Mnuchin: ‘Strong Likelihood’ We’ll Need Another Relief Bill
1:14
During an interview with the Hill on Thursday, Treasury Secretary Steve Mnuchin said that “there is a strong likelihood” that another coronavirus relief bill will be needed, but the administration will “step back for a few weeks” to see if more money needs to be spent, and, if so, how to spend it.
Mnuchin said that the current relief package, the CARES Act, does have provisions in it to help workers, but the unemployment insurance provision needs to be fixed so that people aren’t being paid more by unemployment insurance than they were making working.
He added, “We’re going to carefully review, the next few weeks. I think there is a strong likelihood we will need another bill. But we just have $3 trillion we’re pumping into the economy, and we’re going to step back for a few weeks and think very clearly how we need to spend more money and if we need to do that.”
Mnuchin also stated that he hopes the next bill will be a bipartisan bill. He also said that because the House’s bill, the HEROES Act, “is a partisan bill,” it isn’t being focused on by the administration.
Follow Ian Hanchett on Twitter @IanHanchett
Goldman Sachs Bankster “King of the Foreclosures” Treasury
Secretary Steven Mnuchin vows that the Goldman Sachs infested Trump Admin will
hand no-strings massive socialist bailouts to Trump Hotels. Mnuchin says the
welfare will exceed the Bankster-owned Democrat Party’s massive bailout of
Obama crony Jamie Dimon of J P Morgan’s bailout in 2008
Bullard
Says Unemployment Could Rise to 30%... NOW WE'RE AT 40%
Photo by John
Vachon/Library Of Congress/Getty Images
Trump Is Surrounded by Criminals
https://mexicanoccupation.blogspot.com/2019/11/the-fall-of-donald-trump-final-days.html
"The tax overhaul would mean an unprecedented windfall for the
super-rich, on top of the fact that virtually all income gains during the
period of the supposed recovery from the financial crash of 2008 have
gone to the top 1 percent income bracket."
Then
Congress rushed through a record $2.2 trillion economic “rescue” bill, whose
main purpose was to provide the Treasury and the Federal Reserve the necessary
authority to bail out corporate America and Wall Street.
Coronavirus deaths in US nearing 4,000 as Trump washes his hands of
responsibility
President Donald Trump speaks during a news
conference about the coronavirus in the Rose Garden of the White House, March
13, 2020, in Washington [Credit: AP Photo/Evan Vucci]
TRUMP’S ADMINISTRATION IS INFESTED WITH GOLDMAN SACHS JUST AS OBAMA-BIDEN’S WAS WITH JAMIE
DIMON OF JP MORGAN
Goldman Sachs Bankster “King of the Foreclosures” Treasury
Secretary Steven Mnuchin vows that the Goldman Sachs infested Trump Admin will
hand no-strings massive socialist bailouts to Trump Hotels. Mnuchin says the
welfare will exceed the Bankster-owned Democrat Party’s massive bailout of
Obama crony Jamie Dimon of J P Morgan’s bailout in 2008
Bullard
Says Unemployment Could Rise to 30%
Photo by John
Vachon/Library Of Congress/Getty Images
Trump Is Surrounded by Criminals
https://mexicanoccupation.blogspot.com/2019/11/the-fall-of-donald-trump-final-days.html
"The tax overhaul would mean an unprecedented windfall for the
super-rich, on top of the fact that virtually all income gains during the
period of the supposed recovery from the financial crash of 2008 have
gone to the top 1 percent income bracket."
Global economic slump accelerating
Then
Congress rushed through a record $2.2 trillion economic “rescue” bill, whose
main purpose was to provide the Treasury and the Federal Reserve the necessary
authority to bail out corporate America and Wall Street.
Coronavirus deaths in US nearing 4,000 as Trump washes his hands of
responsibility
President Donald Trump speaks during a news
conference about the coronavirus in the Rose Garden of the White House, March
13, 2020, in Washington [Credit: AP Photo/Evan Vucci]
TRUMP’S ADMINISTRATION IS INFESTED WITH GOLDMAN SACHS JUST AS OBAMA-BIDEN’S WAS WITH JAMIE DIMON OF JP MORGAN
Goldman Sachs Bankster “King of the Foreclosures” Treasury
Secretary Steven Mnuchin vows that the Goldman Sachs infested Trump Admin will
hand no-strings massive socialist bailouts to Trump Hotels. Mnuchin says the
welfare will exceed the Bankster-owned Democrat Party’s massive bailout of
Obama crony Jamie Dimon of J P Morgan’s bailout in 2008
Bullard
Says Unemployment Could Rise to 30%... NOW WE'RE AT 40%
23 Mar 2020523
1:15
The unemployment
rate in the U.S. could hit 30 percent, Federal Reserve Bank of St. Louis
President James Bullard said in Bloomberg News interview.
“This is a planned, organized partial shutdown of the U.S.
economy in the second quarter. The overall goal is to keep everyone, households
and businesses, whole,” Bullard said. “It is a huge shock and we are trying to
cope with it and keep it under control.”
That would be the highest rate of unemployment since the Great
Depression.
Bullard said he expects economic growth to plunge 50 percent in
the second quarter but for the economy to bounce back later in the year, so
long as the appropriate measures are taken by the fiscal and monetary
authorities.
“I would see the third quarter as a transitional quarter,”
Bullard said. The next six months, however, could be very strong. “Those
quarters might be boom quarters,” he said.
Bullard also said the Fed was far from being “out of bullets,”
as some Fed watchers have claimed.
“There is more that we can do if necessary,” he said. “There is
probably much more in the months ahead depending on where Congress wants to
go.”
Trump Is Surrounded by Criminals
https://mexicanoccupation.blogspot.com/2019/11/the-fall-of-donald-trump-final-days.html
“The legal ring
surrounding him is collectively producing a historic indictment of his endemic
corruption and criminality.” JONATHAN CHAIT
TRUMPERNOMICS FOR THE
RICH…. and his parasitic family!
Report:
Trump Says He Doesn't Care About the National Debt Because the Crisis Will Hit
After He's Gone
"Trump's
alleged comment is maddening and disheartening,
but at least he's being straightforward about his indefensible
and self-serving neglect. I'll leave you with this reminder of the scope of the problem, not that anyone in power is going to do a damn thing about it."
but at least he's being straightforward about his indefensible
and self-serving neglect. I'll leave you with this reminder of the scope of the problem, not that anyone in power is going to do a damn thing about it."
TRUMPERNOMICS:
THE SUPER RICH APPLAUD
TWITTER’S TRUMP’S TAX CUTS FOR THE SUPER RICH!
"The tax overhaul would mean an unprecedented windfall for the
super-rich, on top of the fact that virtually all income gains during the
period of the supposed recovery from the financial crash of 2008 have
gone to the top 1 percent income bracket."
Global economic slump accelerating
As the coronavirus
spreads, taking more lives at an escalating rate, its effects are penetrating
ever deeper into the global economy.
GOLDMAN SACHS warned last week that US gross domestic
product (GDP) would contract by 24 percent in the second quarter. There are
forecasts that up to 5 million jobs will be lost in the American economy this
year, with the fall in economic output to total as much as $1.5 trillion.
GOLDMAN expects, at this stage, that US output will
contract 3.1 percent this year and the unemployment rate will rise to 9 percent
from the current level of 3.5 percent. This is on a par with the jobless rate
of 10 percent in October 2009, following the financial meltdown of 2008.
But just as the health
impact of the virus was significantly underestimated, the same may apply to the
current economic forecasts.
“Things look so gloomy
right now that perhaps we should be grateful if we can get out of this health
crisis with a brief recession,” Bernard Baumohl of the Economic Outlook Group
told the Wall Street Journal.
“You just cannot rule
out the prospect of a longer, more destructive depression,” he said.
In other words, a
relatively short but deep recession is now the “best case” scenario.
The eurozone is
expected to experience a fall of around 10 percent of GDP. But this forecast
could well be exceeded. There is no end in sight to the spread of the virus and
no clear assessment of the economic effect of the shutdowns being implemented
to try to combat it.
In an interview with
the Financial Times, the chief economist of the European Union,
Paolo Gentiloni, indicated that officials were working on new measures.
“The consensus is
growing day by day that we need to face an extraordinary crisis with
extraordinary tools,” he said.
“This idea of a V-shape
[recovery] that you can see in the first semester of 2020 is now completely
impossible. We have no previous analysis of the impact of such a widespread
lockdown in major economies.”
Gentolini conducted the
interview as part of a political battle inside the EU over the economic and
financial measures, bringing further into the open the widening rifts between
leading member states.
Powerful forces in
Germany and the Netherlands are opposed to all-European action, regarding this
as a bailout for weaker economies such as Italy.
On the other side, the
French Finance Minister Bruno Le Maire last week warned that failure to act in
a unified manner meant the eurozone was in danger of disappearing.
European Financial
Times columnist Wolfgang Münchau wrote yesterday that the situation
facing the eurozone was “far worse” than the sovereign debt crisis of 2012.
“The coronavirus will
prove to be an economic shock, a corporate solvency crisis and a political
crisis all folded into one,” he said.
Münchau noted that
European countries had fiscal stabilisers such as unemployment insurance, but
these “shock absorbers” were designed to deal with “normal fluctuations.” They
were not “big enough or strong enough for emergencies like this one.”
Pointing to the
deepening divisions in Europe, Münchau wrote that not everyone would want to be
in a monetary union with countries like the Netherlands where the prime
minister was “ideologically opposed” to all-European measures. “This sort of
unwilling partnership is not sustainable.”
In the absence of data
on overall output, the Financial Times conducted a survey,
particularly covering retail and services, to give some indication of what to
expect.
It showed that
vehicular traffic had halved in many of the world’s largest cities, while
spending in restaurants and cinemas had collapsed.
Greg Daco, the chief US
economist at Oxford Economics, said: “Looking at the data across various
sectors of the US economy, it appears we could be heading for the most severe
contraction in consumer spending on record.”
The rapid shrinkage in
the real economy will further escalate the already severe crisis in the
financial system, and extend from the stock and credit markets to the banks.
In a Financial
Times comment, Sheila Bair, the former chief of the US Federal
Deposit Insurance Corporation, wrote: “Big banks throughout the world are
substantially exposed to the pandemic, particularly as it hurts corporate
borrowers.”
Around the world,
non-financial corporations covering every industry, including the hard-hit
energy, transport, retail and hospitality sectors, had racked up debts to the
tune of $70 trillion, she wrote.
“To survive, they are
increasingly hoarding cash and tapping into their massive back-up lines of
credit, placing additional strain on the banking system,” Bair wrote, noting
that as bond markets “seize up,” bank credit may be their only source of cash.
But the ability to
supply credit, she wrote, had been considerably weakened by the $325 billion
paid out by the major global banks last year on dividends and share buybacks,
some $155 billion of which was laid out by the eight largest banks in the US.
Meanwhile, fears are
growing that the enormous pile of debt around the world could start to collapse
as the economic effects of the coronavirus deepen and widen.
According to the
Institute of International Finance, in a report published last November, total
global corporate, government, finance sector and household debt had reached
$253 trillion, equivalent to 322 percent of global GDP.
The unravelling could
start in so-called emerging market economies where there is $72.5 trillion of
debt, much of it denominated in US dollars. The growing dollar shortage in
international markets, which has seen national currencies fall against the
greenback, means obligations on interest and principal payments are rapidly
rising.
This increase in the
debt burden is occurring as all economies drop into recession, or something
worse, and have less cash to meet their commitments.
It is not just emerging
market economies that are affected. The Australian dollar, one of the most
traded in the world, saw its rate against the US dollar drop to as low as 55
cents last week, compared to just under 70 cents a few months ago.
This means that the
debt burden of a company or financial institution that had raised $100 million,
when the Australian dollar traded at 70 cents to the US currency, would rise in
Australian dollar terms from $A143 million to more than $A180 million when the
Australian dollar fell to 55 cents, placing it under enormous strain as
revenues drop.
The cash flow crisis is
striking at the heart of the major economies as well.
In the UK, the Tory
government is considering a plan to take out equity holdings in airlines and
other companies because the economic stimulus packages announced so far are not
sufficient to prevent collapses.
In the US, the Wall
Street Journal has reported that “scores of US companies,” from the
aircraft maker Boeing to the telecommunications Verizon, are “furiously
lobbying” to be included in the bailout packages being prepared by the Trump
administration that could run as high as $2 trillion.
For more than a
century, the semi-official religion in the US has been the denunciation of
socialism, which Trump had planned to make the centre of his re-election
campaign.
Now the universal cry
is: the state must intervene; once again billions must be handed to the
corporations on an even larger scale than in the crisis of 2008.
The calls will only get
louder. According to a Wall Street Journal report yesterday,
investors and analysts say the more than 30 percent drop in the share market
over the past month is not over, despite extraordinary actions by the Fed
involving trillions of dollars.
Summing up the
voracious outlook in corporate and financial circles, a representative of the
global investment and banking firm State Street, told the Journal:
“Market participants need to feel they are backstopped without question.”
Then
Congress rushed through a record $2.2 trillion economic “rescue” bill, whose
main purpose was to provide the Treasury and the Federal Reserve the necessary
authority to bail out corporate America and Wall Street.
Coronavirus deaths in US nearing 4,000 as Trump washes his hands of
responsibility
The
coronavirus killed at least 812 people in the United States Tuesday, the
highest death toll since the pandemic began, while nearly 25,000 new cases were
reported, bringing the total number infected to more than 188,000, the largest
number in the world by far.
Along
with the unprecedented scale of the infection, its sheer speed is staggering.
On March 10, there were only 1,000 reported coronavirus infections in the
United States. Three weeks later, it is nearing 200 times that level. Another
such three weeks would see 40 million people infected in the United States.
The US
death toll has not yet reached the level of Italy (12,428) or Spain (8,464),
but that is only a matter of days. And White House officials continue to
escalate their projections of the total number of deaths in a “best-case”
scenario, setting the figure at a staggering 240,000, with Trump himself
hinting that the total could be double that.
Four
countries—Italy, Spain, the US and France—have now seen more deaths than China,
where the epidemic first broke out in the city of Wuhan last December. After
3,305 deaths, China claims to have largely suppressed the outbreak through
systematic testing, contact tracing and quarantining of those exposed to the
coronavirus.
The
American media and the Trump administration continually describe efforts to
counteract the coronavirus as a war, where the frontlines are being drawn in
emergency rooms and ICUs throughout the United States, and especially in the
New York metropolitan area, where half of all COVID-19 cases are located. On
Tuesday the death toll in New York City itself hit 1,096, and 10,000 people
were hospitalized, with 2,700 of them requiring ventilators.
But in
this war, under the incompetent “commander-in-chief” Trump and his hapless
lieutenants among the state governors, the troops are being sent into battle
haphazardly, without weapons, and largely without regard for their own safety.
Healthcare workers lack sufficient personal protection equipment, and they are
being infected and incapacitated at an alarming rate, with many deaths.
In Spain,
the healthcare workers accounted for 14 percent of the country’s cases, while
in Italy, they accounted for 10 percent. The same process is under way in the
United States. NPR reported that 345 employees of Boston’s four largest
hospitals have tested positive for COVID-19. In New York City, hundreds of
workers have fallen ill. At Columbia University Irving Medical Center in
Manhattan, 50 percent of the intensive-care staff have been infected.
The
result is that in addition to the shortages of hospital rooms, ICU beds, masks,
and ventilators, there is a growing shortage of medical staff who can cope with
the increasing volume of patients seeking medical attention.
Meanwhile, hospitals and healthcare systems are threatening
doctors and nurses who make their concerns over working conditions public. An
emergency room physician, Dr. Ming Lin, in Washington state, was fired because
he gave an interview to a newspaper complaining about inadequate protective
equipment. Ruth Schubert, a spokeswoman for the Washington State Nurses
Association, told Bloomberg, “Hospitals are muzzling nurses and other
healthcare workers in an attempt to preserve their image.” Nurses who have
spoken under conditions of anonymity with WSW S reporters
said that they have been told they would be fired if they talked to the media.
In some
cases, state governors have made statements that amount to a confession of
bankruptcy. On CNN Live, Governor Larry Hogan of Maryland said, “We are all
trying to get more testing, but this is a pinch point on testing, on supplies,
and materials, and PPE and ventilators. Everybody in America knows we don’t
have enough of these things … and without the tests we are really flying blind.
We are guessing about where the outbreaks are, what the infection rates in the
hospitals are, and the mortality rates.”
However,
the Trump White House manages to combine moronic expressions of optimism
(largely in the form of testimonials to Trump’s personal genius) with ever more
ominous declarations that the death toll in the United States will reach six or
even seven figures.
On
Sunday, White House adviser Dr. Anthony Fauci said that 100,000 to 200,000
deaths was a midrange figure that could be substantially lowered if proper
measures were taken. On Monday, White House coronavirus coordinator Dr. Deborah
Birx said that 100,000 to 200,000 was now the floor, the best-case scenario if
everything went perfectly, while Trump himself declared that a death toll in
that range would represent “a good job” by his administration.
On
Tuesday, Fauci and Birx presented a slide show to a press briefing indicating
projections that without severe mitigation, total deaths due to COVID-19 could
reach 1.2 million to 2.2 million. Birx admitted that even with strict
mitigation efforts throughout the month of April, the number of deaths could
range as high as 240,000. At the peak of such a “best-case” outcome, 4,000 to
5,000 people would be dying every day.
Shocking
as such figures are, even more outrageous is the blithe indifference displayed
by Trump personally and his closest aides to the likely results of their own
policy of refusing to conduct a serious struggle to contain the pandemic, not
merely mitigate it.
Trump
himself, towards the end of the press “briefing” that lasted more than two
hours—a clear indication, in and of itself, that the White House antivirus
campaign is an exercise in political propaganda and media manipulation—made
comments that amounted to a self-indictment for criminal negligence on a monumental
scale.
“We’re
going through the worst thing this country has probably ever seen,” he said.
“Look, we had the Civil War. We lost 600,000 people, right? Had we not done
anything, we would have lost many times that, but we did something, so it’s
going to be hopefully way under that. But you know, we lose more here
potentially than you lose in world wars as a country.”
Given
that the US death toll in the Second World War was 405,000, Trump is saying, in
his semiliterate and meandering way, that the US death toll from the COVID-19
pandemic could well be between 400,000 and 600,000.
There was
remarkably little push-back from the journalists of the corporate media who
appeared to be in a daze. While several media outlets had taken note that on
Tuesday morning, more Americans had died from coronavirus than were killed in
the 9/11 terrorist attacks, not even this comparison, inadequate as it is, was
made.
The US
government’s response is best characterized as malign neglect to a pandemic
that was both foreseen and preventable. With complete indifference to the fate
of the people, the Trump administration’s primary focus was on ensuring the
financial markets were protected. Only when the markets began to implode did
the government’s machinery begin to churn to prevent its complete collapse.
Everything else was deemed an afterthought.
First, on
March 3, the Federal Reserve slashed rates by 0.5
percent,
the most significant cut since the 2008 financial crisis.
On March
12, the Federal Reserve added $1.5 trillion of liquidity
into
the banking systems by massively expanding short-term
loans to
the banks to keep money markets stable and provide
banks
with cash in hand. When the markets continued to
plummet
on March 15, the Federal Reserve cut interest rates by a
full
percentage point down to almost 0.00 percent. They also
resumed
quantitative easing by purchasing $500 billion in
treasuries
and $200 billion in mortgage-backed securities.
Then
Congress rushed through a record
$2.2
trillion economic “rescue” bill, whose
main
purpose was to provide the Treasury
and the
Federal Reserve the necessary
authority
to bail out corporate America
and Wall
Street.
Comparing
the gargantuan and energetic efforts to save the markets with the slapdash,
indifferent and grossly incompetent actions in relation to public health, it
is easy to see what are the priorities of the American financial aristocracy.
But there
is another force to be heard from in this crisis—the working class. Instacart,
Amazon, and Whole Foods workers have initiated strike actions against forced
work under unsafe conditions. Workers at General Electric have protested,
demanding their company begin producing ventilators. Many other workers are
rebelling against being forced to remain on the job without protective gear.
As the
crisis escalates, the decisive question is for the working class to develop a
conscious political response, recognizing that it must fight the capitalist
system as a whole, based on a socialist program.
TRUMP’S ADMINISTRATION IS INFESTED WITH GOLDMAN SACHS JUST AS OBAMA-BIDEN’S WAS WITH JAMIE
DIMON OF JP MORGAN
Goldman Sachs Bankster “King of the Foreclosures” Treasury
Secretary Steven Mnuchin vows that the Goldman Sachs infested Trump Admin will
hand no-strings massive socialist bailouts to Trump Hotels. Mnuchin says the
welfare will exceed the Bankster-owned Democrat Party’s massive bailout of
Obama crony Jamie Dimon of J P Morgan’s bailout in 2008
Bullard
Says Unemployment Could Rise to 30%
23 Mar 2020523
1:15
The unemployment
rate in the U.S. could hit 30 percent, Federal Reserve Bank of St. Louis
President James Bullard said in Bloomberg News interview.
“This is a planned, organized partial shutdown of the U.S.
economy in the second quarter. The overall goal is to keep everyone, households
and businesses, whole,” Bullard said. “It is a huge shock and we are trying to
cope with it and keep it under control.”
That would be the highest rate of unemployment since the Great
Depression.
Bullard said he expects economic growth to plunge 50 percent in
the second quarter but for the economy to bounce back later in the year, so
long as the appropriate measures are taken by the fiscal and monetary
authorities.
“I would see the third quarter as a transitional quarter,”
Bullard said. The next six months, however, could be very strong. “Those
quarters might be boom quarters,” he said.
Bullard also said the Fed was far from being “out of bullets,”
as some Fed watchers have claimed.
“There is more that we can do if necessary,” he said. “There is
probably much more in the months ahead depending on where Congress wants to
go.”
Trump Is Surrounded by Criminals
https://mexicanoccupation.blogspot.com/2019/11/the-fall-of-donald-trump-final-days.html
“The legal ring
surrounding him is collectively producing a historic indictment of his endemic
corruption and criminality.” JONATHAN CHAIT
TRUMPERNOMICS FOR THE
RICH…. and his parasitic family!
Report:
Trump Says He Doesn't Care About the National Debt Because the Crisis Will Hit
After He's Gone
"Trump's
alleged comment is maddening and disheartening,
but at least he's being straightforward about his indefensible
and self-serving neglect. I'll leave you with this reminder of the scope of the problem, not that anyone in power is going to do a damn thing about it."
but at least he's being straightforward about his indefensible
and self-serving neglect. I'll leave you with this reminder of the scope of the problem, not that anyone in power is going to do a damn thing about it."
TRUMPERNOMICS:
THE SUPER RICH APPLAUD
TWITTER’S TRUMP’S TAX CUTS FOR THE SUPER RICH!
"The tax overhaul would mean an unprecedented windfall for the
super-rich, on top of the fact that virtually all income gains during the
period of the supposed recovery from the financial crash of 2008 have
gone to the top 1 percent income bracket."
Global economic slump accelerating
As the coronavirus
spreads, taking more lives at an escalating rate, its effects are penetrating
ever deeper into the global economy.
GOLDMAN SACHS warned last week that US gross domestic
product (GDP) would contract by 24 percent in the second quarter. There are
forecasts that up to 5 million jobs will be lost in the American economy this
year, with the fall in economic output to total as much as $1.5 trillion.
GOLDMAN expects, at this stage, that US output will
contract 3.1 percent this year and the unemployment rate will rise to 9 percent
from the current level of 3.5 percent. This is on a par with the jobless rate
of 10 percent in October 2009, following the financial meltdown of 2008.
But just as the health
impact of the virus was significantly underestimated, the same may apply to the
current economic forecasts.
“Things look so gloomy
right now that perhaps we should be grateful if we can get out of this health
crisis with a brief recession,” Bernard Baumohl of the Economic Outlook Group
told the Wall Street Journal.
“You just cannot rule
out the prospect of a longer, more destructive depression,” he said.
In other words, a
relatively short but deep recession is now the “best case” scenario.
The eurozone is
expected to experience a fall of around 10 percent of GDP. But this forecast
could well be exceeded. There is no end in sight to the spread of the virus and
no clear assessment of the economic effect of the shutdowns being implemented
to try to combat it.
In an interview with
the Financial Times, the chief economist of the European Union,
Paolo Gentiloni, indicated that officials were working on new measures.
“The consensus is
growing day by day that we need to face an extraordinary crisis with
extraordinary tools,” he said.
“This idea of a V-shape
[recovery] that you can see in the first semester of 2020 is now completely
impossible. We have no previous analysis of the impact of such a widespread
lockdown in major economies.”
Gentolini conducted the
interview as part of a political battle inside the EU over the economic and
financial measures, bringing further into the open the widening rifts between
leading member states.
Powerful forces in
Germany and the Netherlands are opposed to all-European action, regarding this
as a bailout for weaker economies such as Italy.
On the other side, the
French Finance Minister Bruno Le Maire last week warned that failure to act in
a unified manner meant the eurozone was in danger of disappearing.
European Financial
Times columnist Wolfgang Münchau wrote yesterday that the situation
facing the eurozone was “far worse” than the sovereign debt crisis of 2012.
“The coronavirus will
prove to be an economic shock, a corporate solvency crisis and a political
crisis all folded into one,” he said.
Münchau noted that
European countries had fiscal stabilisers such as unemployment insurance, but
these “shock absorbers” were designed to deal with “normal fluctuations.” They
were not “big enough or strong enough for emergencies like this one.”
Pointing to the
deepening divisions in Europe, Münchau wrote that not everyone would want to be
in a monetary union with countries like the Netherlands where the prime
minister was “ideologically opposed” to all-European measures. “This sort of
unwilling partnership is not sustainable.”
In the absence of data
on overall output, the Financial Times conducted a survey,
particularly covering retail and services, to give some indication of what to
expect.
It showed that
vehicular traffic had halved in many of the world’s largest cities, while
spending in restaurants and cinemas had collapsed.
Greg Daco, the chief US
economist at Oxford Economics, said: “Looking at the data across various
sectors of the US economy, it appears we could be heading for the most severe
contraction in consumer spending on record.”
The rapid shrinkage in
the real economy will further escalate the already severe crisis in the
financial system, and extend from the stock and credit markets to the banks.
In a Financial
Times comment, Sheila Bair, the former chief of the US Federal
Deposit Insurance Corporation, wrote: “Big banks throughout the world are
substantially exposed to the pandemic, particularly as it hurts corporate
borrowers.”
Around the world,
non-financial corporations covering every industry, including the hard-hit
energy, transport, retail and hospitality sectors, had racked up debts to the
tune of $70 trillion, she wrote.
“To survive, they are
increasingly hoarding cash and tapping into their massive back-up lines of
credit, placing additional strain on the banking system,” Bair wrote, noting
that as bond markets “seize up,” bank credit may be their only source of cash.
But the ability to
supply credit, she wrote, had been considerably weakened by the $325 billion
paid out by the major global banks last year on dividends and share buybacks,
some $155 billion of which was laid out by the eight largest banks in the US.
Meanwhile, fears are
growing that the enormous pile of debt around the world could start to collapse
as the economic effects of the coronavirus deepen and widen.
According to the
Institute of International Finance, in a report published last November, total
global corporate, government, finance sector and household debt had reached
$253 trillion, equivalent to 322 percent of global GDP.
The unravelling could
start in so-called emerging market economies where there is $72.5 trillion of
debt, much of it denominated in US dollars. The growing dollar shortage in
international markets, which has seen national currencies fall against the
greenback, means obligations on interest and principal payments are rapidly
rising.
This increase in the
debt burden is occurring as all economies drop into recession, or something
worse, and have less cash to meet their commitments.
It is not just emerging
market economies that are affected. The Australian dollar, one of the most
traded in the world, saw its rate against the US dollar drop to as low as 55
cents last week, compared to just under 70 cents a few months ago.
This means that the
debt burden of a company or financial institution that had raised $100 million,
when the Australian dollar traded at 70 cents to the US currency, would rise in
Australian dollar terms from $A143 million to more than $A180 million when the
Australian dollar fell to 55 cents, placing it under enormous strain as
revenues drop.
The cash flow crisis is
striking at the heart of the major economies as well.
In the UK, the Tory
government is considering a plan to take out equity holdings in airlines and
other companies because the economic stimulus packages announced so far are not
sufficient to prevent collapses.
In the US, the Wall
Street Journal has reported that “scores of US companies,” from the
aircraft maker Boeing to the telecommunications Verizon, are “furiously
lobbying” to be included in the bailout packages being prepared by the Trump
administration that could run as high as $2 trillion.
For more than a
century, the semi-official religion in the US has been the denunciation of
socialism, which Trump had planned to make the centre of his re-election
campaign.
Now the universal cry
is: the state must intervene; once again billions must be handed to the
corporations on an even larger scale than in the crisis of 2008.
The calls will only get
louder. According to a Wall Street Journal report yesterday,
investors and analysts say the more than 30 percent drop in the share market
over the past month is not over, despite extraordinary actions by the Fed
involving trillions of dollars.
Summing up the
voracious outlook in corporate and financial circles, a representative of the
global investment and banking firm State Street, told the Journal:
“Market participants need to feel they are backstopped without question.”
Then
Congress rushed through a record $2.2 trillion economic “rescue” bill, whose
main purpose was to provide the Treasury and the Federal Reserve the necessary
authority to bail out corporate America and Wall Street.
Coronavirus deaths in US nearing 4,000 as Trump washes his hands of
responsibility
The
coronavirus killed at least 812 people in the United States Tuesday, the
highest death toll since the pandemic began, while nearly 25,000 new cases were
reported, bringing the total number infected to more than 188,000, the largest
number in the world by far.
Along
with the unprecedented scale of the infection, its sheer speed is staggering.
On March 10, there were only 1,000 reported coronavirus infections in the
United States. Three weeks later, it is nearing 200 times that level. Another
such three weeks would see 40 million people infected in the United States.
The US
death toll has not yet reached the level of Italy (12,428) or Spain (8,464),
but that is only a matter of days. And White House officials continue to
escalate their projections of the total number of deaths in a “best-case”
scenario, setting the figure at a staggering 240,000, with Trump himself
hinting that the total could be double that.
Four
countries—Italy, Spain, the US and France—have now seen more deaths than China,
where the epidemic first broke out in the city of Wuhan last December. After
3,305 deaths, China claims to have largely suppressed the outbreak through
systematic testing, contact tracing and quarantining of those exposed to the
coronavirus.
The
American media and the Trump administration continually describe efforts to
counteract the coronavirus as a war, where the frontlines are being drawn in
emergency rooms and ICUs throughout the United States, and especially in the
New York metropolitan area, where half of all COVID-19 cases are located. On
Tuesday the death toll in New York City itself hit 1,096, and 10,000 people
were hospitalized, with 2,700 of them requiring ventilators.
But in
this war, under the incompetent “commander-in-chief” Trump and his hapless
lieutenants among the state governors, the troops are being sent into battle
haphazardly, without weapons, and largely without regard for their own safety.
Healthcare workers lack sufficient personal protection equipment, and they are
being infected and incapacitated at an alarming rate, with many deaths.
In Spain,
the healthcare workers accounted for 14 percent of the country’s cases, while
in Italy, they accounted for 10 percent. The same process is under way in the
United States. NPR reported that 345 employees of Boston’s four largest
hospitals have tested positive for COVID-19. In New York City, hundreds of
workers have fallen ill. At Columbia University Irving Medical Center in
Manhattan, 50 percent of the intensive-care staff have been infected.
The
result is that in addition to the shortages of hospital rooms, ICU beds, masks,
and ventilators, there is a growing shortage of medical staff who can cope with
the increasing volume of patients seeking medical attention.
Meanwhile, hospitals and healthcare systems are threatening
doctors and nurses who make their concerns over working conditions public. An
emergency room physician, Dr. Ming Lin, in Washington state, was fired because
he gave an interview to a newspaper complaining about inadequate protective
equipment. Ruth Schubert, a spokeswoman for the Washington State Nurses
Association, told Bloomberg, “Hospitals are muzzling nurses and other
healthcare workers in an attempt to preserve their image.” Nurses who have
spoken under conditions of anonymity with WSW S reporters
said that they have been told they would be fired if they talked to the media.
In some
cases, state governors have made statements that amount to a confession of
bankruptcy. On CNN Live, Governor Larry Hogan of Maryland said, “We are all
trying to get more testing, but this is a pinch point on testing, on supplies,
and materials, and PPE and ventilators. Everybody in America knows we don’t
have enough of these things … and without the tests we are really flying blind.
We are guessing about where the outbreaks are, what the infection rates in the
hospitals are, and the mortality rates.”
However,
the Trump White House manages to combine moronic expressions of optimism
(largely in the form of testimonials to Trump’s personal genius) with ever more
ominous declarations that the death toll in the United States will reach six or
even seven figures.
On
Sunday, White House adviser Dr. Anthony Fauci said that 100,000 to 200,000
deaths was a midrange figure that could be substantially lowered if proper
measures were taken. On Monday, White House coronavirus coordinator Dr. Deborah
Birx said that 100,000 to 200,000 was now the floor, the best-case scenario if
everything went perfectly, while Trump himself declared that a death toll in
that range would represent “a good job” by his administration.
On
Tuesday, Fauci and Birx presented a slide show to a press briefing indicating
projections that without severe mitigation, total deaths due to COVID-19 could
reach 1.2 million to 2.2 million. Birx admitted that even with strict
mitigation efforts throughout the month of April, the number of deaths could
range as high as 240,000. At the peak of such a “best-case” outcome, 4,000 to
5,000 people would be dying every day.
Shocking
as such figures are, even more outrageous is the blithe indifference displayed
by Trump personally and his closest aides to the likely results of their own
policy of refusing to conduct a serious struggle to contain the pandemic, not
merely mitigate it.
Trump
himself, towards the end of the press “briefing” that lasted more than two
hours—a clear indication, in and of itself, that the White House antivirus
campaign is an exercise in political propaganda and media manipulation—made
comments that amounted to a self-indictment for criminal negligence on a monumental
scale.
“We’re
going through the worst thing this country has probably ever seen,” he said.
“Look, we had the Civil War. We lost 600,000 people, right? Had we not done
anything, we would have lost many times that, but we did something, so it’s
going to be hopefully way under that. But you know, we lose more here
potentially than you lose in world wars as a country.”
Given
that the US death toll in the Second World War was 405,000, Trump is saying, in
his semiliterate and meandering way, that the US death toll from the COVID-19
pandemic could well be between 400,000 and 600,000.
There was
remarkably little push-back from the journalists of the corporate media who
appeared to be in a daze. While several media outlets had taken note that on
Tuesday morning, more Americans had died from coronavirus than were killed in
the 9/11 terrorist attacks, not even this comparison, inadequate as it is, was
made.
The US
government’s response is best characterized as malign neglect to a pandemic
that was both foreseen and preventable. With complete indifference to the fate
of the people, the Trump administration’s primary focus was on ensuring the
financial markets were protected. Only when the markets began to implode did
the government’s machinery begin to churn to prevent its complete collapse.
Everything else was deemed an afterthought.
First, on
March 3, the Federal Reserve slashed rates by 0.5
percent,
the most significant cut since the 2008 financial crisis.
On March
12, the Federal Reserve added $1.5 trillion of liquidity
into
the banking systems by massively expanding short-term
loans to
the banks to keep money markets stable and provide
banks
with cash in hand. When the markets continued to
plummet
on March 15, the Federal Reserve cut interest rates by a
full
percentage point down to almost 0.00 percent. They also
resumed
quantitative easing by purchasing $500 billion in
treasuries
and $200 billion in mortgage-backed securities.
Then
Congress rushed through a record
$2.2
trillion economic “rescue” bill, whose
main
purpose was to provide the Treasury
and the
Federal Reserve the necessary
authority
to bail out corporate America
and Wall
Street.
Comparing
the gargantuan and energetic efforts to save the markets with the slapdash,
indifferent and grossly incompetent actions in relation to public health, it
is easy to see what are the priorities of the American financial aristocracy.
But there
is another force to be heard from in this crisis—the working class. Instacart,
Amazon, and Whole Foods workers have initiated strike actions against forced
work under unsafe conditions. Workers at General Electric have protested,
demanding their company begin producing ventilators. Many other workers are
rebelling against being forced to remain on the job without protective gear.
As the
crisis escalates, the decisive question is for the working class to develop a
conscious political response, recognizing that it must fight the capitalist
system as a whole, based on a socialist program.
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