So, we are now in the world flavored with corona. A world where many still claim that the virus is no worse than the seasonal flu, and that there is absolutely no reason to accept economic damage due to a stated need of preventing an exponential rise of cases from completely overwhelming our medical capabilities. These deniers of all things uncomfortable to them refuse to accept any evidence that hasn’t slapped them upside of their heads with a 2×4. They may be a small fraction of the total population of the US, but they speak loudly, and are prone to simultaneously demonstrate many of their rights, as they parade with placards, guns, and the incongruous mash-up of the US flag and the Confederate battle flag. The images of unmasked faces spitting their hatred towards state legislators will be engrained in the history textbooks of the future as they describe this episode in our nation’s narrative.
These bloviators are encouraged by their cult leader, who speaks in the Twitter language. This is a strange language, where thoughts are compressed to bullet points, and ….. becomes the joining conjunction. I can foresee a future library where these masterful expositions of momentary blips of what passes for thought, are portrayed as the speech form of the future. Forget writing meant to last longer than the moment. That is so elitist! Instead, we need to speak directly to the common man, bypassing the superfluous filter of the media. For too long those people have held sway over the agenda of this nation. No wonder we’ve become the laughingstock of the world, pretending that we cared about anything other than gross economic growth. For the sweet nirvana of growth is the only thing that matters,.
It is truly amazing that this nation can be brought from the “Greatest economy in the history of the world,” within two months to a basket case where people line up for miles in cars in order to access a food handout. One might say that the apparent prosperity we enjoyed was an illusion, sustained by the necessary labor of those we now celebrate as the indispensable ones. You know, those who we truly valued by paying wages that precluded any ability to save. Instead, we encouraged overconsumption by the easy availability of credit. Credit for vehicle payments, credit for mortgages, credit in the form of credit cards that ensnare millions into a life of making minimum payments, credit traps like payday lenders. All it took to pierce this illusion of prosperity has been a simple little invader, the tiniest subdivision of life.
The hollowing out of the economy has taken decades. Every so often, we saw what could go wrong with the increasing financialization of our economy. The practice of using junk bond financing in order to make hostile bids for existing stable companies got a little too brazen. Michael Milken, one of the early users of this technique, found that using insider trading in conjunction with the purchasing of a company worked even better, and eventually he was charged and convicted of securities fraud back in 1989. It is not a surprise to learn that he was pardoned by President Trump in February 2020. But it has not been the actual effect of the technique that has caused the most damage to this nation. No, it has been the modification of corporate behavior as a response to the vulnerability exposed from corporate raiders which has inflicted the damage and greatly increased the inequality we have in our nation.
Once corporate boards realized they were liable to be attacked by outside financial wizards, they took many of the actions those wizards would inflict on their victims. No longer was it beneficial to play a beneficial role in the local economy by paying more in wages, and supporting the local economy through donations. Nay, now all that matters is to reward the stockholders. When you combine that with the opening of China, and its legions of low wage workers and its ignoring of environmental restrictions, you saw company after company outsource production to this new savior of the world’s economy. This nation could survive by doing the design work, and the marketing and sales for the products returning via container ships. Component cost is the sole determinant of what is good. The lower the component costs, the more gross margin can accumulate on the final product.
The next piece in this financialization nightmare came about when computer technology made it possible to arbitrage taxation rates among the various countries. If you establish a subsidiary in a low tax location, then use it to move product from one country to another, you can take some vigorish off the top and allocate some of the supply chain profit to this new entity. Now all nations became engaged in the race to the bottom for corporate taxation rates, since all were liable to be victimized by this new technique, and were likely to see taxable profits disappear from their shores.
Then layer debt onto this structure. Not debt for new facilities, for opening new markets, but debt to directly reward the shareholders and corporate executives by enabling the buyback of shares and goosing the stock price. All are happy (except for those who lose their jobs when business does turn down and the debt repayment leads to bankruptcy of the company).
Of course, there are those people who do not fit into this new world so neatly. They are those who have to provide their labor in a single location, who cannot leverage their skills across the globe. People like those who remove our trash, and serve us coffee, and wait tables or bartend, those who provide health care services, those who are in the first responder ranks. As we’ve seen in these past two months, they are the ones who stitch together the threads of society. Without them, we unravel. That is why this original stand at living in quarantine was so important, since we saw in other nations and in New York what could happen when one essential part of this structure became at risk. When health care workers are overwhelmed, the entire health care system becomes dysfunctional at the very time it is being depended on by so many.
But in the corporate environment we live in, every action has its down sides. By closing the health care facilities to discretionary procedures, only a fraction of the personnel employed at these facilities were needed. Therefore it is the nurses and orderlies and service personnel not engaged in the ICU who became expendable, and were furloughed. So we see the extreme irony of health care workers joining the army of the unemployed at the same time as we are depending more heavily than ever on health care workers. Similarly, as assisted living facilities and nursing homes were co-opted by for-profit companies, the need for profit resulted in fewer and fewer resources being available in the front line of these facilities. For the investors, what was important is that the facilities paid their rents for their buildings, which were owned by corporations separate from the health care companies. Thus, we see deaths concentrated in these facilities as they become overwhelmed by the flood of illness.
When even pandemics are viewed through a partisan lens, it is very likely that no real structural change will happen if and when we return to “normal” lives. Even if the power in the Senate and the White House change in the upcoming election, we know that a substantial minority in this nation will never accept the legitimacy of the government. Somehow, we must break the hold of the personality cult that has poisoned the minds of so many, so much so that they ignore all signs of incompetence and mental illness in their leader. It remains to be seen whether the death and illness caused by this virus will suffice to loosen the bonds of this confederacy of dunces.