COVID-19 and the Western Working Classes The COVID-19 shock meets an impending economic recession
By Ingar Solty – 20 March 2020
As of March 2020, the world is back to the future. The global financial crisis of 2007-2008, which escalated into a global financial meltdown in September 2008, was supposed to be the big bang crisis, a once in a lifetime event. And yet, here we are again. The Russia/Saudi Arabia-oil dispute of early March 2020, which has led to a freefall of the price of crude oil and was directed at the U.S. fracking industry, as well as the economic shocks resulting from the globalization of the Coronavirus seem to have caused a new global recession. This has been declared by numerous mainstream economists like Harvard economist Kenneth Rogoff and Pankaj Mishra who are convinced that the world has already entered a new global economic crisis. Most people’s thinking is determined by the development of the COVID-19 crisis, the return of “the hour of executive power” and the fears which it evokes as well as the economic measures which appear to be in response to the health crisis. By disrupting international supply chains and severely harming a highly vulnerable just-in-time production global economy, COVID-19 clearly accelerated the transition into a recession; and yet, this recession was already upon us by the end of last year. GDP growth, capital profitability, capacity utilization, volume of working hours, etc. were already indicating the onset of a recession. In 2019, countries like Germany, for instance, already had the lowest growth rates since 2009, the peak of the global financial crisis. And also, mass layoffs in the global auto industry were no longer mere results of digitalization or the transition to e-mobility but connected to a slump