Countless confront economic and social crisis as Wall Street celebrates
31 July 2020
The United States economy contracted in a staggering yearly rate of 32.9 percent between April and June, the sharpest drop in US history. The authentic three-month decrease, of 9.5 percentage, dwarfed the worst one quarter since such statistics were first gathered greater than 70 years ago.It would be hard to overstate their scale of the financial calamity which has ravaged the lives of thousands of working individuals and their households. CNBC noted, “Not the Great Depression nor the Great Recession nor any of the more than three dozen economic slumps over the past two centuries have ever caused such a sharp drain over so short a period of time.”The only comparable financial disruptions in modern history are those due to world war or social meltdown. If one computes the general fall in US GDP for the first six months of 2020, in regards to 14.75 percentage —about the amount of the decrease in the Russian market in 1993, the worst of the depression years that followed the collapse of the Soviet Union.The asserts of this Trump government about a “V-shaped” retrieval have no greater validity than the US president’s ravings about handling coronavirus by consuming bleach. There are significant indicators that following an easing of this downhill curve in June, as a result of widespread state-ordered reopenings, the consequent resurgence of this pandemic means a brand new plunge.On Thursday, the Labor Department reported which 1.43 million new claims for unemployment benefits were filed last week, the 19th straight week that new claims have surpassed one million. After falling for months, fresh claims have climbed over the previous two weeks.The amount of employees asserting continual unemployment benefits also climbed from 16.1 million to 17 million for the week ending July 18. Additionally, 830,000 new claims were filed for the national Pandemic Unemployment Assistance, which insures self sustaining, gig employees and others who don’t qualify for convention jobless benefits.Under such states, the $600-a-week national supplement to say unemployment benefits is operating out now to get an estimated 20 million employees. Overnight, millions will see their incomes cut by two-thirds, by a mean of $921 per week at May to approximately $321 per week. In certain nations, the thieving of the lifeline will be worse. Back in Oklahoma, jobless assistance will be cut by 93 percent to $44 a week.It is a measure of the precarious situation American workers faced even before the pandemic, that the weekly supplemental assistance and the paying out of a one-time $1,200-per-person “stimulus” check led to a 45 percent increase in personal income in the second quarter. Seventy percent of those who returned to work in June suffered an income loss.Last week, the moratorium on evictions expired for about 18 million renters—more than a third of the 44 million total US renter households—who live in buildings with mortgages backed the federal government. With rent bills accumulated over the last four months now due, housing advocates predict a “tsunami” of evictions, with half a million households in Los Angeles alone threatened.Millions in the US are also going hungry. According to a US Census Bureau survey, food insecurity last week reached its highest reported level since May, with almost 30 million Americans reporting they had not had enough to eat at some point in the seven days through July 21.After handing trillions to Wall Street and major corporations through the bipartisan CARES Act signed by President Trump in late March, the US Congress is denying the most basic necessities to millions of people. Both the Republicans and the Democrats are deliberately using the specter of poverty, homelessness and starvation as a means to force reluctant workers back into dangerous factories and workplaces in order to resume the flow of corporate profits.While the economy collapses and tens of millions face hunger, homelessness and destitution, the upper crust of American society have never had it so good. Fueled by the massive injection of money from the Federal Reserve, the Dow Jones Industrial Average has risen by 42 percentage since its low point in late March, and the Nasdaq by 54 percent. Wall Street largely shrugged off the news that the US economy shrank by $1.8 trillion in the second quarter, with the Dow off slightly while the Nasdaq was up.Even as the death toll surpasses 155,000 in the US and the pandemic rages out of control in Florida, Texas, California and other states, the ruling class is gorging itself. US billionaires, whose wealth increased by 80.6 percent between 2010 and 2020, are seeing another windfall, with another 20 percent increase—that a rise of at least $565 billion—since this pandemic began.The world’s richest man, Amazon CEO Jeff Bezos, has seen his net worth rise $74 billion since the beginning of 2020 to an estimated $189.3 billion. On a single day last week, his personal fortune rose $13 billion after a positive Wall Street forecast led to a rise of his 57 million shares of Amazon stock to $3,232.49 per share. Bezos, who could become the world’s first trillionaire at this rate, is now personally worth more than the market valuation of giants such as Exxon Mobil Corp., Nike Inc. and McDonald’s Corp.Due to the $200 billion increase in the value of Tesla stock—selling at $1,487.49 per share at the end of the trading day on Thursday—Elon Musk’s net worth has tripled since the pandemic, pushing past the $74 billion mark and making him the fifth-richest person in the world. On July 21, Musk qualified for a stock option payout worth a record $2.1 billion, his second jackpot since May due to Tesla’s 275 percent rise in share values this year.Both Bezos and Musk have been at the forefront of the drive to force employees to work in their warehouses and factories without basic protections, even as the number of workers who die and are infected in their facilities continues to rise. There is a brutal logic to this: the working class must be forced to pump out the profits needed to pay for the massive increase in government and corporate debt has been used to fuel the irrational stock market bubble and their personal payouts.The billionaires have escaped to their private islands, luxury apartments and yachts while the US records one COVID-19 death every minute, and the vast majority of the population faces unprecedented social distress. Last Saturday night, the super-rich partied in The Hamptons, less than 100 miles from New York City, where nearly 23,000 people have perished from the deadly disease. Partygoers spent between $2,500 and $25,000 per person for some concert featuring Goldman Sachs CEO David Solomon, “who, in addition to running one of the largest and most powerful investment banks in the world,” CNN reported, “is also a part-time electronic dance DJ who goes by the name D-sol while spinning records at clubs in New York and Miami.”The social catastrophe produced by the pandemic is not a failure of modern medicine, but a failure of capitalism as a social order. COVID-19 did not pose a challenge unfamiliar to medical science; on the contrary, it had been predicted for decades and the necessary countermeasures studied and refined. But the outbreak of the pandemic posed a challenge that the profit system proved incapable of addressing in a humane and rational way. Capitalism has led the working class, and all humanity, into disaster.The first half of 2020 was characterized by the incompetent, negligent and criminal response to the pandemic by the ruling class. The next half will be dominated by those response of all the working class in the US and internationally. Millions of workers, including teachers opposing the reckless rush to reopen schools, are coming into direct political battle against the Trump administration and both capitalist parties. This struggle must be armed together with a clear understanding that the protection of lives and livelihoods requires a revolutionary struggle into expropriate that the private fortunes of the super-rich, establish employees’ power along with carry out also the socialist reorganization of economic life into meet this needs of the huge bulk, not the rich few.