That queasy feeling you have in the pit of your stomach isn't
the Corona Virus, its that darn old 'V' shaped recovery. You
know the one that can't make up it's mind from one day to the
next. You can get whiplash watching the market's wild swings.
It doesn't take much to make the market plunge 700 points on
Tuesday only to rise 750 points on Wednesday based on some
bizarre rumor or flimsy news of an uptick in consumer spending.
What planet do these market strategists live on? Do they ever
leave their computer screens long enough to see what is happening
out on the street? It is not a pretty sight. If you want the one
snapshot of America in the grips of the pandemic; it is the line
of cars, 10,000 long, waiting for free groceries in San Antonio.
Thanks to the billions in liquidity the Federal Reserve has
provided, you can get a new car loan by just signing on the
dotted line. But you can not pay your rent or feed your
family because your job, like millions of others, has
disappeared. A while your student loan, mortgage, and
medical bills are piling up, a new wave of pandemic is
sweeping the country. Assuring that you new car will be
repossessed before you are evicted, leaving you with no
place to come in out of the rain.
The economy is cruising toward a depression if the infection
rate and the body count keep rising and the states must lock
down their economies again. The economy never fully
recovered in many places after the 2008 recession, and now
these cities and towns are facing a triple whammy, being asked
to close their doors once again. Adding to the stress on families
already having difficulty just treading water; you have the Trump
administration's effort to dismantle the Affordable Care Act in the
middle of the pandemic.
This new face on an old system is called precarity capitalism. It
is not division by inequality of income or wealth, but by security
and self-confidence. The minority is settled in safe, well-paying
careers, while the majority lives in persistent anxiety of the rising
cost of living and the reduction of public services that used to be the
standard of the middle class.
The most prevalent indicator of this type of capitalism is the wild
swings in the stock market. The increase in stock price is not tied to
performance or profitability of the company, but to the machinations
caused by market analysts for their profit. It's a nice gig, traders buy
and sell the same stock over and over again, pocketing the profit - they
hope - and score short term capital gains on a few thousand dollars a day;
which is taxed now as regular income. It's Vegas on steroids! Most of
the traders are through by noon, they fold up their lap-tops and enjoy a
celebratory drink with lunch.
When Trump points to the stock markets performance as an indicator of
a great economy he is simply reinforcing the divide. Thirty percent of
Americans missed housing payments - mortgage or rent - in June. Every
bit of economic data; GDP (Gross Domestic Product), consumer spending,
employment, and household income, fell by rates not seen since WWII. The
IMF, International Monetary Fund, has lowed it's U.S. GDP forecast for 2020
to -8%. And Aprils predicted GDP is expected to be -4.5%. This morning
Canada announced that its GDP for April was an astonishing -11.6%.
Trump's relentless optimism about the economy has not lessened the pain most
families are facing, even though he has said that the economic recovery is
like "a rocket ship" not just a 'V'. Most of the PPP - Paycheck Protection
Plan - is scheduled to run out in the middle of this month When that happens,
businesses will be forced to lay off employees just to keep from going bankrupt
themselves. And the supplemental unemployment support will stop at the end
of July. There is no indication that these programs will be extended. If they are
not the economy will take another lurch downward.
The American family is the big loser in this mess, it will take massive intervention
to keep the recession from sliding into a depression. But a depression might just
be what is needed to get us out of this precarity capitalism malaise. Many
economists said that the recession of 2007-2009 was the impetus we needed to
change, but change did not come about. Will this financial crisis finally make
us realize the need for a vast reorganization of not just the economy but of
society itself? Can we bring about real change; a livable minimum wage, health
care for all Americans, affordable college tuition, and an end to racial disparity?
Or will it be business as usual, relying on bailouts and stimuli, believing that the
shattered economic bubble can be re-inflated in just a few months. Will we keep
believing in growth without equity, increased stock prices without value, or will
we finally end the nightmare of Precarity Capitalism? We have a say in the
matter come this November. Let us hope it is not too late by then, to save what
is left of the American Dream.
I'm just sayin'
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