The US economy at mid-year 2020 is at a critical juncture. What happens in the next three months will likely determine whether the current Great Recession 2.0 continues to follow a W-shape trajectory—or drifts over an economic precipice into an economic depression. With prompt and sufficient fiscal stimulus targeting US households, minimal political instability before the November 2020 elections, and no financial instability event, it may be contained. No worse than a prolonged W-shape recovery will occur. But should the fiscal stimulus be minimal (and poorly composed), should political instability grow significantly worse, and a major financial instability event erupt in the US (or globally), then it is highly likely a descent to a bona fide economic depression will occur.

The prognosis for a swift economic recovery is not all that positive. Multiple forces are at work that strongly suggest the early summer economic ‘rebound’ will prove temporary and that a further decline in jobs, consumption, investment, and the economy is on the horizon.

A Second Wave of Permanent Job Losses

Through mid-June to mid-July, the COVID-19 infection rate, hospitalization rate, and soon the death rate, have all begun to escalate once again. Daily infections consistently now exceed 60,000 cases—i.e. more than twice that of the earlier worst month of April 2020. Consequently, states are beginning to order a return to more sheltering in place and shutdowns of business, especially retail, travel, and entertainment services. The direction of events cannot but hamper any initial rebound of the economy, let alone generate a sustained economic recovery.

Exacerbating conditions, a second wave of job layoffs is clearly now emerging—and not just due to economic shutdowns related to the resurging virus.

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Reopening of the US economy in June resulted in 4.8 million jobs restored for that month, according to the US Labor Department. That number included, however, no fewer than 3 million service jobs in restaurants, hospitality, and retail establishments. These are the occupations that are now being impacted again with layoffs, as States retrench once more due to the virus resurgence underway. But there’s a new development as well: A second jobless wave is now emerging in addition to the renewed layoffs due to shutdowns not only of the resumed service and retail occupations, but reflecting longer term and even permanent job layoffs across various industries.

Household consumption patterns have changed fundamentally and permanently in a number of ways due to both the virus effect and the depth of the current recession. Many consumers will not be returning soon to travel, to shopping at malls, to restaurant services, to mass entertainment or to sport events at the levels they had, pre-virus.

In response, large corporations in these sectors have begun to announce job layoffs by the thousands. Two large US airlines—United and American—have announced their intention to lay off 36,000 and 20,000, respectively, including flight attendants, ground crews, and even pilots. Boeing has announced a cut of 16,000, and Uber in just its latest announcement, a cut of 3,000. Big box retail companies like JCPenneys, Nieman Marcus, Lord & Taylor, and others are closing hundreds of stores with a similar impact on what were formerly thousands of permanent jobs. Oil & gas fracking companies like Cheasepeake and 200 other frackers now defaulting on their debt are laying off tens of thousands more. Trucking companies like YRC Worldwide, the Hertz car rental company, clothing & apparel sellers like Brooks Brothers, small-medium independent restaurant and hotel chains like Krystal, Craftworks—all are implementing, or announcing permanent layoffs by the thousands as well.

Reflecting this, since mid-June new unemployment benefit claims have continued to rise weekly at a rate of more than 2 million—with about 1.3 million receiving regular state unemployment benefits plus another 1 million independent contractors, gig workers, self-employed receiving the special federal government unemployment benefits. The latter group’s numbers are rising rapidly since mid-June.

As of mid-July no fewer than 33 million are receiving unemployment benefits, with another 6 million having dropped out of the labor force altogether and no longer even being counted as unemployed. Unemployment therefore remains at what will likely be a chronically high number, at around 40 million—with about 25% of the US labor force unemployed—as renewed service-retail sector layoffs, plus new permanent layoffs, both loom on the horizon.

Added to the growing problem of renewed service layoffs and the 2nd wave of permanent layoffs in the private sector is the growing likelihood of significant layoffs in the public sector, as states and cities facing massive budget deficits are forced to lay off several millions of the roughly 22 million public sector workers in the US. This potential public employee layoff wave will accelerate and occur sooner, should Congress in summer 2020 fail to bail out the states and cities whose budgets have been severely impacted by the collapse of tax revenues while facing escalating costs of dealing with the health crisis. Estimates as of last May are that the states and cities will need $969 billion in bailout funding this summer—roughly two-thirds for the states and the rest for cities and local governments.

The resurgence of layoffs from all these sources is a sure indicator that the economy’s rebound—let alone recovery—is in trouble. Rising joblessness means less wage income for households and therefore less consumption and, given that consumption is 70% of the economy, a slowing of the rebound and recovery. Problems in consumption in turn mean business investment suffers as well, further slowing the economy and recovery. Exacerbating the decline in personal income devoted to consumption due to unemployment is the evidence that even those fortunate enough to return to work after spring 2020’s economic shutdown are doing so increasingly as part time employed—which means less wage income for consumption compared to the pre-COVID period before March 2020.

Overlaid on these negative prospects for employment, consumption, business investment is the intensification of economic crisis-related problems.

Rent Evictions, Child Care & Education Chaos

There is an imminent crisis in rents affecting tens of millions. At the peak in April, it is estimated that roughly one-third of the 110 million renters in the US economy had stopped making rent payments due to the COVID-related shutdowns of the economy. The CARES ACT, passed in March, provided forbearance on rental payments, although perhaps as many as 20 states failed to enforce it. That forbearance directive expires at the end of July, with as many as 23 million rent evictions projected in coming months. A major housing crisis is thus brewing, as well as the second wave of job layoffs.

A combined education-child care crisis is about to occur almost simultaneously. The K-12 public education system is approaching chaos, as school districts plan to introduce remote learning on a major scale in order to deal with the renewed COVID-19 infection and hospitalization wave. The heart of the crisis is that tens of millions of US working class families dependent on two paychecks to survive economically cannot afford to accommodate school district practices for remote learning—especially for young children in the K-6 grade levels. Even if such families could afford to pay for expensive child care, the current US child care system is far from being able to accommodate them. Many minority and working class households, moreover, lack the computers and networking equipment, or even the requisite skills to set it up, to enable their children participate in remote learning.

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Several forces are driving the shift to remote learning: school district fears of liability actions by parents if children become ill, the significant cost of ensuring disinfected classrooms, the lack of classroom space to allow distance learning on site, and the growing concern of teachers regarding their own exposure to infection. At least 1.5 million public school teachers are over age 50 and have health conditions that put them at greater risk of serious infection, should they attend closed-in classroom environments.

The child care plus K-12 education crisis will likely erupt within months on a major scale. Chaos in education is around the corner.

This fall, higher education—colleges and universities—will also experience chaos of their own kind. While distance learning will not be as serious an implementation problem as it will in K-12 levels, costs from the pandemic will force many smaller, private colleges into bankruptcy, consolidation or closure. Public colleges’ funding problems will require them to sharply reduce available services. Remote education will create a two-tier system of higher education—educational services delivered remotely and those of a more traditional nature on campus; or a hybrid of both.

However, demand for higher education services will likely decline sharply in the short term, during which higher education will experience a devastating decrease in tuition and other sources of college revenues. Some estimates show a third of freshmen plan to take what’s called a ‘gap year’: i.e. accept entrance but not attend for a year. That’s a massive revenue loss. Some estimates foresee a 15%-30% decline in new student attendance, with another 5%-10% decline in transfer students, and a similar decline of 5%-10% in continuing students. In addition, the attendance by international students, the ‘cash cow’ for most colleges, will also decline sharply due to the Trump administration’s new rules.

Still other developments will sharply reduce college revenues. Students forced to attend classes via remote learning will demand lower tuition. One can expect a wave of legal suits as students seek to ‘claw back’ full tuition expenses. Other secondary sources of college revenues—from fees, on-campus room and board, endowment earnings and gifts, and sports revenues—also spell a looming revenue crunch.

A wave of college consolidations and closures is inevitable. And with student loan debt at $1.6 trillion it is unlikely that the federal government will introduce new aid through that channel. Nor will States increase their subsidization of public colleges, given the severe state budget deficits on the horizon.

In short, the economic crisis is about to assume more socio-economic dimensions and character: rent, child-care, education chaos will soon overlay the continuing unemployment problem and worsening recession. Social and political discontent, frustration, and anxiety are almost certainly to rise in turn in coming months as a consequence.

Global Recession & Sovereign Debt Defaults

The weakness of the global economy is yet another factor likely to ensure the US economy’s W-shape trajectory. As noted previously, with 90% of other countries in recession, global demand for US exports will remain weak or declining. In addition, global supply chains have also been severely disrupted by the health crisis, or even broken, and will not be restored soon. The global economy is suffering from deep problems of both demand and supply. This too is a unique historical event. Never before have demand and supply problems occurred congruently. Together, they increase the potential for a global depression.

Commodity producing economies have been hard hit, especially oil and metal producing countries. Many were in a recession well before the COVID health crisis. Global trade in general had stagnated, registering little to no growth in 2019, for the first time since modern records were kept. Many countries had over-extended their borrowing, expanding their sovereign debt loads during the last decade. This was money capital borrowed largely from western banks and capital markets (i.e. shadow banks).

Now, with global trade flat and declining, and prices for their export goods deflating in price as well, these debt-extended countries cannot earn sufficient income from exports in order to pay the principal and interest on their debt. As a result, several countries in the worst shape may soon default on their debt payment to western banks, hedge funds, private equity firms, and so on. Debt defaults potentially mean the same western financial institutions that loaned the funds now experience financial crises in turn. In such a manner, financial instability events abroad are often transmitted to the domestic US economy through its banking system. It would not be the first time, moreover, that foreign bank crashes have spilled over the US and rest of the world economy and in the process significantly exacerbated a recession already underway.

Theoretically, countries experiencing severe sovereign debt crises could borrow from the International Monetary Fund. However, the IMF has nowhere near the funds to accommodate multiple large sovereign defaults that occur simultaneously. Nor is it likely that the US and Europe will increase the IMF’s funding to enable it to do so. Once it becomes clear the IMF cannot handle a crisis of such potential dimensions, the global capitalist economy will slip even further toward global depression.

The further deterioration now already occurring in economic relations between the US and China may also potentially impact the Great Recession in the US, and ensure its continued W-Shape recovery. Trump’s trade pact with China signed December 2019 has proven thus far a colossal failure. The president declared at the deal’s signing it would mean $150 billion in China purchases of US goods in 2020—especially farm products, oil & gas, and manufactured goods. At mid-year, China has purchased only $5 billion of the agreed $40 billion in farm products and only $14 billion of $85 billion in US manufactured goods. Trump’s promised $150 billion was never agreed to by China, even before the Covid pandemic struck the US economy in 2020. China never agreed to a dollar value of purchases of US exports, but announced it would purchase based on conditions in 2020-21. Trump’s $150 billion was typical Trump misrepresentation of a deal never made. At best China would purchase perhaps $40 billion in agricultural goods—i.e. about the level of it purchases before Trump launched a trade war with it in March 2018. Failure to deliver his exaggerated public promise in 2020 Trump turned on on China and embraced further his anti-China hard line advisors on trade and other matters. The former ‘trade war’ with China will likely transform now, in the wake of Covid, into a broader economic war with China. Furthermore, the deterioration of relations with China, set in motion by the current recession and the collapse of global trade, shows signs of spilling over to other political and even military affairs.

Permanent Industry Transformations

The COVID health crisis is accelerating the transformation of entire industries and sectors of the economy, US and global. As noted above, household consumption patterns are already changing fundamentally and will continue as changed even after the health crisis passes. Entire industries will shrink as a consequence. Company consolidations and downsizing are inevitable in airlines, cruise lines, and even public land transport. So too will companies fail, consolidate and restructure in the hospitality, leisure and hotel industries, in mall-based retail establishments, inside entertainment (movies, casinos, etc.) to name but the obvious. Sports and public entertainment companies are struggling to redefine their business models and how they bring their ‘product’ to the public for consumption. Even education—public and private—is undergoing a radical shift. Not so obvious is similar fundamental change in oil & energy industries, and later as well in manufacturing as supply chains are slowly returned to the US economy.

Not only will these changes significantly (and often negatively) impact employment levels and wage incomes, but business practices as well. Already businesses are instituting new cost cutting practices under the pressure of the health crisis and shutdowns. These practices will become permanent. And since much of the practices and cost cutting will focus on workers’ pay and benefits, more of what economists call ‘long term structural unemployment’ will result—in addition to the current ‘cyclical unemployment’ occurring due to the current recession.

An historic consequence of the current Great Recession precipitated by the COVID-19 health crisis is the accelerating introduction underway of what some call the Artificial Intelligence revolution. AI is about cost-cutting. It’s about new data accumulation, data processing and statistical evaluation, to allow software machines to make decisions previously made by human beings. AI will eliminate millions of low level decision-making by workers in both services and manufacturing. A 2017 report by the business consulting firm, McKinsey, predicted no less than 30% of all workers’ occupations will be severely impacted by AI by the end of the present decade. 30% of jobs will either disappear or have their hours reduced significantly. That means less wage income and less consumption still.

The important linkage to the current Great Recession 2.0 is that the introduction of AI by businesses will now speed up. What McKinsey formerly predicted for the late 2020s decade will now take place by mid-decade. The economic consequences for the next generation of US workers, the late Millennials and the GenZers will be serious, to say the least. After decades of the permeation of low pay, low benefits ‘contingent’ part time and temp jobs since the 1990s, after the impact of the 2008-09 crash and aftermath on employment, after the acceleration of ‘gig’ jobs with the Uberization of the capitalist economy since 2010, and after the even more serious negative economic effects of the current Great Recession 2.0, the tens of millions of US workers entering the labor force today and in coming years will have to face the transformation of another 30% of all occupations. The future does not portend very well for the 70 million millennials and GenZers. US neoliberal economic policies and the Great Recession 2.0 is accelerating the long term structural unemployment crisis of both the US and the global capitalist economy.

Return of Fiscal Austerity

The US federal budget deficit under Trump averaged more than a trillion dollars annually during his first three years in office. The federal national debt at the end of 2019 was $22.8 trillion. As of July 2020 it has risen to $26.5 trillion—and rising. Earlier projections in March were that it would increase by $3.7 trillion in 2020. That has already been exceeded. So, too, will projections for 2021, or another $2.1 trillion. The deficit and debt will likely rise to more than $4 trillion in this fiscal year and another $3 trillion in 2021. That means the current national debt within 18 months will reach $30 trillion. And that’s not counting the debt level rise for state and local governments, already $3 trillion; nor the debt carried on the US central bank, the Federal Reserve, balance sheet which is scheduled to rise another $3 trillion at minimum.

The point of presenting these statistics is that the US elites, sooner or later, will introduce a major austerity program. It will likely come later in 2021. And it will make little difference whether the administration that time is headed by Democrats or Republicans. It will come and it will target social security, Medicare, Medicaid, Obamacare, education, housing, transport and other social programs.

A The first Great Recession provides a historical precedent. Obama’s recovery program in January 2009 provided for $787 billion in stimulus. But the joint Republican-Democrat austerity agreement introduced in August 2011 took back nearly twice that stimulus, or $1.5 trillion, in 2011-13. That austerity contributed significantly to the W-shape recovery from the 2008-09 economic crash and contraction—i.e. the first Great Recession. With the current deficit surge of $6 trillion to date, likely to increase to $9 to $10 trillion, the US economic elites will no doubt pursue a new austerity regime at some point within the next few years. That austerity will, like its predecessor, ensure at best a W-shape recovery typical of Great Recessions. At worst, it may prove the final event that pushes the US economy into another Great Depression.

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Financial Instability

Those who deny that the US and global economy have already entered a second Great Recession offer the argument that the 2008-09 crash and recession was caused by the banking and financial crash of 2008-09, and therefore, since there has not yet been a financial crash, the economy at present is not in another Great Recession. But they are wrong.

Great Recessions are always associated with a financial crisis, but that crisis need not precede the deep contraction of the real, non-financial economy. The COVID-19 pandemic has played the role of a financial crash in driving the real economy into a contraction that is both quantitatively and qualitatively worse than a ‘normal’ recession. Furthermore, a subsequent banking system-financial crash is not impossible in the coming months, although not yet likely in 2020.

The preconditions for a financial crisis are in development. It won’t be precipitated by a residential mortgage crisis, as in 2007-08. But there are several potential candidates for precipitating a financial crash once again. Here are just a few:

• The commercial property sector in the US is in deep trouble. Commercial property includes malls, office buildings, hotels, resorts, factories, and multiple tenant apartment complexes. Many incurred deep debt obligations as they expanded after 2010 or just kept operating by accruing more high cost debt when they were unprofitable. Today they are unable to continue servicing (i.e. paying principal and interest) on their excessive debt load. Many have begun the process of default and chapter 11 bankruptcy reorganization. Banks and investors hold much of the commercial property debt that will never be repaid. Excess derivatives (credit default swaps) have been written on the debt. A debt crisis and wave of defaults and bankruptcies in 2020-21 in the commercial property sector could easily precipitate a subprime mortgage-like debt crisis as occurred in 2008-09. And derivatives obligations could transmit the crisis throughout the banking system—as it did in 2009. Regional and small community banks in the US are particularly vulnerable.
• The oil and gas fracking industry, where junk bond and leverage loan debt had already risen to unstable levels by the advent of the COVID crisis. The collapse of world oil and gas prices—which began before the COVID-19 impact and continues—will render drillers and others unable to generate the income with which to service their debt. Already more than 200 companies in this sector are in default and bankruptcy proceedings. Again, regional banks that financed much of the expansion of fracking in Texas, the Dakotas, and Pennsylvania will be impacted severely by the defaults. Their financial instability could easily spread to other sectors of banking and finance in the US.
• State and local governments, should Congress fail to appropriate sufficient bailout funding in its next round of fiscal spending in July 2020. State and local governments are capable of default and bankruptcy—unlike the Federal government, which is not. The US has a long history of state defaults associated with the onset of Great Depressions. This time around, state financial instability will quickly spill over to public pension funds, and from public to private pensions, and from there to the municipal bond markets with which state and local governments raise revenue by borrowing to fund deficits.
• Global sovereign debt markets, as previously noted. Defaults on massive debt accumulated since 2010 by many countries could result in serious contagion effects on the private banking systems of the advanced economies, including the US, Europe, and Japan. Should the IMF fail to contain a chain of sovereign debt crises that could follow in the wake of the current Great Recession, a chain reaction of defaults across emerging market economies in particular has the potential to precipitate a global financial crisis.

History shows that financial crises often originate from unsuspected corners of the economy. The above candidates are the ‘known unknowns’. There may also lurk in the bowels of the capitalist global financial system still more ‘unknown unknowns’—i.e. what are sometimes called ‘black swan’ events.

Political Instability

The US and other countries are on new ground in terms of potential political instability. The piecemeal curtailment of democratic and civil rights has been progressing at least since the mid- 1990s. In the 21st century it has been accelerating, both in the US and across the globe. Recent years have seen a growing public confrontation between contending wings of the capitalist elites and their political operatives. Institutions of even limited capitalist democracy are under attack and atrophying. And now political instability is growing as well at both the institutional and grass roots levels. One should not underestimate the potential for even more intense political confrontation among elites, or between segments of the US population itself, from having a negative impact on the current economic crisis and 2nd Great Recession. A Trump ‘October Surprise’ or a November 2020 constitutional crisis are no longer beyond the realm of the possible, but even likely.

The expectations of both households and business may serve as transmission mechanisms propagating political instability into more economic and financial instability. Political instability has the effect of freezing up business investment and therefore employment recovery. It has the further effect of causing households to hoard what income they have and raise the savings rate—at the expense of consumption. It also leads to government inaction on the policy necessary to provide stimulus for recovery.

On a global front, political instability may even assume a global dimension. History in general, and US history in particular, reveals that US presidents seek to divert public attention from domestic economic and social problems by provoking foreign wars. Targets for US attack, in the short term, are Iran and Venezuela—especially the latter, which is more susceptible to US military action. But tomorrow, in 2021 and after, it could well be Russia (Ukraine or Baltics US provocations), North Korea (a US attack on its nuclear facilities) or China (a US naval confrontation in the South China sea)—irrespective of the unlikely success of such ventures.

Like another financial-banking crash, a major political instability event—domestic or foreign—could easily send an already weak US economy struggling in the midst of a Great Recession into the abyss of the first Great Depression of the 21st century.

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The American world that Covid-19 reveals.

The Severe Acute Respiratory Syndrome (SARS-CoV-2) virus, which causes Covid-19, seemed to emerge from deepest history, from the Black Death of the 14th century and the “Spanish Flu” of 1918. In just months, it has infected more than 1.5 million people and claimed more than 88,000 lives. The virus continues to spread almost everywhere. In no time at all, it’s shattered the global economy, sent it tumbling toward a deep recession (possibly even a depression), and left much of a planet locked indoors. Think of it as a gigantic stress test.

Doctors use stress tests to assess the physical fitness of patients. Governments use them to see whether banks have enough cash in reserve to honor their obligations to depositors and creditors in economic crises. The International Monetary Fund conducts stress tests on national financial systems. Now, like several other countries, notably Italy and Spain, the United States faces a different, far tougher stress test imposed by Covid-19. The early results are alarming.

Since the first infection in the U.S. came to light in the state of Washington on January 20th, the disease has spread across the country at a furious pace. Hospitals, especially in New York City, have been deluged and are already at the breaking point. And things will get worse — and not just in New York. Yet the most basic necessities — protective masks, gowns, rubber gloves, and ventilators — are so scarce that they are being reused, further increasing the risk to healthcare workers, some of whom have already contracted Covid-19 from patients. The experiences of China, Italy, and other countries suggest that the disease will take the lives of many of these brave people; indeed, some here have already paid the ultimate price.

And this pandemic will subject our political system, economy, and society to a set of stress tests into the distant future.

The “Wartime President”

By mid-January, the news from China made it obvious that the virus would spread across borders and soon reach the United States. The sheer volume of travel between the two countries should have made that reality all too obvious. Nearly three million Chinese visitors came to this country in 2018 and 2.5 million Americans, counting only tourists, traveled to China. In fact, we now know that, in the weeks after Covid-19 was disclosed in Wuhan, China, more than 430,000 people flew here from that country, thousands of them from Wuhan itself — and this continued even after Donald Trump put his much-vaunted travel measures in place. (“I do think we were very early, but I also think that we were very smart, because we stopped China,” he nonetheless claimed.)

In addition, President Trump and his team remained unruffled, never mind that the country wasn’t remotely prepared for what was clearly coming. Despite secret intelligence reports as early as January warning that Chinese leaders were understating the coronavirus threat’s severity, the administration failed to develop any kind of emergency plan to prepare for the pandemic.

That proved to be a monumental blunder. China confirmed its first coronavirus fatality on January 11th. An infection was first reported in Washington state barely a week later. More than a month after that, at a February 26th press conference, President Trump nonetheless dismissed the seriousness of the disease, noting that seasonal flu kills as many as 69,000 in the U.S. annually. He failed to mention that the virus may have a fatality rate up to 10 times higher than the flu and that a Covid-19 vaccine was nowhere in sight. Only 15 infections had been reported here, he claimed breezily, and “when you have fifteen people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done.”

Close to zero? By mid-March, infections had risen to 1,200 (which soon would prove a drop in the pandemic bucket as “America First” acquired a new meaning). Yet the president called that number inconsequential. Presidential Medal of Freedom recipient Rush Limbaugh did him one better: “Yeah, I’m dead right on this. The coronavirus is the common cold, folks.” He accused the media of exaggerating “in an effort to get Trump.”

True to form, the president was quick to personalize the pandemic. He preened about how scientific experts marveled at his grasp of the complex details of virology and the way supposedly awestruck doctors asked, “How do you know so much?” The president’s self-effacing answer: natural ability, possibly even a genetically-derived aptitude, thanks to “a great, super-genius uncle” who’d worked at MIT.

He declared himself a “wartime president,” despite the lack of any evident strategy to vanquish this particular foe. His response when governors of hard-hit states began pleading for urgent help from the federal government: “Respirators, ventilators, all of the equipment — try getting it yourselves.” The governors, he groused, were “complainers,” who should have stockpiled what they were now begging for. Thin-skinned as ever, he told Vice President Mike Pence that those like Governor Gretchen Whitmer, “the woman from Michigan,” who weren’t appreciative enough of his help didn’t even deserve to have their phone calls returned, at least by him. Inevitably, he had a Limbaugh-like conspiracy theory ready: fear-mongering Democrats were exploiting the Covid crisis to bash him. The virus, he said during a campaign rally — yes, he was still holding them in late February — was their “new hoax.” Fox News and the president’s base duly ran with this theme.

Despite the warning of epidemiologists that the virus’s transmission rate would skyrocket unless Americans were scrupulous about “social distancing,” Trump tarried (and to this day can’t keep his distance from anyone at his news conferences). He failed to use the presidential bully pulpit to disseminate this advice quickly.

Nor, despite an evident shortage of medical supplies and equipment, did he act decisively. The 1950 Defense Production Act (DPA) gives him the authority to order private companies to produce essential medical supplies and equipment, including ventilators, and then distribute them in ways that would prevent hard-hit states from outbidding each other. He rejected widespread calls to use the Act. “We’re not,” he quipped, “a country based on nationalizing our business. Call a person over in Venezuela. How did the nationalization of their businesses work out? Not too well.” Of course, no one had called for a government takeover of American companies. Trump did eventually invoke the DPA reluctantly in late March but has used it sparingly and ineffectively.

Continuing to downplay the Covid-19 threat, he declared during a March 31st Fox News “virtual town hall” on the coronavirus that he would love to have the economy up and running two weeks later on Easter Sunday with “packed churches all over the country.” That was, of course, a pipedream: by March 30th, the Centers for Disease Control and Prevention (CDC) had already reported more Covid-19 cases — 140,904 — here than in any other country and 2,405 deaths. (And yet, in early April, Trump was still talking about the need to fill sports stadiums “sooner rather than later”; the cure, he said, cannot “be worse than the problem itself.”)

As of April 11th, the CDC’s tally had risen to 492,416 infections and 18,559 fatalities, while John Hopkins University’s tracking site reported 526,296 infections and 20,463 deaths (the highest numbers in the world in both categories). Physicians and public health specialists have, however, warned that the toll could already be much higher given the shortage of test kits. President Trump seemed finally to be grasping the gravity of the pandemic, thanks in part to the patient tutelage of specialists like Dr. Anthony Fauci, the long-time head of the National Institute of Allergy and Infectious Diseases. But put this in your no-good-deed-goes-unpunished file: on social media, radio, and television, Fauci has been pilloried by Trump fans for supposedly undercutting the president or, as one acolyte tweeted, for trying to create a “Police State Like China in Order to Stop the coronavirus.” Fauci even started receiving death threats.

Unable to stay out of the limelight, Rudolph Giuliani, evidently seeking to displace Dr. Fauci as Trump’s top coronavirus expert, took to Twitter, practicing medicine without a license and touting the anti-malarial drug hydroxychloroquine as a sure-fire cure for the disease. This despite doctors’ warnings that the drug’s efficacy was unproven and that it could have fatal results, as well as the American Medical Association’s counsel that a rush to use it could lead to hoarding and reduce its availability for treating people with ailments for which it’s actually been approved. The president has followed Dr. Giuliani’s advice on hydroxychloroquine, repeatedly hailing it “the biggest game-changer in the history of medicine.”

At a March 29th press conference, Trump finally ditched his goal of restarting the economy by Easter and asked non-essential workers to stay home until the end of April, venturing outdoors only when essential. The Covid-19 death toll could, he now conceded, end up ranging between 100,000 and 240,000, a number, he asserted, that would only prove “we all, together, have done a very good job” given that he’d heard estimates of “up to 2.2 million deaths and maybe even beyond that” if the pandemic were not dealt with effectively here. Later, he allowed that even 240,000 deaths in the U.S. could be a low end figure. Then he again praised himself for taking decisive steps — assumedly by denying for weeks that the virus was a massive problem, predicting that it would perish in the summer heat, and assuring Americans that you could, in any case, cure it with anti-malarial drugs, which he “may take” himself. Compared to two million possible deaths, 240,000 was, he boasted, “a very low number.” Give him credit for the math, at least: 240,000 is indeed a far lower figure than two million.

Economic Pain—Acute, with More to Come

As the stock market plunged—it had lost more than a third of its value by the end of March—and it became undeniable that the fallout from the virus would cause the economy to crater, Congress passed a $2 trillion-plus Coronavirus Aid, Relief, and Economic Security (CARES) bill on March 27th, which the president signed within hours. The main provisions of that mammoth, nearly 900-page piece of legislation included:

• $1,200 to people with annual incomes below $75,000;
• $2,400 to those who file taxes jointly and earn less than $150,000;
• $500 per child for households with dependent children;
• 13 weeks of unemployment compensation beyond individual state government limits plus a weekly supplement of $600;
• a 50% payroll tax credit up to $10,000 for businesses that continued to pay non-working employees and whose revenues have shrunk by at least 50% compared to a year ago;
• loans to small businesses to help them cover the costs of employees’ salaries and health insurance;
• a $30.75 billion “Education Stabilization Fund,” providing various forms of economic assistance to hard-pressed students;
• six-month deferments on federal student loans and the suspension of penalties for overdue payments;
• $500 billion in loans and guarantees for corporations.

These were certainly much-needed moves and $2.2 trillion was hardly chump change. Still, the number of the unemployed may far exceed current expectations as the economy more or less shuts down. Some economists estimate that the gross domestic product could eventually shrink by a staggering 30%, with unemployment reaching at least 32%, or 47 million people, a figure that would surpass the 24.9% peak during the Great Depression of the 1930s. The CARES stimulus package, geared significantly to big banks and big corporations, may not suffice to meet the needs of an increasing number of jobless people. At least 6.6 million had filled unemployment claims by end of March alone. By early April, the number edged close to 17 million, and millions more will follow. And who knows how much of the $500 billion allotted to corporations will be devoted to protecting workers’ jobs and benefits when less than 10% percent of it has strings attached?

Because the United States lacks the strong social safety nets of European countries, people with meager savings will be especially vulnerable.
Furthermore, some of the measures in the CARES Act to help the jobless expire on July 30th and others at the end of the year, although it could take far longer to truly contain the virus. The government could pony up more money, but the bill itself has no renewal clause, which means that we could be in for another grim legislative battle. Senate Majority Leader Mitch McConnell has already stated that he’ll oppose rapid follow-on legislation until the effects of the current bill are known, lest Democrats “try to achieve unrelated policy items they would not be able to pass.”

The intricately linked global economic system has broken down in just a couple of months, so time isn’t on the side of the unemployed. In addition, the maximum duration of unemployment benefits varies strikingly by state. In North Carolina, it’s only 12 weeks; in Massachusetts, 30. Likewise, the maximum weekly amount paid ranges from $823 in Massachusetts to $235 in Mississippi. Unemployment insurance certainly helps, but the Center on Budget and Policy Priorities calculates that it averages just over $300 a week nationally, covering only 46.6% percent of a worker’s former earnings. Yet if Covid-19 leaves many millions without jobs well beyond July 30th, or perhaps even the end of the year, they will have to pay for food, rents or mortgages, and utility bills, to mention just a few of the basics.

Households with incomes in the bottom 20% will face a particularly hard struggle, to say nothing of the 38 million people already living in poverty. Monthly rent in 2018 averaged $1,450 and monthly food costs (not counting spending in restaurants) $363. The average savings of Americans — excluding investments, retirement accounts, and homes — totaled only $4,830 that year. Unsurprisingly, approximately 27% percent of them report that may not be able to cover even a month’s worth of basic expenses; another 25% say that they could hang on for three months. Then what? Already, laid-off low-wage workers, who could barely meet their basic expenses when they had jobs, have become desperate, while those still employed who work in restaurants and hotels hit hard by social distancing have seen their hours cut back and their tips diminished.

No one knows just how bad things could get, how many people will succumb to Covid-19, or what heights the jobless rate will reach, but of this much we can be certain: the virus’s wave hasn’t crested yet and may not for weeks, or even months. And because the United States lacks the strong social safety nets of European countries, people with meager savings will be especially vulnerable. Apart from the trauma of suddenly losing jobs, people filing unemployment claims have already been wearied by chronically busy phones and crashing websites as unemployment offices face a tsunami of a sort never previously imagined.

The Social Fabric Under Stress

The loss of a job doesn’t just create economic insecurity, it can also produce psychological stress and a diminished sense of self-worth. Covid-19 is likely to leave startling numbers of Americans feeling bereft. Social isolation may provide welcome solitude for a while (at least for those who can half-afford it). Before long, though, it will likely disorient people, particularly the elderly and those who are alone and cut off from friends and family, not to speak of exercise, eating out, or even trips to the local library. Zoom and Skype won’t, in the long run, qualify as the real deal. Well before Covid-19 made its appearance, the Health Resources and Services Administration (HRSA) reported that a fifth of Americans already felt isolated and two out of five claimed to lack “meaningful” social networks.” Loneliness, the HRSA concluded, had become an “epidemic” — and that was before an actual epidemic hit. Medical professionals concurred at the time. Imagine what they’d say now.

Among other things, the coronavirus experience will undoubtedly increase the risk of suicide (especially given the rush to purchase weaponry), already at epidemic levels. In 2017 alone, 47,000 Americans killed themselves. By then, suicide had already become the 10th leading cause of death in the United States, claiming more lives than homicides or motor vehicle accidents. The suicide rate has increased for the last 13 years straight. Among youth, it has jumped 56% in the past decade alone, among blue-collar workers by 40% in less than two decades. Sixty thousand veterans have died by their own hand since 2008, a suicide rate 1.5 times higher than for other adults.

By ratcheting up stress, dejection, and isolation, Covid-19 could also increase domestic violence, the neglect and mistreatment of children, and drug and alcohol abuse, especially among recovering addicts. Globally, the virus has also turbocharged demagogues, for whom the pandemic provides an opportunity to commit hate crimes and engage in scapegoating, racial tropes, and weird conspiracy theories, while using social media to whip up fear, suspicion, and animosity, and deepen social divisions. Admittedly, such problems can’t all be chalked up to the pandemic. Still, they could all get worse as this insidious virus continues to wreak havoc.

Now for the Good Part

Crises highlight and exacerbate a society’s problems, but they also put some of its best attributes on display. Covid-19 hasn’t been an exception. Doctors, nurses, hospital staff, and first responders knowingly endanger their lives daily to care for those sickened by the virus. By April, 25,000 healthcare workers from other parts of the country had converged on New York State, the pandemic’s epicenter, to help. Volunteers have mobilized nationwide to sew masks for hospital workers, stepping in where the government has failed. People have found ways to help elderly neighbors. Strangers have been engaging in acts of kindness and generosity toward one another—an acknowledgement that we confront a shared problem that will consume much more than our livelihoods if we don’t stand together (social distancing aside). Civic groups, non-profit organizations, and companies are pitching in to help in a variety of ways. Governors — Andrew Cuomo of New York, Mike DeWine of Ohio, Larry Hogan of Maryland, Gavin Newsom of California — have been working tirelessly to protect their states, showing that not all parts of the political system are as dysfunctional as Washington, D.C., today.

At some point, we’ll emerge into a different world. What it will be like no one can yet know. Covid-19 has certainly created much despair but reasons for gratitude and admiration as well—something to keep in mind as this terrible stress test continues without letup.

Entering a university should be, to some degree, unsafe.  Away from the gazing eyes of parents, institutional structures for the child, the entrant faces, or at least should face, the prospect of something truly daunting: To think, to entertain discomfort, to see old ideas and presumptions die gloriously in the inferno of learning.  None of this is easy, but all of it should be encouraged. 

The modern university is, however, an infantilizing coddle of an experience, a managerial pit-heap, and a spreadsheet-directed mire of gobbledygook.  It seeks cash.  It has “alignments” with industries.  It embraces “Five Year Plans” which would warm the boilersuit dictators of old.  It hires the legions of public relations as a matter of course.  All this serves to encourage an absence of thought, the dolling out of degrees for purchase, and a range of other additions that make the modern university susceptible to manipulation.

With all this in mind, the China-Australia “education wars” (dare one even go that far?) serve to show that learning is the last thing that matters in the debate.  Relations between Beijing and Canberra have cooled.  Australia’s education sector, having buried itself so deeply in its reliance on Chinese students, is bleeding.  Jobs are for the chop.  And the insistence by the Morrison government in taking the lead on the China containment agenda, from limiting the reach of Huawei to the issue of an inquiry into the origins and handling of the novel coronavirus, has served to irritate and estrange.

Retaliation has been forthcoming.  A trade war in all but declaration has broken out, a surely devastating thing for “the world’s most China-dependent economy”.  Beijing has imposed tariffs on Australian barley.  Beef exports from four Australian abattoirs banned.  Now, it is the turn of Australian universities and the Chinese student market.

China’s Education Bureau has decided to change its tune on the Australian education market, warning students that resuming classes in July might endanger them.  Students should “conduct a good risk assessment and be cautious about choosing to go to Australia or to return to Australia to study.”  It is also all tease and prodding, reversing the entire narrative on COVID-19.  If you do go to Australia, you might be at risk of the pandemic.

This warning also chimed with one that had been issued by the Chinese Ministry of Culture and Tourism on June 6. 

“Due to the impact of the COVID-19 pandemic, racial discrimination and violence against Chinese and Asian people in Australia have seen a significant increase.”

Australia’s Education Minister Dan Tehan, a truly rough, unwashed piece to behold, made sure to bring out the pom poms for the sector he is meant to be representing in a statement to the ABC. 

“Australia is a popular destination for international students because we are a successful, multicultural society that welcomes international students and provides a world-class education.” 

All of these platitudes underscore the one thing Tehan and Australian university Vice-Chancellors understand: cash.

As for the issue of pandemic safety, Tehan reminded any critics that Australia has been fairly credible when it comes to stifling the COVID-19 spread. (Cue the self-flattery, back-patting, congratulations.) 

“Our success at flattening the [coronavirus] curve means we are one of the safest countries in the world for international students to be based in right now.” 

Give the man an advertising position.

Students have found themselves in a geopolitical sandwich, and an unpleasant one it is too.  Chinese students have been telling the ABC that the issue is one of indignation between political representatives rather than the “people”, who have more important things to do, such as tolerate the increasingly commercialised tertiary sector.  One Mr Zhen, who is studying a Masters degree in biomedicine at the University of Adelaide, was keen to stay apolitical.  The June 6 travel warning had been unnecessary; the further warning for returning students had “gone too far”.  Another University of Adelaide student, postdoctoral candidate Primo Pan, conceded to enduring a few instances of racism during the pandemic, though had no desire to throw in the towel. 

“There was an increase in racism targeting Chinese people in Australia, but it’s still a safe place where your personal security is not threatened.”

Australian universities have their palace defenders.  He-Ling Shi of Monash University, knowing which side his bread is buttered on, insists that

“Australian universities have taken various measures and tried to help overseas students… and also facilitated their studies in Australia.” 

This is all too rosy, and even disingenuous. International students have been excluded from protective income measures that would have made retaining Australia as a destination viable.  The approach in terms of assistance packages has been piecemeal, shoddy and deeply bureaucratic.  Universities still demand top dollar from their students, and a generous, collective waiver of fees has not been embraced.  Such students are currency, and the contempt towards them shows.

The Chinese Education Bureau is correct, but in a way quite different to its assumption.  Students are being harmed, but not in the way they might realise.  They are certainly not being made to feel unsafe through rigorous academic standards of the sort Tehan boasts about.  Australian universities have adjusted admission standards and tailored courses that are less challenging in order to increase and retain foreign students.  Those exposing this farce have been attacked.  The function of learning has been replaced by the nature of process and delivery. 

A high-profile European pathologist is reporting that he and his colleagues across Europe have not found any evidence of any deaths from the novel coronavirus on that continent.

Dr. Stoian Alexov called the World Health Organization (WHO) a “criminal medical organization” for creating worldwide fear and chaos without providing objectively verifiable proof of a pandemic.

Another stunning revelation from Bulgarian Pathology Association (BPA) president Dr. Alexov is that he believes it’s currently “impossible” to create a vaccine against the virus.

He also revealed that European pathologists haven’t identified any antibodies that are specific for SARS-CoV-2.

These stunning statements raise major questions, including about officials’ and scientists’ claims regarding the many vaccines they’re rushing into clinical trials around the world.

They also raise doubt about the veracity of claims of discovery of anti-novel-coronavirus antibodies (which are beginning to be used to treat patients).

Novel-coronavirus-specific antibodies are supposedly the basis for the expensive serology test kits being used in many countries (some of which have been found to be unacceptably inaccurate).

And they’re purportedly key to the immunity certificates coveted by Bill Gates that are about to go into widespread use — in the form of the COVI-PASS — in 15 countries including the UK, US, and Canada.

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Dr. Alexov made his jaw-dropping observations in a video interview summarizing the consensus of participants in a May 8, 2020, European Society of Pathology (ESP) webinar on COVID-19.

The May 13 video interview of Dr. Alexov was conducted by Dr. Stoycho Katsarov, chair of the Center for Protection of Citizens’ Rights in Sofia and a former Bulgarian deputy minister of health. The video is on the BPA’s website, which also highlights some of Dr. Alexov’s main points.

We asked a native Bulgarian speaker with a science background to orally translate the video interview into English. We then transcribed her translation. The video is here and our English transcript is here.

Among the major bombshells Dr. Alexov dropped is that the leaders of the May 8 ESP webinar said no novel-coronavirus-specific antibodies have been found.

The body forms antibodies specific to pathogens it encounters. These specific antibodies are known as monoclonal antibodies and are a key tool in pathology. This is done via immunohistochemistry, which involves tagging antibodies with colours and then coating the biopsy- or autopsy-tissue slides with them. After giving the antibodies time to bind to the pathogens they’re specific for, the pathologists can look at the slides under a microscope and see the specific places where the coloured antibodies — and therefore the pathogens they’re bound to – are located.

Therefore, in the absence of monoclonal antibodies to the novel coronavirus, pathologists cannot verify whether SARS-CoV-2 is present in the body, or whether the diseases and deaths attributed to it indeed were caused by the virus rather than by something else.

It would be easy to dismiss Dr. Alexov as just another crank ‘conspiracy theorist.’ After all many people believe they’re everywhere these days, spreading dangerous misinformation about COVID-19 and other issues.

In addition, little of what Dr. Alexov alleges was the consensus from the May 8 webinar is in the publicly viewable parts of the proceedings.

But keep in mind that whistleblowers often stand alone because the vast majority of people are afraid to speak out publicly.

Also, Dr. Alexov has an unimpugnable record and reputation. He’s been a physician for 30 years. He’s president of the BPA, a member of the ESP’s Advisory Board and head of the histopathology department at the Oncology Hospital in the Bulgarian capital of Sofia.

On top of that, there’s other support for what Dr. Alexov is saying.

For example, the director of the Institute of Forensic Medicine at the University Medical Center Hamburg-Eppendorf in Germany said in media interviews that there’s a striking dearth of solid evidence for COVID-19’s lethality.

“COVID-19 is a fatal disease only in exceptional cases, but in most cases it is a predominantly harmless viral infection,” Dr. Klaus Püschel told a German paper in April. Adding in another interview:

In quite a few cases, we have also found that the current corona infection has nothing whatsoever to do with the fatal outcome because other causes of death are present, for example, a brain hemorrhage or a heart attack […] [COVID-19 is] not particularly dangerous viral disease […] All speculation about individual deaths that have not been expertly examined only fuel anxiety.”

Also, one of us (Rosemary) and another journalist, Amory Devereux, documented in a June 9 Off-Guardian article that the novel coronavirus has not fulfilled Koch’s postulates.

These postulates are scientific steps used to prove whether a virus exists and has a one-to-one relationship with a specific disease. We showed that to date no one has proven SARS-CoV-2 causes a discrete illness matching the characteristics of all the people who ostensibly died from COVID-19. Nor has the virus has been isolated, reproduced and then shown to cause this discrete illness.

In addition, in a June 27 Off-Guardian article two more journalists, Torsten Engelbrecht and Konstantin Demeter, added to the evidence that “the existence of SARS-CoV-2 RNA is based on faith, not fact.”

The pair also confirmed “there is no scientific proof that those RNA sequences [deemed to match that of the novel coronavirus] are the causative agent of what is called COVID-19.”

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Dr. Alexov stated in the May 13 interview that:

the main conclusion [of those of us who participated in the May 8 webinar] was that the autopsies that were conducted in Germany, Italy, Spain, France and Sweden do not show that the virus is deadly.”

He added that:

What all of the pathologists said is that there’s no one who has died from the coronavirus. I will repeat that: no one has died from the coronavirus.”

Dr. Alexov also observed there is no proof from autopsies that anyone deemed to have been infected with the novel coronavirus died only from an inflammatory reaction sparked by the virus (presenting as interstitial pneumonia) rather than from other potentially fatal diseases.

Another revelation of his is that:

“We need to see exactly how the law will deal with immunization and that vaccine that we’re all talking about, because I’m certain it’s [currently] not possible to create a vaccine against COVID. I’m not sure what exactly Bill Gates is doing with his laboratories – is it really a vaccine he’s producing, or something else?”

As pointed to above, the inability to identify monoclonal antibodies for the virus suggests there is no basis for the vaccines, serological testing and immunity certificates being rolled out around the globe at unprecedented speed and cost. In fact, there is no solid evidence the virus exists.

Dr. Alexov made still more important points. For example, he noted that, in contrast to the seasonal influenza, SARS-CoV-2 hasn’t been proven to kill youth:

[With the flu] we can find one virus which can cause a young person to die with no other illness present […] In other words, the coronavirus infection is an infection that does not lead to death. And the flu can lead to death.”

(There have been reports of severe maladies such as Kawasaki-like disease and stroke in young people who were deemed to have a novel-coronavirus infection. However, the majority of published papers on these cases are very short and include only one or only a small handful of patients. Moreover, commenters on the papers note it’s impossible to determine the role of the virus because the papers’ authors did not control sufficiently, if at all, for confounding factors. It’s most likely that children’s deaths attributed to COVID-19 in fact are from multiple organ failure resulting from the combination of the drug cocktail and ventilation that these children are subjected to.)

Dr. Alexov therefore asserted that:

the WHO is creating worldwide chaos, with no real facts behind what they’re saying.”

Among the myriad ways the WHO is creating that chaos is by prohibiting almost all autopsies of people deemed to have died from COVID-19. As a result, reported Dr. Alexov, by May 13 only three such autopsies had been conducted in Bulgaria.

Also, the WHO is dictating that everyone said to be infected with the novel coronavirus who subsequently dies must have their deaths attributed to COVID-19.

“That’s quite stressful for us, and for me in particular, because we have protocols and procedures which we need to use,” he told Dr. Katsarov. “…And another pathologist 100 years from now is going to say, ‘Hey, those pathologists didn’t know what they were doing [when they said the cause of death was COVID-19]!’ So we need to be really strict with our diagnoses, because they could be proven [or disproven], and they could be checked again later.”

He disclosed that pathologists in several countries in Europe, as well as in China, Australia and Canada are strongly resisting the pressure on them to attribute deaths to COVID-19 alone:

I’m really sad that we need to follow the [WHO’s] instructions without even thinking about them. But in Germany, France, Italy and England they’re starting to think that we shouldn’t follow the WHO so strictly, and [instead] when we’re writing the cause of death we should have some pathology [results to back that up] and we should follow the protocol. [That’s because] when we say something we need to be able to prove it.”

(He added that autopsies could have helped confirm or disprove the theory that many of the people deemed to have died of COVID-19 in Italy had previously received the H1N1 flu vaccine. Because, as he noted, the vaccine suppresses adults’ immune systems and therefore may have been a significant contributor to their deaths by making them much more susceptible to infection.)

Drs. Alexov and Katsarov agreed that yet another aspect of the WHO-caused chaos and its fatal consequences is many people are likely to die soon from diseases such as cancer because the lockdowns, combined with the emptying of hospitals (ostensibly to make room for COVID-19 patients), halted all but the most pressing procedures and treatments.

They also observed these diseases are being exacerbated by the fear and chaos surrounding COVID-19.

We know that stress significantly suppresses the immune system, so I can really claim 200% that all the chronic diseases will be more severe and more acute per se. Specifically in situ carcinoma – over 50% of these are going to become more invasive […] So I will say that this epidemic isn’t so much an epidemic of the virus, it’s an epidemic of giving people a lot of fear and stress.”

In addition, posited Dr. Alexov, as another direct and dire result of the pandemic panic many people are losing faith in physicians.

Because in my opinion the coronavirus isn’t that dangerous, and how are people going to have trust in me doing cancer pathology, much of which is related to viruses as well? But nobody is talking about that.”

We emailed Dr. Alexov several questions, including asking why he believes it’s impossible to create a vaccine against COVID-19.

He didn’t answer the questions directly. Dr. Alexov instead responded:

We also emailed five of Dr. Alexov’s colleagues in the European Pathology Society asking them to confirm Dr. Alexov’s revelations. We followed up by telephone with two of them. None responded.

Why didn’t Dr. Alexov or his five colleagues answer our questions?

We doubt it’s due to lack of English proficiency.

It’s more likely because of the pressure on pathologists to follow the WHO’s directives and not speak out publicly. (And, on top of that, pathology departments depend on governments for their funding.)

Nonetheless, pathologists like Drs. Alexov and Püschel appear to be willing to step out and say that no one has died from a novel-coronavirus infection.

Perhaps that’s because pathologists’ records and reputations are based on hard physical evidence rather than on subjective interpretation of tests, signs and symptoms. And there is no hard physical evidence that COVID-19 is deadly.

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