We are in a recession. That much is now evident. You will see it being blamed on the coronavirus, which appears to have triggered it this time. A verbal war on COVID-19 is being waged by world leaders and the media establishment, denouncing its health and economic effects.
Statements like ‘the American people are at war with the coronavirus’, or ‘this economic and financial war will be long-lasting’ fill the airwaves and Twittersphere. Some politicians have even demanded that the United Nations declare “a global war on coronavirus”. But world leaders have yet to question the socioeconomic model that has provided fertile ground for this crisis in their societies, and that has aided the unthinkable speed at which the virus has spread outside of China.
Loans taken out by businesses and private individuals are unlikely to be paid back as intended. The banks will then have to either be bailed out or default — those are really the only options. We have seen it before. This time it was a global virus that triggered it – but if it hadn’t, something else would have.
We are once again heading into a full-scale, generation-destroying recession and, once again, the trigger of the crisis is seen as an outlier or mistake. In 2008, it was because of ‘irresponsible wall street bankers’, and in 2011 it was because the Greeks were ‘lying about their state finances’. The fault seldom falls on the system which has placed our economy and well-being into the hands of mystic market forces that, god-willing, will not crash our entire livelihoods.
Must we simply pray that nothing haphazardly destroys everything, so that during the ‘good times’ people at the top can hire us? How does this economic system represent the only alternative? The progressive left has long “highlighted the very problems that the virus has now exposed so starkly,” such as the precarisation of labour, wealth inequality, and housing. Surely there are alternatives to such an obviously flawed system.
The point is this: if it hadn’t been the coronavirus this time, it would’ve been a number of other events. Many economists had already predicted that a large recession will hit us this year, or at least in the near future — be it from ‘contagion from a global credit crisis’ or ‘sparked by automated trading systems’. Individual household debt being at record high levels, and banks proudly proclaiming record profits, are usually two good indicators that the proverbial shit is going to hit the fan.
So, how should we think of this recession, with all of the uncertainty about the future, and economic stress it will cause? I think of it like this: the coronavirus can be likened to Gavrilo Princip’s shooting of Archduke Ferdinand, which triggered the First World War. The war that followed had, however, been brewing for years.
The economic system did not change for the better after our previous crises — instead, it remained just as fragile, if not more, as before 2008. I fear that, unless real action is taken, much will remain unchanged this time around too. We can’t keep stacking cards in a bid to continue ‘business as usual’ as the house of cards is falling.
If the solutions are to be geared towards the pandemic and its effects, and proposals to talk about this fragile economic system are met with arrogant rebuttals along the lines of “unless you expect another pandemic anytime soon, it will all work out perfectly”, then we are set for another one of these recessions into an even worse austerity apocalypse. Focusing on the Gavrilo Princip every time we have a recession is what allows the economic system to remain this prone to crisis and bailouts. It is time to seriously reconsider.
DiEM25’s Progressive Agenda for Europe is a start.
Many are worried about being able to keep their job and being able to pay rent or buy food for their families. Some countries are talking about temporary basic income to alleviate these concerns. If we would’ve lived under the proposed European New Deal, we would not have the same worries about being able to obtain basic goods. Had we restored our social housing program, which is also proposed, we would be less concerned about rent or who has the resources to self isolate. Other policies included in the program, such as the jobs guarantee or the anti-poverty bills would limit your coronavirus anxieties to just the virus and its impact on you, your family and community.
But in the immediate face of the crisis, we need a rapid emergency response that minimises the damage this recession will do.
Last week, DiEM25 announced just the thing: a 3-point plan to deal with the recession. 2000€ for each person would at this moment be incredibly helpful to everyone who cannot go to work, or who got laid off due to the recession. In the long term, the financial security provided by another proposal, the Universal Basic Dividend, would provide that kind of security.
And, perhaps most importantly, the proposal to invest in a green transition to ensure that the recovery from this current crisis does not deepen our ecological crisis, which could unleash far worse ills than the COVID-19 pandemic.
Read more about the 3-point plan: DiEM25 presents 3-point plan for dealing with COVID-19 depression!
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