Corporate greed keeps the pandemic alive

More than two years on, it is hard to imagine there could be someone who is not sick of the pandemic. Although we can point to multiple reasons for the inability to bring Covid-19 under control, a prominent factor is corporate greed.

The elevation of the private profit of a few over the welfare of the many is, sadly, the ordinary course of events in a capitalist world. This is brightly illustrated by the failure of the world’s governments to prioritize health care over money as exemplified by the ongoing failure to make vaccines available to the Global South.

Business as usual, yes, and it would be easy enough to lament the standards of the United States and its wildly expensive health care system being exported to the rest of the world. The U.S. does play a role here, but this time the U.S. is not the biggest villain. The European Union, with its obstinate refusal to waive any intellectual property rule because of fealty to Covid-19 vaccine makers, has been the biggest roadblock.

As new variations and mutations repeatedly spread, achieving a critical mass of vaccinated people is the only way the pandemic will be brought to an end. Covid-19 may never be fully eradicated but it can be reduced to a background nuisance as are many other illnesses. Hesitancy among many in the Global North to be vaccinated has played a not insignificant role, whether by right-wingers believing the nonsense peddled by the likes of Fox “News” or by people on the Left who, not without reason, are skeptical of Big Pharma.

^{Nurse graffiti COVID-19 in Málaga, Spain (photo by Daniel Capilla)}

Those in the latter category see nefarious motivations behind pharmaceutical companies’ promotion of Covid vaccines. But is this another instance of Big Pharma pushing unneeded or even dangerous drugs? Such things do happen; suspicion does have a basis. But let’s consider what Big Pharma wants, which is no different from any other corporation: To accumulate the biggest piles of money possible. Given the global health emergency that arose in the first months of 2020, the surest path to achieving that goal would be to become the first to develop a cure. The pandemic was that rare instance in which the interests of Big Pharma and the general population coincided, and the vaccine makers wouldn’t be, and indeed aren’t, at all shy about taking advantage of an emergency to rack up huge profits, even by their industry’s standards. And with the whole world watching, a vaccine had better work and not cause undue harm.

Thus, because of unique circumstances, creating a safe, effective product for a real problem was actually in a corporate interest. And the profits, thanks to these rare circumstances and government largesse, are gigantic, a topic to which we will return.

Intellectual property as a weapon

It should surprise no one that the vaccine makers are doing everything they can to keep windfall profits rolling in. That means clinging to intellectual property (IP) law, heavily skewed in their favor, to maintain a monopoly. Capitalist governments have rolled over for corporate interests for decades, making IP laws ever more rigid. National legislation has played a role, firmly augmented by so-called “free trade” agreements that are used as battering rams by the United States, the European Union and other advanced capitalist countries to force open less powerful countries’ economies and force the world’s governments, including themselves, to be subordinate to multinational capital. Seeking to undermine government health care systems, and especially the ability of governments to negotiate lower prices, is often a goal of “free trade” deals, most notably demonstrated in the efforts of the U.S. government to push draconian rules in the Trans-Pacific Partnership.

These developments are anathema to the interests of working people everywhere. It is unconscionable, or should be, when IP rules are used to keep life-saving vaccines away from most of the world’s people. Struggles to make Covid-19 vaccines available to the Global South kicked off quickly, and there is no sign that this issue will anytime soon be resolved. This is not only against the interests of those for whom vaccines remain out of reach, but, given that the pandemic won’t end until a substantial percentage of the world’s peoples are inoculated and thus end the risk of still more dangerous variants arising, it is against the interests of those countries whose governments continue to elevate corporate profits over human life.

What the world needs is for manufacturers anywhere in the world to be granted the unrestricted right to manufacture the vaccines.

To achieve this necessity, what is needed is something called a “TRIPS waiver.” This will require some explanation, as once again a trip into the weeds of global trade policy becomes unavoidable.

^{Traffic in a British village is reduced from two lanes to one so there would be sufficient space for walkers to maintain two-meter distances from one another. (Photo by Martinvl)}

Under World Trade Organization (WTO) rules, IP rights are strictly enforced. As the neoliberal variant of capitalism became dominant with the decline of Keynesianism in the 1970s, economic decision-making has been separated from politics, leaving multinational corporations free to move production to the places with the lowest wages and least regulation, constantly on the prowl for locations that can be even more exploited. With components obtained from around the world, assembled in low-wage, low-regulation havens and finished products exported, barriers to trade such as tariffs were necessary and, having won those, corporate executives and financiers next sought to eliminate the ability of governments to regulate them. Thus the era of “free trade” agreements arose, and one of the institutions that was created to enforce corporate supremacy was the WTO.

One of the legs of corporate domination is IP law. How that relates to the pandemic is this: A handful of multinational corporations, interested in the biggest possible profits for their executives and shareholders, can decide who will receive vaccines and at what price. That human life is at stake — more than 6 million have died from Covid-19 — does not make for an exception. As Alain Supiot, writing on international law in the November-December 2021 issue of New Left Review, noted:

“On the one hand, the Preamble to the [World Health Organization] Constitution states that ‘The extension to all peoples of the benefits of medical, psychological and related knowledge is essential to the attainment of health.’ But on the other, since the creation of the World Trade Organization in 1994, this knowledge has become an object of private property, precisely opposed ‘to all peoples’ by virtue of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Until then, it was accepted in international law that the protection of public health interests took precedence over the interests of patent-holders. The TRIPS Agreement reversed this hierarchy and gave primacy to the protection of industrial property.”

Negotiations to enact a waiver are stonewalled

A waiver of TRIPS rules, then, is what is needed. In other words, a comprehensive waiver that, even if temporary for the duration of the emergency, sets aside Big Pharma’s IP rights and allows all manufacturers of vaccines, wherever they are, to produce Covid-19 vaccines. The governments of India and South Africa proposed, in October 2020, just such a waiver to allow the production of one or more of the Covid-19 vaccines. A year and a half later, the world is still waiting, with no resolution in sight.

Sarah Lazare and Paige Oamek, writing for In These Times, recently wrote an article demonstrating the “big lie” of Big Pharma talking points as the industry, in particular Pfizer, furiously resist any weakening of their IP fortresses. They wrote:

“The lie relates to an October 2020 proposal from India and South Africa that the World Trade Organization suspend enforcement of key patent rules so that cheaper, generic versions of Covid-19 treatments and vaccines can get to more people more quickly. (The proposal is referred to as a TRIPS waiver, a reference to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.) The pharmaceutical giants Pfizer and Moderna, concerned with maximizing their present and future profits, emerged as virulent opponents of such a measure, which still has not passed more than a year later, even as just one out of 21 people in poor countries have been fully vaccinated. It is no anomaly that the industry would reject such a proposal — pharmaceutical companies had a big hand in shaping those WTO intellectual property rules in the first place, to protect pharmaceutical monopolies and their profits.”

Negotiations have centered on four-way talks among India, South Africa, the European Union and the United States. A report surfaced in March 2022 that an agreement had finally been reached, but that has been denied, most notably by the U.S. government. Text accompanying the reported agreement was widely and loudly condemned around the world as grossly insufficient, and possibly even adding additional barriers to global vaccine access. Weeks have gone by, and there is no word that any agreement has actually been reached. What the true state of the negotiations may be can not be stated with any certainty, but there is no indication that any deal is imminent. Or that any deal will resemble what is needed by the Global South.

^{A doctor in a hospital during the COVID-19 pandemic (photo by Pablo Jarrín)}

A surprise announcement by the Biden administration in May 2021, when President Joe Biden announced support for a TRIPS waiver, in a partial reversal of U.S. policy that has consistently elevated corporate profits above all other considerations, raised hopes. But the Biden administration pronouncement is less than meets the eye, and the European Union has remained obstinately opposed to any waiver. Providing a fresh demonstration of the anti-democratic nature of the EU, that the European Parliament has three times called for a waiver to be approved and many EU countries are in support have had no apparent effect on EU negotiators.

The U.S.-based watchdog group Global Trade Watch, in its analysis, says that accepting the EU proposal would be worse than having no deal:

“The European Union has been the primary obstacle to progress on the waiver. … The EU’s position had been to basically restate existing WTO flexibilities on patents that almost every WTO member already has, while requiring additional conditionalities. … Any proposal that follows the EU position is worse than no action at all, because it could further undermine current WTO rules that already allow governments to issue compulsory licenses. The need for far greater, not less, freedom to make and use medicines in a global health crisis like the COVID-19 pandemic is precisely why more than 100 countries have supported the waiver as introduced by India and South Africa.”

The EU, however, is not the only obstacle. The U.S. negotiating position isn’t for a full waiver. The Global Trade Watch analysis states:

“The longstanding U.S. position to support a waiver for vaccines only, excluding the tests and therapeutics, is shameful, particularly as President Biden recently lauded testing and treatment as key tools in fighting the pandemic at this stage. The new proposal only covers vaccines, with tests and treatments to be considered six months after the proposal is agreed, if it is agreed. Given the already seventeen-month delay since the waiver was introduced, it is irresponsible to suggest further delay for tests and therapeutics. … The U.S. had also reportedly suggested limiting the geographic scope of the waiver, which would only further limit the ability to scale up manufacturing all over the world. This demand was apparently agreed, as the proposal now on offer would only apply to developing countries that contributed less than 10% of the world’s exports of COVID-19 vaccine doses in 2021.”

Public statements by the Office of the U.S. Trade Representative have not been encouraging. The trade representative, Katherine Tai, “assured” the U.S. Congress that her office is not “working to give away American IP.” With the usual bipartisan commitment to corporate profits, congressional Republicans and Democrats oppose a meaningful waiver, echoing industry talking points to underline their disapproval. A bloc of Republican representatives is seeking to enforce this by introducing a bill that would grant Congress more oversight over negotiations.

Most of the world’s countries back India, South Africa

As many as 120 of the WTO’s 164 countries are said to be backing India and South Africa. Yet many of these countries would be excluded even from the limited and inadequate proposals put forth by the EU and U.S. As noted above, larger Global South countries would be excluded under the U.S. proposal to limit the countries eligible, while also limiting what would be available. Médecins Sans Frontières/Doctors Without Borders, for example, calls on WTO members to “tackle the current barriers to accessing all COVID-19 medical tools, including treatments and diagnostics, and also addresses patents and non-patent barriers in an effective way.” Dimitri Eynikel, EU Policy Advisor for MSF’s Access Campaign, noting the “considerable limitations” of what is on the table, said:

“It is incredibly concerning that the leaked text currently only covers vaccines, but neither treatments nor diagnostics. Excluding treatments and diagnostics is a critical weakness, especially as access to COVID-19 treatments remains a significant problem in many low- and middle-income countries, particularly in Latin America, in part because of patent barriers and restrictive licensing deals controlled by pharmaceutical corporations. Excluding countries with significant manufacturing and supply capacity like Brazil is highly problematic as it arbitrarily blocks potential critical avenues to increase access to COVID-19 medical tools for low- and middle-income countries.”

The severe limitations the EU and U.S. are attempting to impose make it unlikely that a “deeply flawed text” can be set right, according to Professor Jane Kelsey of the University of Auckland. Noting that by the end of 2021, more boosters had been given in high-income countries than total doses in low-income ones, Dr. Kelsey wrote, “The leaked ‘solution’ agreed by the informal ‘quad’ (US, EU, India and South Africa) is insufficient, problematic and unworkable. There are too many limitations to make any significant difference and it is a far cry from the original proposal from India and South Africa that would have effectively addressed the barriers.”

Perhaps activists and medical professionals going on the offensive as part of a public-pressure effort is one way that a fair deal might be forced. Nurses from 28 countries filed a complaint in November 2021 with the United Nations alleging human rights violations by the EU and four countries for “the loss of countless lives” in the pandemic. The nurses, representing more than 2.5 million health care workers around the world, named Britain, Norway, Singapore and Switzerland in their filing — the four countries known to be standing with the EU. The nurses charge that “these countries have violated our rights and the rights of our patients — and caused the loss of countless lives” through “continued opposition to the TRIPS waiver … resulting in the violation of human rights of peoples across the world.” The complaint notes human rights obligations to which WTO member states are legally bound.

^{Nurses demand safe staffing (Photo via National Nurse magazine)}

The organizations behind the filing are mostly from the Global South, but among the 28 are ones from Canada (Canadian Federation of Nurses Unions and Fédération interprofessionnelle de la santé du Québec), the United States (National Nurses United) and Australia (Australian Nursing and Midwifery Federation)).

Deborah Burger, president of National Nurses United, which represents more than 175,000 members in the United States, was unsparing in her assessment. She said:

“The maldistribution of vaccines in the face of more than 5 million deaths, many of them preventable, is a devastating reminder of the deplorable disparity of wealth between the rich nations of the north and the global south. To refuse to act simply to protect the profits of giant pharmaceutical corporations is unconscionable, inhumane, and must be ended.”

Upon receipt of the complaint, Dr. Tlaleng Mofokeng, the UN’s Special Rapporteur on Physical and Mental Health, said, “The nurses’ core demand is one I share.” She said:

“States have a collective responsibility to use all available means to facilitate faster access to vaccines, including by introducing a temporary waiver of relevant intellectual property rights under the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS Agreement). Nurses and health care workers have been on the front line keeping us safe and have witnessed the most painful and heart-wrenching effects of the Covid-19 pandemic. Their evident commitment to the right to physical and mental health provides them with moral authority.”

No executive or shareholder is any danger of starving

Let us now return to the profit margins of pharmaceutical companies and the massive windfall profits being racked up by Covid-19 vaccine manufacturers, which will provide some context to industry arguments. The business news agency Bloomberg reports that Pfizer’s vaccine generated $20 billion in pretax profit in 2021 while Moderna “is expected by analysts to earn $12.2 billion before taxes this year.” Pfizer’s vaccine may rack up $36 billion in revenue this year.

The pharmaceutical industry was already one of the most profitable. To provide some examples, health technology was found to be the most profitable of 19 broadly defined “major” industrial sectors in the U.S. for 2015 and 2016. A BBC report found that pharmaceuticals and banks tied for the highest average profit margin in 2013, with five pharmaceutical companies enjoying a profit margin of 20 percent or more — Pfizer among them. The most profitable pharmaceutical corporations spent far more on sales and marketing than they did on research and development. With little control exerted over pharmaceutical prices in the U.S., it is no wonder that U.S. health care costs are the world’s highest, greatly exceeding any other country.

Even by these rarified standards, the boost to profit margins from Covid-19 have been noteworthy. Pfizer reported almost $22 billion in net income for 2021, only $3 billion more than it reported for 2020 and 2019 combined. Moderna, which even self-described “capitalist tool” Forbes magazine says produced a vaccine “largely funded by taxpayer dollars,” reported $12.2 billion in profits for 2021. Moderna received a billion dollars in government subsidies for its vaccine, and has, overall, received $6 billion from the U.S. government to develop, test, manufacture and deliver its vaccine.

Johnson & Johnson reported net income of almost $21 billion for 2021, a healthy gain of 40 percent over the previous year, a much larger gain than the gain it reported in revenue. And AstraZeneca reported a 37 percent increase in its core earnings per share (a comparison apparently used to exclude special one-time costs from an acquisition).

So it appears that no executive or shareholder of these four pharmaceutical makers is in any danger of being out on the street.

What is the problem in sharing the technology that would finally put an end to the pandemic? The real reason is that the maximum possible amount of profit wouldn’t be accrued. No big corporation is going to admit that, so other excuses are offered.

Debunking Big Pharma’s favorite talking points

The director-general of the World Health Organization, Tedros Adhanom Ghebreyesus, had a revealing conversation with Pfizer’s chief executive officer. As reported by Bloomberg, Dr. Tedros, on a conference call with pharmaceutical executives, said, “Honestly, I’m not seeing the commitment I would expect from you.” The Pfizer chief executive, Albert Bourla, whined that Dr. Tedros was speaking “emotionally.” Consistent with that exchange, Johnson & Johnson’s chief scientific officer, Paul Stoffels, declared at an industry lobbying group gathering that there was no need for any waivers because the industry’s efforts are “sufficient.”

Letting the pharmaceutical industry have its way quite clearly hasn’t been “sufficient,” given the small numbers of vaccines available to the Global South well more than a year since vaccines became available and the inability to stop the pandemic given that lack of availability. The Bloomberg report admitted that “Vaccine inequality didn’t happen by itself. It was the result of decisions by corporate executives and government officials.”

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

Big Pharma talking points have revolved around claims that restrictive patents are necessary to encourage research and development, without which supposedly nothing would be invented. (Yet Jonas Salk famously declined to pursue a patent on the polio vaccine.) A new line has emerged during the pandemic: That even if a full waiver were granted, the Global South is incapable of producing vaccines because of a lack of capability or capacity, and thus granting rights would do nothing to solve the pandemic. Government officials backing the pharmaceutical industry loudly echo these claims, among them former German Chancellor Angela Merkel, French President Emmanuel Macron, and members of the U.S. Congress who are recipients of Big Pharma donations.

The In These Times article “Big Pharma’s Big Lies About Vaccine Patents,” debunks these talking points:

“It’s clever messaging, because it has an air of expert knowledge, casting companies as patiently informing activists who are well-intentioned but don’t understand how vaccine production works. It also plays to pre-existing racist assumptions that the Global South does not have pharmaceutical sectors capable of producing quality goods, but must rely on its more sophisticated former colonizers. … We don’t have definitive proof that pharmaceutical executives sat in a room somewhere and said, ‘Let’s deceive the public about the world’s vaccine manufacturing capacity.’ But there have been enough activists, scientists, and heads of state pointing out holes in Big Pharma’s narrative to make it highly likely that the industry, at the very least, was aware of challenges to the veracity of its claims. And it was in its interest to ignore them. Remarkably, the industry has shown it would rather build its own facilities from scratch — like the BioNTech facilities in Rwanda and Senegal, which won’t even start construction until mid-2022 — than give Global South countries the ability to produce vaccines themselves.”

India, for example, ranks third in the world in producing pharmaceuticals, measured by volume, and generics already constitute 70 to 80 percent of the world pharmaceutical market. The Serum Institute of India is the world’s largest producer of vaccines by number of doses produced and sold.

It’s not only vaccines that are being held back

Beyond vaccines, what about pills that are being developed? Pfizer has developed a Covid-19 oral antiviral treatment and granted a royalty-free license for the pill to the United Nations-backed Medicines Patent Pool, but the license covers only about half the world’s population. The Associated Press reported, “The deal excludes some large countries that have suffered devastating coronavirus outbreaks. For example, while a Brazilian drug company could get a license to make the pill for export to other countries, the medicine could not be made generically for use in Brazil.”

The Medicines Patent Pool said on March 18 that 35 companies around the world will produce generic versions of the pill, which has received an emergency approval by the U.S. Food and Drug Administration. The countries where the generic producers are located include Bangladesh, Brazil, China, the Dominican Republic, Jordan, India, Israel, Mexico, Pakistan, Serbia, South Korea and Vietnam.

Nonetheless, health care activists note that the license is less than adequate. Yuanqiong Hu, senior legal policy advisor for Médecins Sans Frontières/Doctors Without Borders’ Access Campaign said:

“Pfizer’s license with the Medicines Patent Pool for its potential oral antiviral treatment offers supply to 95 countries by generic companies that take up the license, covering about 53% of the world’s population, but this again shows how voluntary licenses come up short and do not harness the full capacity available globally for sufficient and sustainable production and supply of lifesaving medical tools for all. Many upper middle-income countries, such as Argentina, Brazil, China, Malaysia and Thailand, where established generic production capacity exists, are excluded from the license territory. We are disheartened to see yet another restrictive voluntary license during this pandemic while cases continue to rise in many countries around the world. The world knows by now that access to COVID-19 medical tools needs to be guaranteed for everyone, everywhere, if we really want to control this pandemic.”

What is more important: Ending the pandemic or increasing corporate profits? Life or money? The world capitalist system is making its choice. Should that choice be allowed to stand?

Never let a crisis go to waste: The pandemic brings more inequality

Heeding that time-honored advice to never let a crisis go to waste, the world’s industrialists and financiers have taken full advantage of the Covid-19 pandemic to accumulate more wealth. And although you already know that large numbers of people have been thrown out of work and/or are at risk of losing their home, you might not have realized how obscene the increase in inequality has become.

Not surprisingly, given that capitalism is a system with a stranglehold on almost every place on Earth, the rise in inequality is a global phenomenon. Unfortunately, capitalists have usually understood their class interests better than do the world’s working people.

When we discuss the increase in wealth the world’s richest are enjoying, we are talking literally about trillions of dollars. 

We’ll start our survey with a report issued by one of the world’s biggest banks, UBS, and Big Four accounting firm PricewaterhouseCoopers. The authors of the report, “Riding the storm: Market turbulence accelerates diverging fortunes,” can hardly contain their enthusiasm at how successful their clients have been during the pandemic. UBS and PwC “have unique insights into” billionaires’ “changing fortunes and needs” and in the report breathlessly extol “a time of exceptional, Schumpeterian creative destruction” by “billionaires [who] live in turbulent but trailblazing times.” As you can already surmise by the tone-deaf writing, the report is intended as a celebration of vast wealth inequality and is written in a style that comes as close to that of Hollywood celebrity publicists as you are likely to find produced by bankers and accountants.

^{(Artwork by Susana Anaya)}

The report says “Some 209 billionaires have publicly committed a total of USD 7.2 billion” in donations, written within a passage told in solemn tones intended to make us gasp in awe at the selflessness of the international bourgeoisie. Yet we soon enough read that the wealth of the world’s billionaires totaled US$10.2 trillion in July 2020. For those of you scoring at home, that $7.2 billion in proposed donations represents 0.07 percent of their wealth. The average working person donates a significantly bigger portion of their income.

In just three months, from April to July 2020, the world’s billionaires added $2.2 trillion to their wealth! Technology billionaires did particularly well during the pandemic, the UBS/PwC report says, due in large part to the surge in technology stock prices. During the first seven months of 2020 alone, technology and health industry billionaires saw their wealth increase by about $150 billion. Yes, never let a crisis go to waste.

The number of the world’s billionaires, the report tells us, is 2,189. To put these numbers in some kind of perspective, there are exactly two countries in the world (the United States and China) that have a bigger gross domestic product than the wealth of those 2,189 billionaires. Or, to put it another way, their wealth is greater than the economic output of Japan, Germany and Britain, the countries with the world’s third, fourth and fifth largest GDPs and which have a combined population of 277 million.

Is there really no money for social programs?

As might be expected, billionaires in the center of the world capitalist system are no laggards among those accumulating wealth at the expense of everyone else. An Institute for Policy Studies study, “U.S. Billionaire Wealth Surges Past $1 Trillion Since Beginning of Pandemic — Total Grows to $4 Trillion,” reports the collective wealth of the 651 billionaires in the United States has increased by over $1 trillion “since roughly the beginning of the COVID-19 pandemic to a total of $4 trillion at market close on Monday, December 7, 2020. Combined, just the top 10 billionaires are now worth more than $1 trillion.” Those gains are more than the $900 billion pandemic relief package that passed Congress this week, a package held up for months by Republicans fretting over the cost. 

Wall Street has been amply taken care of in the current economic crisis, as it was in the wake of the 2008 collapse, and industrialists also have had massive amounts of subsidies and tax cuts thrown their way. For working people, crumbs. The Federal Reserve, the U.S. central bank, committed US$5.3 trillion to corporations on its own initiative in the first weeks of the pandemic, and most of the $2.5 trillion offered in last spring’s two congressional stimulus packages (the CARES Act of March 27 and the supplement of April 24) went to big business. (There was nothing unique about that as Britain, the European Union and Canada pushed through similar programs.)

The Institute for Policy Studies report notes that the $1 trillion gain by U.S. billionaires since mid-March is: 

• More than it would cost to send a stimulus check of $3,000 to every one of the roughly 330 million people in the United States. A family of four would receive $12,000.
• Double the two-year estimated budget gap of all state and local governments, which is forecast to be at least $500 billion. By June, state and local governments had already laid off 1.5 million workers and public services—especially education—faced steep budget cuts.
• Only slightly less than total federal spending on Medicare ($644 billion in 2019) and Medicaid ($389 billion in fiscal year 2019), which together serve 120 million Americans.
• Nearly four times the $267 billion total in stimulus payments made to 159 million people earlier in 2020.

During the same period, about 70 million lost employment, 12 million workers lost their health insurance due to losing their jobs, 26 million did not have enough food to eat just during a two-week period in November and 98,000 businesses closed. The Economic Policy Institute predicts that if federal aid is not forthcoming, as many as 5.3 million public-sector jobs—including those of teachers, public safety employees and health care workers—will be lost by the end of 2021.

An excuse to ramp up privatization in Canada

The pandemic is being used as an opportunity in Canada to advance corporate goals of privatization. Health care workers in Alberta walked off their jobs in a wildcat strike in November to protest Alberta Health Services’ announcement that it would be laying off 11,000 public positions so those jobs could be filled by private contractors. The Canadian news site Rabble reports:

“Alberta leads Canadian provinces and territories in its pursuit of privatization, and its October announcement that it was laying off up to 11,000 hospital workers has led to worker resistance and criticism from the province’s doctors. (One Calgary physician even set up a grassroots political organization against health-care privatization). Affected workers include those working in housekeeping, food services, laundry and laboratories. The Alberta government claims that these roles are not being eliminated, but instead transferred from public positions to ones filled by private contractors. … This past summer, Alberta Bill 30 was also criticized as opening the door to further privatization of health care. The Health Statutes Amendment Act was an omnibus bill that passed at the end of July.”

Alberta legislators also pushed through a bill that weakens rules and requirements for charter schools to operate and allowed for home schooling to go on unsupervised by public school boards. (Charter schools are designed to weaken teachers’ unions and hand schools to corporations for profit, while the supposed improvements in student outcome are mostly mythological.) Not to be outdone, Manitoba’s provincial government seeks to privatize child care, long-term care homes and liquor sales, and intends to cut public service jobs by 25 percent, Rabble reported.

Jobs losses and insecurity around the world

A University College London report, “Financial inequalities widen due to Covid-19,” called by the authors the “UK’s largest study into how adults are feeling about the lockdown,” found that more than two-thirds of Britons surveyed have suffered deteriorating finances. The report said, “Almost half (47%) of those who were finding things ‘very difficult’ financially before lockdown are now reporting things are ‘much worse’, with a further 23% saying things are ‘worse’. This figure has increased significantly from July, when 57% of the same group reported being financially worse off than before the pandemic.” The report quoted an educational leader, Cheryl Lloyd, as summarizing the situation as follows: “This report shows that the financial impact of the Covid-19 crisis is not being felt equally across the UK. This threatens to further widen existing inequalities as the pandemic continues.”

Conditions are no better across the Channel in the European Union, with disparate impacts on jobs widening inequality on the continent. The Brussels think tank Bruegel reports that, across the EU, “8% of workers educated to lower secondary level or below lost their jobs between the last quarter of 2019 and the second quarter of 2020. Over the same period, the number of jobs for workers with university degrees increased by 3%. Jobs for employees with middle-level qualifications declined by 5%. This picture of differences between low-educated and tertiary-educated workers can be seen in all EU countries and the United Kingdom.”

Those at more risk of losing their jobs are also at more risk of contracting Covid-19. “Sectors more exposed to the pandemic, including restaurants, travel, entertainment and personal services have unsurprisingly suffered more,” Bruegel reports. “But the ability to telework has greatly influenced labour market outcomes. About 70% of those who completed university studies are able to work from home, compared to about 15% of those who have not completed secondary school. Two-thirds of professionals and 85% of managers can work from home, in contrast to close to zero for workers in transportation, installation, construction and agriculture.”

And, as would be expected, conditions in the developing world are still worse. India has experienced a 26 percent decline in industrial employment, according to an India Today report. The broadcaster said:

“Ever since India went under a strict lockdown on March 25, millions of the country’s poorest workers were immediately rendered jobless and left without any income. An unresolved migrant crisis is the biggest example of the plight India’s poor are facing at the moment. Even the country’s vast middle class population encountered a sharp loss of income during the pandemic due to a wave of job losses and pay cuts. … A recent report by the Centre For Monitoring Indian Economy (CMIE) indicates that [21 million] salaried jobs were lost in the first five months of the pandemic, indicating that income levels among middle class households have fallen sharply.”

At the same time Indians across the country were undergoing difficulties, Mukesh Ambani, one of the world’s richest persons, saw his wealth increase by $30.5 billion. Another Indian billionaire, Cyrus Poonawala, added $5.6 billion to his wealth this year, India Today reported.

Even capitalists’ spokespeople profess concern

Inequality has become so extreme that even some of the staunchest upholders of the capitalism that creates this inequality profess to be concerned. (Or perhaps they are worried about people rising up to do something about it and thus advocate a little softening, at least for now.) In November, the Brookings Institution was moved to issue a report, “Windfall profits and deadly risks: How the biggest retail companies are compensating essential workers during the Covid-19 pandemic,” that discussed the big increases in profits enjoyed by giant retailers while their workforce sees only crumbs. Brookings reported:

“We find that while top retail companies’ profits have soared during the pandemic, pay for their frontline workers—in most cases—has not. In total, the top retail companies in our analysis earned on average an extra $16.9 billion in profit this year compared to last—a stunning 39% increase—while stock prices are up an average of 33%. And with few exceptions, frontline retail workers have seen little of this windfall. The 13 companies we studied raised pay for their frontline workers by an average of just $1.11 per hour since the pandemic began—a 10% increase on top of wages that are often too low to meet a family’s basic needs. On average, it has been 133 days since the retail workers in our analysis last received any hazard pay.”

For top executives and speculators who hold large numbers of shares, however, the year of the pandemic has been a bonanza. The Brookings report further stated:

“Many of the least generous companies were the most financially successful, posting huge profits. Amazon and Walmart combined earned an extra $10.9 billion in profit compared to last year, an increase of 53% and 45%, respectively. Their workers, on the other hand, have received below-average COVID-19-related compensation: an extra $1,369 ($0.95 per hour) and $900 ($0.63 per hour), respectively, over the eight-plus months of the pandemic—representing just 6% pay bumps for full-time workers that earn starting wages. Meanwhile, Amazon and Walmart’s stock prices are up 65% and 41% since the start of the pandemic, adding more than $70 billion to the wealth of Jeff Bezos, Amazon’s CEO, and $45 billion to the Walton family—the country’s richest family, who own more than half of Walmart’s shares.”

Wal-Mart spent $500 million on new stock buybacks during the third quarter of 2020 while offering no new hazard pay bonuses for its employees, the Brookings report said. Another big chain, Kroger, announced $1.2 billion in new stock buybacks, causing the stock price to rise (which is the intention), at the same time its grocery workers were given no hazard pay for six months while earning an average wage of $10 per hour. Kroger’s profits during the first six months of the pandemic, meanwhile, totaled $2 billion.

Wal-Mart is a company that pays its employees so little that they skip meals and organize food drives; receives so many government subsidies that the public pays about $1 million per store in the United States; and is estimated to avoid $1 billion per year in U.S. taxes through its use of tax loopholes. Meanwhile, the Walton family collects billions of dollars every year from dividends just for being born in the right family.

Amazon is notorious for the brutal inhuman conditions in its distribution centers and for not paying taxes. Amazon’s owner, Jeff Bezos, is one of the world’s richest people yet he organized a nationwide sweepstakes to see what cities or states would give him the biggest subsidies when he announced Amazon would create a second headquarters.

The International Monetary Fund likely isn’t having second thoughts or feeling remorse about its decades of imposing harsh austerity on developing countries, but has weighed in on the rise of inequality — whether from genuine concern or, much more likely, as a public relations gesture. (IMF papers purporting to reconsider neoliberalism are always much less than they appear.) Because lower-income people are less likely to be able to work from home during the pandemic, and thus more likely to have lost their job, the IMF said “the estimated effect from COVID-19 on the income distribution is much larger than that of past pandemics.”

Loss of work and specter of hunger hit developing world hard

Whatever the motivations of the world’s capitalist think tanks and financial institutions may be in discussing global inequality in the wake of the Covid-19 pandemic, there is no question that working people everywhere are suffering. As early as late April, the International Labour Organization issued a report, “As job losses escalate, nearly half of global workforce at risk of losing livelihoods,” predicting that half of the world’s working people are in danger of disaster. The ILO said:

“The continued sharp decline in working hours globally due to the Covid-19 outbreak means that 1.6 billion workers in the informal economy — that is nearly half of the global workforce — stand in immediate danger of having their livelihoods destroyed. … The first month of the crisis is estimated to have resulted in a drop of 60 per cent in the income of informal workers globally. This translates into a drop of 81 per cent in Africa and the Americas, 21.6 per cent in Asia and the Pacific, and 70 per cent in Europe and Central Asia. Without alternative income sources, these workers and their families will have no means to survive.”

Large numbers of the world’s peoples were already in a highly precarious condition. An estimate by John Bellamy Foster and Robert W. McChesney is that there are 2.4 billion people in their prime working ages (25-54) who are unemployed, vulnerably employed or economically inactive, compared to 1.4 billion actively employed. In other words, there are far more people in the “reserve army of labor” who are precariously or not at all employed than those with jobs, and far from all those 1.4 billion who are employed have secure work. 

^{Striking fast food workers were joined by university workers, students, janitors, retail workers and airport workers in an April 2018 action in Minneapolis. (photo by Fibonacci Blue)}

And with loss of livelihood comes the specter of hunger. The United Nations World Food Programme, also in late April, predicted that the pandemic “will double number of people facing food crises unless swift action is taken.” The agency said, “The number of people facing acute food insecurity stands to rise to 265 million in 2020, up by 130 million from the 135 million in 2019, as a result of the economic impact of COVID-19.”

Nor does the developing world have the health care infrastructure necessary to handle the number of people falling sick from Covid-19. The United Nations Development Programme noted that developed countries have 55 hospital beds, more than 30 doctors and 81 nurses for every 10,000 people, but for the same number of people in a less developed country there are seven beds, 2.5 doctors and six nurses.

Pandemic widens education disparities

The lack of infrastructure to provide education is also acute. Because of school closures and the divide in distance learning, an estimated “86 per cent of primary school-age children in low human development countries are currently not getting an education, compared to just 20 per cent in countries with very high human development,” according to the UN Development Programme. “With schools closed, UNDP estimates that effective out of school rates could regress to levels not seen since the 1980s — the largest reversal ever … and threatening the hard work and progress of the past 30 years.”

Similar conclusions were reported by the Institute for Policy Studies’ Inequalilty.org project. In a September report, the project found that just 6 percent of children in eastern and southern Africa have access to the Internet. In Kenya, schools have been closed for six months. And that has further consequences. “One likely impact of Covid-19 is a rise in teen pregnancies, as adolescent girls are left without the safety net that schools provided,” the report said. “This gendered menace deprives young girls of the opportunity to further their education and attain their career goals. It also exposes them and their children to major health risks. According to the World Health Organization, ‘pregnancy and childbirth complications are the leading cause of death among girls aged 15–19 years globally.’ ”

The pandemic has also widened inequality in education in the developed world. VoxEU, which calls itself a provider of commentary by “leading economists,” reports that the disruption to higher education caused by the switch to online classes is much larger for lower-income students because “lower-income students were more likely to have been financially impacted by COVID-19 and were more worried about the direct health risks from the virus.” VoxEU found that “Lower-income students are 50% more likely than their more affluent peers to expect a delayed graduation due to COVID-19, a gap which disappears once accounting for the differential financial burdens or health risks imposed by COVID-19.”

Pandemic places greater burden on women 

Concomitant with the various inequality aggravations, it’s no surprise that women are being hit harder than men.

Alison Andrew, a senior research economist at the Institute for Fiscal Studies in London, said: “Mothers are more likely than fathers to have moved out of paid work since the start of lockdown. They have reduced their working hours more than fathers even if they are still working and they experience more interruptions while they work from home than fathers, particularly due to caring for children. Together these factors mean that mothers now are only doing a third of the uninterrupted paid-work hours that fathers are. A risk is that the lockdown leads to a further increase in the gender wage gap.”

The Institute, in its report on British fallout from the pandemic, “Parents, especially mothers, paying heavy price for lockdown,” found the following:

• Mothers are 23% more likely than fathers to have lost their jobs (temporarily or permanently) during the current crisis. Of those who were in paid work prior to the lockdown, mothers are 47% more likely than fathers to have permanently lost their job or quit, and they are 14% more likely to have been furloughed. In all, among those working in February 2020, mothers are now 9 percentage points less likely to still be in paid work than fathers.
• Mothers who are still doing paid work have reduced their paid working hours substantially and by more than fathers. Prior to the crisis, working mothers did paid work in 6.3 hours of a weekday on average; this has fallen by over one-fifth to 4.9 hours. Working fathers’ hours have also fallen, but by proportionally less, from 8.6 hours before the crisis to 7.2 hours now. 
• Mothers are also far more likely to be interrupted during paid working hours than fathers. Almost half (47%) of mothers’ hours spent doing paid work are split between that and other activities such as childcare, compared to 30% of fathers’ paid working hours. Where focused work time is important for performance, gender differences in interruptions and multitasking risk further increasing the gender wage gap among parents.
• In families where the father has lost his job while the mother kept hers, men and women still split housework and childcare responsibilities fairly equally. In all other types of households, mothers spend substantially more time on domestic responsibilities.

Such disparate impact means women are again falling further behind men in earnings. “Analysis of those that did produce data suggests it will take almost 200 years to close the gap,” says Dr. Wanda Wyporska, the executive director of the Equality Trust. “Undoubtedly women are bearing the brunt of this, as they did in austerity when 86% of cuts fell on women. There is a cumulative effect which consistently pushes progress back.” The general secretary of the British Trades Union Council, Frances O’Grady, said, “[O]nly one in 10 lower earners are able to work from home, and 69% of low earners are women; it is not a panacea. …Working women have led the fight against coronavirus, but millions of them are stuck in low paid and insecure jobs. We need a reckoning on how we value and reward women’s work.”

^{Women’s March of January 21, 2017, in Chicago (photo by Jonathan Eyler-Werve)}

Then there is the specter of violence from male partners. María Noel Vaeza, United Nations Women Regional Director for the Americas and the Caribbean, in a November report, said:

“While lockdowns and stay-at-home orders may be crucial in limiting and preventing the spread of COVID-19, they also have a devastating impact on women and girls living with the risk of gender-based violence, as many of the factors that trigger or perpetuate violence against women and girls are compounded by preventive confinement measures. Emerging global data has shown an increase in calls to [violence against women and girls] helplines. … Stay-at-home measures are compounding perpetrators’ use of mechanisms of power and control to isolate victims of [violence]. Unemployment, economic instability and stress may lead offenders to feel a loss of that power, which in turn may exacerbate the frequency and severity of their abusive behaviour. At the same time, the crisis is generating additional barriers for women and girls’ access to essential life-saving services such as counselling and justice resources, and legal advice; sexual health and other crucial medical assistance; and the provision of refuge.”

Racial disparities widened by pandemic

No roundup of Covid-19 inequalities would be complete without discussion of racial disparities. The impact of the pandemic’s effect on the economy, because it impacts lower-income working people most severely, has fallen heavily on People of Color. A Center for American Progress report authored by Dania Francis and Christian E. Weller demonstrates the severity of the disparities:

“African Americans have experienced particularly large job losses in a labor market characterized by persistent racism and inequality. … Estimates based on census data show that 54.8 percent of Black workers said that they had lost incomes due to a job loss or cut in hours from late April to early June, compared with 45.8 percent of white workers. The labor market pain has created housing instability for Black families to a much larger degree than was the case for white families. Estimates based on census data show that more than one-third of African Americans who experienced job-related income losses said that they either didn’t pay their mortgage or deferred their mortgage, compared with only 16.9 percent for white families with earnings losses. Among renters, 38.3 percent of Black families with income losses didn’t pay or deferred their rent, compared with 23.1 percent of white families in a similar situation.”

Compounding this financial distress is that, with schools going to remote learning, a lack of resources impacts the education of African-American children. The Center for American Progress report said:

“The lack of reliable internet or an electronic device for remote learning also correlates with fewer hours per week of teaching time. … Unreliable internet access and a lack of consistent access to electronic devices reduces families’ time teaching children by two to three hours among Black families but only by one to two hours among white families. … While the short- and long-term impacts of coronavirus-related school closures and job losses on children’s educational outcomes cannot be measured yet, it is already clear that there are differential effects by race on access to educational resources as a result of the pandemic. In particular, the persistent and large Black-white wealth gap directly and immediately feeds into persistent educational gaps.”

Higher poverty rates also increases the mortality rate from Covid-19. Writing in City Limits, Bijan Kimiagar and Jack Mullan report:

“The pandemic has entrenched extreme inequalities in New York City. Insecurities surrounding employment, health, education and basic safety are affecting many New Yorkers today, but they are disproportionately experienced in communities with the lowest incomes. The sheer rate of COVID-related deaths is more than two times higher in zip codes with very high poverty rates (where 272 out of every 100,000 residents have died) than in zip codes with low poverty rates (125 out of 100,000). New Yorkers with the lowest incomes are feeling the impact of the pandemic on all sides—living in fear of eviction, struggling to put food on the table, and having trouble getting devices to support remote learning for their children.”

For industrialists, financiers and their publicists, the year 2020 might be a time of “exceptional creative destruction,” but for the overwhelming majority of humanity who do the actual work that is converted into the fabulous wealth of those at the top, it’s just plain old destruction. Capitalism as usual.

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.