COVID-19 Pandemic Capitalism and Bonds

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Posted on Apr 22, 2020

COVID-19 Pandemic Capitalism and Bonds

The world as we knew it seemingly turned upside down overnight. With stay at home orders in place, we are no longer rushing to work each day, getting stuck in traffic, hustling to get the kids to school, and scrambling for time to take care of chores. This strange and abrupt stop to “business as usual” has shined a light on the capitalist systems that are now crumbling down, and offers us the chance to pause and ask what’s next?

Photo Credit: Allie Smith

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TRANSCRIPT is BELOW

Music: 

• Blue Dot Sessions – Messy Inkwell
• Blue Dot Sessions – Orie
• lBlue Dot Sessions – True Blue Sky
• Borrtex – Creeping
• AJ Lobo Loco – Pilgrim 2000
• Blue Dot Sessions – Enhanced Shaft
• Blue Dot Sessions – Curiously and Curiously
• Audiobinger – The Garden State

TRANSCRIPT

Anita Johnson this week’s host: Today on Making Contact.

Keeanga-Yamahtta TaylorI  t is important to name the problem because there are those who will tell us that markets can work, that we can fundamentally fix the problems in U.S. society without radical change. But there has never been a single moment in the history of this country where capitalism has not created enormous misery and oppression for tens of millions of ordinary people.

HOST: We are potentially entering a period of austerity in the U.S. at a level not seen since the Great Depression.

By mid April, over 22 million people had filed for unemployment benefits. And it’s unclear whether jobs and businesses that people left behind will still be there when Stay at home orders are lifted.  Keeanga-Yamahtta Taylor believes this is the time to prioritize the collective good of Americans struggling to survive due to the absence of a functioning safety net—instead of providing no-strings-attached-corporate-bailouts.

Keeanga-Yamahtta Taylor : The scale of the Corona virus crisis is so profound that there is also now an opportunity to remake our society for the greater good while rejecting the pernicious individualism that has left us utterly ill equipped for the moment. The class driven hierarchy of our society will encourage the spread of this vicious virus unless dramatic and previously unthinkable solutions are immediately put on the table.

As Bernie Sanders has counseled. We must think in unprecedented ways. This includes universal health care, an indefinite moratorium on evictions and foreclosures, the cancelation of student loan debt, a universal basic income, and the reversal of all cuts to food stamps.

But emergency stop gaps also show what is possible if moratoriums on evictions and foreclosures are possible in the midst of a crisis. Why can’t they be possible in so-called normal times?

Host: Keeanga-Yamahtta Taylor believes this crisis could be the catalyst to remake our society into a true democracy that isn’t controlled by the ruling class. In this existing Covid-19 crisis we’ve seen countries not as wealthy as the US leading emergency relief efforts that support the health, safety and financial interests of their citizens during these most vulnerable times.

On April 9^th 2020, Keeanga-Yamahtta Taylor joined forces with fellow social activists and writers Naomi Klein and Astra Taylor to talk about how to beat Corona virus capitalism. Collectively, they lift up strategies for truly helping our neighbors, standing up for our rights and defending the environment.

Astra Taylor.

Astra Taylor The real pandemic here is capitalism Coronavirus COVID- 19, is an illness, but an unfathomable number of people in the United States alone are going to die of this disease.– Deaths that could be prevented because they’re not getting access to adequate medical care because of the shortage of ventilators, because of a shortage of staff, because they’re afraid to go see a doctor, because they don’t want medical debt.   Because our medical system is so confusing that they don’t even know where to get help. You know, you need referrals for everything. People are going to get sick if they work in the health care sector because they’re not given adequate mask and protective gear.

So there are so many stories already about the fact that doctors and nurses, not to mention the staff and the cleaners and people who sign patients in, and are either maskless or recycling paper masks or trying to bleach them and spray them with Lysol.

I mean, it be like, you know, a family trying to reuse a roll of toilet paper for a month. Right.

These are disposable products that people are being forced to to use and reuse. So, you know, and people are going to be getting sick because they’re going to their jobs. The many necessary, but many unnecessary jobs and being exposed to the disease because they’re not being offered protective gear on the job. They’re not being valued or taken care of. So, you know, this is a crisis that is not just biological. It’s not just about this new virus.

This new pandemic. It’s about the economic system we’re in. I mean, hospitals do not run with adequate resources. They’re you know, they have to run very close to the bone because administrators don’t want to pay for the extra staff. Right. So this is an economic problem that we’re facing. And it’s a tragedy. It’s a human tragedy because people are already dying.

Um today, as Naomi said you know, there is a massive corporate giveaway. There are a few tiny silver linings. But basically the number on the amount of public money that’s being given away is is absolutely astounding. There are estimates over 4.5 trillion dollars. You know, what that shows us is the money’s there.

The money has been there this whole time to do all sorts of other things with. We could have had beautiful universal health care. We could have had beautiful free education. We could have had paid sick leave. We could have had a jobs guarantee. All these things, you know, this whole question of how do you pay for it that we hear over and over again in the US is just total..bs.. Every time we hear that question, how are we going to pay for it? We should point to the actions that were taken today.

And we should actually hear in our heads what they’re really asking what just how are we going to profit from it? Because it’s not a question of paying for things. It’s always the question of, well, who’s going to benefit and who’s going to who’s going to profit. So the money was always there to do something different. And I think, you know, we’re seeing that at the federal level– I do think this goes to the point that we made about ideas, the ideas laying around– I do think we’ve seen some good ideas being picked up in really interesting ways.

So these are my little bits of hope. You know, we’re seeing, for example, the issue that the debt collective has been fighting for student debt cancelation. We had been fighting for this and fighting for a student debt abolition. And, you know, even the Republicans, even Mnuchin, you know, considered some degree of student debt cancelation. Ya know, the Department of Education here has paused collection on student loans and frozen interest. And the Democrats– They failed to succeed. –But were pushing for student debt relief as part of the package. So that’s one idea that has gained ground.

But on state level, on a city level, internationally, we’re seeing all sorts of interesting things happening. We’re seeing evictions being halted. We’re seeing bills be paused. We’re seeing some prisoners being let out. Right. We’re seeing transit be made free. We’re seeing meals be distributed. We’re seeing people suddenly get paid time off and sick leave. So there are all there are good ideas being taken up.

In fact, a friend and I just started a Google doc where we could try to keep track of all of these things. You know, somebody just  this afternoon put that rents aren’t being collected in Uganda, for example.

So all over the world, people are experimenting with better, more humane, sensible ideas about how to put the economy on pause to save lives.

Because, you know, it’s not the economy that needs to be saved.

It’s the economy that’s killing us right now.

So the problem is, I think ultimately about power. The problem is that people have no power in the United States because we don’t have money. And, you know, in 2008, there was a massive economic crisis caused by people basically, you know, playing with these mortgages…. And in the years since and whatever it’s been twelve years, they basically just been rewarded for their bad behavior. And they have, you know, pushed money out the door to their shareholders and enriched themselves. and working people have become even less powerful.

And so what you know, this this problem of debt, you know, it’s part of why. It is a fragile right now. It’s part of why people can’t handle the economic crisis that’s unfolding. I mean, millions of people are losing their jobs. I mean, and people have no savings to fall back on.

What they have instead is debt. And so what we’re about to see  is first of the month is coming up and people are not going to be able to pay. So I guess if I have one message for this moment, you know, it’s that people should feel no shame about that. They should feel outraged and indignant. And we need to get organized now. Can’t pay, won’t pay, organize as a block. So just like labor unions organize workers to withhold their labor to negotiate with the boss.

We want debtors to collectivize their condition and to negotiate. And wield power over creditors or over the government —because often the government has its fingers in our debt obligations. This stimulus package today is advising sort of what are essentially payday loans for the American public. People are going to go into medical debt, right. because they’re going to have to have treatment for this illness. And what we need to do is start organizing for that and recognizing that that’s going to be a bigger problem. And these debts are immoral.

Host: Naomi Klein

Naomi Klein

moments of shock, moments of profound crisis…

Yes, are moments when we can lose a whole hell of a lot or we can be catapulted backwards and we can see the already grotesque economic and social divisions widening still further.

And we are still we are dealing with the impacts or trying to deal with the impact of this pandemic within the fallout of the austerity policies of the foreclosure crisis and the decimation of labor standards that grew out of the last economic crisis.

You know, when we look at how hard it is for southern Europe to deal with the impacts of this crisis, we cannot forget that southern Europe was ground zero of the most sadistic austerity policies after the 2008 crisis, when the social sphere was utterly ravaged in the name of bailing out the banks. And is it any surprise that those hospitals, despite having public health care, are find themselves so ill equipped to deal with this crisis that we need to be making those connections.

But it is absolutely true, as Keanga said, that moments of crisis can also be moments where we catapult ourselves forward because of the unveiling that is underway. That word unveiling I heard when I was in Puerto Rico in the aftermath of Hurricane Maria, where many people talked about what was happening in Puerto Rico as a process of unveiling.

So when people talk about when are things going to return to normal, we have to always remember that normal was a crisis. Is it normal that Australia was on fire a couple of months ago? Is it normal that the Amazon was on fire A couple of months before that? Normal is deadly. Normal is a massive crisis.

We don’t need to stimulate the death/dent economy. We need to catalyze a massive transformation to an economy that is based on protecting life. It is transformation that we need.

The organization that I co-founded called The Leap is part of a wave of organizations that we are in conversation with that are launching different kinds of peoples’ bailouts, green stimulus programs, looking at ways that we can have a truly just recovery.

We are in a better position than we were in 2008 and 2009. We have done a lot of work as social movements in the intervening years: to have people’s platforms, to have our ideas lying around. And now needs to be a moment of maximum confidence, of maximum commitment to push those ideas forward, to demand them, to be willing to disrupt for them. Right. Because people are seeing what so many people already knew, as Keanga said, that this economy that we have has always been willing to sacrifice life on a massive scale in the interest of profit.

One of the things I really feel is being unveiled here, has to do with care, has to do with the labor of care, which is so systematically denigrated and devalued and really just trashed in our culture.

We do not value the work of care because under capitalism we don’t want to admit that we are interdependent. We don’t want to admit that our success is never just our own right. So we have to invisible lives, all of these structures that prop up everybody. Right. And, you know, overwhelmingly, the people who do the work of care of propping up the whole structure are women. Women of color. People of color.

You  know this morning I woke up to an image of a group of nurses who had who were wearing garbage bags instead of scrubs, because that is what they had been forced to do. And it was such a vivid visual representation of the fact that we treat the labor of care like garbage in this culture. We are all feeling so much gratitude towards the people who do the labor of care. Right. And it’s it’s nurses, it’s custodians, you know, it’s the people who are delivering the packages that are our lifeline. That is the people who grow our food. {editors note: Stay tuned for our upcoming show on essential workers, gig workers / Uber drivers / farmworkers}

Our interdependence is being made visible for better and worse. And I think the pivot here, the transformative moment here has to do with grounding whatever is next in a valuing of that labor of care. We can never discard and devalue that labor ever again.

Host Anita Johnson:

You’re listening to COVID-19: Pandemic Capitalism and Bonds, on Making Contact. This show is distributed for free to radio stations in the U.S. To find out how to support us, download shows or get our podcasts, go to radio project .org.  Like us on Facebook and follow us on Twitter. Our handle is making_contact.

Financialisation can be described as the growth and influence of the finance sector and the operations of the economy.

In the aftermath of the Ebola outbreak in West Africa, the World Bank, according to its website, created a new kind of bond, pandemic bonds— described by the bank as “a source of financing to help the world’s poorest countries respond to cross-border large scale outbreaks.”

But the bonds have been widely criticized as offering too little, too late while benefiting investors over the countries they were intended to help.

Kris Peterson is an associate professor of anthropology at the University of California at Irvine. Dr. Peterson spoke with Making Contact producer Monica Lopez about the World Bank’s pandemic bonds and how they work.

Monica Lopez In your interview on the show, No Alibis, which airs on KCSB fm, You talked about the financialization of pandemics and specifically about the creation of pandemic bonds. Would you explain what pandemic bonds are and how they work?

Kris Peterson  The pandemic  bond in particular:  It’s essentially a financial instrument that works like insurance, right- What happens is that the World Bank sells bonds to private sector investors who get a rather phenomenal yearly return, partly paid for by donor countries.

And right now, that’s Japan, Germany and Australia who are backing the bonds. And so if a pandemic occurs, the investors lose the capital they initially used to buy the bonds and that money that they lose is sent to very low income countries affected by the epidemic.

The World Bank got very involved with the avian flu response between 2005 + 2010. And it was clear to the bank, and frontline health care workers at that time, that most countries are not prepared to handle these disease outbreaks.

And then a few years later, between 2014 and 2016, the Ebola outbreak that devastated West African countries with over 11,000 deaths.

And so that particular outbreak did renew some motivation on the part of the World Bank to figure out what global preparedness could look like on their part. Right.

And the obvious and most challenging thing to do, really, I mean, the obvious answer, I think, for a lot of people was, well, we just need to build up public health care systems.

But instead of bolstering countries capacities to manage disease outbreaks instead, the World Bank just turned to this financial mechanism.

Monica Lopez:  So what criteria have to be met during a pandemic for the bonds to trigger to pay out to these poorer countries?

Kris Peterson  There are very specific conditions or criteria that allows the bonds to get triggered.

And the word triggered here means that investors lose their investment and the principal amount that they invested then gets transferred to the World Bank. And there are 76 different low income countries that qualify for, and then can use that money for emergency responses, if they are affected by a pandemic.

So let’s take two trigger criteria: before the money can get to countries there must be a certain number of deaths in order for the money to get triggered. So for the low tranche investment, 2,500  people must die. And I think it’s about 1,500 for the high tranche. And then also a minimum number of deaths beyond the original. A country like I think it must meet minimally 250 where the outbreak took place. So so let’s just pause and take that in for a second. Right.

It is absolutely essential to act very early with a strong response to a disease outbreak. In Nigeria, for example, back in 2014, during the Ebola outbreak, after the first index patient, like the first patient to came down with the Ebola happened, the country declared a national emergency and 3000 volunteers like organized to deal with it. And so, like, it has to be immediate. But the release of the bond money requires first that many people die.

So when you see that many people die, I mean upwards of 1500 or 2500 two thousand five hundred as are required for trigger a payout. Then you’re at a moment when it’s extremely difficult to prevent widespread infections, not to mention extremely costly. Another condition is that you have to wait twelve weeks after the beginning of an officially declared response in order to pay out the money as well. So let me give you an example.

In 2018, there was an Ebola outbreak and it’s still happening actually in the Democratic Republic of the Congo, the DRC. So this outbreak happens, you know, after the World Bank launched the new bonds. And certainly Ebola was one of the viruses that’s comes under the criteria of a pandemic bond.

And the finance media, you know, while this outbreak was going on, you know, I’d been wondering when and if a payout would take place to help mitigate the outbreak. But the problem is that the DRC Ebola outbreak never met any of the trigger criteria.

And so over the last couple of years, the death toll has not reached two thousand five hundred. There was never more than a few cases outside of the DRC borders. There needs to be at least 250. And so investors have been getting their high interest payments and no insurance bond money has been released to respond to the Ebola outbreak.

You know, another one just regarding coronavirus right now is that there must be a particular exponential rate of growth.

And the World Bank’s agency, it hires an independent agency to evaluate whether all of the triggers have been met.

And the one trigger that hasn’t yet not been met with this global corona virus outbreak is that its rate of exponential growth was not as high as it needs to be in order to release funds.

And even if, let’s say that that trigger happens. Right.

Even if a payout did happen, the maximum amount that can be dispersed from what I understand, is 196 million, which would then have to be divided among seventy six of the poorest countries, which it turns out by Olga Jonas, who works at Harvard, says that that’s going to be about eight cents per capita.

So so it’s literally pennies compared to the bailout packages and financing that we’ve been seeing as needed around the world.

Monica Lopez  You had also mentioned that if a full bond payout is not triggered, there’s an option for countries to apply for pandemic emergency financing, which the Democratic Republic of the Congo did and received $50 million. But this third party arbiter that determines whether a payout may be authorized, what is that evaluation process look like?

Kris Peterson:  That also becomes extremely difficult to actually evaluate because the one thing that you need in place to do those calculations is a really robust kind of public health care sector that can, you know, do the counting.

So we’re even seeing here in the U.S. the way in which we don’t really know what the scale of the epidemic is because we don’t have the capacity for testing.

And so you can imagine how other countries are. They can’t even count up what this growth rate is looking like. So it’s it’s a very I mean, a lot of the commentators that I have seen on this have said it’s just like a maze. It’s just a complete confusion. It’s very much unlike catastrophic bonds. Right. Which are bonds that people invest in to pay out for natural disasters like hurricanes and things like this.

What makes it easy to determine the catastrophic bonds is just that the calculations happen after a disaster has happened. Right. So you can calculate the damage and the payout and what the insurance is going to look like. But with the pandemic bonds, you’re calculating in the middle of a pandemic. So you have no idea like what the future need is going to be in terms of payout. And so that combined with the lack of capacity to really count, makes for really very confusing data.

Moncia Lopez:      So instead of this whole pandemic von structure, what might a holistic vision of support look like during a pandemic?

Kris Peterson:  Why don’t I give kind of an example of what Nigeria did during the 2014 Ebola outbreak.

There’s a lot of clinical and medical and scientific expertise on the ground.

And so when a traveler from Liberia came, he was an American, Liberian-American who came to Nigeria, landed and was ill, came down with Ebola. The government just organized an incredible response. And it did things that no one had ever done in the history of an Ebola outbreak.

It had like 3000 volunteers doing contact tracing, which is a public health term, to trace all of the people that the index patient, (the first person to get infected), has contact with–And all of the people that they have contact with and all of the people they have contact with. So up to three generations of contact.

So it launched that immediately within three weeks. The contact tracing team was was monitoring 19,000 homes. Right. So right now with Corona virus, anybody who is infected with Corona virus can be traced back by each generation to the index patient.

We have nothing like that here in the US. It just gave up on that immediately. Here in the U.S., we have multiple private health care systems. We do not have a sort of unified, holistic public health care system that actually envisions the public as something to manage.

We have multiple systems that envision the individual.  And again, selected individuals, those who have health insurance. And, you know, as much as we may talk about Medicare for all in the United States right now. the other thing that’s needed is infrastructure. We really, you know, over the last 20, 30 years w/ sort of neo liberal reforms. We’ve seen such a rollback of public health care and medical care for the public.

You can go to many states. Look, I’ll take South Carolina, for example, where there is not one public HIV program anywhere in the state. There’s one mobile clinic that moves around and there’s many states, a lot of rural states where there’s not a a clinic or a hospital in. In counties, you have to travel 100, 200 miles just to get to get medical care. So we really severely lack infrastructure. It needs to be in place and it needs to be very robustly supported.

Anita Johnson: You’ve been listening to Kris Petersen, associate professor of anthropology at UC Irvine. She spoke with producer Monica Lopez a few days after this interview took place the final trigger happened: an exponential growth rate and Corona virus infections allow for the authorization of a hundred and thirty three million dollar pandemic bond payout.

(wall street trading bell ringing)

You’ve been listening to COVID 19 Pandemic Capitalism. And Bonds on Making Contact. Special thanks to Haymarket Books, The Leap, Debt Collective and the Democratic Socialists of America for allowing us to air excerpts from their Covid + Capitalism series. To hear the full conversation, log on to radio project.org.

THE Making Contact Team is executive director Lisa Rudman, producers Monica Lopez, Salima Hamirani and Anita Johnson, the associate producer is Aysha Choudary. The audience engagement and web coordinator Katherine Styer. And I’ve been your host this week. Anita Johnson, thanks for listening to Making Contact!

These program and transcripts are produced by a skeletal crew. We need your help to keep going. So please, if you appreciate the free access to these materials make a donation today!

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