By Robert A. Vella
There are now over 2.1 million confirmed COVID-19 cases worldwide which have resulted in over 140,000 deaths. Both of those figures are obviously undercounts of the actual numbers. In the U.S., there are nearly 660,000 confirmed infections and over 33,000 fatalities. The severity of the consequent global economic collapse is coming into sharper focus and it is truly staggering. Over the last month, at least 22 million workers have lost their jobs just in the U.S. alone. This means that the coronavirus pandemic has completely wiped-out all of the economic gains since the Great Recession, and the scale of the downturn seems destined to reach that of the Great Depression.
Included in this post is a compelling and revealing article about the fate of globalization which I previewed yesterday in three questions posed to readers. I find it remarkable, to say the least, that a lowly virus many times smaller than a human blood cell could achieve what decades of passionate human effort could not. The specter of neoliberalism, which uplifted living standards in developing countries at the expense of creating anti-democratic supranational corporate entities and rising socioeconomic inequalities, had withstood the challenges of anti-austerity movements across the western world (e.g. Occupy in Europe and America). This centrist establishment, although eroded by flank attacks from the Right and Left, had managed to prevail. But now, in the midst of a terribly costly and self-inflicted crisis, the reality of its failures are all too apparent. While no one can predict the future, it’s probably safe to say that the world might never be the same again.
It is also intriguing to note the likely fate of neoliberalism’s most extreme manifestation. While Donald Trump won the U.S. presidency on a disingenuous platform as an anti-establishment populist, he has since governed as the personification of unrestrained authoritarian capitalism (a.k.a. fascism). That he now faces the wrath of a hostile American electorate is both ironic and illustrative of poetic justice. Nate Silver’s 538 blog of aggregate opinion polls shows that President Trump’s approval rating bump, which he garnered by offering one-time cash payments to Americans and by exploiting his media-covered daily press conferences, has totally disappeared. It currently has his disapproval rating at 51.7% and his approval rating at 44.1%. Those cash payments, by the way, are not being widely distributed as was expected to occur yesterday. I did not receive mine nor did I receive an explanation even though I meet all the qualifying requirements. You can check the status of yours at this link: https://sa.www4.irs.gov/irfof-wmsp/login
Trump’s performance in response to this crisis has failed in just about every way imaginable. The recently enacted small business loan program, which was intended to help employers retain workers, has exhausted its funding. The $500 billion aid to large corporations, which was supposed to be regulated by three layers of governmental oversight, is now essentially a slush-fund Trump can use to reward his political allies after he fired the overseeing Inspectors General. The U.S. has suffered the greatest number of COVID-19 infections and fatalities by far, and the nation’s hospitals are barely coping after continued neglect from his administration. Trump’s bloviating about using nonexistent constitutional powers to further his political interests has been rebuked time and again, and his blatant self-serving lies are falling on deaf ears. If and when America emerges from this catastrophe, it will be in spite of Trump and not because of him.
Here’s today’s news:
The death toll from the coronavirus in the U.S. is nearing 31,000 on Thursday after President Donald Trump said the country passed its peak for new cases.
The jump in the death toll, which stood at more than 26,000 Wednesday morning, comes after New York City implemented a new way of counting fatalities. The city is now including probable cases for which officials did not have a positive COVID-19 test but reason to believe it to be the cause of death.
With nearly 7,000 confirmed deaths and just over 4,000 probable deaths, the city reports close to 11,000 fatalities. Not everyone counted in the increase died in the past 24 hours. Other states have similarly revised their numbers upward as they work to get a more accurate count. Connecticut on Wednesday saw its death toll jump when state officials indicated they had begun including people who died in their homes rather than just people who were in hospitals at the time of death.
A record 22 million Americans have sought unemployment benefits over the past month, with millions more filing claims last week, underscoring the deepening economic slump caused by the novel coronavirus outbreak.
Thursday’s weekly jobless claims report from the Labor Department followed dismal data on Wednesday showing a record drop in retail sales in March and the biggest decline in factory output since 1946. Economists are predicting the economy, which they believe is already in recession, contracted in the first quarter at its sharpest pace since World War Two.
President Trump’s decision on Tuesday to back off his insistence that he would decide when states reopen their economies came after governors grew increasingly frustrated with the White House over his comments, and moved to coordinate their own efforts.
Mr. Trump walked back his inflammatory comments on Tuesday evening, saying “the governors are responsible” for reopening their economies.
President Trump raised the possibility that he could invoke Article 2, Section 3 of the Constitution to adjourn Congress in order to make recess federal appointments, a never-before-used presidential power that Senate Majority Leader Mitch McConnell (R., Ky.) suggested he would not support.
In a statement Wednesday night, McConnell said he shared the president’s “frustration with the process,” but admitted that “under Senate rules,” confirmation processes “will take consent from Leader Schumer,” suggesting he did not agree with the means proposed by the White House.
While the Constitution says that the president “may, on extraordinary Occasions . . . in Case of Disagreement between them” adjourn Congress, it has never been invoked by a president before, and its scope is unknown relative to federal appointments during pro-forma sessions. Later in the briefing, Trump admitted that if he attempted to move forward with the plan, it would “probably be challenged in court.”
Trump and red state governors for weeks have fairly bragged about how large parts of the farm belt have escaped the ravages of the virus without the enforced shelter-in-place policies common on both coasts. It’s still unclear whether the states actually “flattened the curve,” or if the virus just reached there later. But now, cases are erupting, threatening a local population that doesn’t always have easy access to the same health care as more urban areas.
A pork processing plant in Sioux Falls, South Dakota’s most populous city, was forced to close after about 240 employees contracted the virus. Republican Mayor Paul TenHaken asked Gov. Kristi Noem this week to issue a stay-at-home order in Minnehaha and Lincoln counties, where more than 800 of the state’s 988 positive cases have been confirmed.
Noem refused, prompting the city council to introduce a three-week lockdown ordinance on its own that members lament will take a week just to pass.
By Monday, the police in a small New Jersey town had gotten an anonymous tip about a body being stored in a shed outside one of the state’s largest nursing homes.
When the police arrived, the corpse had been removed from the shed, but they discovered 17 bodies piled inside the nursing home in a small morgue intended to hold no more than four people.
The 17 were among 68 recent deaths linked to the long-term care facility, Andover Subacute and Rehabilitation Center I and II, including two nurses, officials said. Of those who died, 26 people had tested positive for the virus.
It would be foolish, amid such uncertainty, to make overly confident predictions about how the world economic order will look in five years, or even in five months.
But one lesson of these episodes of economic tumult is that those surprising ripple effects tend to result from longstanding unaddressed frailties. Crises have a way of bringing to the fore issues that are easy to ignore in good times.
One obvious candidate is globalization, in which companies can move production wherever it’s most efficient, people can hop on a plane and go nearly anywhere, and money can flow to wherever it will be put to its highest use. The idea of a world economy with the United States at its center was already falling apart, between the rise of China and America’s own turn toward nationalism.
There are signs that the Covid-19 crisis is exaggerating, and possibly cementing, those changes.
Trade as a share of global G.D.P. peaked in 2008 and has trended lower ever since. The election of President Trump and the onset of a trade war with China had already made multinational companies start to rethink their operations.
“I think companies are actively talking about resilience,” said Susan Lund, a partner at McKinsey who studies global interconnectedness. “To what extent would companies be willing to sacrifice quarter-to-quarter efficiency for resilience over the long term, whether that’s natural disasters, the climate crisis, pandemics or other shocks?”
She envisions not so much a full-scale retreat from global trade as a shift toward regional trade blocs and greater emphasis on having companies build redundancy into their supply networks. Governments will probably insist that certain goods, like pharmaceuticals and medical equipment, rely more on domestic production given the current global scramble for those items.