The US has already become the first country in the world with the highest number of cases of the coronavirus, and the worst is yet to come. In a country with more than 27 million people without any kind of health insurance and with a health system in the hands of private profit, it is difficult to quantify the magnitude of the disaster, but millions will pay with their health and their lives for decades of neoliberal policies. As if this were not enough, the economic recession that is advancing by giant steps in the world's leading power announces disastrous consequences, even greater than those of the crash of 1929. All this in the midst of an open war with China, which threatens to take away the US’s position as world leader, something that senile American capitalism will try to avoid at all costs by passing the bill to the working class and causing effects of historical significance in the class struggle, inside and outside its borders.
Coronavirus uncovers the “trap” of the longest economic growth in history
According to UN reports, the United States is the wealthiest country with the highest levels of inequality in the world. Behind the propaganda that, until a few weeks ago, was selling us the economical situation of the US as the highest growth in history, we can see the 40 million people who live in poverty, the 18.5 millions living in extreme poverty and the 5.3 who survive in typical third world poverty conditions. Such are the results of the policies that “solved” the 2008 crisis: a massive impoverishment of the working class and the middle classes (65% of the population lives worried about being able to face the bills) and a massive enrichment of the great magnates, thanks to measures such as Donald Trump's tax reform, which gave away $205 billion to the 20% of the population with the highest income.
The spread of the coronavirus pandemic has highlighted the precarious situation of most of American society. Not by chance, the Democratic primary candidate Bernie Sanders who has demanded a public and universal healthcare, has been obtaining great reception. The fact remains true that the absence of public healthcare literally means the ruin for many. A sick leave or an unpayable medical bill means losing one’s job, not being able to pay the rent or the mortgage, and even ending up in destitution. This is not an isolated case or an extraordinary story.
But a pandemic like this is going to blow up the seams of this already precarious situation. To illustrate the magnitude of the disaster that will kill tens of thousands –being optimistic – in the US, here’s some figures: according to an analysis by the Kaiser Family Foundation (one of the US healthcare providers), the calculated cost of treatment for someone with health insurance who has tested positive for coronavirus is $9,763; for those who develop a complication during treatment, the cost rises to $20,292; and for those who do not have any type of coverage, the total amount reaches $34,927. The fact that 20% of the US population does not have or has limited health coverage suggests that the scope of this pandemic can be absolutely savage. Even more so if we take into account that in the US there is no right to sick leave either. The lack of insurance, the lack of money and the fear of losing a job are a real explosive cocktail: millions of people will not ask for medical assistance due to the impossibility of facing an impossible bill, and many others will go to work sick and transmit the disease. Not to mention other ingredients: the US has 2.5 hospital beds for every 1,000 inhabitants (compared to 3 in Spain, 3.4 in Italy, 6.5 in France or 8.3 in Germany); adding to the shortage of beds is the lack of medical equipment: the number of respirators across the country is less than 70,000, and in New York City doctors and nurses are already making isolation suits out of garbage bags. And this is only the beginning.
Faced with this emergency situation, there has not been a single preventive measure in the United States. In fact, already with more than 92,000 infected and 1,300 dead, the government's attitude is truly astonishing. Each state acts in an independent and uncoordinated manner, recommending not to go out in some states but without making any real effort to make these measures effective and, of course, capitalists keep companies open until the last minute. The fact that China, Korea, Italy, the Spanish State... have already gone through the disaster of collapsed hospitals and tens of thousands of deaths has not mattered at all. The distress calls to the White House by the mayor of New York – with 15 times more cases than the rest of the cities – and his governor asking to nationalize the production and distribution of medical equipment, account for the fact that they are well aware of the disaster that is to come.
"This is not a bailout; we are considering providing certain things to certain companies"
The measures announced by Trump – and which have been seasoned with a good dose of the most stinking patriotism, accusing the "Chinese virus" of all ills – have no other purpose than to save, as always, the interests banks and corporations. Along with the open bar of liquidity that the Federal Reserve (Fed) has made available to large stock and bond holders, Trump announced a few days ago the installation of field hospitals in New York, Washington and California with a total of 4,000 beds: less than those that the Community of Madrid has set up at IFEMA!
Trump's real concern – and that of the Democratic apparatus – is not to preserve the lives of the millions of people who are exposed to contracting the virus nowadays, nor to protect them from the consequences of the economic crisis. Behind their verbosity in favor of "protecting the citizens" we find the truth of their actions. Since 2008, the wealth of the 10% richest households has risen 115 times more than that of the poorest 10%. In these years, large companies have obtained extraordinary profits that have been largely devoted to repurchasing their own shares, causing their prices to rise in an unparalleled speculative festival. The big problem is that those benefits have not been destined to the productive economy, but to equity values completely removed from the real economy and artificially inflated. Now capitalists are again resorting to the same measures that have proven powerless to solve the underlying problem, the overproduction crisis.
The example of the large American airlines is very representative of what has happened and is currently happening: according to Bloomberg, since 2010, they have spent 96% of their available cash flow on buybacks of shares, and now demand that the state should rescue them. Boeing is asking to be granted $60 billion, while it spent $65 billion on dividend payouts and buybacks in the past decade. This is not an exception but, as the bourgeois press itself acknowledges, the big firms’ general line.
"This is not a bailout; we are considering providing certain things to certain companies."
This is how the Treasury Secretary, Steve Mnuchin, dismissed the issue. But of course it is! As in 2008, the rich are rescued by condemning the poor. As always, in times of crisis, the most liberal, the defenders of free competition and of tax suppression... resort to the state to plunder it in the name of the common good. After all, that's what they run it for. Said and done: while in mid-March the Fed announced a drop in interest rates to zero and a stimulus plan of $700 billion (the largest since the Great Recession of 2008) to buy assets on the stock market, on Sunday 22 March, in an attempt to calm the "markets", it announced "unlimited asset purchases" for "as long as it takes". Open bar for the great magnates. Of course, neither small and medium businesses nor ordinary people will see a penny of all that, nor will they see their burdens or their mortgage payment alleviated.
The Senate has just approved the most powerful rescue plan in history, with nearly $2 trillion in "aid to businesses and citizens". Although the truth is that the global plan – as explained by the head of the White House Economic Council, Larry Kudlow – will reach $6 trillion, adding up to $4 trillion more in loans from the Fed.
Behind the propaganda about the heated debate that the Democratic Party has provoked, defending that the plan needed to offer more "protection to the employees of the rescued companies and health coverage for the most vulnerable", the reality is that Democrats and Republicans have agreed that of those $2 trillion, $500,000 million are to be dedicated directly to loans and guarantees for large companies, which will be delivered opaquely and without any conditions, not even the maintenance of jobs. The plan also promises direct aid to citizens, with checks for families and $367,000 million for small and medium-sized companies. They have to adopt some type of aid to try to avoid an immediate social catastrophe and an explosion of discomfort among all of the unemployed and the dismissed, but the truth is that they are nothing more than crumbs that will in no way alleviate the social disaster. The bill for this billionaire ransom will be placed, as always, on the shoulders of the working class.
New crisis, old recipes, new uprisings
Many voices already speak of an economic catastrophe greater than that of the crash of 1929. We are dealing with the fact that, between 1929 and 1933, the US GDP fell by 30%; which corresponds with what Morgan Stanley estimates for the second quarter of 2020. Others predict even worse scenarios. James Bullard, chairman of the Saint Louis Federal Reserve and member of the Federal Open Market Committee (body of the US central bank that sets interest rates), predicts a 50% drop in GDP and a 30% unemployment rate in the second quarter of this year. To get an idea, unemployment during the Great Depression in the US reached 25%.
This simply means the massive destruction of productive forces. There is no other way to reactivate the cycle. Capital injections cannot alleviate the central problem, which is a market saturated with goods and unable to absorb them, and which will enter a downward spiral until the necessary adjustment is achieved: poverty and unemployment will further sink demand and, therefore, market saturation. The trend towards capital concentration, as was seen in 2008, will increase and will inevitably translate into extreme social polarization and inequality.
A fundamental issue has been laid on the table: the absolute inability of the bourgeoisie and capitalism – no matter who leads it worldwide – to guarantee the minimum to the majority of the population. We have seen it on other occasions. Faced with the prospect, in the most developed country in the world, of tens of thousands of deaths from humble families, many of us are reminded of the terrible images of the effects of Hurricane Katrina in 2005: the misery that ran through the streets of New Orleans and of the southern states of North America exposed this reality in the first world capitalist power; this happening in the height of the US boom. Now it will be much worse and across the whole country.
American capitalists, through Trump’s voice, are being clear: "the closure of the US economy can cause more deaths than the coronavirus (...) the remedy cannot be worse than the disease". This argument, which translates as the reversal of the few security measures that have been taken (closing of borders and some companies, confinements...), is very illustrative of their plans and interests. Other spokesmen for the American bourgeoisie agree with this approach. Lloyd Blankfein, former president of Goldman Sachs, proposed that citizens with lower risk should return to work in a few weeks. In this system, workers’ lives are worthless; if tens of thousands (or more) have to die to preserve capitalists’ benefits and strategic positions in the world market, then they shall die. Even more so when they are immersed in a brutal war with China for world domination in which the Asian giant advances positions at full speed.
It is impossible to think that everything that is happening and, above all, what will happen, will not cause an international social and political earthquake. The 2008 crisis sparked revolutions, the Arab Spring, Occupy Wall Street... The experience of the working class has been intense and full of lessons. In the US millions have drawn conclusions and put them into practice: before the beginning of this terrible crisis we have seen the teachers' rebellion, the General Motors strike, the threat of a general strike that paralyzed the government shutdown last year, the solidarity with which the working class was shocked at the immigrant internment camps, the strong and upward support for Bernie Sanders... The balance of forces is today much higher for the working class and youth and the accumulated experience will not be forgotten.
The coronavirus crisis has purely exposed the harsh reality of what a senile and reactionary system, which will nevertheless fight to survive at any cost, means for the majority. To end its anarchy and its misery, and to conquer a society in which the abundance of resources is not a reason for poverty and retrogression, but rather for humanity's advance; to conquer a society in which all that wealth produced by the working class is organized in a planned and democratic way, covering social needs, it is necessary to build a revolutionary alternative and to fight for socialism.