Friday, May 08, 2020

Why the premature reopening of the US economy?

Comparing the United States with other countries in terms of their responses to the pandemic, we find an apparent inconsistency. Some countries, like Germany and South Korea, have decided to reopen their economies on the basis of a sustained decline in the number of new cases of Covid-19, while at the same time preparing to deal with a probable second wave. Other countries, like France, detecting no such clear trend in the data, remain in lockdown. At the other extreme we find Brazil, whose president Jair Bolsonaro – himself suspected of being infected – has never acknowledged the seriousness of the disease, taken no action at the federal level, and undermined the efforts of state and city governments. Different as these responses are, they are all at least internally consistent.

Not so the response of the American federal government. There was an initial period of denial and evasion. In that regard the United States was by no means unique: there was a similar period in China, Britain, and Japan. But Trump did eventually recognize Covid-19 as a serious threat. For a few weeks he put on a show of leading the fight against it. Now, however, he has made a U-turn and is determined to reopen the US economy despite objections from medical experts and from many mayors and state governors, who all correctly point out that the data do not justify such a sea change in policy. 

Should we see in this merely another instance of the unpredictable behavior of an idiosyncratic tyrant who constantly contradicts himself and changes his mind? At the tactical level – should he disband his Covid-19 task force or just reorient its priorities? – Trump does indeed seem to improvise as he goes along. At the strategic level, however, I suggest that he is following a definite plan devised at quite an early stage in the crisis. 

Note first that Trump clearly though indirectly announced the reopening of the economy well in advance. In mid-April he told us that ‘next week will be the worst.’ How on Earth could he know that? Only in retrospect will it become known which week of the pandemic was the worst. So what did he mean? My reading is that he had already decided that the week after next he was going to claim that the worst was past and the country could return to business as usual.   

Note also that Trump is showing much more determination in reopening the economy than he ever did in fighting the coronavirus. He resisted pressure to exercise the emergency powers granted to the president by the Defense Production Act in order to compel companies to ramp up production of urgently needed medical supplies. But now he is invoking the very same powers to force meatpacking plants, closed due to mass outbreaks of Covid-19 among their workers, to resume operations under unsafe conditions – on the pretext of a non-existent shortage of meat in the stores. 

Trump is not an ideologue opposed in principle to the use of emergency powers. It depends on the purpose for which they are used. Obviously he is much more serious about reviving business than about protecting public health.

The elephant in the room

The liberal wing of the corporate media is an invaluable source of information about current affairs. For instance, The Washington Post has conducted some excellent investigative reporting on the corruption, incompetence, and confusion that have shaped the response of the Trump Administration to the pandemic. However, there are certain very important aspects of the situation regarding which the corporate media – even their liberal wing – remain silent. Thus we learn a great deal about the interactions of the president and his administration with state governors, with Congress, with leading medical experts, sometimes even with foreign leaders – but there is an elephant in the room. That elephant is the American capitalist class. 

American capitalists are in a position to influence the president (and other public officials) both indirectly, through such organizations as the National Association of Manufacturers, the US Chamber of Commerce, and lobbying groups for different industries, and – for the wealthiest oligarchs, especially those to whom the president owes favors for past financial support – by direct personal access. These are the people to whom the president is in reality primarily responsible, the people with whom he is most concerned to maintain good relations.

Little detailed and reliable information is available about these interactions, but it can safely be assumed that the initial phase of a national and international crisis like the current pandemic is marked by intensive consultations between the president (and his closest colleagues) and prominent representatives of Big Business. I infer that Trump reached a firm understanding with them to the effect that it was expedient to heed the advice of the medical experts, but only for a limited period of time, after which the economy would have to be reopened, whatever the public health situation at the time. They could hardly be expected to leave their money-making at the mercy of a pesky virus! 

I think that Trump promised ‘the elephant’ that the US economy would reopen ‘with a big bang’ in early May. And now he is doing his best to keep his promise.

Capitalists have many reasons to oppose a prolonged lockdown of large parts of the economy. They fear bankruptcy. They fear that consumer preferences will change and demand for their goods and services will never be fully restored. Nor do they like it when workers are paid to do nothing for a long period. Apart from the cost, workers may lose their habit of obedience to the boss and his representatives, making them ‘unemployable’ (that is why the long-term unemployed find it so difficult to get a job). And capitalists do not like it when their accustomed influence on government policy is diluted as a result of public officials paying so much attention to the advice of public health experts. Perhaps people will start to realize that capitalists perform no useful social function.

Mexico too

The premature reopening is a massive biological and social experiment. Its results are difficult to foresee and terrifying to contemplate. And the United States is pulling a reluctant Mexico into the experiment, because American companies rely on components produced in Mexico, especially in the border zone. 

The US Ambassador to Mexico, other US officials, and lobbyists for US corporations are demanding that Mexico reopen factories that have been closed as non-essential. And the pressure is working. Factories are preparing to reopen after threats that otherwise firms will leave Mexico. President Andrés Manuel López Obrador has declared that he will open Mexico’s manufacturing sector days before America’s automotive industry opens.

Strikes and demonstrations have broken out in several border cities against US companies like Honeywell, Lear, and Regal Beloit, demanding shutdowns with full pay for non-essential factories and safe working conditions for those producing essential goods. A rare victory was won by workers at the US wind turbine blade maker TPI Composites, who now have full paid Covid-19 leave. In most cases, however, organizers get fired and production continues as usual. Electrolux, a corporation that makes laundry machines in Juaréz for sale in the US, paused operations only after one of their workers died (here).

Poor Mexico, so far from God, so close to the United States! 

Part of life?

If the Trump Administration now pursues an economic policy that can no longer be reconciled with the advice of medical experts, in what terms will that policy be justified to the general public? What will the president say about Covid-19 figures as they rise higher and higher? Perhaps he will claim that the figures are falsified. Perhaps he will refuse to comment on them.

Another possibility, however, is that he will start to use a ‘talking point’ borrowed from right-wing figures like radio host Rush Limbaugh, who says that risks are an unavoidable part of life and should just be accepted as such. Americans should not allow concern about risks to deter them from doing the things they enjoy. Such caution is contrary to the American spirit.

This attitude has already found official expression in a recent tweet from US Ambassador to Mexico Christopher Landau:

There are risks everywhere, but we don’t all stay at home for fear we are going to get in a car accident.

 While this sentiment might appeal to Trump’s core constituency, opinion polls indicate that it is not shared by the majority of American citizens.
Stephen Shenfield
General secretary of the World Socialist Party of the United States

No comments: