Saturday, March 28, 2020

The Poison of Capitalism

The point of this post is that our forty-year infatuation with neo-liberalism and financialization has made us a weaker, sicker society, with a hollowed-out economy and an inability to respond to predictable and inevitable crises. Also, it seems as if the capitalist ruling class has become so used to being pampered, and being held unaccountable for their crimes, their lies, and their hypocrisy, that they are responding to this current pandemic with such brazen selfishness and inhumanity that [even I] think they are going to provoke a reckoning when all this is over.

Around about 1980, neo-liberalism was promoted as the answer to the "failure" of the pseudo-Keynesianism that western governments had adopted following the policy lessons of the Great Depression and World War Two. Neo-liberalism includes "Free Trade" (re: "investors' rights") policies that allow for the exporting of jobs to countries with cheaper labour and less worker rights. It allows for the movement of capital but NOT for the movement of labour.

It allows for the lowering of taxes on the wealthy and corporations. who were wrongly believed would invest this returned income into job creation. Despite there being little evidence for this, western governments (including Canadian federal and provincial ones) offer up new revenue-busting tax cuts to the wealthy year after year. All that has been achieved is revenue shortfalls that have led to to cuts in public services, including healthcare and education, and increased income and wealth inequality as the rich hoard their money in the financial markets and illegal offshore accounts, and the vast majority are forced to pay more (for, say, healthcare and education) from lower incomes due to de-unionization and the loss of jobs in manufacturing and the public sector.

De-unionization is one aspect of another facet of neo-liberalism, which is de-regulation. Regulations that force businesses to protect workers' physical and mental health cost money. Removing them would (again) give business more money to invest in glorious job-creating growth. Regulations protecting the environment cost money. Get rid of them. Laws preventing monopolies and price-gouging and fraud limit corporate incomes. Eliminate them. De-regulation will allow "job-creators" to have more money to "create jobs" and we will all have wonderful income-creating opportunities. Not, mind you, steady jobs: Because a steady job is anathema to neo-liberalism. We'll all have "gigs" and "side hustles" in the "knowledge economy." It will be an exciting life of flitting from one exciting, well-paying challenge to the next. (Of course this is all garbage.)

Alberta's fundamentalist dullard/tormented closet-case premier, Jason Kenney, has made the remarkable achievement of being the epitome of this bankrupt ideology. And the real-world outcomes of these policies reveals its bankruptcies.

Let's state it plainly; if these policies of neo-liberalism really worked, then forty years of pursuing them should have brought us to a wonderland of wealth and productivity. But, as we see now, the opposite is what we see before us.

And one of the things we see before us is our governments' inept responses to the COVID-19 crisis. In Canada we see billions going to bail-out the owners of oil companies while we simultaneously realize that our healthcare system has been starved to the point of inadequacy to deal with this pandemic. We also see millions of Canadians incapable of being able to afford losing a single pay-period. Canadians have been unable to save. NOT because we're such spendthrifts, but because living expenses (education, housing, transportation, etc.) have soared year after year.

Don't take my word for it. Here's Taylor Scollon from "The Passage" to tell us all about it in "The Coronairus Is About To Expose Just How Broken Our Welfare State Really Is."
At the end of a dark week, let’s begin with that most Canadian refrain of positivity: it could be worse, at least we aren’t the Americans. There are more confirmed cases of COVID-19 south of the border (at least for now), and if you do get sick there you can expect to spend thousands of dollars just to get tested. And don’t even contemplate the cost of care if you’re one of the millions of Americans without adequate health insurance. We can find some solace in the fact that, for us, testing and treatment will be free. 

Aside from that there is not much good news. After all, we share a border with the Americans, and disease doesn’t respect borders. But more importantly, after decades of erosion and cuts, our own welfare state can barely get us through normal times, let alone a crisis. The COVID-19 pandemic is finally forcing all of us to confront that harsh truth.
Scallon points out the inability of many workers to afford quarantine or to qualify for the benefits that might allow them to survive:
we can expect 11 million people to enter self-quarantine for at least two weeks, many of them in the next few months. I fear people have not fully grasped the implications of this.
Immediately, most of those 11 million people will be unable to work. ... most of those quarantined will face enormous challenges hanging on to their income.
The majority will not have employer-sponsored paid sick leave. Only 42 per cent of workers in Canada enjoy this benefit. The remaining 58 per cent will be mostly left to fend for themselves. Sick leave rules vary by province, but only Quebec and PEI guarantee any paid sick leave to workers (two days in Quebec, and one day in PEI after you have been with the employer for five years). Premier Doug Ford’s Ontario government scrapped paid sick leave in 2018. ...
...Those who are eligible can receive a maximum of $573 per week for up to 15 weeks. If you live in any urban region of the country, you know this is barely enough to cover rent on a studio apartment let alone groceries.
Scallon continues with the state of our healthcare system:
Distressingly, those with mild infections contending with financial strain may be the lucky ones.  After decades of cuts and neglect, the public healthcare system we are so proud of does not appear equipped to handle the pressure that will soon be placed upon it. While we have yet to see how the stresses of COVID-19 impact us, we can look at what other countries have experienced and extrapolate based on their readiness.
Our caseload now is low: only 152 cases (as of publication on March 13). But a number of epidemiological studies focused on the Chinese experience found that cases doubled every six days. If this holds true for Canada, we would expect to reach around 39,000 cases by the end of April and 300,000 by mid-May.

Unfortunately, decades of cuts have left our healthcare system less prepared to handle an outbreak like this. While China has 4.3 hospital beds per 1000 people and Italy has 3.7 beds per 1000 people, Canada has only 2.5 beds per 1000 people — or 92,462 beds in total. This represents a decrease of 32 per cent from our 2000 level of 3.7 beds per 1000 people. We also have one of the highest hospital bed occupancy rates in the world at 91.6 per cent, behind only Israel and Ireland. This means that under normal circumstances, our healthcare system has around 7,776 hospital beds available.
Finally, what about the unknown numbers of homeless in Canada? Poor people gravitate to larger cities in search of work and/or government services. But skyrocketing housing costs and the increasing uncertainty of jobs and the persistent stagnation of wages, have all contributed to a rising homelessness. And at the same time, neo-liberal austerity has made being homeless more dangerous and unhealthy:
Without tenant protections and a shelter system already well beyond capacity, people who fall behind on their rent can be evicted and tossed to the street with nowhere to go. Self-quarantine will not be an option for them, or for the 35,000 Canadians who are homeless on any given night.
Everything I've been saying at this blog for years, and which analysis is based upon what many more rigorous and original thinkers have been saying for decades:
It’s important to remember that all of these problems caused by our totally inadequate welfare state are experienced every day by millions of Canadians. It didn’t take COVID-19 to deny people the medication they need to survive, or push more and more people into gig jobs that pay next to nothing, or erode healthcare funding to the point people are regularly treated in the hallway.
For decades our political class told us we need to “cutback”, “trim the fat”, “find efficiencies”, and “sell-off underperforming assets”. They turned our welfare state into a sad joke. Now the bill is coming due, and I fear we are all about to pay for it dearly.
Which now brings us to the sociopathic responses of the US-American and Canadian governments. Justin Trudeau plans on spending $25 billion to shore-up a cratering economy. The 2008 Recession ended up costing Canada around $100 billion just so the economy wouldn't fall into recession. (At least we don't have the total-idiot Conservatives in power. Jason Kenney has responded to Alberta's economic collapse by soiling his diaper and shrieking. In 2008 we had the simpleton Jim Flaherty proposing austerity in the face of calamity. Months previously the imbecile had been forecasting surpluses as far as the eye could see.) Liberals have always been the more reality-based managers of capitalism when compared to their more extremist brethren in the "conservative" parties. "Conservative" politicians can say any fool thing that comes into their heads, fanatically adhere to ruinous tax-cuts and severe austerity for the poor, and so long as they abuse the right scapegoats for their low-information voting base they can continue to be officially respectable.

But, Jason Kirby in Maclean's points out that, once again, Canada's oligarchs and political servants are expecting ordinary Canadian households to shoulder the burden of keeping the Canadian economy afloat. In the 2008 Financial Crisis, Canada's banks got the Canada Mortgage & Housing Corporation (CMHC) to purchase $69 billion in assets and the Bank of Canada to provide billions more in loans to keep them afloat. Canada wasn't hit as hard as Wall Street was because we did not have the same insanely corrupt derivatives market that they did.

But during 2008-2009 (and in housing, up to this very day) Canadians continued to spend, despite generally high unemployment during the crisis and despite a higher average household debt than US households. Something I've remarked upon several times over the years at this blog; The same economic geniuses who warn us about our high debt levels and bemoan our "economic illiteracy" simultaneously exhort us to keep spending to keep the economy moving.

And now, Kirby says:
Instead, with Canada’s economy already more dependent on indebted households than at any time since at least the 1960s, and with the economy facing headwinds from the recent rail blockades and uncertainty over the spread of coronavirus, the hope is that cheap money will keep consumers spending and that households can bail out the economy yet again.
That’s not exactly how Poloz has framed the bank’s rate cut, of course. In his speech the day after the rate announcement Poloz said the goal of the cut was to preserve confidence on the part of consumers and businesses in the wake of steep stock market declines, even if a decade of low rates has done little to spur businesses to invest. But he did warn that the plunge in oil prices to their lowest level since 2016 could spread throughout the rest of the economy as those directly affected “spend less money on everything.”
“The downside risks to the economy today are more than sufficient to outweigh our continuing concern about financial vulnerabilities,” he said, using central banker speak for the state of Canada’s overextended households and the risk they pose to the financial system. He also brushed away concerns that Canadians in some real estate markets will do what they have done every other time rates have been cut — drive expectations of home prices higher and stretch their finances dangerously thin to avoid missing out on the gains. “Declining consumer confidence would naturally lead to reduced activity in the housing market,” he said in his speech. “In this context, lower interest rates will actually help to stabilize the housing market, rather than contribute to froth.”
There are real-world consequences to such blindness and stupidity. This is really happening folks! It really is the case that our leaders expect us to prop-up the economy with money that we don't have. It's as simple (and insane) as that.

But not only are we expected to ignore the ways that they've impoverished us while still expecting us to be happy consumers; we're also supposed to bail them out with scarce public resources while our hospitals go begging during an international pandemic! The goddamned fucking fossil fuels industry, despite having had decades of high profits (in the past) and having paid absurdly low royalties to Alberta and Saskatchewan, and despite having been subsidized with billions of public dollars ever year, and despite their reneging on their obligations to clean up after themselves, ... these corporate titans stand their with their hands out, pathetically mewling that they'll go under if we don't give them billions more, right now. And of course the Liberals are more than happy to accommodate them. (And we're supposed to be grateful that they're not as enormously happy that the detestable Conservatives would have been.)

And jeeziz-fucking-christ! Canada's fucking banks! Our giant, super-profitable, coddled, barely regulated banks! Listen you stupid assholes; the business shut-downs and self-isolation that are the inevitable consequences of this pandemic mean that MILLIONS of Canadians CANNOT WORK and therefore CANNOT GET PAID! To date, the stupid Liberals, led ostensibly by the airhead Justin Trudeau have not implemented a moratorium on mortgages or rents during this time when people CANNOT WORK and therefore CANNOT GET PAID. Instead:
As part of the government's pledge to help Canadians suffering financially due to COVID-19, Finance Minister Bill Morneau asked the heads of Canada's big banks to allow people to defer mortgage payments for up to six months.
In other words, Morneau is asking the banks to voluntarily do the decent and sane thing. Morneau is possibly not stupid enough to think that Canada's bankers can be decent, sane human beings. He probably knows damn well that Canada's bankers will behave just as abominably as they always have. From the same article:
The banks responded by issuing a statement saying they "have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges such as pay disruption due to COVID-19; child-care disruption due to school closures; or those facing illness from COVID-19."
This is public relations talk which means: "We have no intention of doing the sane and decent thing. We want the money! Give us the money! I don't care what you have to do to get it! Give us the money! Can't work? Fuck you! Pay me! Sick in the hospital? Fuck you! Pay me!"

Why the fuck go through all the work of going through mortgage relief on a "case-by-case" basis when you already know that across the board, PEOPLE CAN'T PAY BECAUSE PEOPLE CAN'T WORK BECAUSE OF THE PANDEMIC???????!!!!!!?????

It would be incredibly time-consuming and expensive to review tens of thousands of cases of people needing temporary relief from impending mortgages due to the pandemic. To argue something as stupid as what the banks are arguing is just their being unembarrassed with their lame-ass excuse for their psychopathic behaviour. And these people are psychopaths.

Read that entire article for the various instances of how these monsters are playing ridiculous games with their CUSTOMERS, dicking them around with bullshit demands for information or giving them the runaround. There's too much for me to quote here without simply copying the whole article. I'll just add the following:
CBC News asked each of the big five banks for more information on the criteria for the case-by-case-based decisions on mortgage and credit deferrals.
We asked:

  • Who would qualify?
  • Is there an application process?
  • Does the entire household have to be off work?
  • Will they require documentation?
None of the banks answered any of those questions.

TD, CIBC and Scotiabank all responded by repeating their commitment to work with personal and small-business banking customers on a case-by-case basis. Each encouraged customers to contact their call centres directly or visit their websites.

BMO and RBC did not respond to emails from CBC News.

And this:

The government is purchasing up to $50 billion of insured mortgage pools through the CMHC, which says that stable funding for the banks and mortgage lenders is meant to ensure continued lending to Canadian consumers.

This is the same delusional, contradictory horseshit that they sold us in the 2008 crisis. Throwing taxpayers' money at the banks so that they could continue to provide "credit" to people who didn't want to borrow because their lives had been turned upside down by job losses or (in the USA) the devaluation of their homes.

I mean, it's entirely possible that Bill Morneau, who was born wealthy and worked for his daddy's company before taking it over, is a complete moron who owes it all to nepotism, and that he's so fucking stupid that he believes that the banks need an injection of $50 billion so that they can LOAN money to desperate people who are calling up their banks pleading for help because they can't work. But I honestly don't think Morneau is that stupid. I think the CMHC has given the banks that $50 billion so that they can prop-up their own stock prices. Because he's evil.

Well, this is a blog post that hardly anybody reads and I've got other things I want to do. This post has sat in my "Drafts" folder for almost a week and I want to just publish it and move on. So, for posterity's sake, I'll mention a few of the other links that I wanted to speak about and then conclude.

From The Disaffected Lib, there's the possibility that Trump's sustained denialism about the Coronavirus wasn't just due to delusion and selfish politics. He might have been preaching business-as-usual so that he'd have time to dump his own stock portfolio before the market crashed.

We already know how Republican Senator Richard Burr, while publicly advising calm, was telling a small group of wealthy sugar-daddies to head for the hills while he did likewise. A number of other Repugnicans did the same along with Democrat Dianne "Warbucks" Feinstein.

Meanwhile, a group of investment bankers were found to have been inquiring of executives in health care profiting companies that they had invested in if it was possible that they could, you know, maybe engage in a bit of price-gouging during the pandemic, so as to further enrich themselves.

Over the past few weeks, investment bankers have been candid on investor calls and during health care conferences about the opportunity to raise drug prices. In some cases, bankers received sharp rebukes from health care executives; in others, executives joked about using the attention on Covid-19 to dodge public pressure on the opioid crisis.

Steven Valiquette, a managing director at Barclays Investment Bank, last week peppered executives from Cardinal Health, a health care distributor of N95 masks, ventilators and pharmaceuticals, on whether the company would raise prices on a range of supplies.

Valiquette asked repeatedly about potential price increases on a variety of products. Could the company, he asked, “offset some of the risk of volume shortages” on the “pricing side”?

Michael Kaufmann, the chief executive of Cardinal Health, said that “so far, we’ve not seen any material price increases that I would say are related to the coronavirus yet.” Cardinal Health, Kaufman said, would weigh a variety of factors when making these decisions, and added that the company is “always going to fight aggressively to make sure that we’re getting after the lowest cost.”

“Are you able to raise the price on some of this to offset what could be some volume shortages such that it all kind of nets out to be fairly consistent as far as your overall profit matrix?” asked Valiquette.
Kaufman responded that price decisions would depend on contracts with providers, though the firm has greater flexibility over some drug sales. “As you have changes on the cost side, you’re able to make some adjustments,” he noted.

The discussion, over conference call, occurred during the Barclays Global Healthcare Conference on March 10. At one point, Valiquette joked that “one positive” about the coronavirus would be a “silver lining” that Cardinal Health may receive “less questions” about opioid-related lawsuits.
Cardinal Health is one of several firms accused of ignoring warnings and flooding pharmacies known as so-called pill mills with shipments of millions of highly addictive painkillers. Kaufmann noted that negotiations for a settlement are ongoing.

And, since I started this post, the US Senate (that home of vermin) has passed a bail-out bill that is an even more brazen theft of public resources to reward criminality and incompetence than was the 2008 bail-out package.

It seems to me that this crisis might be a game-changer. Since 2011 I've become increasingly pessimistic about the collective intelligence of the human race to reverse the calamitous trajectory towards ecocide and dictatorship that we're presently on. But it's just possible that the soon to be revealed total failure of the USA's for-profit healthcare system; the murderous impact of decades of shit-head neo-liberal austerity on other OECD countries' social safety-nets (including healthcare); the absolutely disgusting and shameless nature of oligarchs and politicians using this crisis for personal profit; the obvious failure of the delusions of religion, the assurances of imbeciles and grifters, to protect people from a virus; the bungling of Trump; the insanely idiotic elevation of a dementia case to the Democratic nominee for the office of President; ... all that and other instances of madness, just MIGHT inspire people to think about what's necessary for a genuine, revolutionary transformation of a doomed system.


Kevin MacKay said...

Great read man. I'm also writing about how years of neoliberalism have set governments up for chaos during the pandemic. Of course the hardest-hit are the poor and marginal and the working class. Here's hoping the left can organize effectively (for a bloody change). Crisis and opportunity - two sides of the same coin.

thwap said...


Thanks for getting through it. Counterpunch has had some good stuff about the inhuman failure of neo-liberalism too.

As far as organizing, ... we'll have our work cut-out for us. But we have no choice. When I muse about giving into apathy I realize that the human race's condition is terminal unless we have a paradigm shift.