13 de mayo de 2020

USA: In the Face of a New Great Depression?

33.5 million new unemployed, health disaster, increasing "wildcat strikes" and clashes between local administrations and Trump

The data released on Friday 8 confirmed a new jump in the U.S. unemployment rate from 3.5 % in February to 14.7 % in April.

Yes; in two months, one out of ten economically active Americans lost their job. A real social catastrophe. These level of unemployment had not been seen since 1939, when the beginning of the World War II brought to an end the Great Depression that had begun with the financial crash of 1929.

According to the latest data, 33.5 million U.S. workers have filed the request to receive unemployment insurance since March. This is a limited stipend -which varies by state, but is not offered for more than six and a half months- as is all the social assistance that is being provided to contain the social impact of this huge crisis. The check for US$ 1,200 was a one‑time payment and by no means covers the income drop of millions of working families, salaried and self-employed.

The bailout package voted by Republicans and Democrats in Congress has served to channel Treasury funds to the big capital and has led to strong clashes and claims over distribution. The package excludes medium-size companies, only providing assistance to those with 10,000 employees or annual revenues of two and a half billion dollars (Financial Times, April 28). The loans with large benefits included in the package have been provided to companies that have surplus balances, such as the Shake Shack restaurant chain and Los Angeles Lakers basketball team. The scandal surrounding these cases led to the withdrawal of the loan, but it reveals the corporate discretion and looting. Ashford Inc. a hotel chain owned by one of the major donors to the Trump campaign has received US$ 70 million. Boeing received billions of dollars in credit on preferential terms.

The whole operation provided earnings for the intermediary parties  -banks like JP Morgan Chase, Well Fargo, and Bank of America- of about US$ 2 billion so far (The Hill, May 3). This injection of funds has generated days of euphoria on Wall Street and set the conditions for large businesses to use this income to aggressively take over rival companies. Elizabeth Warren, a progressive Democrat who supported the measure, introduced a bill to try to stop mergers and acquisitions at this stage, as if this was not a predictable consequence of the package voted in Congress.


Health disaster and every man for himself

This promiscuous distribution of state funds in the midst of a humanitarian crisis (and without serving to contain any layoffs) is a real provocation against workers who face hardship and disease as immediate prospects.

The enormous employers’ pressure to reopen the economy, shared in particular by Trump (desperate at the perspective of a depression-induced electoral collapse), is having a chaotic impact on the handling of the pandemic. The death toll is already over 78,000 deaths and there are one million cases, clearly keeping the U.S. as the international center of the pandemic (and of the global capitalist crisis). The country represents a third of the world's confirmed cases, even though it started testing its population much later and in a smaller ratio than other developed countries. Tom Frieden, former director of the Centers for Disease Control and Prevention (CDC), believes that to handle this pandemic, the country should have 300,000 employees dedicated to tracking previous contacts of those infected in order to arrange for new isolates. While at the peak of the pandemic 9,000 people were put at work in Wuhan, there are 2,200 in the whole U.S. Nor have spaces been set up to isolate those infected and prevent the spread to family members and neighbors.

The mechanics of the capitalist raid have not been altered by the scale of the disaster. There have been layoffs of health workers in more than a hundred hospitals nationwide, while tens of thousands have been suspended, incredibly, at a time when emergency services are most needed to be fully staffed. One explanation is that the competition for the necessary supplies for the pandemic, such as personal protective equipment, has led the prices to astronomical figures, in an auction-style effect. "This has resulted in extraordinary expenses at a time when we have intentionally lowered patient volume by more than 50 %," explained the CEO of Nacogdoches Memorial Hospital as the cause of the staff suspensions (Labor Notes, April 15)

In this context, Trump led a television event this week called "America United: Going Back to Work," moderated by right-wing Fox News anchors.

No new measures were announced at the event to protect against the virus, although Trump predicted "I think we'll have a vaccine by the end of the year".  Some states are already taking steps to free economic activity, even if the trend of the number of cases is upward, such as Colorado, Georgia, Indiana, Iowa, Minnesota, Nebraska, Texas and Wyoming. No state has had a consistent decline in new cases of coronavirus for 14 days, which was the official benchmark Trump had established at the time.

These circumstances particularly hit the black population of the mentioned southern states. Because of housing, economic, and exploitative labor conditions, blacks and Latinos die in far greater proportion than whites. In Louisiana, blacks account for 32 percent of the population and 70 percent of coronavirus deaths. In Mississippi, the figures are similar: 37 and 72 percent.


The "class war"

The unemployment figures and the deep recession are not the only aspects that make different commentators resemble the situation to the one of the 1930s. Last month, a columnist from The Nation magazine, an exponent of the center-left sector of the Democratic Party establishment that has supported Warren and then Biden in the primaries, titled his analysis “The Coronavirus Class War Has Already Started”.

The author noted that the obscene distribution of funds among the capitalists, the lack of aid to the workers, the obligation for many of them to risk their lives in carrying out their tasks, along with layoffs, suspensions and salary reductions, generate an explosive situation. "The collapse of the American unions in the last decades means that the stabilizing force of the organized labor movement has been lost, making wildcat strikes the weapon of choice in this new class war. The U.S. may be entering a period of workers’ militancy that is far from any levels seen since the 1930s and 1940s.

The May Day workers' actions portrayed this change of era. Nurses and health care workers, one of the sectors that has been at the forefront of the wave of conflict, left from their jobs in thirteen states. There was a concerted strike between workers' organizations from the big companies Amazon, Instacart, Whole Foods, WalMart, Target, and FedEx, demanding safety conditions, paid sick leave and bonuses for risky work. The action resulted in work stoppages, picket lines and calls for accompanying boycotts. This unified action comes on the heels of 140 wildcat strikes in March and April as posted on the site Payday Report. Some of these conflicts have achieved partial conquests, like chinstraps and gloves for Target employees, safety kits in Instacart, or the interruption of production in the automotive industry in Detroit and surroundings, which affected at least 150 thousand workers.

May 1 also gave rise to several virtual actions, rallies and even "cacerolazos" (banging of pots and pans), modeled on Latin American protests. The other major struggle that took a leap forward that day was the tenant strikes. Some estimate that 200,000 family homes have given in to the decision not to pay. The demands include the suspension of rent and mortgage payments and of services for the duration of the emergency, as well as a moratorium on evictions and closings. The National Council of Multi-Family Homes reported that 31 % of tenants stopped paying their rent in April, a figure that is expected to grow in May (Socialist Resurgence, May 2); a survey estimates that in New York City 44 % of tenants will stop paying. In turn, eight million families have stopped paying their mortgages (6.4 %), leaving an unpaid liability of US$ 754 billion.

The enormous capitalist crisis, which preceded the pandemic, has been transformed into a deep depression. The political and social polarization of the country is translating into deep class clashes, which tend to take on a larger scale and a more combative character. Thousands have drawn the conclusion that the capitalist regime is deeply ill and must be surmounted. The fiasco of Bernie Sanders, who has gathered millions of votes talking about socialism but has not installed an independent political movement of the workers on the national scene, must be overcome by building an independent political organization of the exploited masses, firmly rooted in the movements of struggle that are developing in the country.