Are we all in this together?

from David Ruccio

It must be confessed that though the plague was chiefly among the poor, yet were the poor the most venturous and fearless of it, and went about their employment with a sort of brutal courage; I must call it so, for it was founded neither on religion nor prudence; scarce did they use any caution, but ran into any business which they could get employment in, though it was the most hazardous. Such was that of tending the sick, watching houses shut up, carrying infected persons to the pest-house, and, which was still worse, carrying the dead away to their graves.

— Daniel Defoe, A Journal of the Plague Year

I’m almost sick of hearing the refrain, “We’re all in this together.”

I say almost, because I do think there’s a utopian moment in that phrase in the midst of the current pandemic. It speaks of solidarity, of being in common, of paying attention to and honoring healthcare workers and others who are currently laboring in “essential” activities while the rest of us are instructed to stay at home. In that sense, it betokens—or at least aspires to—a thinking about and caring for others.

Gleaners and us—pandemic edition

from David Ruccio

We already had high food insecurity in this country and now we are putting another layer of need on top of it. — Kevin M. Fitzpatrick

One of the many irrational characteristics of capitalism is that billions of tons of food go to waste while hundreds of millions of people struggle with hunger on a daily basis. And like all the other senseless attributes of the way the economy is currently organized, the mismatch between the enormous quantity of food that is available for human consumption but is not consumed and the vast number of people who are food insecure has been highlighted and heightened by the COVID-19 pandemic—especially in the United States.

Even before the pandemic, the Food and Agriculture Organization of the United Nations reported that approximately 30 percent of food produced for human consumption around the world is either lost (from post-harvest to distribution) or wasted (at retail and consumption levels) each year—while an estimated 821 million people (just below 11 percent of the world’s population) were undernourished (pdf).* And in the United States? According to the National Resources Defense Council (pdf), the degree of food waste was even higher—between 39 and 43 percent of the total U.S. food supply. At the same time, according to the U.S. Department of Agriculture (pdf), more than 37 million Americans (13.9 percent of households) suffered food insecurity—and less than one-third of the food that was thrown out would be enough to feed this population completely.

Your job or your life

from David Ruccio

 

source

When social solidarity is essential, it’s common to hear pious sermons against class warfare. Unfortunately, there is a class war. And its victims, so many of them front-line workers, didn’t start it. — E. J. Dionne Jr.

New research confirms what we’ve all been seeing for the past couple of months: the lowest paid, most precarious workers are the ones who are being forced to face the choice between their jobs and their lives.

And, looking forward, as those in charge push to reopen the economy, the most vulnerable workers are the ones who will most find themselves caught up in the ultimate dilemma of capitalist employment during the COVID-19 pandemic: stay at home without the ability to earn a paycheck or go back to work and increase the chance of getting the dreaded disease.

“Nothing will fundamentally change”

from David Ruccio

Three and a half weeks ago, Bernie Sanders became the last challenger to drop out of the race, thus clearing the way for Joe Biden to become the Democratic nominee on the November presidential ballot.

Since then, the novel coronavirus has engulfed the country (and, of course, the world), the U.S. economy has mostly come to a standstill, and tens of million American workers have joined the ranks of the unemployed, while “essential” workers are forced to commute to and labor in perilous conditions and jobless families have found it necessary to walk or take to their cars to wait in line by the thousands outside food banks.

Biden therefore has to find a way of presenting a progressive alternative to Trump by articulating some clear ideas, and perhaps eventually a detailed plan, to confront the most dramatic economic and social crises to face the United States since the first Great Depression.

Billionaire wealth in the USA

from David Ruccio

A new report from the Institute for Policy Studies, “Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes, and Pandemic Profiteers,” reveals that the wealth of U.S. billionaires is indeed staying at home.

US student debt jubilee—pandemic edition

from David Ruccio

The coronavirus outbreak is serving as a mind-expansion exercise, making hitherto unthinkable solutions thinkable. Debts that can’t be paid won’t be. A debt jubilee may be the best way out.

— Michael Hudson

The United States is currently experiencing a dystopian orgy of death and destruction.

Modern monetary theory—pandemic edition

from David Ruccio

Modern Monetary Theorists are having a moment, as governments (many of them run by conservative regimes, such as Donald Trump and the Republicans in the United States) are running gigantic fiscal deficits in order to combat the economic crisis occasioned by the coronavirus pandemic.*

This time, with the $2 trillion CARES Act, the U.S. federal government has taken an additional step down the road of Modern Monetary Theory, by having the Federal Reserve buy an unlimited amount of Treasury bonds and government-backed mortgage bonds — whatever was necessary “to support smooth market functioning”—in other words, by simply creating the necessary money.

But, as Michael Hudson et al. explain, the idea that is being celebrated right now—that running government budget deficits is stabilizing instead of destabilizing—”is in many ways something quite different than the leading MMT advocates have long supported.”

Back to normal?!

from David Ruccio

We can’t stay this way forever—with physical distancing (now that all 50 states have finally issued some kind of Stay at Home order), schools closed (and operating with a semblance of education through online teaching), businesses shuttered (even while the stock market soars).

The question that seems to be on everyone’s lips is, when are things going to go back to normal?

But who wants to return to normalcy? The novel coronavirus pandemic has revealed, if nothing else, just how dysfunctional the situation was in the United States even before COVID-19 started to cut its deadly path across the country. Tens of millions of workers have been furloughed and laid off and there’s still relief for them in sight. Instead, they’re being forced to have the freedom to drive to food banks to obtain groceries and other household supplies. All the while, their fellow employees, who labor in activities that have been deemed essential, are told to endure dangerous commutes on public transportation and to continue to work under perilous conditions, with little regard for their personal safety. Workers didn’t have any say before in the decisions concerning their jobs, let alone in the other policies adopted by their corporate employers—and they certainly don’t now.*

The pandemic has also demonstrated just how unequal life is in the United States, both geographically and socially.

Tale of two cities

from David Ruccio

  

sources [frontline workers, coronavirus cases]

As the Guardian explained earlier today, the coronavirus has discriminated in inflicting its terrible toll on the two very different cities that make up New York City.

16 million American workers have filed initial unemployment claims during the past three weeks.

from David Ruccio

“The economy”—pandemic edition

from David Ruccio

We’re back at it again: “the economy” has broken down and we’re all being enlisted into the effort to get it back up and working again. As soon as possible.

The Congressional Budget Office has announced that it expects the U.S. economy will contract sharply during the second quarter of 2020:

• • Gross domestic product is expected to decline by more than 7 percent during the second quarter. If that happened, the decline in the annualized growth rate reported by the Bureau of Economic Analysis would be about four times larger and would exceed 28 percent. Those declines could be much larger, however.
  • The unemployment rate is expected to exceed 10 percent during the second quarter, in part reflecting the 3.3 million new unemployment insurance claims reported on March 26 and the 6.6 million new claims reported this morning. (The number of new claims was about 10 times larger this morning than it had been in any single week during the recession from 2007 to 2009.)

Just as in the aftermath of the spectacular crash of 2007-08, the supposedly shared goal is to do whatever is necessary to engineer a recovery so that the economy can start operating normally again.

That presumes, of course, that we were satisfied with the normal workings of the economy before, and that such a state of normality is what we all desire moving forward.

Job contagion

from David Ruccio

source

“It’s a lose-lose” for workers

from David Ruccio

It’s now an almost daily occurrence: Donald Trump starring in the White House pandemic briefings, flanked by business executives—from Walgreens, CVS, Target and a host of laboratory, research, and medical-device corporations—to form a mutual admiration society.* The various scientists, public-health experts, and emergency personnel, the ones people want to hear from, are accorded third rank.

And American workers are nowhere to be seen—or heard—even when, as on 24 March, Trump decided to speak for them as wanting nothing more than “to get back to work.”

The fact is, while millions and millions of workers have been furloughed or laid off in recent weeks, waiting desperately to receive financial assistance, many more continue to be forced to have the freedom to labor for their employers on a daily basis. They leave their families and venture out—too many with no alternative but to expose themselves to the risks of the pandemic during their commute on public transportation—and then submit to even more risks on their jobs, with little in the way of protection, as some of their fellow workers contract COVID-19.

Common sense economics

from David Ruccio

In the United States and around the world, governments are responding to the twin pandemics—of novel coronavirus and escalating unemployment—with massive bailouts. Not unlike what happened more than a decade ago, after the global crash of 2007-08.

But there seems to be something different this time around—not only because of the speed of both the viral contamination and the economic meltdown, but also as a reaction to the terms of the bailout that was enacted in the midst of the Second Great Depression.

Here, for example, is Peter S. Goodman reflecting on the response in Britain and the European Union:

During the last crisis, the global financial catastrophe of 2008, the authorities protected corporate interests above those of ordinary people, many economists assert. Britain and the European Union bailed out financial institutions, then recovered the costs by hacking away at public services, effectively punishing laborers and taxpayers for the sins of wealthy bankers.

Just like that, with no apparent controversy, he drops in the idea that, after the last major crash, those in charge sought to safeguard corporations and neglect the interests of “ordinary people.” That was certainly the stance, in the United States, of groups like the Tea Party and Occupy Wall Street but Goodman now asserts it as a commonly held view, with a gesture to authority (“many economists assert”).

Claims in USA for jobless benefits last week rose to 3.28 million from 282,000 a week earlier.

from David Ruccio

The Labor Department on Thursday reported the number of American workers filing new claims for jobless benefits last week rose to 3.28 million from 282,000 a week earlier. Nothing in the 53-year history of the series comes close. In the worst week of 2009, when the job market was reeling, initial claims hit 665,000.

Back to work? A modest proposal

from David Ruccio

By now, many readers will have seen or heard Donald Trump’s call for the country to get back to work within the next couple of weeks, accompanied by a slew of other insidious and irresponsible remarks along the same lines—from business executives, politicians, and pundits, including ex-Goldman Sachs CEO Lloyd Blankfein, Texas Lt. Gov. Dan Patrick, and Fox News. 

What can one say in response to such a blatant disregard for workers’ lives, all in an attempt to protect capitalism, restore private profits, and goose the stock market? Yesterday, Jack Amariglio, Professor of Economics Emeritus from Merrimack College, came up with the perfect rejoinder. . . 

My modest proposal (no satire implied): 

Unemployment pandemic

from David Ruccio

Capitalist crises are neither predictable nor do they stem from a single cause. Instead, at least as I see it, the possibility of a crisis is always there but the causes and triggers are all historical and therefore multiple and varied.

Sometimes, crises in capitalism stem from difficulties in extracting more surplus from workers and a resulting fall in corporate profit rates; at other times, they are caused by the bursting of speculative bubbles and a run on funds within the financial sector; and, as seems to be the case this time around, many corporations relied on cheap money and extended their indebtedness way beyond their ability to pay in the event of an unexpected “shock” (like the novel coronavirus pandemic and, in the United States, by the Trump administration’s much-delayed response). In other words, capitalist crises don’t follow given laws and depend, instead, on the concrete circumstances.

But there is one thing capitalist crises all have in common: unemployment.

Dark times

from David Ruccio

Motto

In the dark times, will there also be singing?
Yes, there will be singing.
About the dark times.

– Bertolt Brecht

( trans. John Willett, from the Svendborg Poems)

 

I’ve been on a bit of a hiatus for the past two months (the last real post, aside from daily cartoons, was back in January). But readers have encouraged me to get back in the game and resume my “occasional” commentary on economics, culture, and society.

Right now, in these dark times—as the number of confirmed cases of and deaths from the novel coronavirus pandemic, in the United States and around the world, continues to soar—we’re focused on immediate measures, individually and socially, to stay safe. And, of course, capitalist economies are in meltdown, not only in stock markets, but with massive unemployment (which the Trump administration wants states to hide from view) and increasing precarity for millions and millions of already precarious workers.

What inequality?!

from David Ruccio

Economic inequality in the United States and around the world is now so obscene, and has convinced more and more people to do something about it, that the business press has initiated a campaign to deny its very existence.

They and the folks they represent are losing the battle of public opinion. And they’ve decided to do something about it.

First up was the Economist, the “newspaper” of record for liberal capitalism [ht: sk], claiming that new research undermines the pillars of the seemingly universal belief that “inequality has risen in the rich world.” Yes, as I have documented from the very beginning on this blog (e.g., here, here, and here), there are plenty of mainstream economists who have attempted to prove that inequality isn’t really a problem—either because it doesn’t really exist or, if it does, it’s not something we can or should do much about. And so the Economist managed to find pieces of research that call into question some of the key pillars of the inequality argument—that the gap between the top 1 percent and everyone else is growing, the middle-class is shrinking, capital is gaining at the expense of labor, and wealth inequality is soaring.

Beyond GDP

from David Ruccio

The idea that GDP numbers don’t tell us a great deal about what is really going on in the world is becoming increasingly widespread.

David Leonhardt, in reflecting the emerging view, has argued that GDP doesn’t “track the well-being of most Americans.”

Now, we’d expect that someone like socialist Democratic candidate Bernie Sanders would question the extent to which the low unemployment numbers, associated with economic growth, hardly tells the whole story about the condition of the American working-class.

Unemployment is low but wages are terribly low in this country. And many people are struggling to get the health care they need to take care of their basic needs.

But even centrist candidates Joe Biden and Pete Buttigieg are making the case that the headline numbers, such as Gross Domestic Product and stock indices, hide the fact “that a very different reality exists for many Americans who have not seen much improvement in their own bottom lines.”