The political economy of Covid-19

Governments around the world are attempting to prop up a failing capitalist system by — surprise! — throwing money at wealthy individuals and corporations, especially in the financial industry. In other words, in this time of unprecedented crisis and economic difficulty, it’s business as usual.

We were here not much more than a decade ago, although the rise in unemployment has been more dramatic than during the economic collapse of 2008. That global economic crisis was a long time coming but was inevitable for anyone willing to pay attention. During the 1990s stock-market bubble, traders repeatedly said the dramatic price rises could not last, but as long as the consensus view was that the long bull market would continue they were not going to step off the ride. When the bubble did burst, new forms of speculation kept the financial industry’s party going for several more years. Credit was the lubricant for the later round, both inflating a real estate bubble and enabling consumer spending to continue in the face of declining wages, until the speculation became unsustainable.

No more bubbles to inflate, governments representing the world’s four largest economies alone committed US$16.3 trillion in 2008 and 2009 on bailouts of the financiers who brought down the global economy and, to a far smaller extent, for economic stimulus. Those commitments included $11 trillion for the U.S. (where money thrown at capitalists far exceeded the $700 billion in the Troubled Assets Relief Program), $4 trillion for the European Union, $750 billion for Japan and $600 billion for China. Smaller economies did that too. The Reserve Bank of Australia shoveled A$1.8 billion (US$1.5 billion at the then exchange rate) at financiers to shore up its banking system. The Reserve Bank of India did the same, handing out 60 billion rupees (US$1.3 billion).

Cherry blossoms in Washington (photo by Sarah H. from USA)

All that was simply to deal with the immediate crisis of 2008. As stagnation continued, many of the world’s most prominent central banks decided to throw new gigantic sums of money at the financial industry. Specifically, through programs known by the technical name of “quantitative easing.” What that is are central banks buying in massive amounts bonds issued by their own governments, corporate bonds and/or mortgage-backed securities. For all the talk of the world’s governments taking “unprecedented” measures to deal with the dramatic economic crash triggered by the Covid-19 pandemic, most of the money being committed is in the form of new quantitative easing.

An economic song and dance

The supposed purpose of quantitative-easing programs is to stimulate the economy by encouraging investment. Under this theory, a reduction in long-term interest rates would encourage working people to buy or refinance homes; encourage businesses to invest because they could borrow cheaply; and push down the value of the currency, thereby boosting exports by making locally made products more competitive.

In actuality, quantitative-easing programs cause the interest rates on bonds to fall because of the resulting distortion in demand for them, enabling bond sellers to offer lower interest rates. Seeking assets with a better potential payoff, speculators buy stock instead, driving up stock prices and inflating a stock-market bubble. Money not used in speculation ends up parked in bank coffers, boosting bank profits, or is borrowed by businesses to buy back more of their stock, another method of driving up stock prices without making any investments.

By any standard, we are indeed talking about massive amounts of money. Just on “quantitative easing” alone, the Federal Reserve, European Central Bank, Bank of England and Bank of Japan spent approximately US$9.36 trillion, or, if you prefer, €8.3 trillion, in the years following the 2008 collapse. Here’s a breakdown:

  • The Federal Reserve spent $4.1 trillion in three QE programs that ended in November 2014.
  • The European Central Bank spent €2.6 trillion on its QE programs, which only concluded at the end of 2018.
  • The Bank of England spent £375 billion on its QE program.
  • The Bank of Japan has spent north of ¥200 trillion; precise figures are not available. Japan’s QE has been so large and long-lasting that the Bank of Japan now owns assets valued at more than the entire country’s economy.

Think of all the social needs that could have been fixed for such sums. For example, the British think tank Policy Exchange estimated in 2015 that Britain’s needs for investment in transportation, communication and water infrastructure to be a minimum of £170 billion. That is less than half of what the Bank of England spent on its quantitative-easing scheme. The U.S. could have wiped out all student debt, fixed all the schools, rebuilt aging water and sewer systems, cleaned up contaminated industrial sites and repaired dams — all for $700 billion less than what was spent on quantitative easing.

Given this recent history — by no means an aberration in the history of these capitalist governments — it is no surprise that relief for the economic crash caused by Covid-19 has been largely directed at corporate boardrooms and the bank accounts of the wealthy.

Stimulus packages to deal with pandemic, but who gets stimulated?

The Federal Reserve, like most central banks, is “independent” of the rest of government. The reason given is to avoid “political interference,” but in reality so the elites of financial institutions can continue to do whatever they want without consequence. But as is customary, the Federal Reserve doesn’t act in a vacuum; Congress and the White House are also doing what they can to shovel gigantic sums of money at financiers and industrialists.

So far, Congress has passed two stimulus packages that were signed into law, one in late March and the second in April. A third has been passed by the House of Representatives, but the Senate has shown no inclination to take it up and there is reason to doubt House Democrats are actually serious about this last effort.

The first stimulus is the CARES (Coronavirus Aid, Relief, and Economic Security) Act, worth $2 trillion, which was signed into law on March 27. This is the act that resulted in United Statesians receiving one-time $1,200 checks from the federal government. Considering that the average monthly rent in most cities of the United States is more than that, those checks are tokens that serve to obscure where most of the money went. It wasn’t to households left without work.

The Federal Reserve (photo by Stefan Fussan)

A second stimulus bill was passed and signed into law on April 24 and is worth another $500 billion. Most of the money in this second stimulus bill was earmarked for the Paycheck Protection Program (PPP), a loan program in the CARES Act intended for small businesses that may be forgiven if firms use them to keep workers on payroll; the PPP had run out of money in two weeks. Democrats said they wanted money in this round to go to state governments struggling with suddenly shrinking tax revenue but, as is their custom, immediately capitulated when Republicans said no.

The CARES Act included $250 billion to bolster unemployment insurance, $500 billion in aid for industry and state governments, other monies going directly to specific industries and $350 billion for the PPP. Sounds nice, yes? Appearances and reality, however, diverge.

Before the second, supplemental stimulus package was passed, it had already become apparent that much of the stimulus money was going to Big Business. And that was not all, as yet more tax cuts for large corporations were included in the CARES Act. According to Democracy Now, “A congressional committee reports tax provisions in the coronavirus stimulus passed by Congress last month will overwhelmingly benefit the wealthiest Americans. Four out of five tax filers benefiting from the $70 billion temporary tax loophole are millionaires or billionaires. They’ll receive an average windfall of $1.6 million — dwarfing the $1,200 payments for working Americans.”

Manipulation of Paycheck Protection Program

Meanwhile, much of the PPP money didn’t go to mom-and-pop businesses forced to close due to the Covid-19 pandemic. At least 75 publicly traded companies received funds from the PPP, which is supposed to help small businesses. The Associated Press reports:

“The Paycheck Protection Program was supposed to infuse small businesses, which typically have less access to quick cash and credit, with $349 billion in emergency loans that could help keep workers on the job and bills paid on time. But at least 75 companies that received the aid were publicly traded, the AP found, and some had market values well over $100 million. And 25% of the companies had warned investors months ago — while the economy was humming along — that their ability to remain viable was in question. By combing through thousands of regulatory filings, the AP identified the 75 companies as recipients of a combined $300 million in low-interest, taxpayer-backed loans. Eight companies, or their subsidiaries, received the maximum $10 million possible, including a California software company that settled a Securities and Exchange Commission investigation late last year into accounting errors that overstated its revenue.”

Even the Big Business cheerleaders at the CNBC business news cable channel reported that “Hundreds of millions of dollars of Paycheck Protection Program emergency funding have been claimed by large, publicly traded companies, new research published by Morgan Stanley shows.” This report estimated that at least $243.4 million of the total $349 billion handed out in the PPP as of April 21 — by which time the PPP had already run out of money — went to publicly traded companies.

The above figures might be an underestimate; a later Washington Post report said “hundreds” of publicly traded companies have received a composite of more than $1 billion in PPP funding, although some of that money has been returned under public pressure. Eighty percent of applicants were left with nothing after funding ran out.

Published reports differ in determining the number of inappropriate recipients of PPP money because there is little accountability. One reason for that, beyond the usual wanting to shield favored donors from public scrutiny, might be that several members of Congress have themselves received PPP money. The Trump administration is refusing to provide information; it would not be a surprise to find there is something to hide there as well. Politico reports that “at least four members of Congress have reaped benefits,” and the actual total might be higher. “It’s a bipartisan group of lawmakers who have acknowledged close ties to companies that have received loans from the program — businesses that are either run by their families or employ their spouse as a senior executive,” Politico reports, naming two Democrats (Susie Lee of Nevada and Debbie Mucarsel Powell of Florida) and two Republicans (Roger Williams of Texas and Vicky Hartzler of Missouri).

Tax breaks for the one percent slipped into stimulus

One tax break inserted into the second stimulus bill only applies to companies with revenue of $25 million and another provision lets people in households earning at least $500,000 a year deduct even more of their business losses from stock market profits, The New York Times reports. These deductions will enable the recipients to reduce what they owe in capital gains taxes. Victor Fleischer, a tax law professor at the University of California, Irvine, told the Times, “Many of the tax benefits in the stimulus are ‘just shoveling money to rich people.’ ”

And given the grifters who occupy the White House, it will come as no surprise that there are special benefits for the owners of real estate. One of the goodies stuffed into the stimulus packages will allow people who own their businesses through partnerships or other similar structures to use all of the losses they claim on paper to offset taxes they might otherwise owe from other income, such as stock market profits, eliminating a cap on how much of those losses could be used. These partnerships can be very profitable, but as long as they show a loss on paper the owners can offset taxes. Jesse Drucker of The New York Times, in an interview on National Public Radio’s Fresh Air program, estimates this tax break for the wealthy will cost the government $135 billion — essentially all of which will go to the top one percent.

The Rideau Canal in Ottawa (photo by John Talbot)

This massive tax break is not specifically written for the real estate industry, but that is the industry that is likely to benefit the most as corporate real estate operations are often structured in these ways. Mr. Drucker said:

“In real estate, you can actually have, in the real world, what is quite a profitable business that generates losses on tax returns because real estate developers get to write down the value of their buildings. That turns into a deduction. And the result is that people like Jared Kushner and Donald Trump — to the degree that we have had some insight into their taxes over the last few years, we have seen that they have reported big losses on their tax returns. In many cases, it’s almost certainly the result of some of these favorable provisions that let them write down the value of their buildings. So the point is that any tax law change you make that gives people the ability to make maximum use of their losses is something that could very easily benefit real estate investors because they have so many losses. And in the case of Jared Kushner and Donald Trump, we don’t have to speculate on that. We know that in previous years, they have reported big losses, which would put them in a position to benefit from this.”

Not even the most elementary provisions to put some limits on where the money is going were inserted into these stimulus bills. For example, although there is a clause prohibiting the use of the money for stock buybacks and extra executive pay, it’s followed by another clause allowing Treasury Secretary Steve Mnuchin (the foreclosure king) to waive the prohibition. Nor are there measures to demand that corporate recipients even pay tax. Reuters reports that the PPP has given “millions of dollars in American taxpayer money to a number of firms that have avoided paying U.S. tax.” Twelve companies provided with $104 million in loans use offshore havens to cut their tax bills, seven of which paid no taxes.

Federal Reserve offers trillions of dollars

The Federal Reserve’s contribution to the wealthy goes far beyond the two stimulus bills. By the end of March, the Fed had already committed more than $3 trillion in loans and asset purchases in the wake of a rapidly collapsing economy. This included fresh commitments to a recently announced new quantitative-easing program in which the Fed had pledged to spend $700 billion to buy Treasury and mortgage-backed bonds in addition to multiple loan programs. Although most of this will come from printing money, $450 billion of this came from the $2 trillion CARES Act stimulus passed by Congress.

Following its March 23 announcement, the Fed announced another round of measures on April 9, this time committing $2.3 trillion in new loans and credits for business and local governments. The centerpiece of this round is the “Main Street Lending Program,” which makes it sound like these loans will be earmarked for small businesses, but loans will be offered to corporations with as many as 10,000 workers and revenues of up to $2.5 billion. Not exactly what we have in mind when we think of “Main Street.” The set of measures could inject $6 trillion into the financial system, but that money, if actually spent, seems mostly destined for the pockets of speculators.

With state and local governments dangerously short on revenue due to the economic crisis, and thus putting social programs in jeopardy, what does the White House want to do? The only “solution” demanded by Donald Trump is to cut the payroll tax, the source of money for Social Security. The president claims he wants a “temporary” payroll tax cut, but that has to be seen not only in light of his complete inability to say anything truthful but his and his administration’s stated desire to cut Social Security. Cutting the funding for the retirement program is a good way to undercut it, which has long been the wish of Wall Street. Even if there weren’t nefarious reasons at work, would a temporary payroll tax cut provide a jolt to the economy? Definitely no, says the Center on Budget and Policy Priorities in a May 12 commentary.

“President Trump has said he will not support any additional relief or stimulus measures in response to the human and economic crisis caused by the Covid-19 pandemic unless they include a temporary payroll tax cut,” the Center said. Stimulus packages are only effective “if they quickly deliver resources to people and businesses that most need it and so are most likely to spend rather than save any extra dollars they receive.” But the Trump plan would fail to help either. The Center said:

“Cutting the employee share of payroll taxes gives the most help (in dollar terms) to higher earners, who are less likely to need the help or to spend most or all of the extra money. Compounding the weaknesses of this approach, it does less for those with lower earnings and nothing at all for people who have lost jobs. And cutting employer payroll taxes is an ineffective way to shore up business hiring and investment. Business’ main problem now is lack of customers for their products — both because of social distancing measures and because many customers’ incomes have fallen dramatically as unemployment has risen. Businesses will not hire (or retain) more workers or invest in more equipment than they need to produce the goods and services they can actually sell.”

Already there are signs that the windfall large businesses have received from the Trump administration have been slipped into bank accounts, not into investment. Economist Jack Rasmus has calculated that the loss of income for the tens of millions of United Statesians plunged into unemployment has cost them a composite $1.3 billion in lost wages. Ridiculing the orthodox economic “theory” that the problem with recessions are “sticky wages” — in other words, wages don’t fall fast enough or far enough during downturns — Professor Rasmus notes that businesses are not investing in the wake of the wage reductions. He writes:

“They’re hoarding the $1.74 trillion in Congressional loans and grants bailouts. And hoarding the $650 billion in business tax cuts also in the bailout legislation thus far (which one hears very little about in the media, I might add). … [T]he short term cash deposits by business in just institutional money funds (only one source) has risen from $2.3 trillion before March 1, 2020 to $3.3T today. That’s a $1T rise in cash deposits by businesses, just in institutional money funds. More is being deposited in commercial banks. The long run average of business deposits in commercial banks has been around 5% (6% under Obama and 4.6% under Trump 2016-19) to 15.8% since March 1. Businesses and investors are hoarding their cash and stuffing it in their short term accounts in banks, funds, and who knows where else, on and offshore.”

Much of that hoard of cash is likely destined for stock buybacks, dividends, speculation, buying companies and boosting lobbying efforts down the road. U.S. corporations spent more than $1.1 trillion on buying back stock in 2018 and although the pace slacked a bit in 2019, more than $700 billion went toward buybacks. Stock buybacks are completely unproductive spending — they are simply corporations buying their own stock, giving those who sell a premium to the trading price and boosting profits for remaining shareholders because the profits will be shared among fewer people. Speculators love them.

Britain, EU and Canada: Lots for financiers, crumbs for working people

Capitalism is a global system, and thus using a crisis to benefit the wealthy and powerful is hardly limited to the United States, even if it is the center of the global capitalist system and thus at the forefront of propping up its winners. Tax Watch UK, which describes itself as an “investigative think tank,” discovered that among the recipients of loans under the Bank of England’s Covid Corporate Financing Facility are 13 companies with links to tax havens or that “have seen controversy regarding their financial affairs.” Those 13 companies received £4.8 billion, or almost 30 percent of the total. Tax Watch UK reports that among these is Baker Hughes, a subsidiary of General Electric, “which is embroiled in a £1 billion tax dispute over unpaid taxes going back to 2004.”

The British government, headed by the mendacious Boris Johnson, hasn’t been shy about handing out money to business. The Bank of England has committed £200 billion to quantitative easing (bond buying), £330 billion in loan guarantees for business and an unspecified amount for “short-term liquidity” for the government, among other measures. Separately, Whitehall has committed tens of billions of pounds to three separate loan programs, property tax holidays, direct grants for small firms, grants for “innovation” and other items. For working people? A total of £14.7 billion of additional funding to the National Health Service and £7 billion for increased payments under the Universal Credit scheme and other benefits. Overall, quite one-sided toward capital.

City of London expanding (Photo by Will Fox)

Similar to the United States and United Kingdom, the bulk of money committed by the European Union to shore up the economy during the Covid-19 pandemic is for quantitative easing. The EU has committed to pouring €1.35 trillion into buying private- and public-sector securities by June 2021 under its Pandemic Emergency Purchase Program.

The EU will also offer a €540 billion addition to its European Stability Mechanism, an International Monetary Fund-style loan program under which money is loaned to governments under condition that recipients implement severe austerity. (This is the program under which the EU paid off the Greek government’s debt to European banks, meaning that Greece instead owed its debts to EU institutions rather than the banks, doing nothing to lower the debt level but forcing Athens to administer punishing austerity that left Greeks destitute.) And on top of the above, the EU has thrown in another €200 billion for businesses. For working people, nothing more than relative crumbs: €37 billion “to support public investment for hospitals, [small businesses], labor markets, and stressed regions” and €100 billion to protect workers and jobs. Once again, quite one-sided in favor of capital.

Back across the Atlantic, Canada has announced multiple programs, including quantitative easing. The Bank of Canada has implemented several QE programs for buying corporate bonds, federal and provincial government bonds, mortgage bonds and commercial paper (short-term debt issued by corporations), as well as programs to provide credit and “support the stability of the Canadian financial system.” The Bank of Canada is not forthcoming about the total cost of these programs; it has committed to spending C$5.5 billion per week, with no cutoff date, on just two programs, the purchases of federal government bonds and mortgage bonds. A measure of what has been spent so far is indicated in the central bank’s balance sheet, which reveals that total assets held by it increased from $120 billion on March 11 to $498 billion on June 11. So that’s $378 billion with more to come.

What is Canada spending on working people? $116 billion for “direct aid to households and firms” and $4 billion for the health system. So a lot less, and even some of this much smaller amount will be going to businesses.

Although more direct aid for working people is being included this time around — given the crisis of neoliberalism and that the massive subsidies to the same financiers responsible for the crash of the economy in 2008 haven’t been forgotten, political leaders had no choice but to sweeten the pot a little — the overwhelming majority of the money dispensed is going to the financial industry and to large corporations. Again it must be asked: How much more useful would it have been to use this money for practical needs and direct payments to people instead of propping up a bloated and wasteful financial system? More directly, how long can the peoples of the world continue to believe that a system in crisis so frequently and requires such massive bailouts works?

The corporate origins of the anti-science “reopen” demonstrations

Many of the same extreme right operatives who created the “Tea Party” are behind the anti-science and anti-intellectual spectacles opposing measures designed to combat the Covid-19 pandemic. And with much the same agenda.

By now, that is not much of a secret, but it is nonetheless necessary to expose these roots, and to debunk the anti-science conspiracy theories they help spread. This is an astroturf operation underwritten by Betsy DeVos, her ultra-reactionary family and veteran operatives linked to them, with FreedomWorks, primary organizer of the early Tea Party protests, and the Club For Growth, a libertarian outfit dedicated to eliminating Social Security, lurking in the background.

Perhaps the most virulent outbreak was in Lansing, where armed militia members were given free reign to roam Michigan’s state capitol building, causing a legislative session to be called off. A truly dangerous precedent — will these characters be allowed to take over the capitol next time? And that these White protestors were left untouched, even allowed to hijack the functioning of government for a day, makes for a sharp contrast with the Black Lives Matter protestors being arrested and brutalized by police around the country.

A doctor in a hospital during the COVID-19 pandemic (photo by Pablo Jarrín0

To make another comparison, recall that similar armed White militia members were allowed to take over a federal sanctuary and desecrate Native American artifacts in rural Oregon in 2016. Can anybody imagine Black protestors taking over a government facility with an intention of sparking a rebellion lasting even a day without every police agency that could mobilize mowing them down in a fusillade of bullets and bombs, much less being allowed to spend weeks and allowed to come and go as they pleased?

Let’s examine the evidence. There is plenty of it, should we wish to look.

The wealthy extremists behind the astroturf campaign

Edwin Rios, writing in Mother Jones on April 17, 2020, provided this report on the Lansing demonstrations:

“The protest, known as ‘Operation Gridlock,’ featured a fair share of MAGA hats, Trump flags, at least one Confederate flag, chants of ‘Lock her up!’ in reference to [Governor Gretchen] Whitmer, and far-right groups from the Proud Boys to the Michigan Liberty Militia. They clogged up the streets outside the state Capitol and defied Whitmer’s ban on public gatherings. The whole charade was facilitated by the Michigan Conservative Coalition, a conservative political group that doubles as a front for Michigan Trump Republicans, and promoted by the Michigan Freedom Fund, a conservative group with ties to Education Secretary Betsy DeVos, a Michigan billionaire philanthropist power broker before she joined the Trump administration.”

A detailed Snopes report put together by Alex Kasprak and Bethania Palma found plenty of DeVos family money:

[T]his anti-lockdown movement was originally pushed by a small circle of fervent activists who have been protesting almost constantly since well before the onset of the pandemic. Furthermore, they have benefited from a political action infrastructure originally created to support the DeVos-funded, anti-union ‘right-to-work’ movement. These methods have apparently created the perception of widespread discontent with public health measures largely supported by the American populace and are part of a campaign playbook self-evidently resulting in an increasingly radicalized base of Trump supporters as the 2020 general election approaches.”

The article reports that the DeVos family made $14 million in political contributions to the Michigan Republican Party and other Republican groups, and also donated substantial amounts of money to the Michigan Freedom Network. The Network is in turn tightly linked to the Michigan Conservative Coalition, a group that the Snopes report characterizes as “a collection of former Tea Party-aligned groups and pro-Trump organizations whose purpose is to recruit and train an ‘army of conservative activists,’ most notably the groups Michigan Trump Republicans, Women for Trump, and the Lakes Area Tea Party. The people who run the coalition have deep ties to the Michigan GOP and to Trump campaign surrogates,” with strong links with Michigan Republican officials.

Not mentioned in these articles but nonetheless relevant is that Betsy DeVos’ brother is Erik Prince, founder of the notorious Blackwater mercenary army.

“Reopening” the economy in the corporate interest

To round out this survey, CNN reporters located two more sources of support:

“One prominent voice supporting the protests is Stephen Moore, the founder of the Club for Growth and an unofficial economic adviser to President Trump. … Moore told CNN he has been working on this organization with FreedomWorks, a conservative advocacy group that gained prominence during the Tea Party era.”

The Club For Growth is an ultra-reactionary outfit with connections to the Koch Brothers dedicated to eliminating government-run social benefits. Club for Growth founder Stephen Moore is on record with this statement: “Social Security is the soft underbelly of the welfare state. If you can jab your spear through that, you can undermine the whole welfare state.” In other words, it’s work until you drop, if he gets his way.

FreedomWorks is a group of corporate lobbyists formerly run by Dick Armey (a hard-line Republican Party operative who once was majority leader in the U.S. House of Representatives) that was the primary organizer of the early Tea Party protests. FreedomWorks’ predecessor organization was the Citizens for a Sound Economy, which was founded and funded by David and Charles Koch (although the surviving brother, Charles, does not currently back FreedomWorks). Sharing similar roots is Americans for Prosperity, a lavishly funded and tightly controlled pressure group founded by the Koch Brothers dedicated to promoting the family business interests and extremist political philosophies, and also heavily involved in organizing the Tea Party. Organizers of the Tea Party sought to deflect anger from corporate elites consumed by greed and arrogance who bend the country’s institutions to their benefit, and instead pin the blame on “the government,” on minorities, on immigrants and any other handy scapegoat. Sound familiar?

Yonge-Dundas Square in Toronto during the pandemic (photo by Sikander Iqbal)

It will come as no surprise those readers who pay attention that the Trump administration has a hand in these events. For several weeks, the White House has been agitating to “reopen” the country regardless of health consequences — an unusually open reminder that working people are seen as nothing more than disposable peons in the eyes of Wall Street and corporate boardrooms.

The Associated Press, as cautious a news agency as exists in the U.S., has provided further details:

“Republican political operatives are recruiting ‘extremely pro-Trump’ doctors to go on television to prescribe reviving the U.S. economy as quickly as possible, without waiting to meet safety benchmarks proposed by the federal Centers for Disease Control and Prevention to slow the spread of the new coronavirus. The plan was discussed in a May 11 conference call with a senior staffer for the Trump reelection campaign organized by CNP Action, an affiliate of the GOP-aligned Council for National Policy. A leaked recording of the hourlong call was provided to The Associated Press by the Center for Media and Democracy, a progressive watchdog group.

CNP Action is part of the Save Our Country Coalition, an alliance of conservative think tanks and political committees formed in late April to end state lockdowns implemented in response to the pandemic. Other members of the coalition include the FreedomWorks Foundation, the American Legislative Exchange Council and Tea Party Patriots.”

As always, we should member that the “freedom” promoted by these representatives of big capital means freedom for capital, not people. “Freedom” is equated with individualism — but as a specific form of individualism that is shorn of responsibility. Imposing harsher working conditions is another aspect of this individualistic “freedom,” but freedom for who? “Freedom” for industrialists and financiers is freedom to rule over, control and exploit others; “justice” is the unfettered ability to enjoy this freedom, a justice reflected in legal structures. Working people are “free” to compete in a race to the bottom set up by capitalists.

To this, we can now add the “freedom” to spread a deadly virus without regard to the danger imposed on others.

Debunking that Covid-19 was created in a laboratory

The complement of exposing the funders and organizers of the movement to ignore measures to provide for public health during a pandemic — how dare Governor Whitmer and other state governors seek to keep people alive! — is exposing the disinformation spread by their followers.

Contrary to conspiracy theories peddling the idea that Covid-19 is an artificial creation, possibly intentionally created for political purposes, multiple teams of scientists have determined that Covid-19 is a virus that originated in nature, and can not have been created in a laboratory. It does not help that U.S. President Donald Trump and his almost as ignorant secretary of State, Mike Pompeo, have repeatedly implied such — in the minds of Trump followers, how could scientists who have spent a lifetime studying diseases and epidemics possibly know as much as the all-knowing, all-seeing Dear Leader?

Downtown Portland, Oregon, during the pandemic (photo by Mattsjc)

Kristian Andersen, an infectious disease researcher at the Scripps Research Institute who led a team of evolutionary biologists and virologists from several countries, said Covid-19 has components that differ from those of previously known viruses and therefore had to come from an unknown virus or viruses in nature. A human-created virus would need to work with already known viruses and engineer them to have desired properties, according to Andersen.

Writing in the peer-reviewed journal Nature Medicine, Andersen and his colleagues wrote, “Genetic data irrefutably show that SARS-CoV-2 [the virus that causes Covid-19] is not derived from any previously used virus backbone” and conclude, “we do not believe that any type of laboratory-based scenario is plausible.”

A molecular epidemiologist in Switzerland, Emma Hodcroft, who is not connected to the study led by Andersen, agreed. Hodcroft, who is part of a team studying changes in coronaviruses to track how they spread, said, “We see absolutely no evidence that the virus has been engineered or purposely released.” Andersen said there were several clues that clinched the case that the virus is natural, including adaptations protecting it from an immune-system attack that doesn’t occur in viruses being worked on in laboratories.

This ongoing work has also debunked the erroneous idea that Covid-19 contains bits of HIV. There was one paper that made the HIV assertion that was not peer-reviewed and was quickly retracted after numerous scientists pointed out serious flaws in it. There are no fragments of the genetic code of HIV in the virus, European Scientist reports in an article that then debunks this conspiracy theory from other angles.

Debunking that deaths from Covid-19 are overstated

Researchers on the Our World In Data web site provide a good explanation for why Covid-19 deaths are likely under-reported, not over-reported. To summarize, the reasons that deaths are being under-reported include that many countries only report Covid-19 deaths that occur in hospitals, meaning that people who die from the disease at home may not be recorded; some countries only report deaths for which a Covid-19 test has confirmed that a patient was infected with the virus; and that the pandemic may result in increased deaths from other causes due to weakened health care systems, fewer people seeking treatment for other health risks and less available funding and treatment for other diseases.

According to the U.S. Centers for Disease Control and Prevention (CDC), the official death toll attributed to Covid-19 counts only laboratory-confirmed Covid-19-associated deaths, and 5,048 probable Covid-19-associated deaths. Not counted are deaths among infected persons who did not access diagnostic testing, tested falsely negative, or became infected after testing negative, died outside of a health care setting or for whom Covid-19 was not suspected by a health care provider as a cause of death. Official Covid-19 deaths also do not include deaths that are not directly associated with Covid-19 infection.

A study of New York City deaths from March 11 to May 2 by the CDC found there were 24,172 excess deaths. The official total of deaths associated with Covid-19, however, is 18,879 deaths. Therefore, the CDC study determined, there were 5,293 deaths that were not identified as either laboratory-confirmed or probable Covid-19-associated deaths. That is an undercounting of Covid-19 deaths as high as 22 percent.

The CDC report said, “Covid-19-associated mortality is higher in persons with underlying chronic health conditions such as heart disease and diabetes, and deaths in persons with these chronic health conditions might not be recognized as being directly attributable to Covid-19. In addition, social distancing practices, the demand on hospitals and health care providers, and public fear related to Covid-19 might lead to delays in seeking or obtaining lifesaving care.”

A separate study conducted by a team of scientists on the death rates in New York State, England, Wales, Scotland, the Netherlands and Italy found that the number of deaths attributed to Covid-19 through May 6 range from one-half to three-quarters of the total number of excess deaths. The scientists, led by Kieran Docherty of the University of Glasgow, concluded that the additional deaths “may represent unrecognized deaths due to Covid-19.”

Debunking that Covid-19 is no more fatal than the flu

The World Health Organization found that Covid-19 data to date suggests that 80% of infections are mild or asymptomatic, 15% are severe infections requiring oxygen and 5% are critical infections requiring ventilation. These fractions of severe and critical infections are higher than what is observed for influenza infection. A WHO report states:

“While the true mortality of COVID-19 will take some time to fully understand, the data we have so far indicate that the crude mortality ratio (the number of reported deaths divided by the reported cases) is between 3-4%, the infection mortality rate (the number of reported deaths divided by the number of infections) will be lower. For seasonal influenza, mortality is usually well below 0.1%. However, mortality is to a large extent determined by access to and quality of health care.”

The United States has by far the most number of cases and the most deaths from the virus, something caused in large part by the for-profit health care system of the U.S., which is designed to deliver corporate profits rather than health care, and thus produces among the worst results of any advanced capitalist country while costing by far the most. A country with a health care system with incentives so inhumane that early deaths are considered to be a “silver lining” for corporations.

Some of the claims that Covid-19 is no worse than the flu rest on a single discredited report. The discredited report, concerning two studies in Los Angeles and Santa Clara counties that purported to claim that Covid-19 death rates are similar to seasonal flus, were quickly and widely debunked. An Ars Technica article said the two studies used flawed statistical models to put the number of people with the virus at 50 to 85 times higher than was actually the case at the time, thus drastically lowering the studies’ reported death rate. The methodologies used to recruit people to this study was also flawed, including using Facebook and e-mail to ask for participants and thus far from random. Finally, the antibody test used in the two studies has a low rate of accuracy.

Need more? The Federation of American Scientists notes that between 2010 and 2019, the flu killed between 12,000 and 61,000 United Statesians during each eight-month long season (October to May). In just over four months, or about half of a flu season, Covid-19 killed over 100,000 people (as of May 28), or 785 people each day, in the U.S. alone.

Finally, Northwell Health reports that each infected person spreads Covid-19 to an average of 2.2 other people. By comparison, those with the seasonal flu infect approximately 1.3. So, yes, it is more easily transmitted than the flu.

As a final thought, it has not escaped my attention that the right-wing anti-science protestors largely did not wear face masks while demonstrating, nor did they observe social distancing. By contrast, the Black Lives Matters protests that erupted after the police murder of George Floyd overwhelmingly wear face masks. (Nor did they carry weapons.) I’ve participated in three Black Lives Matters marches at the time of writing this article, and not only can I confirm that almost everyone wears masks, but there are always a couple of people handing out masks to people who need one. That’s the difference between people who think others should die so they can get a haircut and those with a strong social conscience.

Will the pandemic finish Trump or give his régime an escape?

Amidst all the talk about if the global Covid-19 pandemic will lead to an opening for socialism, or at least a reduction in the grip of neoliberalism, in the wake of capitalism’s failures, a more immediate question is if there is to be a reversal of the march of the Right in electoral politics.

Elections in New Zealand and several Australian states are scheduled for later this year, as are Brazilian municipal, Venezuelan parliamentary and French senatorial elections. The results in Brazil will be of particular interest, given the disastrous administration of Jair Bolsonaro, the extreme right president who lusts for dictatorship and continues to deny the effects of the virus despite the vast numbers of people who are dying. Will Brazilians turn local elections into a referendum on their neofascist president?

To the north, the U.S. elections in November will unavoidably be a referendum on the disastrous régime of Donald Trump, who has mishandled the pandemic from the beginning. But to be counter-intuitive: Will the economic collapse triggered by the pandemic serve to save him?

Times Square never looks like this

Bear with me here. By any logical standard, the performance of President Trump (I still can’t believe I have to put those two words together) even before the pandemic struck should have been sufficient to ensure the biggest electoral loss in history. But if logic was operative, he wouldn’t have been elected in the first place, and his fanatical base is completely impervious to facts, reason or reality. Nonetheless, his base is too small on its own for him to be re-elected. Thus President Trump has consistently staked his presidency on the state of the economy, falsely claiming that the economy has been just wonderful.

For his billionaire buddies, the economy has been wonderful. Not so much for working people. The official low unemployment rate is not a realistic measure. Only working people who are receiving unemployment benefits are counted as “unemployed” in official statistics issued by countries around the world. Thus actual unemployment rates around the world are much higher than the “official” rates, generally about twice as high. A better measurement is the “civilian labor force participation rate” — all people age 16 or older who are not in prison or a mental institution. By this measure, the percentage of people holding jobs in the U.S. remains significantly below its May 2000 peak.

And if what jobs there are don’t pay enough to survive on, what good is that? As a meme recently making the rounds of the internet featured a store clerk saying “Sure the Trump administration has created jobs. I have three of them!”

Overdue for the next recession

The long “recovery” from the 2008 crash could not have lasted much longer. Entering 2020, the world’s capitalist economies were overdue for a recession. The question is always what the proximate cause will be. A downward slide in the U.S. economy would have wiped out the single reason the Trump gang could point to for a reason to vote for the incumbent. In normal circumstances, that would almost certainly have ensured his deserved defeat.

An economic downturn has arrived, with astonishing force. The wildcard is that the downturn’s proximate cause is the pandemic. Will this provide the Trump gang with the excuse that enables them to evade their responsibility? It is no stretch to imagine the talking points once the 2020 presidential campaign resumes: “We had nothing to do with it; it was the virus; nobody could have foreseen it.” President Trump’s base will of course lap up such nonsense and it’ll be endlessly repeated on Fox News. The rest of the corporate media isn’t likely to be a big help here; it is easy to foresee endless hand-wringing pablum asking if the downturn could have been avoided and if the administration is responsible.

In such circumstances, it is possible that the Trump gang will be able to avoid their responsibility and escape blame for an economic downturn that is likely to last for some time, particularly if a significant fraction of the vast numbers of small businesses forced to close under government orders are unable to survive. That seems likely, given that small businesses are expected to keep paying rents to landlords despite having no income and a federal small business loan program that swiftly proved inadequate. Why is it that everybody is expected to sacrifice, except landlords? And except Wall Street, of course.

If, despite the foregoing, the 2020 U.S. election turns on the economy without allowing for excuses, then the Trump gang will be finished. But if instead the state of the economy is knocked out as an issue because the Trump gang successfully portrays the economic crash as a deus ex machina for which they have no responsibility (which would require some corporate media collaboration), then the election will hinge on the ability of both corporate parties to bring out their base on election day, and the degree to which voters loathe the candidates.

The Democratic Party has few peers in its ability to blow elections as was amply demonstrated in 2016. Having done all it could to hand its nomination to its least popular candidate and thus run a Wall Street corporate centrist in an election in which voters were clamoring for a change, the Democratic Party national leadership decided to once again elevate a Wall Street corporate centrist.

The failure of the political process

Joe Biden is not as unpopular as Hillary Clinton, but nonetheless he is emblematic of a party that is incapable of learning lessons or imagining a world not under the thumb of the financial industry. One can imagine the panic that must have set in when a few financiers casually made it known publicly that they would back President Trump if Bernie Sanders were the nominee. Senator Sanders, with his formal endorsement of Vice President Biden on April 13, has formalized the end of his campaign. Attacks on Senator Sanders for being a “sheepdog” or any other such useless epithet, clarify nothing. He won’t have any ability to be an influence on a Biden administration, and retain any ability to shift the Democratic Party at least a little bit leftward, if doesn’t act as a good political soldier and work to elect Vice President Biden. That is hard political reality, however much either Sanders supporters or those to the left of the Vermont senator find it distasteful.

It’s once again a “lesser evil” vote for United Statesians. A bitter pill to swallow. Given the unprecedented danger of the Trump gang, it is perfectly understandable that millions who would have preferred a better choice will vote for the Democratic nominee. If popular opinion puts all due blame for the horrific death toll from the virus on the Trump régime, the Orange Tantrum-Thrower will lose, but that is nothing to count on given that the wanna-be fascist dictator has gone all his life avoiding responsibility for his actions. As already speculated above, it is conceivable that the pandemic will provide an escape card from responsibility. How much will the corporate media enable that escape and how willing will voters be to swallow it?

All the above is short-term politics. (I am assuming the November vote will be held as usual; the voting schedule is specified in the constitution.) The larger question emanates from the spectacular inability of capitalism, and especially of institutions hollowed out by neoliberalism, to cope with the Covid-19 crisis. The failure of neoliberal ideology is clearly seen by large numbers of people as never before, and, to a lesser extent, the failure of capitalism itself, not simply its most recent permutation. But observation and organized action in response are not the same.

Neoliberalism was already breaking down and seen as an ideology needing to be sent to the dustbin of history by ever larger numbers of people. Should neoliberalism be replaced by a somewhat reformed brand of capitalism, a reform that would prove short-lived, or should we properly target the real problem — capitalism itself. Reform the unreformable, or a better world based on human need and environmental stability rather than a mad scramble for private profits and ever widening inequality?

That is a question beyond any election and a question to be answered by all the world’s peoples.