The coronavirus outbreak has shown that capitalism is failing

If there’s ever been a time to radically change our social service policies, this is it.


We won’t have official data for some months, but it’s already clear that the new coronavirus pandemic is unleashing severe economic disruptions that are likely to be long-lasting. Numerous small businesses are shuttering and laying off staff. The stock market plunged so deeply and so frequently that the built-in “circuit breakers” to halt trading were tripped several times already. And there has been a general halt to most economic activity in the country as governments are strapped to address a surge in unemployment compensation claims, support medical industries and infrastructure, and mitigate the worst economic effects as parts of the U.S. join what was already the largest organized quarantine in human history.

If there’s ever been a time to radically change our social service policies, this is it.

The solutions to the acute problems of the coronavirus outbreak are pretty straightforward. Even Hillary Clinton—not one of our most progressive politicians—posted: “free testing, fee waivers, emergency sick leave, quarantines, cancellations, giving a damn.” This is not some radical pipe dream.

The danger has been apparent since mid-January, when Chinese scientists published the virus’ genome and researchers began working on developing tests. But as the virus spread, we’ve found ourselves in the midst of an unprecedented economic catastrophe. We’ve been shown that our deregulated capitalist society cannot protect the population during a national emergency.

The unchecked spread of the novel coronavirus across the United States has exposed not just that cracks run through the economy, but that there is no foundation beneath it.

Right now, as we enter into the second week of a growing national shutdown, the world is seeing the results of that:

1. Tens if not hundreds of thousands of small businesses, and the jobs they provide, are at risk, and no amount of tax cuts or other deferred assistance will help them;

2. People are not inherently rational in moments of crisis (witness the hoarding of toilet paper, as if we were running out of trees); and

3. A minimized federal government is a recipe for chaos, not market efficiency.

And the Trump administration has had to be dragged kicking and screaming to enact the bare minimum of measures to contain the outbreak.

Unfortunately, it’s likely to get a lot worse before it gets better.

How to contain an outbreak

We can learn lessons from other countries such as South Korea, Singapore, and even China, which implemented widespread testing and quarantining. The numbers of new cases in those nations has drastically declined.

But our efforts so far have been woefully insufficient. Health care workers across the country are in dire need of medical supplies and protective equipment—specifically N95 single-use masks and ventilators—while the Trump administration has been reluctant to use the power of the federal government to boost production, instead forcing states to compete with each other to buy their own equipment. Reports as of Monday are that the Trump administration is considering loosening restrictions on containing the virus because he’s more concerned about the stock market in an election year than he is with a lethal pandemic that in about 100 days has already infected more than 400,000 people worldwide, killing more than 1,000 in the U.S., and which is accelerating fast, according to the World Health Organization.

The lone sane voice in the administration, Dr. Anthony Fauci of the National Institute of Allergy and Infectious Diseases, continues to contradict the president on every point. Earlier in March, Fauci publicly disagreed with Trump on how long it would take a vaccine to be available, and has consistently provided a realistic and grim view of the pandemic’s course, in contrast to Trump’s rosy (and blatantly false) claims.

Infections in the U.S. are beginning to spike on a curve that mirrors Italy’s, with the New York City metropolitan area becoming the new hot zone for the virus. The number of new infections in New York is now doubling every three days, and is expected to accelerate over the coming weeks, Gov. Andrew Cuomo said on Tuesday.

Meanwhile, on the other end of the Manichean scale, there’s Texas Lt. Gov. Dan Patrick, who has suggested that seniors should be willing to sacrifice themselves for economic results. He’s not alone. Right-wing pundits have taken up the call that saving the economy is more important than preventing the loss of several million people. This from the same crowd that denigrated the Affordable Care Act over a made-up scandal about “death panels.”

What can we do?

Government to the rescue… maybe?

A $2 trillion aid package for Americans has been introduced in Congress, although even now some commentators say it won’t be enough to avoid a recession. To no surprise, the Republicans would prefer to bail out corporations and make sure Planned Parenthood can’t benefit from it. Democrats in the Senate were able to ensure that $500 billion in corporate bailout funding could not be kept secret until after the election, and that neither Trump’s businesses nor that of anyone else in government could benefit from the bailouts. But as of Wednesday, both sides were still fighting over unemployment insurance, and whether to extend it.  

So, it’s come down to the state and local governments.

Governors and mayors in some of the hardest hit states—Washington, New York, California— are closing schools for the remainder of the academic year or ordering city populations to “shelter in place.” The chorus of demands from governors for the federal government to invoke the Defense Production Act to produce critical medical supplies is growing louder, even as the administration ignores those calls because Trump wants states to submit bids to private companies for the equipment.

And for those who are in denial, such as Florida Gov. Ron DeSantis, who, in what looked like a scene out of Jaws, didn’t want spring break week to be canceled, the local officials stepped in and closed the beaches anyway.

More so now than before, which state you live in may be more of a determining factor in how well you weather this storm. Florida might as well be a different country than New York.

That may be the point of federalism, but it’s also the default position of the government during a catastrophe; not just now, but also during Hurricanes Katrina in 2005 and Maria in 2017, after 9/11, even during the 1918 Spanish flu epidemic and the Great Depression. The feds can coordinate efforts, handle logistics, provide funding, and most important, provide leadership.

The real work, though, happens at the local level.

Forty years of defunding social services has left us with little in the way of a functional national government to respond to a major emergency. And every day that the president dodges responsibility or refuses to direct businesses to produce critical medical supplies, we become more and more like a failed state.

We will get through this, however. We always do. The question is at what cost—to us as individuals and as a nation.

Priorities and politics

Once the virus runs its course—and we have no idea how long that will take—it’s still an election year, in which the most unqualified and unfit president in U.S. history is standing for reelection.

Presumably, former Vice President Joe Biden is going to be the challenger. Will our current situation open his eyes to the need for a more socialist platform, such as the one that U.S. Sen. Bernie Sanders has been pushing?

That would be smart. Because if there’s ever been a sign that we need a national health care program, to provide paid sick leave for all working people, and to implement countless other protections for people who have been trampled by big business and their stand-ins in Congress, this is it.

The shutdown of the economy has demonstrated—again—that working people, not bankers, keep the economy running. When Congress passed a corporate tax cut in December 2017, businesses used the money to buy back their stock (boosting prices) and give bonuses to executives. Very little of it made it into the hands of working- and middle-class Americans.

That’s why an aid package needs to put money into people’s pockets. The current deal being floated, which includes a one-time payout of $1,200 per person, may sound nice, but that’s not even one month of rent for many people, and it doesn’t much help the rising number of newly unemployed. (Meanwhile, the United Kingdom has already promised to pay for up to 80 percent of lost wages, up to the equivalent of $2,900 USD per person per month. Canada likewise has approved a package that would give individuals $2,000 per month for four months.)

We could do that, too. It’s called deficit spending.

The U.S. treasury can print more money to get us through this crisis—or any other emergency that comes our way. It’s just that in recent years, the neoliberal conventional wisdom has said we can’t do that, because, as former President Ronald Reagan said in his inaugural address, “Government is not the solution to our problem, government is the problem.”

So instead we squandered our fiscal strength on cutting corporate taxes.

If we were to print more money, we could keep the economy afloat and pursue an aggressive industrial policy to make medical equipment and build hospitals and quarantine facilities. And we can take advantage of this situation to strengthen our social safety nets so we’ll be better prepared for the next pandemic—or maybe event prevent it.

This is a moment to rethink how our government functions. Are we really 50 individual nations competing with each other to procure medical equipment? Or are we one nation, undivided?

It’s time to choose.


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