Six on "our" Economy: Rev. Wm Barber: Inequality and Poverty Were Destroying America Well Before Covid-19; In the post-pandemic world, the U.S. economy could be totally different; Leonard Pitts Jr.: We’re suffering from two pandemics: the coronavirus
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Jaffe speculated about permanently reduced demand for oil if many workers continue to work from home after the pandemic passes.
“Maybe your boss is going to let you work remotely on Friday. Multiply that by everyone in the country, that’s a lot of people not driving to work,” she said.
Advances in information technology revolutionized where and how products are made, as well as how they’re transported and distributed — and they are almost certain to undergo a major transformation in the wake of the pandemic.
That will help accelerate corporations’ new emphasis on resiliency instead of cost efficiency.
For decades, multinational firms relentlessly sought to raise profits by scouring the world for cheap materials and producing goods in the cheapest, most efficient manner.
That commonly meant sourcing goods from far-flung suppliers and producing on a just-in-time basis to keep just enough inventory on hand and squeeze as much efficiency and profit out of the system.
Now the buzzword is going to resiliency — that is, “the ability to absorb a shock, and to come out of it better than the competition,” said Kevin Sneader and Shubham Singhal of the consulting firm McKinsey & Co. That, they said, “will be the key to survival and long-term prosperity.”
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More than a quarter of American companies operating in China said they planned to shift sourcing of materials or supplies because of the pandemic, in some cases moving them outside China, according to a March survey released Friday by the American Chamber of Commerce in Shanghai.
China has long been the dominant and low-cost link in global manufacturing and trade, and any major shift away from there will cut into the profits and raise prices for both retailers and consumers. ...
They face increasing pressure to raise wages and provide better benefits like sick leave, and many are looking at how they can reconfigure their physical stores — such as widening aisles and making them one-way — and doing away with cash and credit card hand exchanges, even as they feel even more heat from internet rivals like Amazon.
"Indeed, in responding to the COVID-19 pandemic and the question of when and how the nation’s economy should be reopened, we seem to have tapped the U.S. Strategic Stupid Reserve. The result has been a truly awe-inspiring display of America’s matchless capacity for mental mediocrity.
Surveys show, for instance, that a solid majority of Americans (63 percent according to a CBS News poll) are more worried about re-opening the country too fast and worsening the pandemic than opening it too slowly and worsening the economy. Yet a noisy minority of protesters is furious at government for trying to keep them healthy. They demand their right to life, liberty and the pursuit of acute respiratory distress.
Meantime, there’s Dr. Phil, opining on Fox “News” that “45,000 people a year die from automobile accidents, 480,000 from cigarettes, 360,000 a year from swimming pools, but we don’t shut the country down for that.” Turns out he’s off a smidge on the number of drownings, which is actually fewer than 4,000. And who knew swimming pools, car accidents and cigarettes were contagious?
Then you have governors like Brian Kemp of Georgia and Ron DeSantis of Florida rushing to re-open their states in defiance of medical advice. “COVID-19 is not here, bro,” one surfer assured a Jacksonville TV news crew. Doesn’t that take a load off your mind?
And let’s not forget Las Vegas, where Mayor Carolyn Goodman went on CNN to demand the re-opening of casinos, suggesting her town could be a “control group” to find out if social distancing works — the gambling capital playing craps with the lives of its own people. Not that Goodman would wager her own life. Asked by Anderson Cooper if she would visit the re-opened casinos, she demurred, saying she has to get home to her family."
In fact, America’s corporate capitalist behemoths have long used reform rhetoric and moderate reform proposals to increase their control over markets, ideas, and people, all while quelling whatever public criticism they faced. In our contemporary context, Amazon’s “voluntary” minimum wage increase and Exxon Mobil’s support for a carbon emissions tax to combat climate change are cases in point.
In November 2018, Amazon voluntarily raised its minimum wage to $15 an hour for its 350,000 US employees, including current employees and seasonal hires. This wage increase came in the wake of prolonged public criticism about labor practices and starvation wages at the company’s warehouses across the country.
Senator Bernie Sanders and the Fight for $15 movement have been particularly critical of the Seattle-based retail giant’s labor and compensation policies. Sanders’s town hall meetings with former and current Amazon employees in 2018 elevated public concerns about employees’ low wages, marginal benefits and overwork at the country’s second-largest private-sector employer.
For workers, it is still unclear how Amazon’s wage hike will affect them in the longer term, especially since the company announced that it would also scrap some bonus and incentive initiatives for hourly employees.
For Amazon, the immediate benefits are clear: the company’s political capital and public image have benefited considerably. On the heels of Amazon’s announcement about raising its wages, Sanders and other minimum wage activists applauded the company’s decision and gave “credit where credit is due.”
Independent media coverage was more honest, and much less favorable toward Amazon. The Young Turks investigative reporter Ken Klippenstein commented that “Amazon isn’t doing this because they’re nice,” but rather because “public pressure forced them to.”
While both lines of argument offer valid observations about the labor market and public opinion as drivers behind Amazon’s minimum wage increase, they also obscure the distinct and deliberate agency of large corporate entities to protect their power, when challenged, under the guise of self-regulation.
In an attempt to reclaim and dictate terms of the minimum wage narrative, Amazon CEO Jeff Bezos boasted: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.” Despite Bezos’s concession on this matter, it should be obvious that, more than any other contributing factor, Amazon realized that by voluntarily increasing its wages, it could pre-empt state or federal minimum wage legislation, while repairing its public image and remaining competitive in the current labor market.
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In October 2019, I argued that mounting corporate debt, falling profits and increasing financial fragility threatened an economic implosion in the case of even a momentary downturn. If I had been told then what would have already unfolded by March 2020, I would have had difficulty believing it. At that time, I inferred that the next crisis would force central banks to pump gargantuan sums of cash into the teetering financial system, and that governments would be forced to bail out and nationalize corporations on an as-yet unseen scale. Some of this has already occurred, and the crisis is still in its earliest stages.
Our predictions about the next crisis were based on the assumption that it would unfold similarly to other financial crises, where falling profits would cause debt bubbles to implode, creating a cascading shock through the banking system. But now we face a more serious problem.
The pandemic has interrupted the basic production and distribution of goods and services. In essence, we face an “old school” supply shock — resulting from a catastrophe like war, disease or famine — layered on top of a hypermodern financial collapse. As such, the ordinary measures used to respond to a modern capitalist crisis — central bank easing, fiscal stimulus and so on — are completely insufficient to address the scale of the problem.
Offering cheap loans can only go so far if companies are not making any money at all; cutting checks to ordinary people will only do so much if there is nothing to buy. This realization has forced even the most stalwart capitalists to admit that “capitalism doesn’t work in an eighteen-month shutdown.”
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Tellingly, the biggest “tail risk” cited by respondents to Bank of America Merrill Lynch’s latest global fund manager survey published on Tuesday was a second wave of infections. This is proof, if any were needed, that virus-driven shifts in sentiment should be treated with caution in the absence of a vaccine."
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