Bailing out on the old normal

A shuttered shop in Vancouver, British Columbia. Image: Rod Raglin/Flickr

Image: Rod Raglin/Flickr

As Saskatchewan prepares to reopen its economy, along with several U.S. states, we shall start to see how broken the economy really is. Just as more than half of U.S. households live paycheque to paycheque — hence the miles-long car line-ups to food banks — most smaller companies live on credit and last month’s receipts.

A recent article in The Atlantic explained that nearly all of the six million incorporated companies in the U.S. employ fewer than 500 people. “Many of these small- and medium-size companies face extinction during the pandemic shutdown,” says the article. “While their income has evaporated, they still owe wages to workers and rent to landlords. This is a recipe for cascading bankruptcies.”

Similarly, the business pages wail that the U.S. economy shrank 4.8 per cent in the first quarter, its most severe contraction since the 2008 stock market crash. The IMF forecasts that Canada’s economy will shrink by 6.2 per cent this year. Since capitalism requires constant, endless growth, any shrinkage signals failure. Even with a significant rebound next year, catching up to earlier projections could take years.

Of course, all of these growth projections assume that the world’s goal is the “old normal”: a constantly growing economy driven by fossil fuels, where most products come from overseas and university graduates can aspire to pay back their student debt by dog-walking and driving or cycling for Uber Eats. On the other hand, shouts a growing chorus, if the economy is really that broken, this is the point in history where we could build it differently.

Declaring, “The current crisis is an unprecedented wake-up call,” UN Secretary-General António Guterres used his Earth Day speech to outline a new approach. “We need to turn the recovery into a real opportunity to do things right for the future,” he said.

“I am therefore proposing six climate-related actions to shape the recovery and the work ahead. First: as we spend huge amounts of money to recover from the coronavirus, we must deliver new jobs and businesses through a clean, green transition.” All of his other points follow from this: driving public money to building sustainable, resilient infrastructure and financial systems, and global co-operation.

“Now is no time to lose our nerve,” says Naomi Klein, urging Canadians and Americans to bail out of the old economy and make “The Leap” into green jobs and renewable energy.

“Moments of shock are volatile,” she says. “We either lose ground, get fleeced by elites, and pay the price for decades, or we win progressive victories that seemed impossible just a few weeks earlier.”

The Leap already has well-defined social and economic goals in health, work and climate, such as, “At least 40 percent of all housing should be publicly owned.” Behind each goal lies a thought-out philosophy, in this case: “The most effective public health and anti-poverty plan we have is housing for all.”

“The pandemic has shown us that the rich can shelter in second homes while seniors, working class and vulnerable communities in overcrowded or inadequate housing face a possible death sentence. This is unacceptable.” The People’s Bailout urges that government, “Suspend all rent and mortgage payments — no foreclosures or evictions during the crisis. And no debt bombs waiting on the other side.”

“The coronavirus crisis has revealed which workers are truly essential in our society,” it adds. “We must not only value care and public service work, but make it the foundation of our next economy.”

The Leap supports labour unions, of course. More than that, it supports worker ownership of the companies they work for. In this, they’re supported by the Canadian Worker Co-op Federation, representing 40 “solidarity” businesses, either worker-owned or where workers have voting rights. With so many businesses stretched thin by the shutdown, the CWCF has applied for funds to help some of them convert to worker-owned businesses, which are proven to be highly resilient in changing times.

The Leap correlates closely to the Green New Deal in the U.S. (There’s also a Green New Deal Canada, which has partnered with 150 existing organizations). The U.S. GND was defeated in the Senate in March 2019. Yet its spirit remains alive. Take the Sierra Club. As its website says, Sierra Club and the Green New Deal recognize that “Climate change and inequality are inextricably linked.”

“The goal of the Green New Deal is an economy that protects and works for all of us, and our shared home, the earth,” declares the Leap. “The best safeguard against a return to reckless pursuit of maximum profit is to put the economy under democratic control. Public, cooperative, and worker ownership must be a guiding principle as we roll out new infrastructure, industries, and jobs.”

“With everything up for grabs,” says the Council of Canadians website, offering, “The Green New Deal(s) we need now.” Globally, the COC sees an “imperative” for programs that include “the comprehensive decarbonisation and restructuring of our economies and social systems while protecting the climate from collapse … Recently, a powerful narrative has emerged: the Green New Deal, a powerful call for change that brings with it hopes for delivering deep social and economic transformations.”

Therefore, the COC and three other progressive organizations — Canadian Centre for Policy Alternatives, the Institute for Agriculture and Trade Policy and the Institute for Policy Studies — are holding webinars with Transform Europe and the Rosa Luxemburg Siftung. The next webinar, on May 6, features Maude Barlow, Mike Davis and Martin Schirdewan.

Reopening probably will last until fall, and maybe into next year. No one knows how many businesses will be able to reopen, and then survive under social distancing rules — or recurring cycles of pandemic and social isolation. But there seems to be consensus on one point.

“America will never be the same,” warns conservative commentator Grady Means in The Hill.  “America never has been hit so hard and lost so much, so quickly.”

“[COVID-19] has put millions out of work, has cut several trillion dollars out of the market, and endangered the survival of hundreds of thousands of American companies. In a very short period of time, it has been devastating and transformational …”

“The idea behind the Green New Deal is a simple one,” Naomi Klein writes in her latest book, On Fire. “… In the process of transforming the infrastructure of our societies at the speed and scale that scientists have called for, humanity has a once-in-a-century chance to fix an economic model that is failing the majority of people on multiple fronts.

“Because the factors that are destroying our planet are also destroying people’s lives in many other ways, from wage stagnation to gaping inequalities to crumbling services to surging white supremacy to the collapse of our information ecology. Challenging underlying forces is an opportunity to solve several interlocking crises at once.”  SOURCE

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