The coronavirus recession, also known as the Great Lockdown or the Great Shutdown, is a severe and ongoing global recession. An economic consequence of the ongoing COVID-19 pandemic, the first major sign of the coronavirus recession was the 2020 stock market crash on 20 February.
- The economy has collapsed due to this unprecedented challenge of Covid-19. The worst sufferers are the informal sector workers, daily wagers and the poor. We need a complete reboot of our economy and we must ensure that at least now we use this as an opportunity and build an environmentally sustainable model which is human economy, ensuring living wages to all and not perpetuating and furthering inequality.
- Amitabh Behar, as quoted in Covid-19 Exposed India’s Apathy Towards its Migrants. Only Social, Financial Security Will Ensure Their Return (May 17, 2020) by Naushad Khan, News18 India
- Capitalists preach "the market" for the working class – stand on your own two feet, don't rely on the government – but themselves sponge off the public big time. Just look at the billions in subsidies and tax concessions the fossil fuel companies, huge enterprises for the most part, extract from state and federal governments in Australia. The vehicle manufacturers raked in hundreds of millions a year from the Australian government for decades until deciding it wasn't enough and went overseas. This is why big companies and industry groups hire armies of former politicians to lobby on their behalf in the offices of premiers and prime ministers – there's money in government coffers and they want it. And while the capitalists talk about "the market" setting wages for workers, in reality, they don't really allow the market to do the job. They use the whole apparatus of state repression, the industrial tribunals, the police, the courts to suppress workers' rights to organise to pursue their demands. But when a crisis hits all the bullshit about the market is thrown to the winds. And that is just what we are seeing now. Faced with the collapse of the capitalist economy, for the second time in a dozen years, with massive bankruptcies on the table and the stock market plunging by more than 30 percent and more to come, fervent advocates of the free market are now embracing government intervention to save their skins.
- The Australian Chamber of Commerce and Industry is urging the federal government to provide wage subsidies to workers, equivalent in value to Newstart to all businesses experiencing a sharp downturn. It is also asking the government to provide concessional loans of up to half a million dollars, with 80 percent of the debt guaranteed by government, as well as wage subsidies to cover sick leave entitlements. Nothing but corporate welfare of a kind that they have long decried when applied to workers themselves. In the short term, working class households will get some benefits from this cash splash. In Australia welfare beneficiaries will be getting $750 in their bank accounts. In the United States it is likely that Americans will receiving close to $1,000. But this is just short term relief to get the economy moving. The long term benefits will go to the capitalist class in the form of tax cuts and other financial concessions. The current crisis demonstrates not only that all the ideological nonsense about the virtues of the free market is quickly thrown overboard when capitalist interests are threatened, but also that the idea that governments are essentially powerless in the face of the markets is rubbish. Governments are not helpless victims who cannot do anything in the face of "economic reality". In the normal course of events, when we demand things like better welfare, health care or education, governments tell us that it isn't possible.
- It's not that governments have suddenly discovered a big pot of gold in the basement of the central banks. They say that they are taking these measures to both protect public health and to save the economy. But it's obvious which takes priority. The new measures constitute the largest bailout bonanza in world history, carried out through state-administered transfers of public wealth and current and future debt to billionaires and big business: socialisation of losses, privatisation of profits. The outcome will be to further transfer, consolidate and concentrate wealth, just as has occurred since the GFC. While there is discussion about small handouts, nothing serious is being proposed to halt the mass layoffs now gathering steam.
- In pretty much every spending package, subsidies to business, government loans and tax concessions account for two-thirds or more of the funds outlaid. Things that directly benefit workers – the big majority of the population – account for only one-third of the money.
- It turns out that these things, too, can be done. So, in an economic emergency, few of the usual rules apply. Governments can marshal the resources and can threaten the narrow interests of private businesses. Hardcore libertarians despise these measures as rampant socialism. From their perspective, they're right: the very existence of such programs is condemnation of the free market capitalist model that they promote. But they are best seen only as another approach to the management of the capitalist economy. The fact that governments across the OECD are now prepared to spend trillions of dollar to save the financial system from collapse only confirms that the world economy cannot be left safely in the hands of "the market". And, the situation clearly confirms that when the capitalist class and governments deem it necessary to save their system, lots of measures they once denounced as "unaffordable", not permitted by the condition of "the economy", are actually affordable and permitted. Governments can act when required. The ideological justifications of yesterday are revealed as threadbare. But nor are government interventions of this nature geared towards the interests of the working class, only the interests of the bosses.
- The imminent public health crisis facing poorer countries as a consequence of COVID-19 will be further deepened by an associated global economic downturn that is almost certain to exceed the scale of 2008. It is too early to predict the depth of this slump, but many leading financial institutions are expecting this to be the worst recession in living memory. [...] Closely connected to this are the measures put in place by governments and central banks since 2008, most notably the policies of quantitative easing and repeated interest-rate cuts. These policies aimed at propping up share prices through massively increasing the supply of ultra-cheap money to financial markets. They meant a very significant growth in all forms of debt — corporate, government, and household.
- Adam Hanieh, This is a Global Pandemic – Let’s Treat it as Such, 27 March 2020, Verso Books
- We are entering an alarming situation where many poorer countries will face increasingly burdensome debt repayments while simultaneously attempting to manage an unprecedented public health crisis – all in the context of a very deep global recession. And let us not harbor any illusions that these intersecting crises might bring an end to structural adjustment or the emergence of some kind of "global social democracy." As we have repeatedly seen over the last decade, capital frequently seizes moments of crisis as a moment of opportunity — a chance to implement radical change that was previously blocked or appeared impossible.
- Adam Hanieh, This is a Global Pandemic – Let’s Treat it as Such, 27 March 2020, Verso Books
- Let's be clear: what's happening right now is the economic and financial equivalent of 9/11 and the Financial Crash rolled into one. And what's fast coming down the track could make even the Great Depression look like a stroll through the park. A total and complete shutdown of vast sections of the economy, indefinitely, with mass unemployment possibly around the corner.
- As the coronavirus epidemic stretches on, working people are facing an economic collapse, the likes of which have not been seen since the Great Depression. Organizing to fight for an immediate ban on all layoffs has to be an essential part of any program to protect the working class and to make the capitalist's pay for their crisis.
- Working people are facing what could be the biggest unemployment crisis since the Great Depression. As states and cities across the country continue to shut down schools, libraries, restaurants, bars, and other non-essential services in order to stop the spread of the coronavirus, hundreds of thousands of workers have already lost their jobs, and millions more will soon follow. While restaurant, theatre, hotel and hospitality workers have been some of the first to see massive layoffs, huge losses in travel, retail, and oil drilling and extraction industries are also expected, as more and more people are quarantined. [...] Such job losses would mean dire poverty for huge sections of the working class.
- Unfortunately, despite calls from progressives like Sanders and AOC, the U.S. government has so far done little to address the problem of layoffs and unemployment; and even limited proposals, such as universal paid sick leave and emergency cash payments, have been met with obstruction by Republicans and Democrats. While such government measures are important and necessary, they are clearly not enough. Confronting this crisis ultimately means confronting capitalism, and that means directly resisting these layoffs, since layoffs are always the first weapon used against working people in moments of economic crisis. Big businesses and corporations that have benefited from years of economic growth (not to mention the massive surplus value of workers' labor) owe employees and their families a huge debt and it's time to pay up. In order to make this happen, working people must organize for and demand: 1. An immediate ban on all layoffs. 2. Full wages for all employees, whether they are working during the crisis or not. And 3. A redistribution of working hours among currently unemployed workers (including undocumented and precarious workers) so that no one is denied the essential right to employment. Any company that cannot or will not comply with these demands should be nationalized under workers' control or expropriated directly by the workers themselves. Wherever possible the capital of these companies should also be immediately put to the service of solving the current economic and health crisis and providing for the full needs of the working class. Sitting by and allowing companies to layoff workers, on the other hand, expecting that the crisis can be solved with an expansion of the existing safety net, or direct cash payments, would be a huge mistake and would only weaken the power of the working class and ultimately strengthen the power of capital.
- While capitalists and their paid politicians will scoff at these demands, claiming they are economically infeasible or impossible, this is because they only understand the language of profit and cannot imagine a world run for the benefit of all. Nonetheless, the fact remains that capital has significant resources that could and must be made available to all working people. Most major corporations such as Amazon, Walmart, Disney, Delta, GM, etc., have enough reserves and more than enough credit to continue to pay their employees the full amount of their wages for the length of the health crisis. Therefore, in the case of private corporations, working people must demand that the federal government make any future market aid contingent upon a wholesale indefinite ban on all layoffs, with full wages and continued benefits for all employees, whether they are working or not. States must likewise make all operating licenses for private companies and corporations contingent upon the same demand. Industries that refuse, particularly health, transportation, and manufacturing industries should immediately be subject to nationalization under workers' control.
- Of course, working people ultimately cannot rely upon the federal government or the state governments (whose purpose is to maintain the hegemony of the markets and the rule of capital) to fix this crisis in any equitable way. Only the working class has the power to make this happen through mass strikes and work actions. In order to act swiftly in the case of any layoffs, lockouts, or shutdowns, working people ultimately must organize themselves at their workplaces and in the streets, whether they are in a union or not, and be prepared to use their collective power to demand that all necessary resources be employed for the well being of the whole class with full compensation and benefits, that full back pay be provided to all workers upon returning to work, and that everyone has access to well compensated employment.
- The COVID-19 pandemic is an unprecedented global health, social and economic crisis. [...] The pandemic, in other words, is now testing the capacity of our political and economic systems to cope with a global problem situated at the level of our individual interdependence, which is to say at the very foundation of our social life. [...] We equally depend on the state to help businesses of all sizes endure this trial by providing them with the financial assistance and guaranteed loans they require in order to avoid bankruptcy and retain as much of their workforce as possible. States no longer have any qualms about spending without limits in order to save the economy — "whatever it takes!" — while just weeks ago states opposed any request to increase hospital staff, hospital beds, or emergency services, out of its obsessive concern for budgetary constraint and limiting the public debt. States have since rediscovered the virtues of interventionism, at least when it comes to funding private enterprise and shoring up the financial system. One of the most ambitious stimulus plans to date has been implemented by Germany. Their plan constitutes an abrupt break with the ordoliberal dogmas that have been the norm since the beginning of the Federal Republic of Germany.
- Christian Laval and Pierre Dardot, The pandemic as political trial: the case for a global commons (March 28, 2020), ROAR Magazine
- In China, the epidemic effectively paralyzed the country both politically and economically. Freezing economic production and trade has never been practiced on such a scale, and the outcome has been a very serious economic and financial crisis in China.
- Christian Laval and Pierre Dardot, The pandemic as political trial: the case for a global commons (March 28, 2020), ROAR Magazine
- We are extremely skeptical of Macron's promise to be the first leader to question "our developmental model" after the crisis is over, and there are plenty of reasons to think that the drastic economic measures currently in place will eventually share the same fate as those enacted during the 2008 economic crisis: we will likely see a concerted effort to "return to normal" — i.e., return to our otherwise uninterrupted destruction of the planet amidst increasingly conditions of social inequality. And we fear the enormous stimulus packages designed to "save the economy" will once again be borne on the backs of the lowest-paid workers and taxpayers.
- This is unlike almost any other shock that we have seen in how quickly everything has ground to a halt, not just in the stock market but in everyday lives. And I truly do not believe that there is an action we can consider right now that is too small. I certainly have not seen any proposal that I would say is too large for us to be considering right now...We have to examine why there wasn't political appetite to do more in 2008. And the reason for that was because there was a package that was entirely designed to favor corporations, to bail out Wall Street that was more concerned with stock prices than wages and the health of Wall Street than the actual healthcare system. And that's why there wasn't political appetite to do more because we passed out billions of dollars and then the CEOs came in flying in on their private jets, asking for more... Now is a very different time. If we focus our package on immediate bailouts for everyday people, making sure that we're issuing things like mortgage and rent and student loan debt moratoriums, making sure that we're getting cash into people's hands, ensuring the fact that if they have to go to the hospital, coronavirus related or not because as we know this can trigger a series of other health issues, that you will be financially okay. And that is the number one thing that we need to do right now.
- We need to be introducing stabilizers to working families. And Katie Porter is absolutely right on the point of tax credits. You know, I think sometimes with all due respect to my colleagues, we get into this, you know, there's a lot of like this 90s wonkery going on where if we do a backdoor tax credit, oh, that's a clever way of helping people. But it doesn't address the core issue, which is that people are experiencing a shock right now. We need to get checks into people's hands. If you're concerned about it being means-based, tax it on the other end. Get everyone a check right now. And then if you want to make sure that the millionaire's don't get 1,000 bucks, do an extra, you know, tax them on the other end of that and make sure that they can't wriggle out of that.
- Just as in the 1930s, world capitalism, as it had existed until then, had reached a dead-end, and the need for it to be altered for the sake of preserving the system itself, was emphasised by many perceptive bourgeois thinkers, exactly in a similar manner contemporary world capitalism too has reached a dead-end and cannot continue as before. [...] Any change in capitalism, however, including a revival of the so-called "welfare capitalism" of the post-War period, will entail a loosening of the hegemony of international finance capital and hence will face stiff opposition from it. The fact that the need for such change is clear to bourgeois thinkers, does not mean that finance capital will simply voluntarily make a sacrifice of the hegemony it currently enjoys. Indeed the history of the 1930s itself bears witness to this fact. [...] Any change in capitalism, however, including a revival of the so-called "welfare capitalism" of the post-War period, will entail a loosening of the hegemony of international finance capital and hence will face stiff opposition from it. The fact that the need for such change is clear to bourgeois thinkers, does not mean that finance capital will simply voluntarily make a sacrifice of the hegemony it currently enjoys. Indeed the history of the 1930s itself bears witness to this fact.
- It is real-life class struggle, informed no doubt by ideas, that ultimately determines which way the world will move. Hence even for altering contemporary capitalism in the direction of the so-called “welfare capitalism” of yore, it would be essential to have the working class fighting for such an agenda. But when it does so, and when international finance capital resists such an agenda, we would be in the thick of class struggle. Time alone will tell whether this struggle would remain merely at the level of achieving a revival of “welfare capitalism” or whether it would go beyond capitalism altogether towards a socialist alternative. Once class struggle, for changing the system in its present form, acquires momentum, its outcome would depend on praxis and may not necessarily remain bounded within the system itself.
- The chief fearmonger of the Trump Administration is without a doubt Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health. Fauci is all over the media, serving up outright falsehoods to stir up even more panic. He testified to Congress that the death rate for the coronavirus is ten times that of the seasonal flu, a claim without any scientific basis. On Face the Nation, Fauci did his best to further damage an already tanking economy by stating, "Right now, personally, myself, I wouldn't go to a restaurant." He has pushed for closing the entire country down for 14 days. Over what? A virus that has thus far killed just over 5,000 worldwide and less than 100 in the United States? By contrast, tuberculosis, an old disease not much discussed these days, killed nearly 1.6 million people in 2017. Where's the panic over this? If anything, what people like Fauci and the other fearmongers are demanding will likely make the disease worse. The martial law they dream about will leave people hunkered down inside their homes instead of going outdoors or to the beach where the sunshine and fresh air would help boost immunity. The panic produced by these fearmongers is likely helping spread the disease, as massive crowds rush into Walmart and Costco for that last roll of toilet paper. […] People should ask themselves whether this coronavirus "pandemic" could be a big hoax, with the actual danger of the disease massively exaggerated by those who seek to profit – financially or politically – from the ensuing panic. That is not to say the disease is harmless. Without question people will die from coronavirus. Those in vulnerable categories should take precautions to limit their risk of exposure. But we have seen this movie before. Government over-hypes a threat as an excuse to grab more of our freedoms. When the "threat" is over, however, they never give us our freedoms back.
- With nearly one-third of all Americans on government-enforced lockdown and the National Guard pouring into the streets, it's a good time to take stock of the coronavirus scare and the real nature of the threat. What is our most important investment as the markets crash?
- Ron Paul, "What's Coronavirus' Greatest Threat? What's The Most Important Investment?" (23 March 2020), Ron Paul Liberty Report
- The dynamics of the economic and financial crisis will strengthen the tendencies toward recession, aggravating the effects of the health crisis. This relationship means that the duration and depth will be dependent on the combination of both crises. The drops in the stock market are bursting a bubble that helped maintain weak economic growth (particularly in the U.S.), without having resolved any of the structural problems that burst forth with the 2008 crisis (low productivity, low investment). Companies today are more indebted than in 2008, so a series of bankruptcies (in airlines, shale oil companies in the U.S., tourism, etc.) could hit the banks. Unlike 2008, the banks appear to be in a better position, but this all depends on the depth of the recession. There are other significant differences compared to the last recession: instead of coordination between the governments of the main powers that was seen in 2009 (when they were obviously terrified by the depth of the crisis), today confrontations are prevailing due to geopolitical tensions and ruthless competition not only between the United States and China, but also between the U.S. and Germany (with strong economic ties to China), and even between the United Kingdom and the European Union. For all these reasons, we call on working people and youth to take the struggle for measures against the crisis into our own hands.
- Congress passed a $2 trillion stimulus package for which the American taxpayer will be held entirely responsible. Even worse, the new legislation contains a $500 billion allocation (another corporate giveaway) that the Federal Reserve will use as a capital base for borrowing $4.5 trillion. That massive sum of money will be used to buy toxic bonds in the corporate bond market. Just as Mortgage-Backed Securities (MBS) were used to fleece millions of investors out of their hard-earned savings in the run-up to the 2008 Financial Crisis, so too, "toxic" corporate bonds were the weapon of choice that was used to pilfer trillions of dollars from investors in the run-up to today's crisis. (Same scam, different instrument) The virus was merely the proximate cause that tipped the sector into meltdown. The problem had been festering for years and everyone in the financial community (Including the Fed, the BIS and the IMF) knew that it was only a matter of time before the market would blow sky-high. Which it did.
- Mike Whitney, "Putin Says 'The Rich Must Pay' for the Corona-Virus" (28 March 2020), The Unz Review
- The desperate policies of panic-driven governments involve throwing huge amounts of money at the economies collapsed in response to the coronavirus threat. Monetary authorities create money and lend it at extremely low interest rates to the major corporations and especially big banks "to get them through the crisis." Government treasuries borrow vast sums to get the collapsed economy back into what they imagine is "the normal, pre-virus economy." Capitalism's leaders are rushing into policy failures because of their ideological blinders.
- The problem of policies aimed to return the economy to what it was before the virus hit is this: Global capitalism, by 2019, was itself a major cause of the collapse in 2020. Capitalism's scars from the crashes of 2000 and 2008-2009 had not healed. Years of low interest rates had enabled corporations and governments to "solve" all their problems by borrowing limitlessly at almost zero interest rate cost. All the new money pumped into economies by central banks had indeed caused the feared inflation, but chiefly in stock markets whose prices consequently spiraled dangerously far away from underlying economic values and realities. Inequalities of income and wealth reached historic highs. In short, capitalism had built up vulnerabilities to another crash that any number of possible triggers could unleash. The trigger this time was not the dot.com meltdown of 2000 or the sub-prime meltdown of 2008/9; it was a virus. And of course, mainstream ideology requires focusing on the trigger, not the vulnerability. Thus mainstream policies aim to reestablish pre-virus capitalism. Even if they succeed, that will return us to a capitalist system whose accumulated vulnerabilities will soon again collapse from yet another trigger.
- The second reason I focus on capitalism is that the responses to today's economic collapse by Trump, the GOP and most Democrats carefully avoid any criticism of capitalism. They all debate the virus, China, foreigners, other politicians, but never the system they all serve. When Trump and others press people to return to churches and jobs—despite risking their and others' lives—they place reviving a collapsed capitalism ahead of public health.