capitalism’s terminal death spasms continue to the ‘last gasp’

Johnson grants £350b COVID-19 hand-out to big business
Thomas Scripps, WSWS, Mar 18 2020

PM Johnson at Downing Street, Mar 12 2020. (Photo: Simon Dawson/AP)

PM Boris Johnson and Chancellor Rishi Sunak used yesterday’s coronavirus press update to mount an unprecedented financial handout for UK corporations. Sunak announced £330b in loans to be made available at “attractive” rates and said he would “go further if required,” promising an “unlimited lending capacity.” This is equivalent to 15% of the UK’s annual GDP. A further £20b was pledged in the form of tax breaks, cash grants and compensation to firms that have to pay statutory sick pay. Providing whatever funds are deemed necessary directly to businesses would, Sunak said, be enshrined in law through an upcoming coronavirus bill! He declared:

We have never, in peacetime, faced an economic fight like this one. We must act like any wartime government and do whatever it takes to support our economy.

Unlimited support for business stands in grotesque contrast to the contempt and neglect of working people forced to bear the brunt of the crisis. Asked directly about “staff costs,” Sunak made no commitment to guaranteeing workers’ jobs and wages, or compelling companies to do so. Instead the trade unions are to be enlisted to police an “employment support” scheme, which will enforce the decisions as to who remains in a job and who is sacked as firms shed staff by the thousands. On Monday, Johnson held a conference call with business leaders asking them to divert some production capacity to producing essential medical ventilators. One business leader told the press that he said the project could be known as “Operation Last Gasp.” Corporations are already lining up to demand taxpayers’ cash to preserve their profits. Virgin Atlantic’s parent company, IAG, demanded on Sunday that the UK government commit to a £7.5b bailout of the country’s aviation industry. Sunak said yesterday that he was working on a specific package of support for airports and airlines. Virgin Atlantic, owned by multi-billionaire ‘Sir’ Richard Branson, hailed this “unprecedented level of support” even as it demanded its workforce agree to take eight weeks “unpaid leave” while offering all its 10,000 employees “voluntary redundancy.” With the financial spigots opened to the CEOs and shareholders of major companies, their employees are left to fend for themselves in the face of a mounting public health crisis.

Sunak’s pledges were made amid another leap in the UK’s coronavirus statistics. The death toll has climbed to 71, while the number of confirmed cases has reached 1,950. Lack of testing means that the real number of infected is likely to be at least 35 times higher. Yesterday the UK’s chief scientific adviser, ‘Sir’ Patrick Vallance, was already stating that the real number of infected was in the region of 55,000. His admission is a devastating indictment of a government which, until Monday, was simply telling those who had a cough or fever to stay at home and self-isolate for a week. Its sharp policy reversal that evening, involving new directives for household quarantining and social distancing, was forced by the leaking of an internal document from Public Health England predicting hundreds of thousands of deaths, and Imperial College London’s COVID-19 Response Team’s research paper which estimates that the UK government’s original coronavirus strategy of “mitigation” would cost 260,000 lives. Plans to simply mitigate the spread of the virus through case and household isolation, and the shielding of over-70s, would see the peak of the epidemic exceed the supply of critical care beds eight times over. The report concludes:

Epidemic suppression is the only viable strategy at the current time, including population-wide social distancing combined with home isolation of cases and school and university closure as a minimum policy.

Since any return to normality without a vaccine or substantially immunised population would lead to a rapid, if delayed, increase in infections, these measures “will have to be in place until a vaccine is found, or herd immunity is very gradually arrived at.” Given the length of time involved, the report suggests monitoring hospital admissions for COVID-19 patients as a trigger for “switching on and off population-wide social distancing and school closure,” while maintaining policies for household home isolation indefinitely. It estimates that social distancing measures would have to be enforced for two-thirds of the next two years. Neil Fergusson, the head of the Imperial College research team, said:

We might be living in a very different world for a year or more.

Depending on how strictly these measures are implemented, the report estimates the total number of coronavirus deaths over the next two years could be kept between 8,700 and 100,000 people. Its authors acknowledge that they do not account for indirect deaths caused by increased pressures on the health services or by the social restrictions themselves. The importance of early action for the necessary policy of epidemic suppression was stressed:

For suppression, early action is important, and interventions need to be in place well before healthcare capacity is overwhelmed. There is a 2-to 3-week lag between interventions being introduced and the impact being seen in hospitalised case numbers. This means acting before COVID-19 admissions to ICUs exceed 200 per week.

Though the specific numbers are new, the WHO and countless scientific and medical experts have been making exactly this point for weeks. The Johnson government wasted around two months of preparation time pursuing a policy of “herd immunity” which prioritised the profits of the corporations over human life based on a “desired” outcome that 60% of the UK population get infected. Even now, the government is refusing to fully implement the recommended policies. Self and household isolation measures, home working and restriction on non-essential travel or on visits to pubs and theatres all remain purely advisory. Those who cannot work from home are still forced to travel into work with no preparations made for their protection. Anyone who needs to self-isolate for a prolonged period must rely on derisory statutory sick pay of £94.25 a week and those in the gig economy, more than 1m workers, are forced to work regardless of their health or be left penniless. Despite the Imperial College report’s statement that “school and university closure is predicted to be more effective in achieving suppression” than restrictions like household quarantining, and the closure of schools across the rest of Europe, no such steps have been taken in the UK. In a monumentally cynical gesture, Health Secretary Gavin Williamson told schools that legally required Ofsted inspections will be halted to “remove unnecessary burdens” on school staff. Government inaction is meeting increasingly vocal opposition in the working class. A petition launched on Mar 6 demanding the government “Close Schools/Colleges down for an appropriate amount of time amidst COVID19,” had secured more than 665,000 signatures by yesterday. Students and staff are expected to stage a mass walkout on Friday, using the hashtag #Covid19walkout. One young person wrote on Twitter:

My Mum is a teacher in her 60s, coming home to my Dad in his 70s. As much as Boris finds them disposable, they’re the only family I’ve got and they deserve a damn sight more than being written off to balance his books.

Aware of the political dangers posed by such mounting social anger, an article in the FT by Europe Editor Tony Barber warned:

It is in the nature of cataclysmic events, such as the pandemic, to accelerate and refashion historical developments that would have happened anyway. The first world war intensified turmoil in Russia, leading to the revolutions of 1917, and drove forward the emergence of the US as the 20th century’s leading global power. The second world war marked the definitive end of European supremacy in international affairs and the planet’s transformation into an arena of Pindo-Soviet rivalry. The pandemic and its economic fallout, unless brought under a measure of control, is sure to have similar large-scale consequences.

Merkel’s response to coronavirus: Draconian measures for German population, unlimited loans for corporations
Ulrich Rippert, WSWS, Mar 18 2020

Merkel at the Chancellor’s Office on Monday evening (Photo:Markus Schreiber/AP).

Angela Merkel announced sweeping emergency measures at a press conference on Monday evening in response to the rapid escalation of the coronavirus pandemic. The chancellor said that they included “very restrictive” measures that have not been seen in Germany in the post-war period. External borders have been largely closed and strict controls introduced at border crossings. Businesses have largely been ordered closed, apart from supermarkets, chemists, fuel stations and banks. Opening times for restaurants are now severely restricted, with regulations to ensure a minimum distance between tables and limit the number of guests. All schools, universities, and sport and recreational facilities are to be closed. Meetings in community colleges, musical institutes and other private educational and recreational institutions are also now prohibited. Religious services are also banned, including in churches, mosques and synagogues. These measures were a response to the rapid spread of the coronavirus in Germany, which should have been contained much sooner. The number of those infected shot up from 4,800 at the weekend to more than 9,000 on Tuesday evening, with 26 deaths. This is due to the fact that the federal government has responded with malign neglect to the spread of the pandemic and the swift growth of cases in Italy and Spain in particular. The reduction of social contact is essential to slow the exponential spread of the pandemic, all experts agree on this point. But while the population’s freedom of movement is being drastically curtailed, the government is doing virtually nothing to actively combat the dangerous disease. Merkel made no reference to the need to carry out comprehensive virus testing. Yet the experiences of China and South Korea make clear that comprehensive testing is decisive in containing the virus. The WHO has also urgently recommended such an approach. Merkel announced no additional measures to increase hospital capacity. It is not people’s lives, but the profits of big business that are the government’s main priority. Merkel stated at the beginning of her press conference:

We want to retain economic procedures as much as possible.

Although she noted how dangerous close social contact is for spreading the virus, one area in which thousands of people stand side-by-side for hours at a time on a daily basis was conspicuous by its absence from her list of bans: production plants. Workers are being forced to continue working, even in areas of industry that have absolutely nothing to do with securing the basic necessities of life. The schools have been closed, but teachers are forced to enter contaminated buildings and draft emergency learning plans. The same goes for kindergartens and childcare centres. Last Friday, the federal government announced a bailout package for businesses and banks “of an unlimited sum.” With the grand coalition and its Social Democrat/Green Party predecessor having cut spending on health care and social services to the bone over decades, at least €500b will be made available to protect the banks and major corporations from the coronavirus crisis. This is more than the entire annual federal budget or the notorious 2008 bank bailout. Finance Minister Olaf Scholz, a stubborn advocate of balanced budgets and no new government debt when confronted with calls for higher pensions or social welfare payments, stated:

We have enough money, and we’re putting it to use.

Scholz and Economy Minister Peter Altmeier claim repeatedly that the issue is to “save employees and businesses,” and place great emphasis on jobs. But this is an outright deception. During the bank bailout of 2008, the talk was of the need to provide a social safety net for the workers. The result was sweeping social spending cuts and austerity programmes for the workers, while the financial elite enriched itself exponentially. The programme includes measures to ease access to state support for workers on reduced hours, enable the state to pay social insurance contributions, offer liquidity to companies, and allow businesses to defer tax payments. The class character of the grand coalition’s policies could hardly be made clearer. While coronavirus tests are denied and workers are compelled, in spite of an immediate threat of infection, into the factories, the state is opening the treasury without restrictions to the financial oligarchy. Major corporations in particular will benefit. While loans from the state-controlled Bank of Reconstruction were up to now available to small and medium-sized businesses with an annual turnover of up to €500m, this limit will now be increased to €2b. And in ongoing programmes for larger corporations, the limit for interest payments will be increased to €5b. The KfW’s assumption of risk will also be increased to 80% of the total loan. The title of the news article in the FAZ was:

Government writes a blank cheque.

Finance Minister Scholz said:

We’re not scattering a few scraps, but slapping it on thick. This is the bazooka.

Although the gargantuan financial bailout will have wide-ranging political consequences and trigger sweeping austerity measures, it was not subject to serious debate in the federal parliament or state legislatures. Within a single day, it was adopted by the cabinet, passed by the lower and upper houses of the federal parliament, and signed into law by Germany’s president. Such a vast financial bailout has never been rushed through parliament with such speed. Parliamentary deputies did not even have time to read it, never mind discuss it in the relevant committees. Representatives of the employer organisations were delighted. Ingo Kramer, president of Germany’s employers’ association, referred to the bailout as an appropriate measure. The head of business affairs for the industrial employers’ association in the steel sector, Oliver Zander, commented, “We are extremely satisfied.” Just last week, his association had demanded precisely the measure now adopted by the government. The trade unions and Left Party also joined in the celebratory applause. Tagesschau, Germany’s flagship television news show:

There hasn’t been this much unity between the trade unions and employers for a long time. Leading representatives of both sides indicated their strong approval for what the federal parliament approved and the government announced.

The conflicting interests of workers and employers did not play a major role under current conditions, said Reiner Hoffmann, head of the German Trade Union Confederation, but rather the common responsibility of ensuring that the economy keeps running. It is necessary “to show that we are able to act in such a crisis situation.” Left Party parliamentary group leader Dietmar Bartsch told Deutschlandfunk:

Everything has to be done to keep the economy going. In the face of thise crisis, this is not an appropriate time for the opposition to make strong criticisms, so what I’m hearing from Mrs Merkel and Mr Söder, that we’re doing everything necessary and possible, is a reasonable approach.

Australian workers face mass job cuts amid coronavirus crisis
Oscar Grenfell, WSWS, Mar 18 2020

Australian federal government ministers have reportedly been briefed that up to half a million jobs may be destroyed over the coming months, amid the rapidly expanding health crisis and economic turmoil caused by the coronavirus pandemic. Finance Minister Mathias Cormann callously declared this week that the population must prepare for businesses to close and jobs to be lost. This morning, Virgin Australia announced that it will cancel all international flights from Mar 30 to Jun 14, amid the imposition of effective travel bans by the Australian government and its counterparts around the world. This amounts to the grounding of a fleet of some 50 aircraft. The company will also slash its domestic flights by half over the same period. As of last year, Virgin Australia directly employed 10,620 employees. A company statement made clear that its workforce will bear the brunt of the crisis, foreshadowing workers being compelled to take leave without pay and to use their entitlements to survive over the ten-week period. In a thinly-veiled threat of mass lay-offs, Virgin stated that these measures would be necessary to avoid redundancies. Feigning “equal sacrifice,” the company had already announced that it would reduce executive salaries by 15% and temporarily suspend bonuses. Virgin’s CEO Paul Scurrah receives a base salary of $1.3m/yr. If he is subjected to the “pay cut,” he will still receive over $1.1m. According to Glassdoors, the average annual base pay for a Virgin Australia cabin crew employee is $45,500, with the lowest-paid receiving just 38,611 per year. Virgin’s announcement came a day after Qantas, Australia’s largest airline, reported that it would slash international capacity by 90% until at least the end of May. The reduction will also apply to its low-cost carrier Jetstar. Domestic flights will be reduced by 60%. Qantas CEO Alan Joyce had already announced last week that only “the fittest will survive” in the global airline industry. He declared that 2,000 of the company’s 26,000 employees were “surplus to requirements.”

Even before the Coronavirus struck, Qantas and Jetstar have been on cost-cutting offensive, with the assistance of the trade unions, focussed on attempts to slash workers’ wages and conditions. The federal Liberal-National Coalition government has responded with what amounts to a massive cash hand-out to the largest airline companies. It has announced an initial $715m package, which will include the waiving of a series of fees and charges to Virgin, Qantas and Jetstar. The bail-out is not tied to any guarantee against lay-offs. Executive remuneration in the airline industry is among the highest across industry. Qantas CEO Alan Joyce was the highest-paid CEO in the country last year, taking in almost $24m from his base salary, bonuses and company investments. He has cynically declared that he will suspend his salary until the end of the financial year, just months away. Commentators have noted that Qantas alone spent almost $500m last year on share buybacks, in a bid to drive up the returns for the company’s wealthiest shareholders. Mass sackings will extend throughout the travel and tourism industries. Earlier this month, Flight Centre, which manages bookings and offers travel packages, announced the closure of 100 stores across the country, threatening the jobs of many of its 20k employees. The tourism sector, which employs almost 1m people, accounting for roughly 8% of the total workforce, is grinding to a halt. Chinese citizens, who are subject to a ban on entering Australia, account for 1.4m of the country’s annual tourists. There are predictions of hundreds of hotel closures, along with the collapse of tour businesses. Employees at major landmarks and tourist attractions will likely face layoffs. The retail, hospitality, nightlife and entertainment sectors, which had already been hit by declining disposable income, face decimation.

On Sunday, the Australian Broadcasting Corporation reported after industry bodies began calculating losses as a result of government bans on mass gathering, that workers in the arts had already reported $25m in lost income as a result of the bushfire and coronavirus crises. Up to 190k jobs will be lost in the entertainment sector alone. The government response to the airline slow-down is of a piece with the stimulus package it outlined earlier this month, providing for cash handouts of around $1.3b to businesses, including in the tourism and hospitality sectors, and up to another $7b in tax deductions and incentives. By contrast, the stimulus mandated a one-off payment of just $750 to the unemployed, who are on the poverty-level Newstart allowance, along with old-age pensioners and other welfare recipients. Labor has signalled its bipartisan support for the pro-business policy. The government has rejected calls for policies that address the plight of the country’s 3.3m casual workers, who have no job security, sick leave or entitlements. Last Thursday, PM Scott Morrison declared that casuals with coronavirus symptoms who are required to self-isolate will now be eligible for the welfare Sickness Allowance. It was rapidly revealed, however, that it would take them an estimated five days to register with Centrelink and up to 13 weeks before they received a payment. In other words, they would not receive a cent of the woefully inadequate $280/wk payment during the fortnight, or longer, that they were unable to work. The policy, touted by the government as an act of compassion, places casuals with coronavirus symptoms in a shocking situation. Many people live from week to week and would be unable to pay their rent or buy food without income, raising the prospect that they will go to work, threatening a further spread of the virus.
The callous measure is in line with the declarations of government ministers that they will not be “rushed” into unveiling any policies aimed at ensuring that casual workers who lose their jobs will be able to survive. Some ministers have contemptuously claimed that casuals, who are among the most impoverished section of the workforce, will have put money aside for an emergency. They have cynically cited the fact that casuals’ base rate of pay is supposed to be slightly higher than permanent employees, to compensate for a lack of entitlements and sick leave. This ignores the fact that casual employment is most prevalent in the lowest-paid industries.

Over the past week, Australian Council of Trade Unions Secretary Sally McManus has postured as a champion of casual, contract and gig employees who make up somewhere between 40% and 50% of the total workforce, but she has focused her calls on demands for immediate sick leave for casuals with coronavirus, rather than demands that all workers remain employed amid the economic slowdown. The ACTU and its affiliated unions, moreover, have played the central role in preventing walk-outs by teachers and other sections of the working class, who are demanding that the industries be temporarily shut to ensure health and safety and prevent the further spread of the virus. Most fundamentally, the massive rates of casual and insecure work in Australia are the direct result of the collaboration of the unions with companies and governments over the past three decades. In the 1980s, the ACTU partnered with the Hawke Labor government and major businesses to impose Accords that deregulated the economy and provided for the destruction of hundreds of thousands of permanent jobs across manufacturing and industry. In the 1990s, they supported the introduction of enterprise bargaining by the Keating Labor government, which divided employees up company by company, and has provided the basis for countless workplace agreements slashing conditions and wages. The record demonstrates that it is above all Labor and the unions that are responsible for the fact that the coronavirus has placed millions of workers and their families on the precipice of both a health and financial catastrophe.

New Zealand government predicts COVID-19 recession, gives billions to business
Tom Peters, WSWS, Mar 18 2020

On Tuesday, New Zealand finance minister Grant Robertson announced a $12.1b stimulus package, equal to 4% of GDP, in response to the rapidly worsening global economic crisis triggered by the spread of the COVID-19 coronavirus. The Labour Party-led government’s measures, like similar ones internationally, are geared towards propping up big business. Working people will be made to shoulder the burden of a recession, which PM Jacinda Ardern stated on Monday will be worse than the 2008 global financial crisis that led to unemployment doubling. New Zealand has 20 confirmed cases of COVID-19, all of whom entered the country from overseas. There could well be other, as yet undetected, cases. While the government claims public health-care is its priority, Tuesday’s announcement does not provide enough funding for mass virus testing, let alone a possible major influx of severely ill patients. As of Tuesday only 571 people had been tested in addition to the positive cases. There have been reports of symptomatic people being denied tests due to stringent eligibility criteria. Only $500m is earmarked for healthcare, a funding increase of about 2.5%. Tens of billions of dollars are needed urgently to hire thousands more workers and fund mass testing, medication, protective equipment and intensive care facilities. Hospitals are already drastically under-staffed and unable to cope with patient numbers after decades of austerity. If New Zealand experiences a major COVID-19 outbreak, thousands of people could die from lack of access to care.

Last weekend, Ardern announced more restrictions on travel, requiring anyone entering the country to self-isolate for 14 days, in an attempt to contain the virus. Chinese and Iranian travellers are still being denied entry despite the virus now spreading in many countries, including Australia. Finance minister Robertson admitted many people will lose their jobs. With an eye on the upcoming September election, he told Radio NZ the government remained focused on reducing poverty and homelessness. In fact, despite Labour’s false promises, social inequality and the housing crisis have worsened over the last two and a half years. The stimulus package includes a meagre $25 a week increase in welfare benefits and pensions, which is about an 11% raise for an unemployed person. This falls well short of the recommendation last year by the government’s own Welfare Expert Advisory Group to lift the poverty-level payments by 47%. The main components of the package are a $5.1b handout to employers, described as a “wage subsidy” scheme, and $2.8b worth of business tax reductions. This is in addition to the Reserve Bank’s “emergency” cut to official interest rates on Monday from 1% to a record low of 0.25%, to ensure the flow of cheap money into the financial system after a global crash in share values. The Reserve indicated it will introduce quantitative easing measures if needed, ie effectively print money by purchasing debt from the banks. Business New Zealand chief executive Kirk Hope praised the government, telling Radio NZ it would be relatively easy for businesses to apply for a subsidy of $585 a week per full-time worker up to a maximum of $150k for 12 weeks. Companies are eligible if they experience a 30% decline in revenue for any month in the first half of 2020. Funding of $126m is provided for businesses to give workers an additional 14 days of sick leave. Casual workers and self-employed people are eligible. But sick people may need to be isolated for much longer, and will need extra time off if they live with others who become sick. Companies will not be required to pay workers to stay home if they fear contracting the virus. This means workers can be forced to keep going to work despite health risks. The Council of Trade Unions joined big business in applauding the package, with President Richard Wagstaff telling Radio NZ:

There’s a real sense that we’re in this together as a nation.

The unions have accepted thousands of job cuts in forestry, tourism and other industries, and are preparing to enforce tens of thousands more, as they did following 2008 to defend corporate profits. While the banks and super-rich investors will be protected, workers are being thrown on the scrap heap. Unemployment, currently 4%, will increase sharply. Aviation businesses will get an initial $600m bailout, not including Air New Zealand, which is still in talks with the government, its majority shareholder. The airline will sack 30% of its workforce, about 3,750 people, after cancelling 85% of international flights. The E tū union, which has 5,000 members at Air NZ, praised the money for businesses and accepted job losses as inevitable, only requesting to be consulted in the process. This is the tip of the iceberg. Tourism, which directly and indirectly supports about 400,000 jobs, 14% of the workforce, has ground to a halt. The Tourism Industry Association estimates 100,000 jobs could be lost. Hundreds of concerts, festivals and other events have been cancelled following a government ban on gatherings of more than 500 people. Auckland’s SkyCity casino, which employs 5,000 people, has announced job cuts are possible. About 30% of forestry businesses have shut since February, with an estimated 1,500 redundancies. The industry has been badly affected by supply chain problems exacerbated by coronavirus in China, NZ’s main export market.

The working class cannot remain passive in the face of this crisis, which the capitalist system has completely failed to prepare for. In opposition to the entire political establishment and the union bureaucracy, which insist workers must sacrifice their living standards and potentially endanger their health, workers must form new organisations, rank-and-file committees, to demand their basic rights. No expense can be spared to protect human life and health. Tens of billions of dollars are needed for healthcare, including universal COVID-19 testing and increased hospital capacity. Schools must be closed and parents and caregivers fully paid to stay home. Those unable to work due to illness or because of the crisis must receive full pay, not poverty-level benefits. Billions are required to end homelessness and overcrowding, which facilitates the spread of disease, with a massive public housing program and major rent and mortgage reductions. The fight for these social rights requires an internationally coordinated campaign, consciously directed at ending the profit system and reorganising society along socialist lines. The vast wealth concentrated in the top 10% of society, the fortunes of the banks, speculators and big business, and the billions wasted on the military, must be redistributed to meet human need.

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