class from day one in the recently passed legislation. The lowest paid workers in the U.S. particularly are most likely to have no sick time benefit. Yet, serving as the bulwark of service industries these workers are the most exposed to the public and therefore the contagion itself. Most of them cannot afford to miss a day of work and feel pressured to show up for their shifts notwithstanding the public statements of their bosses to “stay home” if they feel ill. When too much missed work could result in a lost job, concealing one’s symptoms becomes the answer.
For those in the U.S. having no insurance, now numbering nearly 28 million, finding a provider that will even see them without upfront payment is nearly impossible. These workers have a dubious choice – beg, borrow or steal from monies needed for food and housing or go to the local emergency room. There service can be obtained, but a big bill is sure to follow — $20,000 for in-hospital coronavirus care for example, estimates the Kaiser Family Foundation. One in five uninsured adults in 2018 went without needed medical care due to cost, and the uninsured working family is less likely than those with insurance to receive preventive care and services for major health conditions and chronic diseases.
Even with insurance, especially for the 41 million underinsured, the after-care bills from insurance companies often an unwieldy blow, if not financially disabling. Co-pays and deductibles can take heavy slices from the monthly budget, if overpriced premiums have not taken a toll first. Increasingly apparent and reasonable to many is the need to convert to a national public health care system in the U.S. Such a system would be open to all without preconditions or exceptions. When health care is needed you go in to get it. The ruling class and their spokespeople in the media say such a system is not good, that it would not work. Working people can agree with that, except we see it as not good or workable for the ruling class. It’s just fine for everyone else.
The national public system would eliminate the massive, repetitive bureaucracies found in insurance companies, of which redundant CEOs are a part together with their bloated salaries. Gone would be sales staffs, legions of paper processors, lawyers, lobbyists, advertising hucksters and internal staffing that determine who gets coverage and who is denied. A definitive report on single payer healthcare published in late 2018 by the University of Massachusetts, Amherst, finds somewhere near $275 billion a year is spent on these socially useless functions and contribute to making the U.S. system the most expensive in the world. In a just transition to a public system those workers displaced by the closure of private insurance companies would be provided with paid training to assume socially productive work.
While a public system under capitalism would not stop a viral epidemic it would harden the resistance of the population from its effects, both in terms a healthier populace at the onset of an epidemic as well as one no longer driven to financial catastrophe.
Of course enemies of national public healthcare program, including Joseph Biden, the likely Democratic Presidential nominee, will ask how this is to be paid for. The working class should make no excuses or apologies. The capitalist ruling class which has grown its wealth by the theft of appropriated labor over the past centuries will pay for it. Tax cuts for the rich will be reversed and rates of taxation for individuals and corporations will revert to what they were in the 1950’s. Even Republicans in that era supported such taxation. Whatever additional financial measures needed will be taken as well. Free health care for all!
Perhaps the final insult to be heaped on working people during the COVID-19 contagion will be the cost of developing vaccines. Pharmaceutical corporations in the vaccine business are already salivating over who can do vaccine the quickest. Markets will be huge, both for the current crisis as well as for years to come since experts believe the virus or its mutated form may likely arise again. The drug companies will be paid exorbitant sums for their preventative doses, no matter who ends up with the bill. Some victims will pay directly. Insurance companies may pay, extracting reimbursement through rising premium payments. Or governments may foot the bill, which appears increasingly most likely after mass pressure has pushed Congress to this conclusion. But overseas markets will boom and the rich will get richer.
Capitalist economy goes over the edge.
On top of the COVID-19 crisis, we now have an economic free-fall as well. Have no doubt about it. The U.S. economy is in full recession as this is written and is bound to deepen significantly, possibly equaling or surpassing the Great Depression begun in 1929.
A thumbnail analysis offered by an economics writer for the New York Times wrote: “The 11-year bull market, which grew in tandem with one of the longest economic expansions in United States history, weathered a European debt crisis and survived President Trump’s trade war with China, is dead – a casualty of the global coronavirus pandemic.”
It is accurate to say the recent economic expansion has met its end. Actually, though, “one of the longest economic expansions”, so called, now has been curtailed by the “Worst Rout for Wall Street Since 1987 Crash” states a recent headline from the same journal. The sheer magnitude of the boom was followed by the horror of investor losses in the bust. The stock market has gone on to lose a third of its value, erasing all gains since Trump came to office, and is now in the worst decline since the historic crash of 1929.
As always under capitalism it is the working class that suffers the greatest during such times, notwithstanding the crocodile tears of elected officials who offer billions and all sorts of aid packages to businesses. It is expected that tens of millions of workers will lose their jobs, as well as their health insurance if they have it. Already evidenced by the dour statistic that more claims for unemployment benefits occurred in the week ending March 21 than at any other time in U.S. history — 281,00 to be exact. The mass exit from one’s livelihood has just begun.
Socialists support every effort to place dollars into the hands of working people at this critical juncture, including the $1,000+ payment likely in the soon-to-be finalized stimulus plan. Even such limited elements as these are welcomed by the working class. Help is needed, now, though we should not be fooled. These measures are inadequate as would most so-called “solutions” offered by the capitalist government. For example, an anticipated provision in the current $2 trillion plan would stipulate that furloughed workers receive full salary for 4 months. Socialists would respond: the working class demands full pay and benefits for any layoff, at any time, for the full duration until called back, not just during a crisis.
Mass pressure has forced Democrats to include these limited reforms in the business bailout. On the other hand, but with Democratic support, the Republican are primarily focused on saving the system which left to its own internal dynamic would collapse. Here we find billions of dollars in loans, loan guarantees, Federal support to the bond markets and all-out effort to preserve the cash liquidity and credit markets of the major corporations and banks. The $2 trillion stimulus package still being negotiated as we go to press is said to have a $500 billion lifesaver set aside for the financial and corporate sectors. While the 2 capitalist parties might disagree on specific terms, they are in full agreement that capitalism and its corporations must be saved.
One industry to be included in the proposed bailout is particularly emblematic of the giveaways to corporations by the emissaries of the ruling class in Congress. The passenger airline industry would be provided a $50 billion bailout package. No doubt the industry has been the recipient of one economic setback and hit after another – reflected by reduction in passenger counts of 70 to 80% and with travel routes obliterated by international travel quarantines.
Workers justifiably question a bailout, however, given the industry is coming off a decade marked by record profits. In the period between 2015 to 2019 the four biggest U.S. airlines collectively bought back $39 billion in stock and generated $6 billion in dividends to shareholders, almost as much as they are now asking the government to give them. Also, as recently as February, Delta Airlines approved a $257 million dividend to shareholders. Not to be left out of the emerging corporate pork barrel, Boeing too is requesting $60 billion, almost equal to the $60.5 billion it paid out since 2013 in dividends and stock buybacks.
Sara Nelson, president of the Association of Flight Attendants, and others have their bailout antennas raised. She recently commented: “We have told Congress that any stimulus funds for the aviation industry must come with strict rules. That includes requiring employers across aviation to maintain pay and benefits for every worker; no taxpayer money for CEO bonuses, stock buybacks or dividends; no breaking contracts through bankruptcy; and no federal funds for airlines that are fighting their workers’ efforts to join a union.” As you might expect, there are considerable forces in Congress that oppose such restrictions.
Another solution for failing industries is to nationalize them, right now, placing them under workers control and bringing them back from bankruptcy as a socially-productive contributor to society, not as a profit-seeking entity of capitalism. If the stock markets now view such industries as approaching worthlessness, so be it. That will be the basis upon which shareholders will be compensated., rather than providing those same shareholders with financial gratuities for their poor performance.
It’s the system.
The current expansion was not ended by the coronavirus pandemic, however — it was brought about by the nature of the economic system itself. The virus was simply the signature on the expansion’s death certificate. It was the push over the cliff.
Booms and busts are the ever-repeating features of capitalism. This latest bust will have even greater ramifications for the working class than the bust of 2008, even possibly exceeding the Great Depression of the 1930’s. The millions of layoffs occurring, evictions, defaults, bankruptcies and utter and total economic despair already in play – topped off by the societal health emergency – will undoubtedly at first send our class reeling. We cannot even head into the streets to protest by virtue of having to avoid becoming sick. But a response will come.
The condition of today’s working class is a product of a 40-year decline in its wage buying power and the corresponding erosion of its standard of living. The neoliberal assault begun in the Ronald Reagan era has been defined by the continued destruction of labor unions, general loss of workplace benefits, substitution of part time and seasonal employment for permanent full time work, and the rise of the so-called gig economy — workers now often holding 2, 3 and even 4 part time jobs at once. While the rich got richer, the majority of the working class was provided with greater job insecurity and an even smaller piece of the economic pie.
If misery loves company, there is plenty of it. As this article is written the economies of Italy, Germany, France, England and Spain are in a near-comatose state. Looking around in the U.S. the majority of industries have effectively shut down. Whether it is air travel or auto manufacturing or cruise lines or restaurants, the economy is stopped for an indeterminate amount of time. Oil is in disarray and stock markets here and around the world are recording record losses Unemployment has skyrocketed. Banks have stepped back their financing of corporate bond issues, the key capitalist economic feature to their profitability and survival. In nation after nation less is being produced as spending shrivels.
Most mainstream economist are at a loss to explain Most economists prized by the mainstream capitalist media maintained until February that the current U.S. economy was sound, some even using the word “robust.” Goldman Sachs economists were still forecasting growth of 2 percent through year-end, a forecast now retired. Deutcshe Bank economists thought it would be a worst-case stock market fall of 6,000 points, a number already exceeded by 65 percent.
This is the reason revolutionary socialists refer to them as the bourgeois economists. They are supportive of the capitalist system in earnest, focusing mostly on indictors such as short- term versus long-term interest yield curves and monetary interventions in the economy by the Federal Reserve Bank. They have limited grasp of the economic cycles within which the market economy performs. As the wise New Englander would say, they can’t see for the forest for the trees. They are wrapped up in defense of an economic system they cannot adequately explain. And, they don’t know what to do about the busts.
Even before the coronavirus pandemic struck Marxist economists observed that economic activity was slowing to a stop in most major capitalist economies, if not already contracting. In the fall of 2019 University of Massachusetts professor and Marxist economist Richard Wolff believed that a recession was imminent. “Wherever capitalism has settled in the 300 years that this system has dominated the world, in every country, in every region here’s the pattern: Every four to seven years, there’s an economic downturn … Based on that — and if you remember that the last big downturn that we had was in 2008 — well then we are overdue.”
Bourgeois economists keenly understand that busts have enormous social consequences – reduced production of goods and services, massive job loss, financial failures, and further immiseration of everyday people. They have been aware of this for centuries since the time of the earliest proponents of capitalism. Yet, they and the national leaders they have advised over the years have not come up with a solution. Marxist economists on the other hand, since the time of Marx himself, have demonstrated that it is the structural nature of the capitalist system that produces the cycles, and that it is the system itself that needs changing if we are to avoid the abysmal cyclical result.
Michael Roberts, another Marxist economist, also has been predicting a recession for some months, long before the pandemic developed. Now that it has enveloped the world he summarizes: “I’m sure when this disaster is over, mainstream economics and the authorities will claim that it was an exogenous crisis nothing to do with any inherent flaws in the capitalist mode of production and the social structure of society. It was the virus that did it. This was the argument of the mainstream after the Great Recession of 2008-9 and it will be repeated in 2020.”
The recession that has now started, accelerated by the economic ramifications of the COVID-19 pandemic, states Richard Wolff, is a “recipe for very serious economic problems…What you’re seeing is this terrible combination of the accumulated debt … coupled with the delayed downturn and that is a volatile mixture.”
In a capitalist economic system the goal is profit. The need to provide investors with profit leads capitalists to decisions which they believe will increase their market share at the expense of competitors, thereby increasing profits. It is the capitalist imperative but also its contradiction. In the most basic terms, capitalist entities increase their production in an unplanned way as do their competitors, leading to overproduction. Then, with goods unsold in the market, companies pull back, layoffs and factory shutdowns occur, economic purchasing declines, and the cycle completes. Capitalism’s periodic booms and busts are a result of overproduction, not scarcity. (For a more extensive explanation of capitalist boom and budgets see Ernest Mandel, An Introduction to Marxist Economic Theory, https://socialistaction.org/marxist-education).
Allegiance to profit versus science and solutions.
Little to nothing has been done in the U.S. over past decades for scientific research and programs to prevent viral infections in the first place. A growing number of activist-scientists have lamented on the missed opportunities to learn from the past viral tragedies of the Middle East Respiratory Syndrome (MERS), Severe Acute Respiratory Syndrome (SARS) and Ebola. Then again, the world capitalist system including the United States thrives in a framework of profit-making reactive medicine, not proactive, life-enhancing science and health care. Taking that to heart the behemoth drug companies make money on vaccines – provided that the profit margin is great enough – and not on the prevention of viral infections.
Citing the influence of Rob Wallace, a socialist and evolutionary biologist, economist Michael Roberts continues: “plagues are not only part of our culture; they are caused by it. The Black Death spread into Europe in the mid-14th century with the growth of trade along the Silk Road. New strains of influenza have emerged from livestock farming. Ebola, SARS, MERS and now Covid-19 has been linked to wildlife. Pandemics usually begin as viruses in animals that jump to people when we make contact with them. These spillovers are increasing exponentially as our ecological footprint brings us closer to wildlife in remote areas and the wildlife trade brings these animals into urban centers. Unprecedented road-building, deforestation, land clearing and agricultural development, as well as globalized travel and trade, make us supremely susceptible to pathogens like corona viruses.”
It is doubtful that once the COVID-19 catastrophe has been subdued, the ruling capitalist class will come forward and offer their apologies, to say that they have learned a great lesson, that they will now listen to science, and that all will be changed going forward. The day will come, however, when their historical successors – the working classes of the world – will do that in their stead.