Economic Effect of Coronavirus Could Be
Revolutionary
By Paul
Craig Roberts
March
16, 2020 "Information
Clearing House"
- Coronavirus and globalism will teach us vital
lessons.
The question is whether we can learn
vital lessons that do not serve the ruling
interest groups and ideologies.
Coronavirus will teach us that a country without
free national health care is severely
handicapped. Millions of Americans live paycheck
to paycheck.
They cannot afford health care premiums,
deductions, and copays.
Millions have no insurance.
This means millions of people infected
with coronavirus who cannot get medical help.
The morbidity from this is intolerable in
any society.
Shutdowns associated with efforts to contain the
spread of coronavirus will deny income to
millions of Americans who live paycheck to
paycheck.
What do they do for food, shelter,
transportation?
You don’t have to think very long along
these lines to see a very frightening scenario.
Globalism has taken down the ladders of upward
mobility by exporting American middle class jobs
to Asia.
A population once able to save now lives
on debt, the service of which is interrupted by
recession/depression and by debt service
absorbing all net disposable income.
Globalism has also reduced the survivability of
our society by making it dependent
on externally produced goods, the supply
of which can be cut off by disruptions in other
societies, by policy disagreements leading to
sanctions, and by an inability to export enough
to pay for imports, which is what the offshored
production of US firms is.
The
United States has an unprotected population and
an economy in trouble.
For years corporate executives have run
the companies for the benefit of their bonuses,
which are largely dependent on rises in their
company’s share price.
Consequently, profits and borrowings have
been invested in buying back the companies’
shares and not in new investment in the
businesses.
Corporate indebtedness is extreme and
will threaten many corporations and many jobs in
a downturn. Boeing is a case in point.
Economist Michael Hudson has for many decades
studied the use of debt-forgiveness to restart
economies killed by debt burdens.
Debt forgiveness for corporations has a
different implication than debt forgiveness for
individuals.
For corporations, forgiving debts lets
those who financialized and indebted the economy
and the population off the hook.
To avoid rewarding them for the
catastrophe they produced and to prevent
widespread public outcry and distrust,
nationalization is implied for insolvent
companies and banks.
Nationalization would be limited to insolvent
companies and financial institutions and doesn’t
mean that there would be no private companies or
businesses.
Additional nationalization could be used
to prevent strategic companies from substituting
their interests for national interests, which
they do when they move American jobs and
factories offshore. Pharmaceuticals could be
nationalized along with health care. Energy
which often sacrifices the environment to its
profits could be considered for nationalization.
A successful society has to have more
driving it than private profit.
For
most Americans nationalization is a dirty word,
but it has many benefits.
For example, a national health care
system reduces costs tremendously by taking
profits out of the system.
Additionally, nationalized pharmaceutical
companies could be made more focused on research
and cures than on profit avenues.
Everyone knows how Big Pharma influences
medical schools and medical practice in line
with Big Pharma’s approach. A more open-minded
approach to medicine would be beneficial.
Socialist is another American dirty word, one
that is being used against Bernie Sanders.
I
have not turned into a socialist overnight.
I am simply thinking outloud.
How can the economy recover when the
population and corporations are smothered by
debt?
Debt forgiveness is the only way out of
this debt suffocation.
Can debts be forgiven without
nationalization? Not without a huge giveaway to
financial mangers and Wall Street.
It is the members of the “one percent”
who have received 95% of the increase in us
income and wealth since 2008. Do we want to
reward them for smothering the economy with debt
by bailing them out without nationalizing them?
The
combination of an economy covered in debt and an
unprotected population is clearly revolutionary.
Do we have leadership capable of breaking
out of interest group politics and ruling
ideologies in order to save our society and put
it on a more sustainable basis?
Or will the economic hardships be blamed on the
virus, the catalyst that ignited the debt
timebomb?
Dr. Paul Craig Roberts was Assistant Secretary of
the Treasury for Economic Policy and associate
editor of the Wall Street Journal. He was
columnist for Business Week, Scripps Howard News
Service, and Creators Syndicate. He has had many
university appointments. His internet columns
have attracted a worldwide following. Roberts'
latest books are
The Failure of Laissez Faire
Capitalism and Economic Dissolution of the West,
How America Was Lost,
and
The Neoconservative Threat to
World Order.
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The
views expressed in this article are solely those
of the author and do not necessarily reflect the
opinions of Information Clearing House.