Illustration by Ajay Mohanty
By Gaspar Zapata
While much of the ongoing global pandemic remains unpredictable, the response of the current administration suggests a future of violent economic insecurity, especially for the working class. Covid-19 has ushered in death and destruction as well an economic crisis the scale of which continues to expand. Unemployment figures are now double the levels of joblessness during the peak of the 2007-8 Great Recession and are only expected to rise. The basic needs of working people (food, shelter, healthcare) seem increasingly unattainable. An estimated one-third of tenants could not pay rent last month and an already weak social safety net means that the number of food insecure Americans is set to surpass 40 million. Yet, the U.S. is home to nearly half of the world’s high-net worth individuals.
This extraordinary wealth combined with generalized poverty is not by accident; it was historically created by decades of neoliberal policies that yielded socialism for the rich and predatory financial capitalism for the working class. The Trump administration will only intensify this social stratification if it continues along its current path.
Neoliberalism refers to a set of ideas, beliefs and practices that promote improving human well-being through individual freedom, free markets and free trade. Since the 1970s this utopian vision has served to justify attacks on organized labor and to build support for waves of corporate deregulation. It has also been used to legitimize the destruction of welfare programs. Reagan advanced neoliberalism by tapping into racist and sexist tales of “welfare queens” to rationalize cutting programs for the poor. Clinton did his part by deregulating banking and finance and thereby set the stage for the predation of middle- and low-income households during the sub-prime crisis twelve years ago.
Gradually, workers have seen wages stagnate while the cost of living keeps rising. Overall economic productivity and GDP have risen but workers have not been given a fair share of this output. The rich, on the other hand, have enjoyed historically low tax bills. These trends have generated a “double squeeze” on workers where their livelihoods are being directly exploited through low-wage, insecure work while their social safety nets have eroded and their debts have accumulated.
For the past forty years government officials, corporate lobbyists, investment bankers, and free-market intellectuals armed with neoliberal ideas have led us into a world of grave inequality, mass incarceration and what Ruth Wilson Gilmore has called organized abandonment. They have designed a political-economic system where the richest 1% own half of the wealth in the world and where the rest of us are saddled with trillions of dollars in student and credit card debt because our wages our low and our benefits practically non-existent.
During times of crisis the internal contradictions of this system become glaringly clear, but leaders dogmatically continue to apply the same inadequate solutions.
In 2008 we witnessed the neoliberal crisis playbook in action as Congress authorized billions upon billions of relief funds to rescue a collapsing financial sector. In a strategy consistent with neoliberal philosophy, experts and politicians made the protection of troubled markets their top priority. What we must remember, however, is that “markets” are people; they are ordinary borrowers and workers but also CEOs, top executives and elite investors.
When the Great Recession was said and done, distressed working-class homeowners saw only an insignificant slither of those relief funds. It should be no shock, then, that the only income group who gained wealth since the crash has been the top ten percent income bracket. To say that “we” have recovered from the subprime crash is misleading. Only the very wealthy recovered; the rest of us are struggling to keep up.
Covid-19 is revealing the persistence of neoliberal thinking and the colossal failures of our present and past political leadership. In this cruel historical drama politicians have embraced neoliberal solutions to solve social problems created by decades of neoliberal policies to begin with. The Coronavirus Aid, Relief, and Economic Security (CARES) Act is more of the same.
A provision in the CARES Act includes a potential $1.7 million tax break for high-earning individuals, or an estimated 43,000 U.S. taxpayers. Individuals with annual incomes below $75,000 will only receive a one-time $1,200 stimulus check. For those most in need of immediate relief the stimulus check pales in comparison to the relief being offered to the millionaire class. Moreover, the billions potentially lost through these tax breaks could be used to support hospitals, schools and other social services.
The Trump administration is fiercely embracing neoliberal solutions to the pandemic, even using it to deregulate environmental protections. This approach has not and will not work. The global pandemic and its aftermath will not be solved by extending aid to the rich while leaving the rest of us vulnerable to the brutal cycles of finance capitalism. It is already worsening food insecurity for working families and disproportionately claiming Black, Indigenous and Latinx lives. It will require bold actions like nation-wide rent strikes and pro-worker legislation like the proposal for a rent and mortgage freeze and the bill proposed to forgive student debt. Finding a way out of our shared predicament requires waging a united struggle against the murderous system which threatens our collective well-being.
All power to the people!
