“To the glorious March 18! “, Arthur Rimbaud
Added note: The apex of ignominy in this matter will certainly go to PM Boris Johnson and his dangerous relying on so-called « herd immunity ». See « Immunité collective », la stratégie risquée du Royaume-Uni pour lutter contre le coronavirus » by Cécile Ducourtieux Publié aujourd’hui à 15h25, mis à jour à 16h31 https://www.lemonde.fr/international/article/2020/03/14/immunite-collective-la-strategie-risquee-du-royaume-uni-pour-lutter-contre-le-coronavirus_6033097_3210.html
Quote: “With its 5,000 beds in intensive care available, (the system) would be quickly overwhelmed.” . Hence, the Conservative PM quickly made his choice !!! There was a time when the British were justifiably proud of their NHS public system. They could gently laugh at the American private system, see for instance the 1972 movie “Where does it hurt?” featuring a hilarious Peter Sellers… Since then, the emulation of the Yankee « model » cooked in Mises’s sauce, has caused them to unwillingly give birth to a statistical artefact, namely the explosion of injuries in hospitals due to small patient rooms which were reduced to optimize space to a point that they cannot safely contain the patient, the machines and the visiting medical teams at the same time. Mr. Jeremy Corbyn had presented an excellent electoral program courageous enough to break with this inhuman capitalism and its “animal spirits”. Perhaps he should hurry-up to the barricades, since the salvation of his country and fellow citizens is at stake… without forgetting to put Canary Wharf and the City as well as Gerard Winstanley and William Blake back to where they really belong in a civilized and egalitarian society …
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Who will pay the cost of this new bailout of speculative finance, of the stock market and of private companies?
What will be the compensation due to citizens in terms of the Labor Code, Reduction of the Work Week, public social systems, public infrastructures and social ecology? The post-crisis socio-economic recovery must be devised in a republican and egalitarian manner.
Recall that the nationalization of Northern Rock in the UK during the subprime crisis did cost a mere fraction of the cost of the bailouts of private banks by Western governments or equally privatized central banks. At least, in the case of Northern Rock, public recapitalization, made it possible to preserve productive credit and small savings. It also implied public control. The nationalization of credit in Island initially made the same virtuous demonstration.
Today, despite an even more disproportionate financialization of the economy, and therefore despite major systemic risks compared to 2007-2008, the political and economic leaders adamantly refuse to return to the functional segregation of the sector with the equivalent of the 1933 Glass Steagall Act, which distinguished between deposit bank and commercial bank. As everyone knows, this anti-speculation law was repealed in 1999 thanks also to the advice of the pitre Tirole. Moscovici helped prevent this return in the EU while Donald Trump unraveled the Dodd-Frank law in the United States, despite the fact that it never was anything more than a semblance of minimal regulation. This allows speculative finance to cannibalize the real economy, which tends to accelerate deindustrialization, including in the health and pharmaceutical sectors. (1)
In light of these lessons from the recent past, the French president seems to have lost a good opportunity to withdraw his destructive plan to substitute the current public pension regime with a points regime that will fatally lead to the privatisation of retirement plans. The current French repartition plan induces a lesser level of poverty, hence better health, among seniors compared to most other developed societies. He could have done so without losing face in the name of the national mobilization made necessary by the health emergency. As we know, the health crisis is likely to affect the elderly more than the other demographic cohorts. In a similar vein it should be stressed that despite the fact that Social Affairs is an exclusive national competence, neither the European Commission nor any current European government gives the signal for an accelerated return to publicly-owned and extensive social safety-nets. However, they remain the best ramparts for ensuring national security at a lower cost and without pecuniary discrimination. They also remain the best counter-cyclical instruments that have proven themselves to date. In the wake of the Greek debt crisis, it was rightly noticed that “austerity kills”. (2)
“Whatever it takes” in all tones, in all languages, but exclusively thinking about the preservation of the stock market and of the profits of the speculative financial sector. All the while carefully avoiding the urgent if temporarily closure of the workplaces in order to protect workers, making, of course, an exception for essential services but according to very strict security protocols. In fact, workers have the right to refuse to work without being penalized when the employer does not provide safety in the workplace. To get to work, it is often necessary to take public transportation, which is usually expensive and crowded, so that it is impossible to comply with the instructions laid down by civil authorities, in particular with regard to the minimum safe distances between people to avoid « droplets » and contagion. This amounts to knowingly putting workers in danger with a high probability of becoming sick with COVID-19. And what about the inhuman conditions experienced by inmates in illegally overcrowded prisons which already were the subject of several reprimands and condemnations at European level? Under these conditions, without being a Foucault pushed in the back by Maos, the revolt of prisoners, many of whom are awaiting trial or are sentenced to very short sentences that do not justify imprisonment, will not surprise anyone. (3)
However, the mortality rate caused by the coronavirus is much higher than that of ordinary influenza. Its pulmonary aspect dangerously affects patients at risk and the elderly more than the Asian populations. Above all, its exponential spread rate is such that it risks very quickly undermining existing health facilities. This is already the case in northern Italy. The South for its part usually lives in a sanitary desert often managed by the mafias with a large institutional complicity, a sad fate from which the North is far from being exempt, Lombardy among others.
This is a predicament further compounded by the rampant privatization of the system. The initial control of the spread is all the more important as it reduces the risk of more lethal mutations of the virus. In economic terms, drastic actions from the start imply lower final costs, especially when the incubation period is relatively short and the foci of epidemic can be precisely defined and circumscribed, taking however into account the carriers who are not exhibiting no symptoms. If the exponential curve is allowed to express itself without containing it to the maximum, the “peak” will inevitably move higher and, more serious still, the return to normal will only be longer and more costly. The temptation is then to minimize the crisis by falsifying the statistics; this is done by the attribution of the cause of death to other chronic diseases already affecting coronavirus patients. Such warnings is beginning to be heard in Italy and in the USA, among other countries. Meanwhile, the privatising logic will fatally lead to the choice to treat patients, at least the less well-off, according to… their survival (?) life expectancy …. (4)
There are three logics to deal with the matter, a scientific logic, a bureaucratic and accounting logic and a Darwinian cynically philo-Semite Nietzschean logic. The first two should go hand in hand under the pre-eminence of the scientific approach, the precautionary principle being valid here without reservation. We will remember the metaphor devised by Paul Langevin about the traveler carried in a train approaching the speed of light and walking backwards in the wagons. Contrary to common fallacies, his rate of aging remains dictated by its telomeres. In the case of COVID-19, it is the epidemiological characteristics that should prevail in order to preserve and save lives. The availability of health infrastructures should be the adjustment variable, not the other way around. As for the third logic, typically stated in cold-blood and without remorse state of mind by a Donald Trump in one of his infamous Tweets, which consists in comparing COVID-19 to influenza, it is quite simply guilty, dangerously guilty.
Through its discipline, the People’s Republic of China has shown once again how strict and appropriate measures, putting the lives of citizens before profits, remain the best strategy for ending the crisis. But China also has effective socio-economic planning and a non-Marginalist management of money and credit, both public and private. In addition, it rehabilitated its public health network in time and developed operational plans to respond to possible crises. In this case, she was able to build functional hospitals in a matter of days. She can also count on competent and dedicated scientific staffs and on proven research and development budgets. (5) That said, by normalizing economic and social life, she should not lower its vigilance. In the context of the Western criminal crusades carried out in the name of the “clash of civilizations” and of the preventive war doctrine, and taking into account the current US trade war against all potential military and economic rivals, China should also question the origin of this pandemic. She should also inquire into the necessary new measures to be adopted in the framework of international arms control, in particular that of biological weapons…
In the West none of this is available. Here reigns the most arrogant and silliest monetarist neoliberalism creed, that of Mises and of his current hegemonic clique, according to which it is the public hospital which creates diseases, which otherwise would only be a matter of Will and of avowed eugenics. Ergo … (6) The same a-social speculative logic prevails for the entire economic system for which society does not exist, no more than the worker. In addition to having to reproduce in a household that involves the three components of the “global net revenue ” of households (7), including deferred salary, the worker cannot be considered or treated as a mere factor of production like any other, one tradable 24 hours a day on the World stock exchange by a simple click of the mouse.
It should be noted that buybacks are now amount to around 80 billion Euros per month within the EU, which surely « justify » recurrent new TLTROs and other QEs, but does not serve workers’ interests in the least. Indeed, the latter are doomed to wage deflation with which one pays stagnant individual wages with the theft of deferred salaries and reduced access to public infrastructures and services due to their privatization. (Remember Enron’s bankruptcy, which was only the tip of the iceberg ? ) All without mentioning the growing precariousness and its economic and fiscal consequences, paving the way for a disastrous downward spiral … The only winners are the dividend collectors who are often exempt from tax and who invest in tax havens. Western society today is experiencing unprecedented inequalities at all levels, a barbaric injustice which it had learned to forget after the 14-18 WW, also thanks to the salutary fear provoked by the workers’ movement and by the Revolution of ‘October 1917. In the US this produced the exemplary rise of the CIO unions without the backing of which the collective bargaining system would not have been generalized by the New Deal, nor would the latter have been possible. « Organising the un-organised » has always been the key to social conquests in the US as elsewhere.
The economy must serve social and individual needs as a priority in order to guarantee the emancipation of all citizens, without exception. Its vocation – except from pathological philo-Semite Nietzschean – that is, that of all marginalism and in particular that of the inept Austrian Marginalist school – is not to maximize the profit of a few against the general interest and against social utility. These two components of all civilized life are also protected by our Constitutions and by the Universal Declaration of Fundamental Individual and Social Rights -1948 – both born of the Resistance, these same texts that these people now want to destroy, including the public pension system .
It goes without saying that in times of health crisis everyone must comply with the directives issued by the public authorities, even if this means expressing themselves on the rationality of the measures taken. However, we cannot keep silent about the neoliberal ideological aspects of the proposed exit from the crisis. Neither at the national level, nor at the European level, nor at the international level.
We are told today that the Fiscal Compact is suspended in the EU. However, as Mr. Mélenchon mentioned amid general indifference, including at the time in Italy, it no longer has the force of law since December 31, 2018, the date before which it had to be transcribed into European law. This is undoubtedly explains why it is now inserted and reinforced into the reform of the MES !!! (8)
The French President promises to take action and do everything “no matter what”, the German Chancellor promises more than 550 billion Euros to the German firms already well connected to regional banks. These notoriously have close ties to industries and are luckily under exclusive German jurisdiction.
One reads, for instance, “Ursula von der Leyen tries to put an end to the disastrous remarks of Christine Lagarde who knocked down the Stock exchange on Thursday, Milan especially. A breath of fresh air for the markets and for Italy, which can thus function in an emergency without community restrictions. And that’s not all: the German government has indeed announced “unlimited” loans to companies worth at least 550 billion Euros, in order to cope with the crisis caused by the coronavirus epidemic. Figures that would explode the Maastricht parameters for everyone. ” (9)
The real question is: Who will pay? And with what counterparts for the workers and for citizens?
Remember Trichet, the one who violated the ECB’s statute with its Facility 1 and 2 ? From transient as they should have been, they quickly became permanent, and then took the pitiful turn of Draghi’s “whatever it takes” ( 10). It followed that no normalization – or reset – is no longer possible and that the strategy of the imposition of negative interest rates in the hope of reducing the public debt on the back of the savers is dead before being. (The Zero Bound doctrine of overrepresented and overpaid pitres like Blanchard, Summers and Co.)
Following the 2007-2008 crisis, Trichet admitted that the rescue of private banks had cost more than 17% of European GDP directly and around 30% indirectly in terms of the economic and fiscal impact. He warned that such a huge bailout was no longer conceivable. However, the same bailout strategy is cheerfully implemented, while cold-bloodedly and without the slightest embarrassment, maintaining the same economic and financial parameters. (11) The same was done in March 2008 in the midst of the subprime when the American Treasury led by Paulson imposed as remedy for the crisis, the implementation of his March 2007 Report which was favorable to the greater financialization of the economy, hence contributing to the crisis! (12) All the while reinforcing the neoliberal monetarist logic of the flat tax, the tax expenditures and other exemptions for employers and the wealthy accompanied by linear cuts in public infrastructure and public services in the name of the doctrine of the Minimum State.
This time around, it is too much; it is the straw that breaks the camel’s back. Citizens will have to do some urgent clean up, including by optimizing their vote. The authentic Left will have to do its homework to present truly civic and socially credible alternatives, thus breaking with the current regressive mantra. The end of the philo-Semite Nietzschean economic and social narrative must be acted upon. (13)
Paul De Marco
Notes:
1 ) See Berruyer in https://www.les-crises.fr/debats-loi-bancaire-1/ , etc. As everyone knows, Tirole is three big ideas directly causing three major disasters, first the financial deregulation leading to the subprime crisis, then the « contract unique » leading to the Italian Jobs Act and the Loi travail in France and last but not least imperfect competition regulated according to the presumed needs of consumers, a choice that explains the current tax treatment of Gafam and of other transnational oligopolies. It seems that with the help of the Jewish-American criminal D. Kahneman, he is now working on a new big idea …
2 ) See “The Body politics: why austerity kills” in the Book reviews section of my old Jurassic site http://www.la-commune-paraclet.com/Book%20ReviewsFrame1Source1.htm
3 ) On the prisons see “Poggioreale: uno scatto, mille parole…”, di Vincenzo Morvillo
http://contropiano.org/news/cultura-news/2020/03/10/poggioreale-uno-scatto-mille-parole-0124993?unapproved=207444&moderation-hash=c9068955a3f48c365d1219621c8cfa1a#comment-207444.See also chapter 5 entitled “Accoglienza, prigioni e sfruttamento degli migranti”, in the article available here: http://rivincitasociale.altervista.org/litalia-alle-prese-con-le-migrazioni-moderne/ . Things have gotten much worse since then because of the chronic and often police-mafia malfunctioning of our justice system and because of the unscrupulous security laws. Besides that they deliberately mix security, xenophobia and migrations issues. These are, in particular, the Minniti and Salvini 1 and 2 laws. I add that, in Italy, the law on the social reintegration of former prisoners, while exemplary on paper, is no more respected than the Constitution itself . This is unworthy of a civilized country. What is applied is a logic of social control that perverts the sociological theories of Emile Durkheim, an evolution that I had denounced in my premonitory article « Le lit du néo-fascisme » and its « Annexe » both freely available here: http://www.la-commune-paraclet.com/fascismFrame1Source1.htm#racisme
4 ) Here is the quote “” So last year 37,000 Americans died from the common Flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life & the economy go on. At this moment there are 546 confirmed cases of CoronaVirus, with 22 deaths. Think about that! ” Trump tweeted. ” https://www.thedenverchannel.com/news/national/coronavirus/trump-compares-coronavirus-to-flu-in-tweet-says-lower-gas-prices-good-for-consumer . For statistics, see: The “linee di faglia” del coronavirus ”di Aldo Romaro http://contropiano.org/news/politica-news/2020/03/11/le-linee-di-faglia-del-coronavirus-0125068 or the American CDC https://www.thedenverchannel.com/news/national/coronavirus/trump-compares-coronavirus-to-flu-in-tweet-says-lower-gas-prices-good-for-consumer . For the abuse of the concept of expectation of survival in this context of crisis see: “Coronavirus. Come medici in una guerra. Interventi solo su chi ha speranza di sopravvivere ” di SC http://contropiano.org/news/politica-news/2020/03/08/ormai-si-ragiona-come-medici-di-guerra-interventi-solo-su -chi-ha-speranza-di-sopravvivere-0124916 . As well as my premonitory denunciations against the rehabilitation of euthanasia under the cover of death with dignity; indeed, liberating hospital-beds the quickest possible thus optimizing profits is more important than people’s lives, see the relevant articles in http: // www.la-commune-paraclet.com/fascismFrame1Source1.htm#racisme
5 ) see “Coronavirus, Alibaba da record: il suo test rivoluziona la diagnosi” Il colosso tecnologico cinese Alibaba ha sviluppato un sistema di Intelligenza Artificiale in grado di diagnosticare il Covid-19 in tempi record e con un’accuratezza straordinaria, 6 marzo 2020 https://quifinanza.it/soldi/per-italia-niente-patto-di-stabilita-von-der-leyen-mette-una-pezza/360996/?ref=virgilio
6 ) See Note 11 of my article on the Italian health system: http://rivincitasociale.altervista.org/la-sanita-tra-tagli-e-corruzione-una-vittima-eccellente-del-federalismo-fiscale/ or in English Note 10, here: http://rivincitasociale.altervista.org/purchasing-power-standard-of-life-socially-necessary-working-time-and-global-net-income-of-the-households-2-31-dec-2018/ . On the Sécu see Note 7 here: : http://rivincitasociale.altervista.org/casse-sociale-acceleree-en-france-par-la-reforme-des-regimes-de-retraite-et-de-lassurance-chomage-20-juillet-2019
7 ) See the concept in Foreword and my Appeal here: http://rivincitasociale.altervista.org/test/ . I believe that the alternative program outlined in my Tous ensemble remains valid including for the cooperative aspect extended to crafts, small businesses, without excluding small farms and shops, thanks to public credit. I said then “Carmaux’s time has come”. This would make it possible to durably change the constellation of social-political forces in favor of social democracy in the quadripartite framework described. In this Jean Jaurès was right. Besides, even in the Bolshevik model the sovkhoz and the kovkhoz farms went hand in hand …
9 ) See:
A ) “Per Italia niente patto di Stabilità”. Von der Leyen mette una pezza ” Borse in ripresa dopo le parole della presidente della Commissione Ue, che ha corretto il tiro dopo la sciagurata conferenza stampa di Christine Lagarde, 13 marzo 2020, https://quifinanza.it/soldi/per-italia-niente-patto-di-stabilita-von-der-leyen-mette-una-pezza/360996/?ref=virgilio
B ) ) « Coronavirus : Macron sonne la mobilisation “quoi qu’il en coûte” (“des dizaines de milliards” selon Le Maire) », Par La Tribune avec AFP et Reuters | 13/03/2020, 11:35 | 1353 mots https://www.latribune.fr/economie/france/coronavirus-macron-sonne-la-mobilisation-quoi-qu-il-en-coute-le-maire-parle-de-dizaines-de-milliards-d-euros-842045.html.
For the rational way of interpreting the Maastricht Criteria I refer to my Keynesianism, Marxism, Economic Stability and Growth – 2005 – in Download now in the Books-Books section of my old Jurassic site www.la-commune-paraclet.com. I also stress that the euro protected the « gauche plurielle » and the RTT against any speculative attack against France, like that of September 19, 1949 launched by Washington against the British pound… and its imperial preferences. Even if reforms are necessary, by recovering public credit, in particular for the financing of public and para-public debt, we can abandon the management of the currency at the ECB. Money and credit are two distinct things. Public credit would de facto eliminate the blackmail currently operated via the spread as well as the “credit crunch” caused by the liquidity issued by the ECB and the FED. Incidentally, it is the member States that define what inflation is, and the exchange rate is a joint power held by them and the ECB. Public credit is an anticipation, at rates close to zero, of the investment necessary for Enlarged Reproduction, or dynamic general equilibrium. This anticipation can easily be subjected subject to recurrent and rigorous audits, including by Parliament. Almost 2/3 of it usually transform into payroll and jobs, therefore into internal demand, and 1/3 into fixed capital, by definition not very speculative. This is easily verified by the derisory level of public and para-public debt in France, Italy and elsewhere before the privatization of the Central Bank. In France, this disastrous privatization was the consequence of the so-called Pompidou-Giscard-Rothschild law of 1973.
10 ) The lax pro-speculation policies implemented by Draghi, the former employee of Goldman Sachs in part responsible for the Greek fiasco, led to the surge of Italian debt aggravated by the explosion of Target 2 to more than 450 billion Euros. Indeed, the money made available to banks enabled foreign banks, in particular German and French banks, to reduce their exposure to Italian debt. Furthermore, and above all, this inept and ruinous policy gave credence to the idea that the spread was the new word of the gospel to which everything else should be sacrificed in order to preserve the speculative system. The alternative use of public credit, the only real solution to current financial and economic contradictions, was dismissed and concealed. This does not prevent Italy today from temporarily suspending short sellings (“Spain, Italy ban short selling”
https://www.zerohedge.com/geopolitical/eu-leaders-slam-trumps-unliteral-travel-ban-global-outbreak-death-toll-passes-4500, or to a Cottarelli, the Mister Scissors of the primary budget balance at 3% and more (!), to argue against the (legally defunct) Fiscal Compact …It goes to show that, whenever their privileges are at risk, the neoliberal monetarist leaders and their servi camera know instinctively how to protect their interests, without any superfluous dogmatism
11 ) For a summary of the inanity of these parameters, see: http://rivincitasociale.altervista.org/the-pseudo-economic-science-of-the-bourgeoisie-here-is-why-we-should-quickly-change-economic-paradigm/
12 ) See “Credit without collateral” and “The Treasury and the FED” in the International Political Economy section of my old Jurassic site www.la-commune-paraclet.com
13 ) I refer for example to my Methodological Introduction and to my Synopsis of Marxist Political Economy in the Livres-Books section of my old Jurassic site www.la-commune-paraclet.com
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See also “Climate and indoctrination” in http://rivincitasociale.altervista.org/climate-and-indoctrination-march-2019/