COVID-19 Exposes Economic Misery as U.S. Capitalism’s “New Normal”

Danny Haiphong
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Neoliberal capitalism is incapable of containing the pandemic or facilitating an economic recovery for the masses.

“Precarity for the working class will only intensify once eviction, foreclosure, and student loan moratoriums end.”

Six months have passed since the capitalist economy crashed and the IRS deposited its first round of so-called “stimulus checks” worth a paltry $1200. The extended unemployment insurance that many workers relied on for survival dried up at the end of July. The two-party corporate duopoly has not agreed to implement a second round of assistance for working people to survive the economic fallout from the COVID-19 pandemic. In fact, Congress has taken an extended vacation  in the months leading up to the presidential election in November. While the big story of the U.S.’ COVID-19 saga has been the 200,000 fatalities to the disease, millions more have seen their livelihoods completely demolished.

Economic misery is indeed the “new normal” of U.S. capitalism’s late stages. The numbers do not lie. Working class and poor Americans are struggling more than ever from Great Depression-like conditions. Eight million people have fallen into poverty  since May, six million in the last three months alone. Fifty-four million people, roughly fifteen percent of the population, could be food insecure  by the end of 2020. Even agents of finance capital in the foundation world cannot turn a blind eye to the sixty-five million people in the U.S who have filed for unemployment since March.

COVID-19 has facilitated a criminal level of economic precarity for everyone except the lords of capital and their closest confidants. Capitalists may have lost control over the stability of their system but have managed to accumulate enormous profits off the backs of the poor. Billionaire wealth in the U.S. has increased by nearly one trillion dollars  since the pandemic. This number increases to 10.2 trillion U.S. dollars  when the world’s billionaires are taken into account. Jeff Bezos, the world’s richest man, has made $74 billion since the clock struck midnight last January.

“Misery is the new ‘normal’ of U.S. capitalism’s late stages.”

But the worst has yet to come. Precarity for the working class will only intensify once eviction, foreclosure, and student loan moratoriums end. When they do, tens of millions if not hundreds of millions will be faced with enormous bills they simply cannot pay. Only a massive overhaul in the U.S.’ non-existent social welfare system can reverse the explosive misery that will be added onto the working class’ already enormous economic pain. The failure to contain the pandemic in the U.S. means COVID-19 will spread for many more months to come and keep even a modest stabilization of the capitalist economy effectively out of reach.

U.S. capitalism had not yet overcome the crisis of 2007-2008 when the decision was made to enact a policy of “herd immunity” as a means to preserve the rule of austerity during a pandemic. The 2007-08 crisis set Black wealth on a collision course toward zero by 2053 . This is likely to accelerate in the aftermath of the current crisis. Black jobs and livelihoods have been most impacted  by the thirty percent contraction in the U.S. economy since the pandemic. And while so-called “jobs” numbers had improved prior to March, stagnant incomes and the uncounted millions of part-time and/or discouraged workers were a stark indication that life for majorities of people had not.

“Only a massive overhaul in the U.S.’ non-existent social welfare system can reverse the economic pain.”

The latest crisis of U.S. capitalism has burst asunder a host of illusions about the durability of the system. One of the biggest illusions of modern U.S. capitalism is the assumption that a post-industrial economy is also a post-labor economy. Finance capital may be the engine behind the U.S.’ service-based economy, but the exploitation of labor remains the source of all profit. The very prospect of a further impoverished working class sent the global capitalist economy into a depression after years of slow growth. COVID-19 disrupted global supply chains and rendered large sections of the working class unable to sell their labor.  Thus, behind the derivatives, asset swaps, and the myriad forms of speculation partaken on Wall Street resides the exploited living labor that the lords of capital rely on for existence.

COVID-19 has also rendered useless the axiom that “There is No Alternative” (TINA) to U.S.-led neoliberal capitalism. Two countries in the Asia Pacific, China and Vietnam, have proven that neoliberal capitalism is incapable of containing the pandemic or facilitating an economic recovery for the masses. China’s market socialist economy contained the pandemic in three months . The People’s Republic of China has since steered its economy back on a path of positive growth while setting its sights on eliminating extreme poverty by the end of 2020 and becoming a carbon neutral country by 2060. Vietnam organized perhaps the most impressive response to COVID-19 after several consecutive years of significant economic growth and reductions in poverty.

The examples set by China and Vietnam will have an enormous impact on the political and economic development of the global order itself. Global South nations already looked upon both countries as economic miracles prior to the pandemic. China and Vietnam’s emphasis on a people’s centered development model and state ownership of the commanding heights of the economy lays a framework for how the rest of the Global South can achieve economic growth and address social problems like pandemics. The U.S. comes out of the COVID-19 experience with nothing to offer the Global South but economic misery, mass death, and political instability. Two hundred thousand dead and a hemorrhaging economic base simply cannot compete with the winds prosperity and modernization blowing East.

“The U.S. comes out of the COVID-19 experience with nothing to offer the Global South.”

Unfortunately for most in the U.S. and Western world, basic political economy is clouded by white supremacy and imperial hubris. The U.S. will not give up its hegemony without a fight, which is why the State Department, U.S. intelligence, and the Pentagon have been busy waging a new Cold War against China and keeping pace with its many wars against China’s allies in the Middle East, Africa, and Latin America. Such militarism is a further drain on the economic life of the masses, but this externality is of little concern to the predatory capitalists that wield the power of the U.S. state to the benefit of their addiction to endless war. The pandemic and economic crisis are secondary to the ultimate objective of keeping U.S. corporations and financial institutions at the top of the global pecking order.

Oppressed people everywhere are facing a monumental moment of transition in global politics. Whether the outcome is positive or negative for the U.S. is dependent upon the people, particularly Black Americans and their allies in the broader working class. Economic misery may be “new normal” of U.S. capitalism but ever-increasing levels of exploitation have always been a key feature of the system. History is on the side of the people because history is defined by the life and the eventual death of social systems. However, this fact will remain buried in the propaganda of the dominant system until a deeper consciousness of why capitalism has failed the masses is developed and nurtured into a mass movement. Only then can the oppressed take the necessary steps to becoming the primary makers of history rather than mere passive recipients of their oppressors’ depravity.

Danny Haiphong is co-coordinator of the Black Alliance for Peace Supporter Network and organizer with No Cold War. He and Roberto Sirvent are co-authors of the book entitled American Exceptionalism and American Innocence: A People’s History of Fake News–From the Revolutionary War to the War on Terror (Skyhorse Publishing). His articles are re-published widely as well as on Patreon at patreon.com/dannyhaiphong. He is also the co-host with BAR Editor Margaret Kimberley of the Youtube show BAR Presents: The Left Lens and can be reached on Twitter @spiritofho, and email at wakeupriseup1990@gmail.com.