Trump orders meatpacking workers back on the job as opposition mounts to back-to-work campaign

https://www.wsws.org/en/articles/2020/04/29/pers-a29.html






29 April 2020

US President Donald Trump’s executive order invoking the Defense Production Act to force employees at meatpacking plants back to work marks a new stage in his administration’s confrontation with the working class.

Trump has refused to compel companies to produce emergency protective equipment and testing supplies despite widespread shortages of both. But when it comes to forcing workers to toil in unsafe and unsanitary conditions, Trump is mobilizing all the powers at his disposal.

The White House is seeking to set a precedent for enforcing a return to work while absolving corporations of any legal responsibility. The order will indemnify Tyson Foods and other meatpacking companies from lawsuits from employees who say they have been forced to work in unsafe conditions.
At least 20 meat and food processing workers have died from COVID-19, and 5,000 have been infected or quarantined. On Tuesday, several dozen workers walked off the job at the Smithfield Foods pork plant in Crete, Nebraska after the company reversed course and announced it would not close for cleaning, even though 48 workers at the facility tested positive.

From Kathleen, Georgia to Sioux Falls, South Dakota, meat processing workers have protested and walked off the job to demand proper protection and sanitation. These highly exploited workforces are disproportionately composed of immigrants from Latin America and east Africa.

With the coronavirus pandemic continuing to rage, infecting over three million people and claiming the lives of at least 216,000 globally, working-class opposition to the back-to-work effort being pursued by ruling elites, largely ignored by the media, is erupting all over the world.

The United States remains the epicenter of the pandemic, with more than one million cases and nearly 60,000 confirmed deaths. The world’s richest country, with less than five percent of the global population, now accounts for one third of all cases.

A recent series of polls shows that, despite the media’s promotion of small right-wing “back to work” protests, Americans overwhelmingly support stay-at-home orders and other social distancing measures. Last week, a Politico/Morning Consult poll found that 76 percent of respondents supported continuing restrictive measures for as long as necessary to curb the pandemic, even if it harmed the economy.

Garment workers in Selma, Alabama walked off the job Thursday, shutting down their plant after several workers at the facility contracted COVID-19. One worker summed up the general sentiment: “They don’t care about us. They just want us to work.”

On Sunday, 8,500 miles away, garment workers in Dhaka, Bangladesh took to the streets to demand two months back wages as they face starvation without any income. The global center of garment production had been shut down since March as workers refused to work in unsafe conditions.

Bangladesh continues to see a rise in the number of daily confirmed cases, and there are no indications that the pandemic is on the wane. Nonetheless, factory owners began reopening their plants this weekend, with most refusing to implement any safety measures, such as providing hand sanitizer or keeping workers apart at their workstations.
Wildcat strikes by autoworkers in Michigan, Ohio and Ontario shut down the auto industry in March, even as the United Auto Workers was negotiating with the companies to find ways to keep the factories running during the pandemic. Joint union-company plans to reopen the plants by the beginning of May have been pushed back two weeks as workers resist returning.

Just across the US border in Ciudad Juárez, Mexico, thousands of maquiladora workers who build auto parts and consumer electronic components have gone on strike and protested to demand the closure of their plants with full pay. As of last week, thirteen maquiladora workers had died in the city, accounting for nearly half of all confirmed coronavirus fatalities.

The coronavirus is now spreading rapidly in Latin America. In late March, thousands of call center workers staged wildcat strikes throughout Brazil over unsafe conditions, declaring, “We will not die in our cubicles!” The strikes, which followed calls by Italian workers for a mass strike against one of the same major transnational companies operating in Brazil, was denounced by the union that purports to represent the call center workforce.

Workers employed by food delivery App companies struck in several cities in Brazil as well as in Ecuador, Argentina and Chile beginning on April 17, demanding safer working conditions and increased pay. The actions followed a similar strike in Spain.

Nurses quit en masse Monday to protest the lack of protective personal equipment and low wages at the Kommunarka hospital in Moscow, one of the main facilities for treating coronavirus patients in the city. While nonessential businesses were closed at the end of March and confirmed cases in Russia have been surging by the thousands every day, plans are already being drawn up by government ministers for a return to work.

So far, every measure taken by world governments under the guise of combatting the pandemic has been dictated by the interests of the ruling elite. Trillions of dollars have been transferred from the working class to the banks and corporations, fueling the massive rise of stock markets. After enriching itself, the ruling class is demanding that workers get back on the job to create the surplus value and profits necessary to underwrite these subsidies for the rich.

Workers demanding safe working conditions and the closure of nonessential industries cannot rely on the unions, which throughout the crisis have worked for the companies in an effort to keep as many workers on the job as possible and to stamp out signs of opposition.

To fight for their interests, workers must form independent rank-and-file safety committees in every workplace, independent of the unions, to organize and coordinate action with their brothers and sisters in every industry around the world to demand a scientifically and medically guided response to the pandemic.

These committees must raise the demand that there be no return to work at nonessential industries. Those workers engaged in work essential to the functioning of society must be guaranteed every protection. Full income must be guaranteed for all those workers who are laid off or furloughed for the duration of the pandemic. Workers must establish control over health and safety at their workplaces, in consultation with medical professionals, to ensure safe conditions.

Above all, this requires taking up the fight for international socialism, uniting all workers internationally across industrial, linguistic and national lines, a political perspective that is diametrically opposed to the capitalist ruling elite.

Niles Niemuth

China faces triple whammy amid Covid-19 crisis

Factory activity slows, export orders dry up and consumers worry about job security as the virus stalks the planet

By GORDON WATTS

APRIL 30, 2020




https://asiatimes.com/2020/04/china-faces-triple-whammy-amid-covid-19-crisis/







China faces a triple whammy as it cranks up the economy amid the Covid-19 crisis.

Factory activity is proving sluggish, international trade is facing “greater challenges” and consumer spending is shrinking because of unemployment fears.

With vast regions of the planet still in lockdown, the omens are ominous.

On Thursday, crucial Chinese data about manufacturing activity illustrated the bumpy road to recovery.

Official numbers released by the National Bureau of Statistics showed that the Purchasing Managers’ Index in April came in at 50.8 compared to 52.0 last month, which was down from analysts’ forecasts. A figure above 50 separates expansion from contraction.

“The spread of the pandemic is accelerating overseas, and global economic activity has contracted sharply,” Zhao Qinghe, a senior statistician at the NBS, said in a statement.

“[With] insufficient orders, China’s foreign trade faces greater challenges,” Zhao added.

Another survey published just hours later painted an even gloomier picture.


The Caixin/Markit PMI tends to feature a mix of small- and medium-sized companies compared to the National Bureau of Statistics poll, which concentrates on big businesses and state-owned enterprises.
‘Sharp fall’

For April, it dropped to 49.4 compared to 50.1 last month. But it was still above February’s reading of 40.3, the steepest fall on record.

“The sharp drop in export orders seriously hindered China’s economic recovery in April, although businesses were gradually getting back to work,” Zhong Zhengsheng, the director of macroeconomic analysis at the CEBM Group, said in a note accompanying the Caixin/Markit poll.

“Amid the second shockwave from the pandemic, the problems of low business confidence, shrinking employment and large inventories of industrial raw materials became more serious. A package of macroeconomic policies, as suggested in the April 17 Politburo meeting, must be implemented urgently,” Zhong added.


Indeed, these are unprecedented times. So far, more than 3.2 million people have been infected globally by Covid-19 with the death toll edging past 228,000.


Major trading partners, such as the United States and Europe, have been badly hit along with leading Southeast Asia nations. The fallout will certainly descend on China and could crimp consumer spending for the rest of 2020.

Earlier this week, a study released by the People’s Bank of China gave a snapshot of household sentiment. Compiled in the first quarter, the PBOC polled 20,000 bank customers in 50 cities across the country.

Slightly more than 53% of those interviewed revealed that they would be saving more because of concerns about a virus “second-wave” and a deteriorating employment outlook.

A similar story has been reported in the United States and Europe as economies across the globe struggle with the Covid-19 catastrophe, threatening lives and livelihoods.

In China, this could lead to deflationary pressure and force Beijing to increase stimulus measures.

“We have already seen reports of China’s factories laying off workers due to foreign buyers withdrawing orders. Factories’ profits will fall throughout the supply chain in China. This will hit employment and wages and therefore domestic demand,” Iris Pang, the chief economist for Greater China at ING, the multinational bank, said in a note.

“Global demand is likely to remain weak due to high unemployment rates in major economies. China’s export orders from the rest of the world should be smaller on both a quarter-on-quarter as well as a year-on-year basis. This is confirmed by the very bad new export orders sub-index of the [official] manufacturing PMI at 33.5,” she added.





President Xi Jinping’s government is particularly concerned about struggling small- and medium-sized companies. They have borne the brunt of the pandemic and many are still in intensive care.

Creating 60% of China’s GDP growth, the private sector accounts for around 80% of urban jobs and includes legions of SMEs.

“Public records suggest that at least half a million firms [in China] were dissolved in the first quarter and more are likely to close shop,” Mark Williams, the chief Asia economist at Capital Economics, said earlier this month.

In turn, this will heighten anxiety about job security in the world’s second-largest economy.

Last week, a report released by The Economist Intelligence Unit predicted that urban unemployment, excluding 290 million migrant workers, would reach 10% this year compared to 3.6% in 2019.

“We estimate at least an additional 22 million urban workers will lose their jobs in 2020, pushing up the unemployment rate to around 10%. A further 250 million could experience wage cuts in the range of 10 [to] 50%,” the EIU said.

But that might be on the conservative side. UBS Securities reported that up to 80 million jobs have been lost in the service sector, industry and construction. “China’s labor market pressure may be the most challenging since the late 1990s and early 2000s,” it said.

Now, that is a chilling thought.

Billionaires Are the Pandemic’s Villains, Not Its Heroes

BY MEAGAN DAY

As tens of millions of Americans lost their jobs in the coronavirus crisis, the richest Americans saw their wealth rise by hundreds of billions of dollars. It’s not a coincidence.




https://jacobinmag.com/2020/04/billionaires-coronvirus-pandemic-profiteers-taxes













More than twenty-four million US workers have applied for unemployment benefits in the last five weeks. That figure represents more than one in seven workers. For comparison, in pre-coronavirus times, one million workers applied in a five-week period.


A freeze on normal economic activity is necessary to keep as many people home as possible and stop the spread of the virus. But mass economic devastation is not an inevitable result.

In Western and Northern European countries, for example, governments have taken aggressive action — often at the urging of the Left and labor unions — to protect workers’ jobs during the crisis so they’ll be waiting for them when it’s safe to return to business as usual, and providing adequate relief in the interim. Researchers at the Economic Policy Institute call this approach “deep-freezing the economy,” the idea being that it can be thawed out and quickly restored when the pandemic is over. Yes, it costs money, but so does an interminable economic slump.

The United States has chosen not to go this route. Congress has authorized trillions in spending, but with one exception — the airline industry, and even then only because the flight attendants’ union pushed for it — it hasn’t taken any direct payroll guarantee measures, instead allowing mass layoffs to occur unimpeded. Those jobs will not necessarily be available when economic activity resumes, likely guaranteeing high unemployment for a long time to come.
Backdrop of Austerity

In the meantime, while the federal government has extended unemployment insurance, workers in the United States struggle with inadequate welfare infrastructure. Last summer, the National Employment Law Project published a paper titled “Are State Unemployment Systems Still Able to Counter Recessions?” The answer, they concluded, was no: instead many state unemployment systems were intentionally dysfunctional, designed to make it difficult to apply for and receive aid, a kind of austerity by paperwork. The authors of the study recommended major anti-austerity overhauls in order to prepare for the inevitable next recession.

But now it’s too late. In the worst-offender states, like Florida and North Carolina, broken unemployment infrastructures “are wreaking havoc with the claims filing process. As a result, workers who need benefits are unable to access them.” Beyond them, many other states “that have designed programs to fail may collapse under the weight of the surge of new claims.”

As a result of these and other errors — none of them accidental, all undertaken with the interests of wealthy taxpayers in mind — the US working class, not yet back on its feet since the last devastating economic crisis just over a decade ago, is in for a lot of unnecessary misery. A great deal of pain could have been avoided with adequate social spending and anti-austerity program design, but instead US lawmakers continued to shred the nation’s already threadbare safety net while inequality has skyrocketed and the wealth of the nation’s richest people has soared.
Billionaire Bonanza

So how are the mega-rich fairing in these trying times? The Institute for Policy Studies’s annual Billionaire Bonanza report was just released, and it finds many of them doing better than ever. Thirty-four US billionaires have seen their wealth surge by tens of millions of dollars since the beginning of 2020. Eight of them have seen their wealth grow by over a billion dollars. The combined wealth of all billionaires in the United States has increased nearly 10 percent.

“This spring, in the face of a global pandemic, headlines are trumpeting the beneficence of billionaires who are donating what amounts to as little as 0.00001 percent of their fortunes to help their fellow humans in need,” write the authors of the report. They note that Forbes even published a fawning issue titled “Agents of Change: How the World’s Billionaires Are Using Their Wealth to Reinvent Their Businesses and Provide Aid Amid the Coronavirus Pandemic.”

These are the same people who lobby and pressure and dangle donations in front of politicians in order to bring down taxes on the rich. As a result of their efforts, billionaire taxes have been slashed 79 percent in the last four decades, and the sum total of US billionaire wealth jumped from $240 billion in 1990 to nearly $3 trillion today.

All of this has come, of course, at the cost of austerity and the expense of public programs. In other words, these are the same people who convinced politicians to design unemployment insurance programs to fail working-class people. They’re not the heroes of the crisis — they’re the villains.
The King of Tax Avoidance

The biggest pandemic profiteer is Jeff Bezos. “The closure of hundreds of thousands of small businesses is giving Amazon the opportunity to increase its market share, strengthen its place in the supply chain, and gain more pricing power over consumers,” note the study’s authors.

While it’s true that Amazon is selling and shipping useful goods during the shutdown, it’s also true that Bezos has subjected his employees to dangerous pandemic-related working conditions, which they aren’t permitted to avoid unless they want to miss a paycheck. As a result, Amazon warehouses all over the country have become hotbeds of COVID-19. When workers have stood up for their safety and that of the public, they’ve faced retaliation, including being fired and even publicly smeared.

Over the course of the crisis, Bezos’s wealth has increased $25 billion, more than the annual GDPs of eighty-eight countries. In demonstration of his philanthropic largesse, he gave $100 million of that to the charity Feeding America.

Of course, Bezos is also the king of not paying taxes, the very habit of the mega-rich which has brought the welfare state to its knees, compounding the mass working-class suffering caused by the economic shutdown. But don’t let that distract you.

The Beginning of the End for Oil?

Michael T. Klare says a vast restructuring of the global energy enterprise is happening now.




https://consortiumnews.com/2020/04/29/covid-19-the-beginning-of-the-end-for-oil/







Energy analysts have long assumed that, given time, growing international concern over climate change would result in a vast restructuring of the global energy enterprise. The result: a greener, less climate-degrading system. In this future, fossil fuels would be overtaken by renewables, while oil, gas, and coal would be relegated to an increasingly marginal role in the global energy equation. In its “World Energy Outlook 2019,” for example, the International Energy Agency (IEA) predicted that, by 2040, renewables would finally supersede petroleum as the planet’s No. 1 source of energy and coal would largely disappear from the fuel mix. As a result of Covid-19, however, we may no longer have to wait another 20 years for such a cosmic transition to occur — it’s happening right now.

So, take a breath and, amid all the bad news pouring in about a deadly global pandemic, consider this: when it comes to energy, what was expected to take at least two decades in the IEA’s most optimistic scenario may now occur in just a few years. It turns out that the impact of Covid-19 is reshaping the world energy equation, along with so much else, in unexpected ways.

That energy would be strongly affected by the pandemic should come as no surprise. After all, fuel use is closely aligned with economic activity and Covid-19 has shut down much of the world economy. With factories, offices, and other businesses closed or barely functioning, there’s naturally less demand for energy of all types. But the impacts of the pandemic go far beyond that, as our principal coping mechanisms — social distancing and stay-at-home requirements — have particular implications for energy consumption.

Among the first and most dramatic of these has been a shockingly deep decline in flying, automobile commuting, and leisure travel — activities that account for a large share of daily petroleum use. Airline travel in the United States, for example, is down by 95 percent from a year ago. At the same time, the personal consumption of electricity for telework, distance learning, group conversations and entertainment has soared. In hard-hit Italy, for instance, Microsoft reports that the use of its cloud services for team meetings — a voracious consumer of electricity — has increased by 775 percent.

These are all meant to be temporary responses to the pandemic. As government officials and their scientific advisers begin to talk about returning to some semblance of “normalcy,” however, it’s becoming increasingly clear that many such pandemic-related practices will persist in some fashion for a long time to come and, in some cases, may prove permanent. Social distancing is likely to remain the norm in public spaces for many months, if not years, curtailing attendance at theme parks and major sports events that also typically involve lots of driving. Many of us are also becoming more accustomed to working from home and may be in no rush to resume a harried 30-, 60-, or 90-minute commute to work each day. Some colleges and universities, already under financial pressure of various sorts, may abandon in-person classes for many subjects and rely far more on distance learning.

No matter how this pandemic finally plays out, the post-Covid-19 world is bound to have a very different look from the pre-pandemic one and energy use is likely to be among the areas most affected by the transformations underway. It would be distinctly premature to make sweeping predictions about the energy profile of a post-coronavirus planet, but one thing certainly seems possible: the grand transition, crucial for averting the worst outcomes of climate change and originally projected to occur decades from now, could end up happening significantly more swiftly, even if at the price of widespread bankruptcies and prolonged unemployment for millions.


Oil’s Dominance in Jeopardy

As 2019 drew to a close, most energy analysts assumed that petroleum would continue to dominate the global landscape through the 2020s, as it had in recent decades, resulting in ever greater amounts of carbon emissions being sent into the atmosphere. For example, in its “International Energy Outlook 2019,”the Energy Information Administration (EIA) of the U.S. Department of Energy projected that global petroleum use in 2020 would amount to 102.2 million barrels per day. That would be up 1.1 million barrels from 2019 and represent the second year in a row in which global consumption would have exceeded the notable threshold of 100 million barrels per day. Grimly enough, the EIA further projected that world demand would continue to climb, reaching 104 million barrels per day by 2025 and 106 million barrels in 2030.

In arriving at such projections, energy analysts assumed that the factors responsible for driving petroleum use upward in recent years would persist well into the future: growing automobile ownership in China, India and other developing nations; ever-increasing commutes as soaring real-estate prices forced people to live ever farther from city centers; and an exponential increase in airline travel, especially in Asia. Such factors, it was widely assumed, would more than compensate for any drop in demand caused by a greater preference for electric cars in Europe and a few other places. As suggested by oil giant BP in its “Energy Outlook” for 2019, “All of the demand growth comes from developing economies, driven by the burgeoning middle class in developing Asian economies.”

Even in January, as the coronavirus began to spread from China to other countries, energy analysts imagined little change in such predictions. Reporting “continued strong momentum” in oil use among the major developing economies, the IEA typically reaffirmed its belief that global consumption would grow by more than one million barrels daily in 2020.

Only now has that agency begun to change its tune. In its most recent “Oil Market Report,”it projected that global petroleum consumption in April would fall by an astonishing 29 million barrels per day compared to the same month the previous year. That drop, by the way, is the equivalent of total 2019 oil usage by the United States, Canada, and Mexico. Still, the IEA analysts assumed that all of this would just be a passing phenomenon. In that same report, it also predicted that global economic activity would rebound in the second half of this year and, by December, oil usage would already be within a few million barrels of pre-coronavirus consumption levels.

Other indicators, however, suggest that such rosy predictions will prove highly fanciful. The likelihood that oil consumption will approach 2018 or 2019 levels by year’s end or even in early 2021 now appears remarkably unrealistic. It is, in fact, doubtful that those earlier projections about sustained future growth in the demand for oil will ever materialize.

A Shattered World Economy


As a start, a return to pre-Covid-19 consumption levels assumes a reasonably rapid restoration of the world economy as it was, with Asia taking the lead. At this moment, however, there’s no evidence that such an outcome is likely.

In its April “World Economic Outlook” report, the International Monetary Fund predicted that global economic output would fall by 3 percent in 2020 (which may prove a distinct underestimate) and that the pandemic’s harsh impacts, including widespread unemployment and business failures, will persist well into 2021 or beyond. All told, it suggested, the cumulative loss to global gross domestic product in 2020 and 2021, thanks to the pandemic, will amount to some $9 trillion, a sum greater than the economies of Japan and Germany combined (and that assumes the coronavirus will not come back yet more fiercely in late 2020 or 2021, as the “Spanish Flu” did in 1918).

This and other recent data suggest that any notion China, India, and other developing nations will soon resume their upward oil-consumption trajectory and save the global petroleum industry appears wildly far-fetched. Indeed, on April 17th, China’s National Bureau of Statistics reported that the country’s GDP shrank by 6.8 percent in the first three months of 2020, the first such decline in 40 years and a staggering blow to that country’s growth model. Even though government officials are slowly opening factories and other key businesses again, most observers believe that spurring significant growth will prove exceedingly difficult given that Chinese consumers, traumatized by the pandemic and accompanying lockdown measures, seem loath to make new purchases or engage in travel, tourism and the like.

And keep in mind that a slowdown in China will have staggering consequences for the economies of numerous other developing nations that rely on that country’s tourism or its imports of their oil, copper, iron ore, and other raw materials. China, after all, is the leading destination for the exports of many Asian, African, and Latin American countries. With Chinese factories closed or operating at a reduced tempo, the demand for their products has already plummeted, causing widespread economic hardship for their populations.

Add all this up, along with a rising tide of unemployment in the United States and elsewhere, and it would appear that the possibility of global oil consumption returning to pre-pandemic levels any time soon — or even at all — is modest at best. Indeed, the major oil-exporting nations have evidently reached this conclusion on their own, as demonstrated by the extraordinary April 12th agreement that the Saudis, the Russians, and other major exporting countries reached to cut global production by nearly 10 million barrels per day. It was a desperate bid to bolster oil prices, which had fallen by more than 50 percent since the beginning of the year. And keep in mind that even this reduction — unprecedented in scale — is unlikely to prevent a further decline in those prices, as oil purchases continue to fall and fall again.

Doing Things Differently





Energy analysts are likely to argue that, while the downturn will undoubtedly last longer than the IEA’s optimistic forecast, sooner or later petroleum use will return to its earlier patterns, once again cresting at the 100-million-barrels-per-day level. But this appears highly unlikely, given the way the pandemic is reshaping the global economy and everyday human behavior.

After all, IEA and oil-industry forecasts assume a fully interconnected world in which the sort of dynamic growth we’ve come to expect from Asia in the 21st century will sooner or later fuel economic vigor globally. Extended supply lines will once again carry raw materials and other inputs to China’s factories, while Chinese parts and finished products will be transported to markets on every continent. But whether or not that country’s economy starts to grow again, such a globalized economic model is unlikely to remain the prevailing one in the post-pandemic era. Many countries and companies are, in fact, beginning to restructure their supply lines to avoid a full-scale reliance on foreign suppliers by seeking alternatives closer to home — a trend likely to persist after pandemic-related restrictions are lifted (especially in a world in which Trumpian-style “nationalism” still seems to be on the rise).

“There will be a rethink of how much any country wants to be reliant on any other country,” suggests the aptly named Elizabeth Economy, a senior fellow at the Council on Foreign Relations. “I don’t think fundamentally this is the end of globalization. But this does accelerate the type of thinking that has been going on in the Trump administration, that there are critical technologies, critical resources, reserve manufacturing capacity that we want here in the U.S. in case of crisis.”

Other countries are bound to begin planning along similar lines, leading to a significant decline in transcontinental commerce. Local and regional trade will, of course, have to increase to make up for this decline, but the net impact on petroleum demand is likely to be negative as long-distance trade and travel diminishes. For China and other rising Asian powers, this could also mean a slower growth rate, squeezing those “burgeoning middle classes” that were, in turn, expected to be the major local drivers (quite literally, in the case of the car cultures in those countries) of petroleum consumption.

Effects of More Telework


Another trend the coronavirus is likely to accelerate: greater reliance on telework by corporations, governments, universities and other institutions. Even before the pandemic broke out, many companies and organizations were beginning to rely more on teleconferencing and work-from-home operations to reduce travel costs, commuting headaches, and even, in some cases, greenhouse gas emissions. In our new world, the use of these techniques is likely to become far more common.

“The COVID-19 pandemic is, among other things, a massive experiment in telecommuting,” observed Katherine Guyot and Isabel Sawhill of the Brookings Institution in a recent report. “Up to half of American workers are currently working from home, more than double the fraction who worked from home (at least occasionally) in 2017-2018.”

Many such workers, they also noted, had been largely unfamiliar with telecommuting technology when this grand experiment began, but have quickly mastered the necessary skills. Given little choice in the matter, high school and college students are also becoming more adept at telework as their schools shift to remote learning. Meanwhile, companies and colleges are investing massively in the necessary hardware and software for such communications and teaching. As a result, Guyot and Sawhill suggest, “The outbreak is accelerating the trend toward telecommuting, possibly for the long term.”

Any large increase in teleworking is bound to have a dramatic dual impact on energy use: people will drive less, reducing their oil consumption, while relying more on teleconferencing and cloud computing, and so increasing their use of electricity. “The coronavirus reminds us that electricity is more indispensable than ever,” says Fatih Birol, executive director of the IEA. “Millions of people are now confined to their homes, resorting to teleworking to do their jobs.”

Increased reliance on electricity, in turn, will have a significant impact on the very nature of primary fuel consumption, as coal begins to lose its dominant role in the generation of electrical power and is replaced at an ever-accelerating pace by renewables. In 2018, according to the IEA’s “World Energy Outlook 2019,”a distressing 38 percent of world electricity generation was still provided by coal, another 26 percent by oil and natural gas, and only 26 percent by renewables; the remaining 10 percent came from nuclear and other sources of energy. This was expected to change dramatically over time as climate-conscious policies began to have a significant impact — but, even in the IEA’s most hopeful scenarios, it was only after 2030 that renewables would reach the 50 percent level in electricity generation. With Covid-19, however, that process is now likely to speed up, as power utilities adjust to the global economic slowdown and seek to minimize their costs.

With many businesses shut down, net electricity use in the United States has actually declined somewhat in these months — although not nearly as much as the drop in petroleum use, given the way home electricity consumption has compensated for a plunge in business demand. As utilities adapt to this challenging environment, they are finding that wind and solar power are often the least costly sources of primary energy, with natural gas just behind them and coal the most expensive of all. Insofar as they are investing in the future, then, they appear to be favoring large solar and wind projects, which can, in fact, be brought online relatively quickly, assuring needed revenue. New natural gas plants take longer to install and coal offers no advantages whatsoever.

In the depths of global disaster, it’s way too early to make detailed predictions about the energy landscape of future decades. Nonetheless, it does appear that the present still-raging pandemic is forcing dramatic shifts in the way we consume energy and that many of these changes are likely to persist in some fashion long after the virus has been tamed. Given the already extreme natureof the heating of this planet, such shifts are likely to prove catastrophic for the oil and coal industries but beneficial for the environment — and so for the rest of us. Deadly, disruptive, and economically devastating as Covid-19 has proved to be, in retrospect it may turn out to have had at least this one silver lining.

The state attempts to rescue collapsing capitalism

http://www.marxist.com/the-state-attempts-to-rescue-collapsing-capitalism.htm







The IMF declared at the beginning of April that we have entered into “the worst economic downturn since the Great Depression”. Yesterday, their perspective was confirmed when figures released for the US showed a rate of 4.8 percent decline. Today, the figures are out showing a 3.8 percent contraction in one quarter in the Eurozone. The disastrous handling of the coronavirus pandemic sharpened an economic crisis that was already in the making.
An unprecedented fall

The figures released today were worse than expected. The 3.8 percent drop in the Eurozone for one quarter is significantly worse than the US 4.8 percent on an annualised basis (the equivalent figure for the US would be somewhere in the region of 1.5 percent). The French economy has contracted by 5.8 percent and the Spanish by 5.2 percent last quarter. The figures for the European economies are worse than any quarter on record and the drop is far more dire than in 2009. The second quarter is expected to be worse everywhere.

The virus epidemic couldn't have hit at a less opportune time. The world economy never recovered from the crisis of 2008-09, as we have explained in the past. What recovery there was had ebbed, with the economies of Germany, Japan and the UK at the very least already contracting.


Capitalism is facing a crisis of senile decay. This rotten system should have been overthrown a century ago, but a combination of world war, and the role of reformists and Stalinists gave it a new lease on life. The first signs of the end of the post-war boom could already be seen in the crisis of the ‘70s, but through austerity and attacks on the working class, combined with an unprecedented expansion of credit, the capitalist class postponed the evil day. Now, the chickens are coming home to roost.

The IMF World Economic Outlook earlier this month made for dire reading. The IMF forecasted a contraction of 4.2 percent in the world economy this year. That’s significantly worse than the previous post-war record fall in 2009 of 1.6 percent. The vast majority of countries would suffer a recession this year, with the advanced capitalist countries being hardest hit. The Eurozone would face a 7 percent contraction. Japan – at this point relatively unaffected by the epidemic – a 5 percent contraction, and the US a 6 percent contraction. All of these predictions assume the economy would be over sometime this summer, and there would be no second wave of the virus this year or next year. This is not an optimism that is shared by epidemiologists.


The IMF helpfully provides us with alternative scenarios of what would happen if their baseline prediction doesn’t hold up. If there is another wave in the second half of the year, the fall would be steeper, at around 7 percent. Yet, the IMF is on the optimistic side of the argument.

A number of private institutions are predicting more grim scenarios: IHS Markit was predicting a 3 percent fall in the US GDP Q1 2020, on an annualised basis. This turned out to be an optimistic estimate, as figures out on 29 April showed the equivalent of an 4.8 percent contraction (annualised). IHS Markit furthermore predicted an eye watering 27 percent drop in Q2 as the lockdown impact hits (again, on an annualised basis). This doesn’t mean literally a 27 percent drop this quarter, but that the rate of decline is such because the effects of the lockdown will not accumulate over coming quarters. Still, the drop is expected to be significantly more severe than in 2009. In other parts of the world, Morgan Stanley is predicting an 11 percent drop in Eurozone output this year, with the UK not far behind on 10 percent. Even Christine Lagarde was threatening Eurozone governments with a 15 percent drop in output if they didn’t take action.




Another curious assumption made by the IMF is that the infection won’t spread widely outside the advanced capitalist countries. Why the poorer countries of the world would be better equipped to deal with the pandemic is anyone’s guess. In these countries, starved of resources and bled dry by imperialism, overcrowding, poor housing and lack of healthcare will create the conditions for a human catastrophe. The only saving grace so far has been the relative lack of international travellers, which has reduced the number of imported cases, but once local transmission takes off there will be little stopping it.

As the infection spreads rapidly in India, Africa and Latin America, the prospect is raised also of an economic disaster: whereas the IMF expected India to grow by 2 percent in 2020, Fitch Ratings and Barclays Bank both predict stagnation, with 0.8 percent and 0 growth respectively.

But all of these forecasts are qualified guesswork. The truth is that no one really knows. The IMF also assumes that the economy will rebound quickly, as soon as measures are lifted, but that is also a big assumption.
Disaster in the making

Many industries are reeling from the crisis:
Retail shops were already struggling under the pressure from online retailers. Many shops that have been closed now for the purpose of social distancing will never reopen, or if they do, they will find their customers are no longer there.
The same goes for restaurants who, if they survive the lock-down, will not see their customers return.
The travel industry will probably recover, but will not get anywhere close to what it was any time soon. At this moment in time, the worldwide airline capacity is down 73 percent. The airline industry took six to eight years to recover from the 9/11 attacks, and that was during a boom. This time will probably be worse. Both Airbus and Boeing are looking for bailouts.
Higher education is going to be hit hard. This is the case in the two biggest markets for education: UK and US.
The oil industry is in a panic mode. Demand for oil has fallen by 20 million barrels a day, or roughly 20 percent, as people are staying home. Even the unprecedented agreement between the US, Saudi Arabia and Russia has failed to raise the price above its 18-year low.
The automotive industry, central to the manufacturing sector, is forecast to see a cut in sales by 21 percent globally, with a 26 percent drop in Europe. If it wasn’t for massive government support, this would have already resulted in mass layoffs and plant closures.
Even US hospitals, in their own particular grim calculations, are asking for bailouts after having to cancel more profitable procedures in order to treat coronavirus patients.

Despite governments around the world paying unprecedented amounts in support to business, unemployment is rising at an unprecedented rate. In the US, 26 million have applied for unemployment benefits (which doesn’t necessarily mean they have been permanently laid off).

Economists surveyed by the Wall Street Journal expect 14 million jobs to be lost in the next couple of months and the unemployment rate to rise to 13 percent in June: the fastest increase ever. One of Trump’s economic advisors, Kevin Hasset, has made headlines by predicting a 16-17 percent unemployment rate, comparing this to the 2008-2009 crisis when the US lost 8.7 million jobs: “Right now, we're losing that many jobs about every 10 days”.

No one, of course, knows where this will end, but they are already raising the prospect of unemployment rising to 20 percent in the US and northern Europe, which managed to avoid mass unemployment in 2009. The ILO is warning that 1.6 billion people – half the global workforce – is “in immediate risk of losing livelihood”. It also estimates that 1.6 billion workers in the informal sector already have lost 60 percent of their earnings in the first month of the crisis.

The 1930s saw US GDP fall by 25 percent over a 3 year period, with unemployment rising to 25 percent. If the bourgeois managed to avoid a depression in 2008-9, now this prospect is very real:


“‘Severely depressed demand, supply disruptions and extremely high uncertainty will keep manufacturing on an extremely weak trajectory in the near term,’ said Oren Klachkin, economist at Oxford Economics. ‘We believe the economy will gradually start to return to normal in Q3, we note that the risk of an extended lockdown could make for a very slow and uneven recovery.’”

The hope of the economists is that the economy will be able to recover rapidly once the artificial constraints are removed. Yet, the longer they remain in place, the more damage they will cause. The capitalist market economy is by far the least suited to these kinds of measures. The famous invisible hand is highly dependent on credit and confidence, the latter being a prerequisite of the former. Yet, at the moment, there is no confidence in the future.

Consumers and businesses look to the future with trepidation, as no one knows what is around the corner. No one knows what the world will look like after lockdown ends (not to mention when it will end), and so no one will make the investments that are needed in order to kickstart the economy again. Why invest in productive capacity when the productive capacity is already too plentiful and you don’t know whether the customers will want your products or be able to afford them?
A lender of last resort

This is why the state is now playing an unprecedented role. The state is now the lender of last resort, the consumer of last resort and the goose that lays the golden eggs. We commented on this in an article published a month ago, but now developments have gone even further.

State debts were already high, if not as high as during World War II. Now, they are set to overtake their world war peak, with no realistic prospect of being paid back. The state has pledged unprecedented amounts of money in loans and subsidies in an attempt to keep business open during the lockdown.

Market after market is failing. The insecurity and the lack of credit (despite all their best efforts) mean that companies that were reasonably sound three months ago are now facing bankruptcy. In the world of finance, always fond of making up new buzzwords, this has become known as a “fallen angel”. Now, governments and central banks are expected to keep these companies alive until the situation stabilises.

In the US, the Federal Reserve is massively expanding its balance sheet as it pushes credit into markets where it hasn’t been present since the Great Depression. A $600 billion programme is taking shape, offering loans through banks of up to four years to small and mid-size businesses. It’s trying to insulate itself from the losses, asking the issuing banks to take 5 percent of the loans and the federal government to cover the first $75 billion of any potential losses from the scheme.

However, the small and mid-size business lending is dwarfed by the total credit being pumped into the system. At the end of last year, the Federal Reserve had around $4 trillion on its balance sheet. But it is now seeing an extremely rapid programme of asset purchases (how central banks lend money). By 22 April, it had reached $6.6 trillion, and it is expected to reach $8-11 trillion. At the height of the depression of the 1930s, the balance sheet of the Fed was just above 20 percent of US GDP. It surpassed that level in about 2011. Now, they’re expecting it to reach 40-50 percent – and in record time.


The ECB is widely expected to start supporting “fallen angel” junk bonds this week in order to prevent large-scale bankruptcies in the Eurozone. They are also expected to further expand their €2.8 trillion quantitative easing programme. Despite the ECB not yet formally having agreed to do so, markets and rating agencies are firmly expecting it to prevent both companies and southern European countries going bankrupt. In reality, they are giving the ECB little choice in the matter.
...and a spender of last resort

Government debts worldwide are estimated to rise by 16 points of national income, from 69 to 85 percent of GDP this year. The US budget deficit is estimated at 19 percent (the highest since 1945) after the fourth pandemic relief package, and will only get bigger. The average for the advanced capitalist economies is just over 10 percent, and Brazil, China and India are at a similar level. Thus, not only is the state effectively guaranteeing a large chunk of the debt market but a large chunk of the expenditure in the economy is made up by the deficit in the state budget.

At the same time as attempting to bring down companies’ borrowing costs, governments are also shuffling large-scale subsidies to companies to keep employees on the books. More than 30 million workers in Germany, France, the UK, Italy and Spain are having the state pay their salaries, albeit at a reduced rate. This is around one fifth of the entire workforce of these countries.

One of the problems with these schemes, which are intended to provide short-term support to otherwise viable companies, is that it is virtually impossible to know what will be a viable business or not in five months' time, as the past is not a very good guide to the future. The risk is clear that central banks and governments will wind up keeping companies on life support with no end in sight.

This is precisely what the government and central banks are not supposed to be doing, but they have no alternative:


“‘Capitalism without bankruptcy is like Catholicism without hell,’ Howard Marks, director of investment fund Oaktree Capital Management LP, said in a letter to shareholders this month, writing that ‘Markets work best when participants have a healthy fear of loss.’ Mr. Marks in a later interview said he didn’t want to imply Mr. Powell’s actions were wrong: ‘The fact that something can have negative, unintended consequences, doesn’t mean it’s a mistake.’”

Whatever they might think of the measures, very few actually think they are wrong, and fewer still have any alternative. Republicans who were objecting to the bailouts of 2008 are now supporting the measures with the excuse that circumstances are unique: “This should be considered a very freakish Black Swan event, not anything that would be revisited under ordinary circumstances,” according to Senator Pat Toomey. Steve Bannon, Trump’s one time political advisor is just one of many to recognise the new situation:


“‘The era of Robert Taft, limited-government conservatism?’ said Steve Bannon, President Trump’s onetime political guru, referring to the Ohio senator who fought the expansion of government programs and federal borrowing. ‘It’s not relevant. It’s just not relevant.’”

Even the Brazilian “Chicago Boy” finance minister, Guedes, has been forced to relent under pressure from the ruling class. The ruling class are not interested in empty platitudes and are openly discussing whether he is up to the job or should be sacked. He has introduced a $223 billion emergency support package, and is now trying to defend himself from looking “like a Keynesian economist”. Apparently he has drawn a “conceptual distinction” between emergency measures and structural reform. But Keynes was never a principled proponent of state intervention, he merely saw it as a necessity under certain circumstances to ensure the functioning of capitalism and prevent revolution.

To give Guedes and Toomey their due, it is true that crises of this magnitude only occur very rarely, like a black swan. In fact it’s only the second one in the history of capitalism. However, that caveat is meaningless, given that we are in a crisis right now and there is no way out in the short term. It only reinforces the point that faced with this crisis they are only capable of throwing lots of public money at the problem. It doesn’t matter if they are followers of Friedman or Keynes they wound up doing the same thing in the end, because they have no choice.
The role of the state

The increased role of the state in itself is itself a symptom of the rebellion of the productive forces against the constraints of private property, as Engels, Lenin and Trotsky pointed out. Ted Grant explained this in the 1950s:


“Of course the increased role of the state with the end of laissez faire had already been pointed out by Marx and Engels. The tendency of the productive forces to outgrow the envelope of private ownership, forces the state to intervene more and more in the 'regulation' of the economy.”

And again how the monetarist trend of the past few decades will necessarily have to be thrown into reverse:


“‘Every action has an equal and opposite reaction.’ This law applies not only to physics but to society. The drive towards privatisation will reach its limits. This is already beginning to happen in Britain. At a certain stage, the tendency towards statisation will reassert itself.”

This is what has now happened, and with a bang. It does, however, in no way solve the crisis, but merely provides a band-aid by transferring the liabilities onto the public balance sheet. In the 1950s, there were plenty of illusions that state intervention would solve the problems of capitalism. Ted Grant pointed out that it would not stop another crisis, and he was proven correct when the boom of the 1950s gave way to the crisis of the 1970s.

This virus has hit an economy that was already struggling hard. This crisis has been in preparation since the end of World War II. The capitalists managed to postpone it by a massive increase in debt, but that has now reached its limits. The crisis of overproduction is in full swing.

Some large corporations will emerge out of this stronger. They will do so not on the basis of developing the productive forces, by investing in new technology and industry, but my means of being the last company standing, as the other, less profitable, go bankrupt. Consolidation will inevitably mean job losses. This will further undercut the market, which will make new investments unprofitable. The state will intervene to save the companies that are too big to fail, but it can not save the economy as a whole.

State monopoly capitalism, as Lenin called it, doesn’t stop the crises of capitalism because it doesn’t actually do away with the anarchy of the market. The profit motive remains the driving force of the economy, it is just given a helping hand by the state. Yet, whatever lines of credit are extended to the multinational companies, whatever subsidies, there will be no investment unless there is a market, and the market now is shrinking, as workers are laid off and taking pay cuts.
A planned economy is needed

The coming disaster is not a necessity. If we didn’t live under this barbaric society, which puts profits above all else, we would be able to manage the crisis without it turning into a catastrophe. If too many products are produced, that should merely give workers additional spare time. Only under the warped logic of capitalism does too much productive capacity turn into a crisis.




A nationalised planned economy could, in these circumstances, shut down with little damage to the long-term prospects of the economy. There would of course be some dislocation but the economy would be able to restart at a similar level of production. There might be some shortages of less-essential items for a period, but there would be no unemployment, no starvation, no homelessnes and the economy would recover quickly.

Resources could be allocated rapidly from one sector of the economy to another, using the ingenuity of the working class, fully involved in the management of the economy. There would be no need to pay capitalists extortionate sums of money in order to get them to fulfill the basic needs of society, whether it’s food or protective equipment. The level of solidarity between workers is on display everywhere the virus has hit. If workers were in charge, rather than excluded from all the important decisions, the spontaneous outpouring of solidarity on social media and clapping in the streets would have been transformed into concrete action.

Capitalism is preparing misery for billions of workers. Our task is to confine this rotten system to the dustbin of history where it belongs. The future of humanity depends on it.

Stacey Abrams Sinks to a New Low in Desperate Quest to Attain Power

https://www.youtube.com/watch?v=2cvLBEkb69k&feature

THE REAL DISEASE IS INEQUALITY

https://otherwords.org/the-real-disease-is-inequality/




The forces of greed shoved working families to the edge — all it took was a virus to push them over.

By Jim Hightower | April 29, 2020


In this horrible time of economic collapse, it is truly touching to see so many corporate chieftains reaching out in solidarity with the hard-hit working class.

We know they’re doing this because they keep telling us they are. Practically every brand-name giant has been spending millions of dollars on PR campaigns in recent weeks asserting that they’re standing with us, declaring over and over: “We’re all in this together.”

Except, of course, they’re really not standing anywhere near us. While we’re waiting in endless lines at food banks and unemployment offices, the elites are still getting fat paychecks and platinum-level health care.

The severity and gross disparity of our country’s present economic collapse is not simply caused by a sudden viral outbreak, but by a decades-long plutocratic policy of intentionally maximizing profits for the rich and minimizing everyone else’s wellbeing. As the eminent economist Joseph Stiglitz rightly put it, “We built an economy with no shock absorbers.”

Jobs, once the measure of a family’s economic security, have steadily been shriveled to low-wage unreliable work, untethered to a fair share (or any share) of the new wealth that workers create. In a relentless push for exorbitant, short-term profits, today’s executives have abandoned any pretense that a corporation is a community of interdependent interests striving to advance the common good.

Instead, while the honchos are richly covered, they’re washing their hands of any responsibility for the health, retirement, and other essential needs of their workforce. “Rely on food stamps, Obamacare, and other publicly-funded programs,” they say, even as their lobbyists and for-sale lawmakers slash the public safety nets so rich shareholders and speculators can take evermore profit.

These forces of American greed have shoved millions of working families to the economic precipice — and all it takes is a virus to push them over.