Eric Toussaint & Henri Wilno: The Coronavirus pandemic is part of a multidimensional crisis of capitalism
While governments and
mainstream media keep claiming that the stockmarket crisis is a consequence of
the coronavirus pandemic, I pointed out that all the ingredients for another
financial crisis had been present for several years and that the coronavirus
was merely the spark or trigger of the stockmarket crisis, not its cause (No,
the coronavirus is not responsible for the fall of stock prices) . The
amount of volatile stuff in the financial sphere had long reached saturation
point and we knew that a spark could lead to a huge blow-up. We did not know
when or how it would happen, but we knew it could happen.
The first major
stockmarket shock occurred in December 2018 on Wall Street. Under pressure from
a handful of large private banks and the Donald Trump Administration, the
U.S. Federal
Reserve (the Fed) resumed its rate cuts. A
new frenzy of rising share prices
flared up and big corporations went on buying back their own shares so as to
amplify the process See (To
confront capitalism’s multifaceted crisis the bankers must be expropriated and
the banks socialised) . Large private companies raised their debt levels
and major
investment
funds contracted loans to buy companies
of all kinds, including in the manufacturing industry.
Next, again on Wall
Street, from September to December 2019, there was a major crisis due to a
shortage of liquidities.
The Fed made a massive intervention, injecting hundreds of billions dollars to
prevent markets from collapsing (The
Credit Crunch is Back and the Federal Reserve Panics on an Ocean of Debt).
The European Central
Bank (ECB) and other major central banks (UK,
Japan, China, etc.) implemented more or less the same kind of policy and they
now bear a huge responsibility for the accumulation of volatile elements in the
financial sphere.
Of course the scale of
the decline in production in the months following March 2020 will be
unprecedented compared to the crises of the last 70 years. It will be crushing.
But the production crisis had already started on a large scale in 2019, notably
in the car industry with a massive fall of sales in China, India, Germany, the
UK and other countries. Overproduction also affected the equipment and machine
tool manufacturing sector in Germany, one of the world’s leading producers in
the field. Chinese industrial growth experienced a serious slow-down, which had
serious consequences for countries that exported to China, whether equipment,
cars or raw materials. During the second semester of 2019, a recession started
in the manufacturing industry in Germany, Italy, Japan, South Africa,
Argentina, and in several industries in the USA.
The coronavirus
pandemic was the trigger. Any other serious occurrence might have led to the
same effect, such as an open ‘hot’ war between the USA and Iran or a US
military intervention in Venezuela. The stockmarket crisis would then have been
presented as a consequence of the war....
http://www.cadtm.org/The-Coronavirus-pandemic-is-part-of-a-multidimensional-crisis-of-capitalism
Delilah
Friedler: Capitalism Is America’s Religion. The Virus Makes That Clear
American capitalism has dropped the mask — and its face is cruel and selfish
American capitalism has dropped the mask — and its face is cruel and selfish
