Notes
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like in 2008, Roberts expects mainstream economists to blame the crisis on exogenous factors
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stock markets have plunged as much as 30% in the span of weeks
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economic activity was already slowing leading up to the pandemic
COVID-19 was the tipping point. One analogy is to imagine a sandpile building up to a peak; then grains of sand start to slip off; and then comes a certain point with one more sand particle added, the whole sandpile falls over. If you are a post-Keynesian you might prefer calling this a ‘Minsky moment’, after Hyman Minsky, who argued that capitalism appears to be stable until it isn’t, because stability breeds instability. A Marxist would say, yes there is instability but that instability turns into an avalanche periodically because of the underlying contradictions in the capitalist mode of production for profit.
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back in 2018, the WHO coined the term "Disease X"
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they predicted this disease would arise from animals
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they predicted it would come from a place where economic development drives people and wildlife together
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Rob Wallace (author of Big Farms Make Big Flu) argues that pandemics are caused by our culture
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a whole host of diseases can be linked to animal cultivation: SARS, Ebola, MERS, the Black Death, and now, COVID
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the COVID recession isn't a supply-side or demand-side shock: it's a consequence of capitalism's drive for profit
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it starts with supply, not demand
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demand is downstream of supply
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"if people cannot work and businesses cannot sell, then incomes drop and spending collapses and that produces a ‘demand shock’"
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mainstream economists think the recovery will bounce back like it did in 1987
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global profitability is low
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Malthusargued that surplus populations could be eradicated by plagues. This, he argued (incorrectly) would make the economy more productive
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for a brief period of time unemployment in the US was 50%. This isn't comparable to 2008
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Much like the pandemic curve, economists must also "flatten the curve"
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their approach so far has been to have central banks provide emergency liquidity
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Financial crisis is still high risk
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Looming debt bomb: corporate debt is higher than ever
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The worst is yet to come
Commentary
Note that this article was written in March, and much of it is still relevant as of 6/23.
Many of the things referenced in this article are also mentioned in Mask Off
The point of this article is to show that crises of capitalism are not exogenous to the system, but endogenous (this point is also made in Capital.