The fiasco of the Coronavirus Rescue Package shows that in the US, all’s business as usual. As American leadership finally awakens to the gripping reality that the world they hold so dear may collapse in front of their eyes, Covid-19 is wrecking its way through the economy all the way to the Senate floor, where policymakers continue to debate the specifics of the much-anticipated stimulus package.
On the rainy morning of March 23, lawmakers in DC failed to reach an agreement on the specifics of the US$2 trillion bill when Democrats again voted against its christening. The result: pandemonium on Capitol Hill. As a nice reminder, while these elected officials may “care” about the majority of Americans who now must struggle with financial uncertainty amid institutional collapse, it wouldn’t be American politics without the rich and powerful making a nice buck from the crisis.
The current deadlock follows the “Phase 2” coronavirus bill passed by the House of Representatives last week. At that time, policymakers anticipated that “Phase 3” would give $50 billion in aid to the airline industry, roughly $150 billion for other hard-hit sectors of the economy, and two rounds of direct payments on April 6 and May 18 to affected individuals totaling $250 billion. Five days of coronavirus hell taught policymakers that their numbers were too low.
The impasse over “Phase 3” lies in its specifics: Democrats say the bill operates as a classic bailout that fails to give adequate assistance to families and laid-off workers. What’s more, the bill currently authorizes the Secretary of the Treasury to dispense the funds at his discretion, a glaring lack of accountability that may see federal funds allocated without any oversight.
The Republicans counter by blaming the Democrats for playing party politics and not respecting the urgency the situation to take immediate action before more people lose their jobs.
World’s ‘wealthiest economy’
Within the lobbying networks of DC, not so small businesses promise that without liquidity, they will have to continue laying off their employees and further send the world’s “wealthiest economy” into a spiral of economic collapse. Yet one wonders whether these corporations, including the airlines that have monopolized market share at the expense of the consumer and spent billions buying back their own stock over the past decade, would have to lay people off anyway if there is no resurgent demand, even with the nice cushion of the bailout softening the fall.
As millions of workers caught in the turmoil of capitalism with “neoliberal characteristics” embrace the reality of no pay and no health care, moderates must wake up to the reality that the conventional economic wisdom of the past few decades is not only bogus but also the main reason American life has become so unstable.
Yes, the stimulus package fails to include oversight mechanisms. Indeed, nothing in the bill prevents the corporate recipients from using the funds to buy back their own stock or take other self-defensive measures. And if the past is any indicator of present behavior, executives tend to relieve their shareholders before their workers.
Yes, the stimulus package fails to compensate people adequately – granting a one-time payment of only $1,200 for every adult and $500 per child. And really examining the bill reveals that many low-income households would only be left with a paltry $600 to navigate the turbulence.
But the real problem is just how silly these figures seem when compared with the reality on the ground. A reality shaped by decades of economic policies that see corporations as the real drivers of life and the role of government to simply stay out of the way. A reality that treats low-income workers as disposable and not worthy of protection. A reality that means the world’s wealthiest economy could fall apart in a matter of weeks.
Made in its own image
Critics of neoliberalism have talked about the fragility of the American system for years. This fragility can really be seen in the staggering costs of living in the US and how businesses generally treat their workers.
And herein lies a great paradox.
From 1980 onward, while the cost of consumer goods decreased because of the proliferation of global supply chains and international trade, the cost of social mobility (and basic human necessities like health care, education and housing) skyrocketed because of the mismatched appreciation of assets in the banking system.
This process of financialization – or the trend of large corporate businesses making their profits from financial markets rather than producing goods or services – set up the dynamic we see in the US today: an economy that cares more for its shareholders than its workers.
Indeed, anybody who wants to defend conventional wisdom about the benign intentions of corporate America or the business-lobbying nexus need only to look at another piece of coronavirus-related legislation signed into law last week.
The ultimate irony is that the very corporate stakeholders that are pleading to Congress for funds in the name of preventing mass layoffs successfully lobbied Congress to include a provision in last week’s Families First Coronavirus Response Act that exempts companies with more than 500 employees from having to provide paid sick leave. This means that the businesses with the most money in the US can in essence tell their workforce that if they get sick, they must fend for themselves.
The largest employers in the US, including Walmart and McDonald’s, don’t give their employees paid sick leave and severely limit the benefits that part-time workers can receive such as paid time off and rudimentary health insurance. Even Amazon, a company now boasting of its efforts to address the Covid-19 pandemic, will not provide paid sick leave to its workers unless they have been tested positive for the coronavirus, a virtual impossibility in America. And this paid leave lasts only for two weeks!
After only one week of widespread “social distancing” we Americans are beginning to see chaos. A small injection of money for families living paycheck-to-paycheck will do little to combat potential months of closed businesses and services, or worse, a trip to the hospital.
As businesses continue to close and millions of American workers find they are without a source of income and health insurance, the real effect of economic recession will kick in fast. The structural instability of the American nightmare will reveal that the conventional wisdom of experts was at best wrong and at worst casuistic manipulation and sophistry.
Without a change or more action, the people who cherish this world so much might have to watch as violence unfolds. This time the revolution will be televised.