COVID-19: Exposing the Ugly Face of Capitalism

Opinion By KAY MATTHEWS

During these months of COVID-19’s impact on the health, social, and economic well-being of citizens of the world, I’ve been reading many articles about how the pandemic will shape the future of civilization. We all know there will be no return to “normal”—The New York Times dedicated an entire Sunday Review section called “The America We Need”— but what solutions may emerge to save us—and who will be in a position to make them—are burning questions that we’re all struggling to answer.

I also watched the movie Planet of the Humans—contested by environmentalists and used as propaganda by the right—that explores another crisis: climate and ecosystem collapse. The message here is that the environmental movement challenging the climate crisis has basically failed by buying into “green” industrial capitalism for alternative energy solutions that rely on the very fossil fuels they are trying to replace. The film questions how our economic system—late stage capitalism— fuels endless growth and consumerism that can never be met by massive scale alternative energy. But in the best critique I’ve read of the movie, the authors (two Antwerp academics) claim that it fails in four intertwined social and ecological crises of capitalism:” 1) Not all humans are equally responsible for the degradation of the planet (class and race differences); 2) a focus on Western lifestyle issues rather than environmental justice; 3) a Malthusian claim of overpopulation; and 4) in failing to provide possible solutions it creates a narrative that can be co-opted by “ecomodernists” who advocate for alternatives like nuclear energy.

These are the issues that the movie could have taken on if the focus had remained on the crisis of capitalism rather than the failure of biomass, solar, and wind. So I turned to Ann Pettifor, who in her book The Case For the Green New Deal, argues that the entire economic system of global capitalism can and should be restructured so that we can afford to save ourselves and the planet: “There will be no chance of protecting earth’s life support systems if we do not simultaneously escape from the grip of the masters of the globalized financial system.” She goes on to explain how this revolution—or as Albert Camus frames it, rebellion as a demand for unity—can create a more balanced system that decentralizes the financial sector to allow state authorities, the central banks, and the financial ministries to establish a steady state economy that manages economic activity at sustainable levels. “To deploy this financial power in the interests of society and the planet, citizens need to understand that this was ultimately our latent power, which should have been used by citizens to defend the public interest, rather than by technocrats to defend the interest of private wealth.”

Now the COVID-19 crisis has laid bare this inequity. In a recent edition of Mada, an Egyptian progressive journal, former Democracy Now! correspondent Sharif Abdel Kouddous posted an interview with Mike Davis on “pandemics and super capitalism” to try to parse the relationship between globalization and the latest in a series of viral pandemics we’ve confronted. Davis, an emeritus professor at the University of California, Riverside, is the author of two of my favorite books, Ecology of Fear and City of Quartz, along with The Monster at Our Door: The Global Threat of Avian Flu.

In response to the question, “Is capitalist globalization biologically sustainable,” this is what Davis has to say, which concurs with Pettifor’s advocacy of a decentralized system:

Economic globalization — that is to say, the accelerated free movement of finance and investment within a single world market where labor is relatively immobile and deprived of traditional bargaining power — is different from economic interdependence regulated by the universal protection of the rights of labor and small producers. Instead, we see a world system of accumulation that is everywhere breaking down traditional boundaries between animal diseases and humans, increasing the power of drug monopolies, proliferating carcinogenic waste, subsidizing oligarchy and undermining progressive governments committed to public health, destroying traditional communities (both industrial and preindustrial) and turning the oceans into sewers. Market solutions leave in place Dickensian social conditions and perpetuate the global shame of income-limited access to clean water and sanitation.”

The question that follows, of course, is will this pandemic and the climate crisis force a breakdown of the global economy that enables economic independence necessary to protect labor rights and small producers while at the same time sustaining important global markets for vaccine development and technological advances (Davis also warns that these advances carry the risk of the development of surveillance capitalism). What we’ve seen so far, with the CARES Act economic stimulus, the second round of loans and grants to small businesses, and the next round still to be determined, is a chaotic response that unfortunately resembles the 2008 Great Recession giveaway to corporate America, about which journalist Matt Taibbi, in his book The Great American Bubble Machine, says: “The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Another book, Homewreckers, whose subtitle “How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream” (Aaron Glantz) pretty much lays out how this pandemic will be handled, as the above mentioned gang includes the Trump administration crooks who are currently running the show: Treasury Secretary Steve Mnuchin (formerly of Goldman Sachs) and Commerce Secretary Wilbur Ross. These two swooped in after the 2008 recession and scooped up failed banks (failed due to subprime and reverse mortgages) subsidized by the government and then flipped the banks as soon as possible, affording them billions of dollars in return.

Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin

Now in face of the 2020 COVID-19 economic disaster they’re doing pretty much what they’ve always done: make sure their corporate donors and cronies who made them rich in the first place get the bailouts. The CARES Act, which on paper designated a $500 billion bailout for large companies, actually leveraged $4 trillion from the Federal Reserve. Of the original $350 billion allocated in The Small Business Paycheck Protection Program (PPP), over $243 million ended up going to large corporations: “banks were incentivized to prioritize bigger borrowers in their lending decisions.” According to Forbes, “only 5 percent of all small businesses were able to access those funds, and over 30 million are still struggling to receive relief.”

The federal government supplemented its small business aid program on April 27 with an additional $310 billion and anticipated that money would be gone in a matter of days, but two weeks later about 40 percent of the money remains available. The American Prospect reports that the Wall Street Journal (the WSJ has a firewall), claims the reason for this is because the PPP requires small businesses dedicate 75 percent of the loan to payroll—which make the loans forgivable—but many of them with high rent and expenses will not have enough money to stay in business even with the PPP funding.

Above and beyond the failure of the aid packages to help small (supposedly) businesses and their employees, we all know who has been left out of—or discriminated against—in the relief packages: undocumented workers; minors; and poor people who do not file income taxes (including veterans and the disabled with non taxable benefits). As for people of color, according to the Center for Responsible Lending, “Roughly 95 percent of Black-owned businesses, 91 percent of Latinx-owned businesses, 91 percent of Native Hawaiian or Pacific Islander-owned businesses, and 75 percent of Asian-owned businesses stand close to no chance of receiving a PPP loan through a mainstream bank or credit union.” This is largely reminiscent of what happened during the Great Recession, when people of color were denied credit on housing loans or were offered bad terms to concentrate predatory loans in black or Latinex neighborhoods (redlining).

According to a new report by the Institute for Policy Studies, over 22 million people lost their jobs between March and April, while during the same three week period, U.S. billionaire wealth increased by $282 billion. As of April 15, Amazon’s Jeff Bezos’s fortune had increased by an estimated $25 billion since January 1, 2020. This is quintessential neoliberal capitalism. What if Bernie Sanders had won the presidential race in 2016 and implemented social democracy in its place—or at least put policies in place that were pushing us in that direction. The response to the corona virus would have been what he and others (Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Ilhan Omar (D-Minn.) and Richard Blumenthal (D-Conn.)) advocate for in a recent bill submitted in Congress, some of which other countries—Denmark, Germany, and the UK, among others—have implemented instead of the corporate bailout by the USA:
• Raise corporate and wealth taxes;
• Forgive student loans and medical debt;
• Guarantee free healthcare to all;
• 100% paycheck compensation for unemployed workers during the pandemic;
• A monthly stipend of $2,000 to all Americans during the pandemic;
• Cancellation of rent and mortgage payments during the pandemic.

The government is already spending the money to cover this in the relief and bailout packages that aren’t relieving the pain and suffering of those who need it most. And as I referenced in a previous La Jicarita article, just a percentage of the $740 billion National Defense Authorization Act of 2020 (and the $1.5 trillion nuclear weapons buildup over the next three decades) could go a long way toward paying the price. Senate Republicans are currently challenging the latest relief bill proposed by the House over the issue of “too much debt.” In an interview in naked capitalism, Richard Vague, author of A Brief History of Doom: Two Hundred Years of Financial Crises, lays out the argument that there is a huge difference between private and public debt, and it is the public sector, the government, that must step in to alleviate the financial crisis to fix inequalities, save small businesses, and improve stagnant wages, unlike the recession bailout that was “lopsided” in favor of businesses that “brought us Trump.”

There will be more Trumps in the future unless we change course to save ourselves and the planet. As one of my favorite young journalists, Nathan Robinson, in his Current Affairs journal puts it: “You can see that this is a very dangerous time for free market ideology actually, because if it did turn out that it was possible to consume less and have one’s welfare be taken care of, if certain sectors of the economy were deemed “non-essential,” meaning we could live without them, it would suggest that perhaps we can, in fact, live differently. Thus there is a very strong interest in telling us all to “Move along, back to work, nothing to see here,” even if it is against the wisdom of public health experts, because the people who own the country do not want you to find out that we do, in fact, have enough money to take care of everyone.”

 

 

 

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