Paradoxical though it might sound, to the Western political and economic establishments, COVID-19 is a gift. The pandemic will invariably have devastating economic consequences, but a financial crisis was inevitable and imminent even before it emerged. The start of this crisis was evident back in September 2019. The pandemic will now serve as a convenient cover-up of this fact, whilst inconvenient questions will be swept under the rug.
In this way, the new financial crisis will not be blamed on the economic model of the West, which has not changed one iota since the Big Recession of 2008/2009. Nor will it be blamed on brutal austerity measures, nor on the stagnating incomes of the majority of workers. Nor on the shameless neglect of the astronomical rise in inequality. No, the system is working perfectly – it’s this new virus, see, that’s to blame.
Western nations, as well as those aspiring to their example, will now have the perfect excuse to continue implementing their destructive economic and social politics for another decade, at least. People’s endurance will be tested to its limit, as we are manipulated into believing that the sole purpose of existence now is merely staying alive, and little more. There is a systematic whipping up of hysteria which has brought the world into a state of collective paralysis, thereby enabling every totalitarian experiment to be carried out with no resistance.
All big economic crises, since the triumph of neoliberalism in the 80s through to today, have been brought about the same way – a combined and unchecked massive increase of public, state and corporate debt. In the second half of 2019, global debt reached an incredible $350 trillion and surpassed 320% of global GDP. Both figures are far higher than they were in 2008 when a crisis on an unprecedented scale occurred.
The system has been practising short-termism for a decade now – money is constantly being printed, whilst interest rates are being held lower than ever before seen in modern times. Debts can only be paid off by incurring new ones, however, the unsustainable growth of corporate debt is beginning to collapse the financial system from within. In the US, a serious cash-flow crisis last September catalysed yet further printing of money on an enormous scale. International organisations, as well as global media, feigned ignorance. And then the virus came. Unlike previous crises which were essentially crises of demand, the one we are experiencing today is simultaneously a crisis of both demand and supply because a large part of industry (particularly services) has ceased. That particular combination is usually seen only in periods of economic sanctions and wartime.
Many countries in the West right now intend to print several trillion dollars, euros, pounds, etc. – and that’s just for starters. No one will question this enormous injection of new money. No one will notice that during crises, money inexplicably seems to appear and is always available for bank and corporate bailouts. It is always available for acquiring weapons, for carrying out military exercises and brutal military interventions. It is only ever unavailable for social welfare, for medical equipment, for health- and care-worker salaries, for academic research and education. Western systems are excellent at „creating“ financial derivatives, tools for time-wasting by way of social media and various Hollywood-branded brain-washing, soul-destroying materials. They only falter when it comes to caring for human beings – when they need protecting with facemasks, ventilators, increased hospital capacity, medicines and other tangible remedies.
After the pandemic has passed and the dead have been counted, a new wave of economic victims will emerge. Big banks and corporations will be bailed out, but everyone else will be reeling from irreparable damage. Unemployment will soar and the most vulnerable will be hardest hit – the millions who have neither health nor social insurance, nor savings – only debt. No one will count the victims of poverty, nor will we see daily tolls of the affected and dying as a direct result of it.
This crisis will yet again impoverish small and weak economies. Capital, which is already fleeing developing countries, will withdraw even faster. Developing economies will be on their knees as they become incapable of rescuing their own citizens and industries. No one will notice how powerful countries that are subsidising their own companies with trillions, using the pandemic as a cover, are plainly breaking the basic market rules – rules that they created.
And then these same countries, along with the IMF, will offer „aid“ in the form of credit, thereby handing already indebted countries a new financially obliging noose. In exchange for “coloured paper” – dollars and euros – developing countries will continue trading their tangible, real assets – manufactured goods, property and resources. Domestic experts, lovers of the small state and a free market, will painstakingly explain that this is by no means daylight robbery, no, this is merely the West magnanimously investing its hard-earned savings. Unfortunate and incompetent governments will fall for the same old tricks and trust the same advisors. As for the lowly citizens, they will be grateful just to have survived and still be breathing, albeit suffocating financially. I’m afraid that those kind souls who believe that we will learn something from this pandemic and experience a sort of catharsis or rebirth, are fooling themselves. After the pandemic, the world will be even more ruthless and cruel.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.