As economies reel from the meltdown triggered by the novel coronavirus pandemic, governments scramble to build the system back up. But it’s the system that brought about the fall, and if we keep reviving it, will do so again.
The desperate policies of panic-driven governments involve throwing huge amounts of money at collapsed economies in response to the coronavirus threat. Monetary authorities create money and lend it at extremely low interest rates to the major corporations and especially big banks: “to get them through the crisis.” Government treasuries borrow vast sums to spend the collapsed economy back into what they imagine is “the normal, pre-virus economy.” Capitalism’s leaders are rushing into policy failures because of their ideological blinders.
The problem of policies aimed at returning the economy to what it was before the virus hit is this: global capitalism by 2019 was itself a major cause of the collapse in 2020. Capitalism’s scars from the crashes of 2000 and 2008/09 had not healed. Years of low interest rates had enabled corporations and governments to “solve” all their problems by borrowing limitlessly at almost zero interest rate cost. All the new money pumped into economies by central banks had indeed caused the feared inflation but chiefly in stock
— source rdwolff.com | Richard Wolff | Apr 14, 2020