Coronavirus Reveals the Cracks in Globalization

Yves here. While this article has a lot of helpful suggestions, it does not acknowledge that public health is a state and local, not a Federal matter. The Federal government can intervene only by invoking emergency authority, which in every case I can recall, has been done only when asked (begged) by the relevant authorities. Thus I cannot see the Federal government taking the lead with coronavirus on the medical front, as much as that is desperately needed. Look, for instance, at how it was New York State that imposed a containment area around coronavirus hot spot New Rochelle, and how New York State has started making its own hand sanitizer.

By Marshall Auerback, a market analyst and commentator. Produced by Economy for All, a project of the Independent Media Institute

The coronavirus will eventually pass, but the same cannot be said for the Panglossian phenomenon known as “globalization.” Stripped of the romantic notion of a global village, the ugly process we’ve experienced over the past 40 years has been a case of governmental institutions being eclipsed by multinational corporations, acting to maximize profit in support of shareholders. To billions of us, it has resembled a looting process, of our social wealth, and political meaning. Governments that wanted to stay on top would have to learn to master soft power to learn to be relevant in a globalized world, mostly acting to smooth transactions and otherwise stay out of the way.

In a globalized world, nation-states were supposedly becoming relics. To the extent that they were needed, small national governments were said to equate to good government. This hollow philosophy’s main claims now appear badly exposed, as the supply chains wither, and the very interconnectedness of our global economy is becoming a vector of contagion. In the words of author David Goodhart, “We no longer need the help of rats or fleas to spread disease—we can do it ourselves thanks to mass international travel and supply chains.”

To be sure, there were many warning signs that called into question our hitherto benign assumptions about globalization: the Asian financial crisis of 1997-98 (during which the Asian tiger economies were decimated by unconstrained speculative capital flows), the vast swaths of the Rust Belt’s industrial heartlands created by outsourcing to China’s export juggernaut, the concomitant rise in economic inequality and decline in quality of life in industrialized societies and, of course, the 2008 global financial crisis. Nobel laureate Joseph Stiglitz described many of these pathologies in his book Globalization and Its Discontents, as did economist Barry Eichengreen, who lamented that “the nation state has fundamentally lost control of its destiny, surrendering to anonymous global forces.” Both noted that globalization was severing a working social contract between national governments and their citizens that had previously delivered rising prosperity for all.

Those who would argue that the inexorable march of globalization cannot be reversed should consider the parallel during the early 20th century. Globalized economic activity and free trade were dominant before the onset of World War I; in 1914, trade as a proportion of global GDP stood at 14 percent. Needless to say, two world wars, and the Great Depression (which brought us the Smoot-Hawley tariffs), reversed this trend. The Cold War sustained regionalization and bifurcated trading blocs. Its end, and China’s accession into the World Trade Organization (WTO), ushered in a new high-water mark in globalized trade.

But while it is true that viruses do not respect national boundaries, nothing has blown apart the pretensions of this New World Order as dramatically as the coronavirus, a pandemic now assuming global import, as international supply chains are severed, and global economic activity is brought to a screeching halt. We are increasingly seeing the hollow political content at the core of supranational entities such as the EU, structured more to comfort merged investor groups than strengthen public health systems.

Speaking of Europe, while the coronavirus started in China, its most long-lasting impact might be in the EU, as it has dramatically exposed the shortcomings of the latter’s institutional structures. Take Italy as the most vivid illustration: The spread of COVID-19 has been particularly acute there. Being a user of the euro (as opposed to an issuer of the currency) the Italian national government risks exposing itself to potential national bankruptcy (and the vicissitudes of the volatile private capital markets) if it responds with a robust fiscal response, absent the institutional support of Brussels and the European Central Bank (which is the sole issuer of the euro). According to MarketWatch, “Italy needs a €500 to €700 billion ($572 billion to $801 billion) precautionary bailout package to help reassure financial markets that the Italian government and banks can meet their debt payment obligations as [the] country’s economic and financial crisis becomes more fearsome.”

The tragic case of Italy (where the entire country is now in full quarantined lockdown) provides a particularly poignant example of the gaping lacunae at the heart of the eurozone. There is no supranational fiscal authority, so the Italian government has been largely left to fend for itself, as it is trying to do now, for example, providing income relief by suspending payments on mortgages across the entire country. Here is a perfect example of where European Central Bank support for the Italian banking system would go a long way toward mitigating any resultant financial contagion. But so far, as Wolfgang Munchau of the Financial Times has noted, the ECB remains in “monitoring” mode. Indeed, the eurozone as a whole lacks the institutional mechanisms to mobilize on a massive, coordinated scale, in contrast to the U.S. and UK, and eurozone finance ministers remain incapable of agreeing on a coordinated policy response.

Other eurozone countries may no longer be complacent about the threat posed by COVID-19, but their national governments are more focused on the need to stockpile their own national resources to protect their populations. Italy remains particularly vulnerable to the ravages of this virus, as it has an aging population, so if coronavirus runs rampant through the country, it could potentially crash the nation’s entire hospital system, as this account by an Italian doctor suggests.

EU solidarity, showing cracks on issues ranging from finance to immigration, increasingly resembles every country for itself.

Defenders of the EU may well retort that health care is designated as a “national competency” under the Treaty of Maastricht. But how does one expect national competencies to be carried out competently in an economic grouping devoid of national currencies (the key variable as far as supporting unconstrained fiscal capacity goes)? Additionally, the evil of decades of Brussels-imposed austerity has meant there aren’t enough hospital beds, materials and staff anywhere in Europe, let alone Italy. This might well represent the death knell for a European project based on aspirations for an “ever closer union.”

In spite of the manifest incompetence of the Trump administration, the U.S. at least has institutional mechanisms in place via the Centers for Disease Control (CDC) and the Federal Emergency Management Agency (FEMA) to provide Americans with clear, credible instructions devoid of political spin. As Professor James Galbraith has persuasively argued, the U.S. government has the capacity to “establish a Health Finance Corporation on the model of the Depression-era Reconstruction Finance Corporation. Like the RFC, which built munitions factories and hospitals during and after World War II, the HFC should have broad powers to create public corporations, lend to private companies (to fund necessary production), and cover other emergency costs. Even more quickly, the National Guard can be deployed to deal with critical supply issues and to establish emergency facilities such as field hospitals and quarantine centers.” Likewise, Senator Marco Rubio has “sought to expand what’s called the Economic Injury Disaster Loan program, which allows the Small Business Administration to start lending money directly instead of just encouraging banks to do so,” as Matt Stoller has written. Parenthetically, this represents a marked break with historic GOP policy, which for the most part has accepted the embedded assumptions inherent in globalization.

And while traditional monetary policy tools such as interest rate cuts are hardly adequate to stem a supply shock, Galbraith also points to the ability of the Federal Reserve to offer emergency financial support to help American companies through the worst of the coronavirus outbreak, by “buy[ing] up debt issued by hospitals and other health-care providers, as well as working to stabilize credit markets, as it did in 2008-09.” Andrew Bailey of the Bank of England has made similar recommendations to the UK government.

Even with the measures proposed by Galbraith, Bailey and Rubio, virtually all Western economies, having largely succumbed to the logic of globalization, are now vulnerable, as supply chains wither. China, the apex of these offshored manufacturing supply chains, is in shutdown mode. Likewise South Korea and Italy. Worse, there appears to be a singular lack of understanding on the part of many multinational companies as to how far these supply chains go: “Peter Guarraia, who leads the global supply chain practice at Bain & Co, estimated that up to 60 per cent of executives have no knowledge of the items in their supply chain beyond the tier one group,” reports the Financial Times.

A “tier one” company supplies components directly to the original equipment manufacturer (OEM) that sets up a global supply chain. But as is now becoming increasingly recognized, there are secondary-tier companies, which supply components or materials to those tier-one companies. When goods are widely dispersed geographically (instead of centered in a localized industrial ecosystem), it is harder for executives to have full knowledge of all of the items in their respective companies’ supply chains, so the deficiencies of the model only become apparent by the time it is too late to rectify.

In the U.S. specifically, the mass migration of manufacturing has seriously eroded the domestic capabilities needed to turn inventions into high-end products, damaging America’s ability to retain a lead in many sectors, let alone continue to manufacture products. The country has evolved from being a nation of industrialists to a nation of financial rentiers. And now the model has exposed the U.S. to significant risk during a time of national crisis, as the coronavirus potentially represents.

There is no national redundancy built into current supply networks, with the most problematic consequences now evident in the pharmaceutical markets. Countries such as China or India are beginning to restrict core components of important generic drugs to deal with their own domestic health crisis. This has the potential to create a major crisis, given that the U.S. “depend[s] on China for 80 percent of the core components to make our generic medicines,” writes Rosemary Gibson in the American Conservative. She also notes that “generic drugs are 90 percent of the medicines Americans take. Thousands of them, sold at corner drug stores, grocery store pharmacies, and big box stores, contain ingredients made in China.” Constraints on production, therefore, intensify as more and more of the manufacturing process pertaining to the drugs themselves is geographically globalized. And in regard specifically to research-intensive industries, such as pharmaceuticals or biotech, the value of closely integrating the R&D with manufacturing is extremely high, and the risks of separating them are enormous.

These are by no means new problems. We’ve been dealing with supply-side shocks emanating from hyper-globalization for decades, and the response of Western policymakers has largely been in the form of fiscal or monetary palliatives that seldom address the underlying structural challenges raised by these shortages. To the contrary: democratic caveats to globalization have been characterized as inefficient frictions that hinder consumer choice.

For now, we should start by reducing our supply chain vulnerabilities by building into our systems more of what engineers call redundancy—different ways of doing the same things—so as to mitigate undue reliance on foreign suppliers for strategically important industries. We need to mobilize national resources in a manner akin to the way a country does during wartime or during massive economic dislocation (such as the Great Depression)—comprehensive government-led actions (which runs in the face of much of today’s prevailing and increasingly outdated economic and political theology). In other words, the revival of a coherent national industrial policy.

To save the global economy, paradoxically, we need less of it. Not only does the private/public sector balance have to shift in favor of the latter, but so too does the multinational/national matrix in manufacturing. Otherwise, the coronavirus will simply represent yet another in a chain of catastrophes for global capitalism, rather than an opportunity to rethink our entire model of economic development.

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35 comments

  1. fdr-fan

    Okay until the final paragraph. We don’t need to “save the global economy”. We need to recover national economies and kill the global economy. Trade only the materials and crops that aren’t available or growable in each country. Absolutely no trade in labor or manufactured products.

    Reply
    1. drumlin woodchuckles

      I agree. We need to exterminate the global economy. We need to restore national economic-sovereign economies with the least feasible trade permitted between any of them.

      The Corporate Globalonial Plantation won’t exterminate itself. This globalization-weakening event gives us an opportunity to see the cracks, find them, drive wedges into them, and prevent them from coming back together. This pandemic, itself spread by globalization, gives us an opportunity to begin exterminating globalization.

      The extermination of globalization would also help us begin to exterminate global warming, which globalization and Free Trade causes.

      Reply
      1. Ian Ollmann

        Sometimes I think we lose sight of the fact that globalization has been the most potent tool for lifting billions out of poverty worldwide. It has been orders of magnitude more effective than any other program.

        Maybe this is not the goal.

        Reply
  2. Harry Shearer

    But but but….”redundancy”, which engineers like, is in direct conflict with “efficiency”, which economists revere. Think of how many “smart” appliances we can invent and market if we don’t have to make health-care and manufacturing robust again.

    Reply
    1. Lambert Strether

      I’m picturing “iM@sk,” an app that delivers masks* to your door.

      Of course, there’s a shortage of masks, so an algorithm determines who gets a mask first. Platinum members get masks instantly; Gold members within 48 hours; Silver members within two weeks; Bronze members when supply permits. The app has a handy countdown clock to let you know when your mask will come.**

      * Also bleach, alcohol, gloves, etc. There’s a cross-selling deal with Netflix so you can self-quarantine in comfort.

      ** As a public service, the iM@sk app also provides downloadable directions for how to make your own mask from common household materials, like the non-woven bonded fabric you have under your kitchen sink.

      Reply
    2. vlade

      Cheetah paradox. The fastest land animal, but often dies if injured as can’t hunt and has no fat to speak off to take it through lean times.

      NC has discussed number of times that you can’t have “efficiency” and “reduncancy”. Of course, if your drive is short-term profit, it requires efficiency, and redundancy is just a cost.

      The smarter companies that have built redundancy, will be the predators left once the injured cheetahs die off.

      Reply
        1. Amfortas the hippie

          does my little farm/doomstead count?
          multiple redundancies has been a large part of The Goal for a long time.

          as for actual businesses, no…except maybe for the more esoteric sectors of FIRE….are “exotic financial instruments” redundant?

          “just in time”, “warehouse on wheels”, as well as globespanning supply lines have worried me since i learned of them.
          “efficiency” as a weapon, that eventually gets turned on oneself.

          Reply
        2. Wukchumni

          My favorite tale of redundancy going away was the oxygen system on commercial airliners. In the past it had 3 or 4 independent redundant systems built in and cost around $20k per seat, and then the cost cutters came up a single digital oxygen system costing only around $500 per seat.

          Reply
        3. Synoia

          Yes: Ford and General Motors.

          If you cannot buy form one company, there are alternatives. The companies are single points of failure. The combination of multiple single point of failure provide redundancy and resilience.

          Supporting the Historical US concept of “truce busting” and encouraging competition in all markets.

          Reply
      1. flora

        old joke:
        Libertarian market CEOs used to be called financial tigers.
        What are they called now?
        ans.: financial cheet’ahs.
        ba dum tsssh

        —–

        Thanks for this post.

        Reply
    3. Paul O

      Indeed. As an both an engineering (core mobile network infrastructure) and an econ graduate (PPE and life long interest) this has been an (perhaps, the) issue for me over the last 30 years. There are many ways in which redundancy and resilience have been degraded. Not least in terms of people with the combination of deep technical understanding and problem solving skills.

      Baking in fragility in the name of efficiency. Efficiency? Well maybe, but only on a short enough timeline. And timelines have been getting shorter (to validate ‘cost cutting’).

      Reply
  3. urblintz

    I don’t like to be a smart-fanny and do appreciate the thinking and expertise that shines through this fine essay. I learned an enormous amount and feel better prepared to argue the subject.

    But the second half of that last sentence…

    ” the coronavirus will simply represent yet another in a chain of catastrophes for global capitalism, rather than an opportunity to rethink our entire model of economic development.”

    taken by itself, makes everything before it, well… redundant. of course it will.

    Reply
  4. alex morfesis

    and and and….the “tax planning” departments at majorco international will be crying on about all their masterful overseas tax siloing now having to come apart by having to actually re-shore production…oh the pearl clutching to come….

    Reply
  5. Ignacio

    I usually like reading Auerback’s posts but in this exceptional case I had to stop reading at about the 10th paragraph or so. It is the case that in the heat of the moment we are not having good reaction and fear is driving us a little bit mad. Leaving our personal phantoms and demons to ride free when we should be carefully thinking on our personal safety and the fate of the social structures that sustain us is not good idea. For instance, identifying Italy as the core of the problem is IMO a misrepresentation of facts. A small city in Northern Italy was, just by chance, the first place in EU where the outbreak started showing all its virulence and it took us by surprise because we were all in denial. Not only in the EU, a few days ago Mr. Strether left a link in his Water-cooler citing American economists saying that the US would probably not be reached by the epidemics. As an example on how in denial we have been, take a look at this letter sent to the editor of eurosurveillance the 21st of January by physicians from Marseille asking why so much fear about the new disease when they had tested and identified 0 Covid cases in their hospitals while we should focus on flu or rhinovirus. It is almost certain they are now regretting having this letter sent.

    Though M. Auerback IMO rigthly crtitizices the fragmentation of the institutional and political framework in the EU, in comparison with the all powerful globalized supply chains, I cannot agree more, I also think he is missing how the institutional response is being organised. After the initial denial, the response to the emergency is necessarily reactive (think of equipments in short supply). In Madrid we are just about 7 days behind of Italy in epidemics development and I can see the same phenomenon here. We are starting to see that we could soon be in short supply of treatment equipment in hospitals. Schools and universities are closed starting today and large gatherings prohibited and yesterday some panic scenes in supermarkets were seen, just like in Italy. The government has programmed a set of measures that are going to be implemented as their necessity is seen such as delaying tax or mortgage payments, and some other help with a focus in small companies and autonomous workers. Both Italy and Spain will almost certainly give a kick in the ass to austerian stupidity and do things necessary to try to mitigate the damage and I bet there won’t be any EU institution denying whatever support needed because, ya know, the BCE and other institutions will realise their survival is at risk if they try to be too orthodox in an emergency situation. So far, IMO, the biggest mistakes have been made in China from the very beginning of the outbreak to the brutal quarantines imposed. I think that in the EU, keeping open borders was good reaction.

    We will see how this unfolds in the US. This said, I wish the best for Americans of both Americas, Asians, Oceanians, Europeans etc. I hope that authorities around the world have good reaction with this emergency.

    Reply
    1. ObjectiveFunction

      Good comment, I agree. I’ve been offline for a bit, so forgive me if mentioned already, but early irruption of the virus in Italy is no mere accident. Chinese groups have bought up Italian luxury brands and then imported thousands of Chinese sweatshop migrants to preserve the coveted Made In Italy label while keeping costs low. Same arrangements in Spain I think, but you would likely know better than I.

      For so long as people can’t be arsed about where their food clothing and shelter really comes from, there will always be loopholes devised by the unscrupulous. The arbitrage toothpaste is very hard to put back in the tube.

      I greatly enjoy Auerback’s (and Hudson’s) work although I am no socialist (to my mind, today’s bankster or McKinsey wanker simply becomes tomorrow’s third deputy minister for banana bending – regardless, it’s still a small club and most of us ain’t in it).

      But in order for nations, however defined, to regain self-sufficiency, cartelization of labor enforced in law is going to have to become a thing again, whether it’s via unionization, craft guilds or certification (credentialism by any other name would smell as sweet).

      Reply
      1. Ian Ollmann

        Epidemiologists with the best track record of predicting this thing in its early stages think the link is actually the volume of air travel. Same with Korea, Iran and Japan. The predictions were pretty uncanny. How it progresses from there, once seeded, seems to depend on the local response to the threat.

        However, let’s not let that get in the way of a good conspiracy theory.

        Reply
  6. clarky90

    Re; “The coronavirus will eventually pass……” yawn yawn, so now let’s speculate about finance……

    Look up!! at the mighty deluge! that is silently rising up, out of the deep!, and moving slowly towards land! as we dawdle, wistfully unaware, on the sea shore….”who might the Dem presidential candidate be? hmmmmm?”

    The 1918 influenza pandemic (January 1918 – December 1920 lasted for three entire years, as a “deadly” pandemic. It “only” managed to infect about 27% of the World’s population. That was before international/national air travel to everywhere on Earth. It is thought that this covid19 will eventually infect 50% to 70% of the World’s population. Africa, India, South America, New Zealand……

    The 1918 Flu, “H1N1”, still visits us every year, like clockwork, killing 0.1% or so. It never went away.

    This novel covid 19 is only beginning. Nobody knows, BUT, I expect this virus to travel around the World, in wave after wave- for many years and then become, endemic. There are now (in a just a few months) two infectious stains (L and S) of covid19.

    How long will our Global Potemkin Village (built from FIRE) shelter, us from this storm? I expect it to be smashed to smithereens in the coming few months or sooner. (imo)

    Reply
  7. Hayek's Heelbiter

    One question: Why does Thomas L. Friedman, author of The World is Flat, extolling the glories of globalization, still have a job paying no doubt tens if not hundreds of thousands of dollars a year, while many better informed and infinitely more prescient NCers have trouble putting groceries on the table?

    Curious minds wonder.

    Reply
    1. John Wright

      I realize your comment was rhetorical.

      But..

      Why does Friedman still have a job after all of his globalization cheer leading and war mongering?

      Answer: Because he writes what his bosses want him to write.

      In the upside-down world of USA media, people who give good advice (Chris Hedges and Phil Donahue on the Iraq War) get fired, while those who give bad advice (Friedman on almost everything) keep their jobs.

      The contempt Friedman has for people may be illustrated by his “Suck on this” comment directed at innocent Iraqis who he judged needed to see US military power directed against them.

      This is the USA, where harmful media people are brought down by sex-scandals (Charlie Rose, Chris Matthews) not by the quality of their media work.

      Reply
      1. Synoia

        Does this make me look fat?
        Yes your majesty.
        Off with his head!!

        It is a human problem. Not just a US behavior.
        Power corrupts, and absolute power corrupts absolutely.

        The CEO of a large company is no different from the Baron in a Feudal Barony.
        The President of the United States is an Elected Monarch.

        Reply
  8. Mike

    I don’t get the article’s point about a fractured EU response vs a coordinated American response. CDC has been torched by budget cuts and the nurses association in the USA – didn’t they say few hospitals have any plans in place for an outbreak? Each country is going to have it’s own challenges – good show on Joe Rogan this week and goes into 45% of Americans are obese – a big risk factor when combating Covid-19. Also a revelation was nearly all generic drugs use in America are sourced from India and China.
    EU borders have been very fluid for decades, its not an easy thing to shut down for any reason and yes a lot of the response has been reactionary.
    So back to Globalisation – there are risks, this is the price.

    Reply
  9. David

    Some good points, but a couple of quibbles.
    Globalisation is not the same as trade. Trade, it’s sometimes hard to recall, was originally “I’ll swap you what you want for what I want.” So the English exported wool, for example, and imported silks and spices. Globalisation is an attempt by an insane MBA student to restructure the world economy to be maximally “efficient” without concern for externalities. Globalisation is going down for sure, but of course it will take a lot of perfectly respectable trade with it.
    I’m also getting a bit tired of reading that viruses “don’t respect national borders.” Of course, if there were groups of independently moving viruses, travelling through Europe on their little feet, they wouldn’t think to contact the authorities when they cross national borders. But viruses have to be transported by something, usually people, and people (as in China recently) can be required to respect borders. Already there are signs that Free Movement in Europe is coming under strain (Slovenia closed its border with Italy yesterday) and judging by the violent reactions of the “no borders” lobby, they are worried that it may be one of the many types of collateral political damage.
    One other thought: this epidemic may be the first in living memory where the PMC, politicians and media figures are disproportionately affected. (I can’t think of a single case of a politician who’s ever died of flu). The PMC etc. travel a lot more, get out a lot more and mix a lot more with foreigners. When there’s no cure, some of them – CEOs, Ministers, media pundits, bankers – are going to die. What then? Already, the more contacts you have, especially with other countries, the worse things will be. Lawyers will find courts closed, consultants will find organisations less ready to consult them, business junkets and conferences will be cancelled, holidays postponed and upper middle-class parents will find that Tarquin and Miranda are unexpectedly at home because the European School in Florence has been closed. Some things will be very hard to bear.

    Reply
    1. Wukchumni

      The changes coming on account of the virus will be substantial, and if we’re all sitting on the sofa, afraid to leave the house for a year, supply chains will be rusty @ best when Coronavirus finally makes off for parts unknown, or pretty much wrecked.

      There are very few among us who can afford to miss work and paychecks, and not only that, but those crazy preppers for once are 100% correct (why they don’t concentrate on food primarily, is a mystery) in that everything we eat comes from somewhere else typically.

      The extraordinary plum of the USD being the worlds’ reserve currency looks to be in trouble too, and in a weakened state of things, might just turn into any other fiat monetary instrument.

      The internet will change as well, with much of the world stuck in place, i’d expect traffic on here to explode, in that I can’t think of a better time waster.

      There’s also the aspect of the Coronavirus hangover even after it departs, survivors won’t let loose of their newfound way of living so easy.

      Reply
      1. Amfortas the hippie

        five wheelbarrow loads of manure left to go and i’ll have a half acre plus of raised beds in production.
        and for grins….and because they keep well, and are loaded with vitamins…I’ve planted extra squash and pumpkin seeds wherever there’s a little hole in the drip irrigation for trees in the pasture.
        I do this anyway…because i long for food security/autarky.
        but this time, it’s with a mind that a yeoman farmer with an actually working farm might come in handy to my neighbors(in a broad sense!) this year.
        I’ve heard several people….none of them known Tin Foil types…mention worries about the trucks not coming to resupply us way out here.

        Reply
        1. Wukchumni

          About half of our fruit trees are old enough to supply more than we need, and our neighbor’s orchard produces 3x as much as us, so unless we get a plague of locusts on a cheap flight out of Africa, should be ok.

          Reply
  10. periol

    I will never forget reading the Wikileak where the US state department was strong-arming an African government on behalf of Shell Oil. It drove home for me the reality that governments and corporations both serve their wealthy elite masters, and don’t even pretend to serve the people they ostensibly represent.

    That made me realize it’s always been this way.

    I was in high school when NAFTA went through. I remember reading all the dire warnings from people opposed, and all the glowing thoughts from those in favor. Now, in hindsight, it has been much worse for everyone except the wealthy. The dire warnings weren’t dire enough.

    Coronavirus isn’t a black swan. People have been predicting a pandemic would strike a blow to globalization for a long time. The companies suffering from their short-sightedness FULLY DESERVE what they’re getting. I’m sure hoping the fallout hits the corporate landscape hard. Let’s see some naked capitalism in action.

    Reply
    1. Massinissa

      Your comment reminds me of Smedley Butler’s ‘War is a Racket’ from about 100 years ago. It was true then and its true now. And I’m talking about government practices in general, not just war: You could take ‘War’ out of the title and replace it with anything else the american government does these days and it would still hold true.

      Reply
  11. Stratos

    “The companies suffering from their short-sightedness FULLY DESERVE what they’re getting.”

    They do indeed. That is why they are lobbying the White House for bailout economic assistance funds.

    It would be a real stinker if they are bailed out with tax dollars and the average citizen is forced to pick up their own medical and time-off-the-job tabs.

    Reply
    1. drumlin woodchuckles

      One wonders if Trump could be humiliated into abandoning crony socialist bailouts by reminding the mediasphere that Obama specialized in crony socialist bailouts. And would Trump really want to do the Obama thing?

      Reply
      1. TheHoarseWhisperer

        yes, he would.

        except that this time, the problem is much more serious. while Obama faced a problem of confidence, trump faces genuine cascading enterprise failure. e. g. for the lack of flying, the airlines fold, for the lack of airlines, Boeing folds, for the lack of aircraft manufacturing, all of Boeing suppliers fold. not to mention that Boeing is just one example, but airports closings reverberate through the muni bond markets and have 4th and 5th order consequences that none of can predict because of complexity.

        Reply
  12. drumlin woodchuckles

    By the way, thinking back on the ” will 50% of frackers go bankrupt?” post and thread . . . with Saudi Arabia overpumping oil to crash the price and crush the frackers, this would be a good time for the Green Movement of several hundred million people to strangle back their individual oil use as much as they could stand it.

    If several hundred million highly motivated de-consumers chose this moment to drive and etc. as little as possible, and make their driving and etc. as efficient as possible; their individdle little efforts would add up to one big klektiv effect. When one million little slime mold cells come together and begin moving the same way, they form a slime mold which moves visibly. Perhaps people looking for a “spirit totem” might take inspiration from the slime mold.

    If 300 million Green Movement DeConsumers could all semi-cott oil and oil products hard enough to bring the price of oil below $10.00 a barrel and keep it there till 50% of the frackers have gone roach-motel extinct with no one willing to buy up their distressed “assets”, then those 300 million Green Movement DeConsumers will have achieved something real and lasting.

    For the viewers’ inspiration, here are a couple of slime-mold videos.
    https://video.search.yahoo.com/search/video?fr=sfp&p=you+tube+slime+mold+moving+videos#id=10&vid=cbd2ecea3b5a183be9361ff1686bd66b&action=click

    https://video.search.yahoo.com/search/video?fr=sfp&p=you+tube+slime+mold+moving+videos#id=6&vid=aea31b03aed39bf9fc566a260fcfd29f&action=click

    Picture 300 million Green Movement DeConsumers moving against the oil industry just like this.
    Are you-all inspired?

    Reply

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