Commentary
In the United States, the blow to the economy has yet to come
The pandemic has imposed a slowdown of historical proportions, not only because of the lockdowns, but because of the drop in consumption, with a devastating impact on income and employment.
Now that the U.S. elections are (almost) over, there are more reasons not to be too confident about the future. Not that of the world—over which the threatening wave of the pandemic is spreading, deadly, obscuring another and far more terrifying tragedy: that of climate change—but that of the United States and, in particular, its economy. Biden has won, and the prospect of an autocracy dominating the planet has become less and less likely, but all the problems are there and could be seen in the vote. Because the richest economy on earth – rich overall, but where only 1% have three quarters of the wealth and all the levers of power—is finding itself stalled in the middle of the highway and not knowing where to go.
America has always been the vanguard of capitalism, the laboratory of progressive solutions, the place of choice for the consecration of models. The golden age of wild capitalism, described by Mark Twain with satirical realism; Roosevelt’s New Deal after the Great Depression – very “American,” even though based on the theories put forward by that British dandy, John Maynard Keynes—and the policies of demand management and the welfare state; Reagan’s deregulation; the neo-liberalism of the Washington Consensus—all of them come from there, from that land of opportunity. However, it is precisely in the United States, the undaunted proponent of de-regulated globalization, that the latter has produced its sharpest effects among all the advanced economies.
Because there is a reason why Biden – and the Democrats – did not win “in a landslide.” If America is divided, as people say, it’s not because the two parties have divided up the votes 51 to 47. But because those 73 million voters who chose Trump and the GOP are truly divided from the 79 million who chose Biden and the various Dems running for Congress. They are divided politically, economically, geographically. Beyond the Electoral College mechanism, which makes the interpretation of the vote confusing, it’s clear that it’s not only the uneducated white voters of the working class who have once again chosen the aspiring autocrat and his party. In dozens of suburban and rural counties, the Democrats have not broken through; on the contrary, they have lost support.
It is not true that the pandemic and its failed management by the Trump Administration did not affect the vote. These factors have indeed awakened the desire for an efficient state that offers protection, for a government that is up to standard, but only in a part of the electorate, the one that has suffered the most from the contagion and the one that is most informed and educated, mainly urban. But the pandemic, used as a smokescreen, allowed Trump and his people to disguise their message once again. While the conservative elites do find their place in the GOP, the party has the bulk of its support among the masses—not the lowest on the social ladder, but the ones before the lowest.
Because America is an unequal country, and it is this inequality that is fueling the following of the Republicans and their unlikely leader. And it is the great size of this inequality that makes the United States a giant with feet of clay. The pandemic has imposed a time-out of historic proportions on the economy, not because of the lockdowns, but because of the drop in consumption and the closure of hundreds of small and medium businesses. This had a devastating impact on incomes and employment. And then, whoever was most affected by the pandemic voted for Biden, and would not have voted otherwise in any case. But if we are perhaps moving beyond the worst moment of the pandemic now, the nadir of the economy has yet to come.
Whether the famous “stimulus” is put back on track or not will certainly make a difference. And the new Congress that emerged from the elections will not be generous. The 40% of low-wage workers who have lost their jobs will struggle to find others, and the more time they are left unemployed, the worse things will get. It’s about that mass of 15 million families, mostly immigrants—often not even legal—who live on precarious and irregular jobs, even in “essential” sectors. And those families who live on rent or mortgage, the lower middle class of the suburbs, white, black, of every color. And there are also the enormous deficits in the budgets of the 50 states, as well as the municipalities of the big cities (with the threat of unemployment for millions of public employees, who might be fired from one day to the next). All this is bringing the economy to the edge of the precipice, however much Big Tech might continue to make profits.
If Wall Street is seemingly doing fine at the moment, that doesn’t mean that a real depression has been averted, nor does it mean that Biden will be able to restore a shattered social body and an economy that is being battered from one day to the next. Because if there is one thing The Donald has brought out, it is the now-angry discontent of those who have felt abandoned, dispossessed by neoliberal globalization (without being aware of the real cause, moreover). Sure, today you can buy more stuff at bargain prices, but you have to have the money to buy it. “When the promise is broken / You go on living, but it steals something from down in your soul” (Springsteen). A society divided into classes, chauvinist, where the underlying racism is functional to the deregulated capitalist machine, cannot be seriously put into question by the kind of liberal thinking that is appealing to educated souls but does not convince in the households where people watch Fox News and the deserted malls of the badlands of the suburbs.
“What is this land of America? / So many people travelling there,” sang Pete Seeger, giving voice to an immigrant like those that came from Italy. Now, one will have to seriously ponder to understand what this America is, divided between social implosion and a long road ahead that no one knows where it might lead.
Originally published at https://ilmanifesto.it/negli-stati-uniti-la-botta-alleconomia-deve-ancora-arrivare/ on 2020-11-20