Santa Cruz
Santa Cruz
Indybay Regions North Coast Central Valley North Bay East Bay South Bay San Francisco Peninsula Santa Cruz IMC - Independent Media Center for the Monterey Bay Area North Coast Central Valley North Bay East Bay South Bay San Francisco Peninsula Santa Cruz IMC - Independent Media Center for the Monterey Bay Area California United States International Americas Haiti Iraq Palestine Afghanistan
From the Open-Publishing Calendar
From the Open-Publishing Newswire
Indybay Feature
Related Categories: U.S. | Labor & Workers
Wave of layoffs in the US election campaign
by Joachim Bischoff and Frank Adloff
Monday May 18th, 2020 6:33 AM
The corona pandemic triggered the most massive job losses in the USA since the Great Depression in the 1930s. Unemployment rose to its highest level in more than 70 years.
In April alone, 20.5 million jobs outside agriculture were cut, according to the government administration.
Wave of layoffs in the US election campaign
"It's the economy, stupid!"
by Joachim Bischoff

[The conclusion of Joachim Bischoff's article published on 5/9/2020 is translated from the German on the Internet,]

...The corona pandemic triggered the most massive job losses in the USA since the Great Depression in the 1930s. Unemployment rose to its highest level in more than 70 years.

In April alone, 20.5 million jobs outside agriculture were cut, according to the government administration. The unemployment rate jumped from 4.4% to 14.7%, the highest level in the post-war period. The Labor Department also admitted that the actual number of unemployed was probably about seven million higher than officially reported, so in real terms it will have been 19.5%. Prior to the start of the crisis in February the unemployment rate was 3.5% but in March it rose to 4.4%. Not only is the scale of job destruction shocking but also the speed of job losses...

Even if the weakening of the infection rate in the USA continues, it will take longer for the US economy to recover. The need for reconstruction for the US economy and labor market is enormous. In US history, higher unemployment rates were only experienced during the Great Depression of the 1920s and 1930s. At that time, the rate was estimated to have reached almost 26%.

Almost all 50 states imposed exit restrictions in March to slow down the spread of the coronavirus. Many shops, malls and businesses were closed, restaurants and hotels remained empty. Many employees* in these companies applied for unemployment benefits.

Since the beginning of the month, many states have begun to slowly relax corona regulations - although in many places the pandemic still seems far from under control. Trump's government is therefore hoping that the labor market and the economy will recover rapidly from the third quarter onward. The US president told Fox News television that the latest figures are no surprise. "Even the Democrats aren't holding me responsible." He said that before the Corona pandemic broke out, the United States had the strongest economy with him as president. He said he could return the economy to its former strength: "Those jobs will all come back. And they're going to come back soon. " He said the coming year will be "phenomenal" for the United States economically.

Since March, the US Congress and the US government have issued stimulus packages of about 2.7 trillion dollars. support the weakening economy. Of this amount, around 650 billion US dollars alone are available for a credit program that will largely replace wage costs for small and medium-sized companies in the coming weeks in order to limit the rise in unemployment. The loans can be waived later if certain conditions are met. However, if the economy does not recover significantly in the coming months, the unemployment rate could rise even further after the program expires.

Dismissals can be made easily and quickly in the USA, the labor market policy instrument of "short-time work" does not exist, and other welfare state instruments such as properly equipped health insurance or extensive protection against dismissal, which provide wage earners with greater protection in crisis constellations, are undeveloped.

And because health insurance in the USA is often tied to the workplace, millions of Americans* are likely to have lost or can no longer afford insurance cover in the midst of the still dramatic pandemic. Nearly half of American workers are also in the low-wage sector, and sick pay is a rare luxury. With the loss of their jobs and health insurance, many are at risk of sliding into poverty. 40% of the population barely make it to the next payday and have no financial reserves. The already alarmingly high inequality for a rich industrialized country is reflected drastically in the number of victims of Covid-19. It will deepen even more with a severe recession.

Private households in debt

According to a Pew Research Center survey, one third of U.S. citizens* were unable to pay all their bills in April. In a "normal" month, 24% have difficulty meeting their financial obligations. For many, this means that they cannot fully pay their mortgages, car loans and student loans. Although the Federal Reserve Bank of New York has not yet identified such effects of the Corona crisis in a report on household debt covering the first quarter of 2020, it is hoping that the crisis will have a positive impact on the economy.

Mortgages, student loans, car loans and credit card debt are the four major debt categories, with mortgages alone accounting for almost 10 trillion dollars or 68% of all household debt. Monthly mortgage payments are the largest financial obligation of American households, averaging around $1,500 in March. To service a car loan, about $440 is due each month. With student loans, the situation is confusing because many debtors* are already in arrears. The average monthly payment is set at $87 by the New York Fed. These are considerable sums, which is why the US Congress in the so-called Cares Act, which contains about $2 trillion, has set a new average monthly payment of $87. $ 2 trillion third Corona aid package.

At the heart of the package are the provisions to protect debtors*. In particular, homeowners who finance their home with a mortgage guaranteed by the federal government benefit from this. In the USA, around 70% of mortgages are currently guaranteed by the state.
That is, the mortgages are either purchased or securitized by Fannie Mae or Freddie Mac, insured with the Federal Housing Administration, or guaranteed, assigned or insured by other federal agencies.

According to the Cares Act, debtors can suspend payments on such mortgages for six months. According to the New York-Fed, this will relieve private households by a total of up to $55 billion per month. The Cares-Act also provides for a protection for student debts, which can lead to a relief of up to $7 billion per month. Overall, these provisions could result in temporary relief of more than $370 billion over six months. Congress has not made any provisions for car borrowers. However, many creditor institutions are offering relief programs on their own initiative.

Despite the mountain of debt and the loss of labor income, many households still have other ways to make ends meet with credit. Although there are currently already $900 billion in credit card debt outstanding, the New York Fed estimates that consumers have borrowed around three trillion dollars. US-$ could be called on by consumers to compensate for loss of income. Home equity lines of credit are also available for homeowners. According to the Fed report, a total of an additional $577 billion in credit could be tapped with this instrument. A comparison of debt ratios also suggests that there is room for maneuver: on the eve of the corona crisis in early 2020, household debt amounted to 66.4% of GDP - almost 20 percentage points less than on the eve of the financial crisis in 2008.

Reconstruction of the US economy

US President Trump is counting on a rapid recovery of the labor market and the economy from the third quarter onward and on a continuation of the times before the spread of the coronavirus. Until February, Trump fought for the US Federal Reserve to accompany aggressive spending and tax reduction policies with low interest rates and expansive lending. Customs policy - above all with Canada, Mexico and China - also served to support the US economy and stabilize the US job market. In the fourth quarter of 2019, the world's largest economy had still grown by a solid 2.1%. The stock markets reported record highs and many economic experts* expected economic growth of a good 2% for the current year 2020.

Since the beginning of March, the good economic prospects have been a thing of the past. Meanwhile, experts* are warning that the USA is threatened by the worst slump in growth since the Great Depression of almost 100 years ago, as the country has slipped into a deep recession despite massive support packages. Between January and March inclusive, economic output for the year as a whole fell by 4.8% compared with the previous quarter - and in January and February there were no restrictions.

US Federal Reserve Banker Mary Daly also expects the consequences of the corona pandemic to reverberate for a long time to come. She no longer expects the US economy to recover rapidly this year, but rather expects it to shrink by almost a third year-on-year. Daly also urges a cautious easing of restrictions: "I hope that we listen to the health authorities and that we take it slowly but gradually. If we do that, I expect growth in 2021," said the president of the San Francisco Federal Reserve Bank.

Endangered re-election of Trump?

It is now clear that the economy will not recover as quickly as many experts* initially predicted. Average unemployment in the USA will rise to a much higher level. The debt of private households will increase and - as the long queues in front of the emergency food supply offices prove - consumer purchasing power will not provide a strong impetus for an economic recovery either.

The socio-economic crisis in the wake of the pandemic could have political consequences in the coming months, the crash in economic prospects and the worsening misery in the US labor market could jeopardize a re-election of Donald Trump in November. At present, the US president's demoscopic approval ratings are falling slightly, even among his supporters*. Trump himself, however, is convinced that all the jobs he has lost will return very soon.

Only two months ago his election campaign concept was undisputed. In essence, he stuck to what Bill Clinton's strategist James Carville once so strikingly summarized: "It's the economy, stupid!
Even if fickle voters* in the middle might rub up against his way of taking down anyone who dares to contradict him in ugly tweets, in the end the good economy would lead many to vote for him for another four years.

Even without the outbreak of the pandemic, stabilizing the US economy would have been a difficult balancing act. After the pandemic, this concept lies in ruins. Even the aforementioned economic advisor to President Kevin Hassett expects GDP to fall by 20 to 30% in the second quarter and speaks of the worst slump since the Great Depression of the 1930s.

The mixture of incompetence, self-dramatization and recrimination with which Trump is managing the crisis is now hurting him, even those who initially benefited from the fact that Americans* tend to back the chief of the executive in times of acute uncertainty.

In the Rust Belt states, where the election will probably be decided as in 2016 - in Michigan, Pennsylvania and Wisconsin - he is behind his opponent Joe Biden in the polls. However, in April four years ago, pollsters had seen the later loser Hillary Clinton there with an even clearer lead than Biden today.

In the downward spiral, Trump is concentrating on moving his opponent closer to China - to the country from which he is demanding "very substantial damages" because it did not stop the spread of the virus from the outset. He had his foreign minister, Mike Pompeo, speak on Fox News of "massive evidence" that the virus came from a Wuhan laboratory, after the latter had already said on the same day that they did not know where Sars-CoV-2 came from. In the same interview, Pompeo also said that "the best experts so far seem to believe that it was man-made", only to agree a moment later when he said that he "completely agrees" that this was not the case.

Directing voters' frustration in this direction, turning the November vote into a referendum on China, may be Trump's only chance to stay in office beyond January 2021. "China will do everything to make sure I lose the election," he recently announced in the Oval Office, and he never misses an opportunity to attack the People's Republic, be it with the threat of new customs duties or adventurous theses about the origin of the virus.

The ever new attacks aim to distract from his own failure in the Corona crisis and present China to the American public as the scapegoat for the pandemic. Many Americans* are insecure and frightened, at the same time anti-Chinese resentment is palpable and increasing. According to a survey by the Pew Research Center, two-thirds of Americans* see China in a negative light.

Trump had already used China and its trade practices in his election campaign in 2016, and he will do so again in 2020 with reference to Beijing's behavior in the Corona crisis. But it will not be the focus of the election campaign. The US president will not be able to push the development of the pandemic at home and its dramatic socio-economic consequences into the background. Millions of Americans* have already lost their jobs in the Corona crisis.

It has become apparent that there is neither a coherent national strategy for combating Covid-19 nor a convincing concept for the reconstruction of the US economy thereafter. The slogan "Make America great again" could become a stumbling block for Trump this time. "It's the economy, stupid!"

Time, fear and the end of omnipotence
Guest article The corona pandemic and climate change shake the controllability fantasies of Western modernity. The separation of nature and culture is no longer valid
by Frank Adloff

[This article published in May 2020 is translated from the German on the Internet,]

COVID-19 shows that Western modernity has reached an impasse

Everyone currently agrees that Covid-19 has brought us into a world historical caesura, with an open exit. The first diagnoses of the future are already being made, and left-wing intellectuals are participating in this game with expected reflexes: For example, one now sees the time ripe for communism (Slavoj Žižek) or expects a permanent state of emergency (Giorgio Agamben).

These snapshots ignore the obvious: firstly, nobody knows how things will go on, and secondly, first of all, a crack has arisen in our imaginative space. The foundations of modern societies have been shaken. Politicians have done the unthinkable and reduced public and economic life for the common good. For a few weeks fantasies of omnipotence and controllability vis-à-vis nature, which are so typical of Western modernity, had to be put aside. It became clear that existing certainties can be shattered at an insane rate, that there are no guarantees of security. False certainties were replaced by contingency consciousness. The belief in feasibility has given way to a cautious and tentative search for temporary solutions. We are no longer the masters of our house. At the same time, paradoxically, the only thing that has happened is exactly what the sciences have been warning about for years - so it was possible to know.

Alleged certainty

The loss of collateral is the sign of the times. New things now seem possible on the one hand - on the other hand, it is precisely this loss of supposed security and certainty that is frightening. Fear is a future-oriented affect. It seldom seems productive, spreads virulently and mostly one tries to suppress it or channel it into a renewed search for controllability, control and certainty - also in the form of conspiracy theories. In this process, fear first of all expresses the vulnerability of life. Is this fear socially bearable at all, can it be made productive, or must it inevitably be suppressed? This question marks the crossroads we are at. So far, the fear of the consequences of our actions, such as climate change, has been very successfully suppressed.

It is becoming increasingly clear to everyone that the corona pandemic is only the beginning. Compared to the consequences of climate change, dealing with Covid-19 is probably still an easy task. The corona crisis shows the different temporalities we are dealing with. The fact that the virus originates from animals, was transmitted via zoonoses and that the loss of biodiversity that has been going on for thousands of years is favoring pandemics is increasingly becoming a general knowledge base. Although the pandemic spread across the world within a few weeks, it was prepared by a history of globalization that goes back over a century. The virus of neoliberalism, on the other hand, has been circulating for more than 40 years and has fueled the crisis through privatization and savings in the health sector. This shows that the acute crisis has an enormous lead time and that different temporalities overlap in it. At the moment, they overlap and we will probably see something similar again in the near future.
Shock with lead time

For the climate crisis will also lead to acute shocks and catastrophes: be it heavy rainfall with floods, droughts with water and food shortages, or migration from war zones and hot climates. These shocks, too, have a time lapse of decades and centuries. Since the end of the Second World War, we have seen a great acceleration in the strain on the Earth system: CO2 emissions, energy consumption, water and fertilizer consumption have increased dramatically since then. The development of resilient social infrastructures and the preventive fight against the massiveness of climate change therefore belong together in the Anthropocene. The problem is, on the one hand, the degree to which the earth will warm up and how many species will die and, on the other, how societies are prepared for this. However, the problem of climate change - or more generally: nature - cannot be controlled. Rather, it will be a question of interlocking social concepts of time with the rhythms of the warming planet.

A criticism of the modern separation of nature and culture has long been formulated in Earth System sciences, philosophy and the social sciences. Now it is actually clear to us that it is obsolete. Anyone who now speaks of a purely societal crisis fails to recognize the fact that the virus is actually doing something - that it is also part of human society. Anyone who conversely naturalizes Covid-19 overlooks the fact that the activities of the virus cannot be understood without protective masks, respirators, police, data collection, virologists and politicians. Our social crisis can only be described in ecological terms: Different species are interdependent.

Modernity in a dead-end street

Taken together, this means that the traditional future horizon of modern societies has shrunk dramatically. Whereas in modern times the future was considered open in principle and turned towards progress, it now sounds almost desperate when one tries to draw the contours of a positive and sustainable world. Covid-19 should first of all lead us to perceive the crack in time, to see that Western modernity has reached a dead end. In the standstill of the lockdown, the different temporalities of man and nature seem to be heading for an extreme acceleration: the next drought and drought in Europe, for example, is already looming.

This is painful, frightening and almost unbearable - the counter-movements aimed at isolation and displacement are already in the starting blocks. Since modernity is characterized by a fundamental lack of moderation, and since notions of omnipotence and hubris are inscribed in it, Covid-19 brings with him the impertinence of having shown the limits of this historical path of development. We are now experiencing social standstill or regression in the acceleration of ecological damage, no longer progress, but the containment of catastrophes. Above all, we are experiencing interdependence, not independence.

The crisis has brought enormous suffering and even death to many people. Corona has thus raised the urgent question of how to live together on this planet in a good and fair way. A crack now runs through our imaginary space, which shows that we cannot shape and control everything. So the world could experience, at least for a moment, that self-limitation is possible. However, no one can say at present how this rift will be inscribed in the collective memory of societies in the future.

Frank Adloff is Professor of Sociology at the University of Hamburg and Co-Director of the research group "Future of Sustainability". The text is an excerpt from a contribution by the author in the following book, which will be published by transcript Verlag in July 2020: Christian Keitel, Michael Volkmer, Karin Werner (Ed.): The Corona Society. Analyses of the situation and perspectives for the future
We are 100% volunteer and depend on your participation to sustain our efforts!


donate now

$ 227.00 donated
in the past month

Get Involved

If you'd like to help with maintaining or developing the website, contact us.


Publish your stories and upcoming events on Indybay.

IMC Network