the accelerated crisis

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By Osvaldo Coggiola e Edgar Azevedo*

The ongoing ideological operation presents the economic crisis as a product of the health crisis when, in fact, it preceded the pandemic, which openly manifested and sharpened it.

The hallucinatory (objectively homicidal) speech of the holder of the Executive Branch of Brazil, on March 24, calling for the country’s “return to social normality”, ignoring all universally recognized health standards and prevention, with potentially catastrophic consequences due to the coronavirus pandemic coronavirus, all in the name of “saving the economy”, is the clumsy attempt (but not lacking in political bases) to impose a kind of de facto power, located above the Legislative, the Judiciary and even, partially, the Executive itself . A “Supreme Chief”, a Duce.

Taking advantage of the emergency, the decree of a state of siege entered the political agenda. Bolsonaro, in addition, dismissed 30 generals with troop command and appointed a new Chief of Staff, Marcos Antônio Amaro dos Santos, who was Chief Minister of the Military House of Dilma Rousseff. Bolsonaro’s undertaking recognizes a precedent (therefore, a political logic) in the mobilizations, targeting Congress and the Judiciary, convened and supported by the president himself on March 15th. Bolsonaro’s intervention in the national network was condemned by mayors, governors, senators and deputies (with the exception of the PSL bench, 10% of Congress, which qualified Bolsominia’s speech as “statesman intervention”), spokespersons for health workers , and even by her (traditionally conservative) professional orders, which literally described her as a “criminal”.

One of the official scenarios provided by Abin (Document No. 015/2020 – March 23, 2020) works with a maximum projection of 5.571 deaths by April 6, with Brazil exhibiting behavior similar to the epidemic curves of Iran, Italy and China. Abin's comparison of the growth curves from one hundred confirmed cases, Brazil x Europe, shows a similar growth of these curves in our country and those of Germany, Italy, Spain, France and the United Kingdom.

The intelligence agency report cites scientific sources: “Two out of three infections of the new coronavirus were caused by people who were not diagnosed with the virus or who did not have symptoms. This means that infected people who feel healthy or have very mild symptoms are spreading the virus without realizing it, posing a major challenge to containing the pandemic. Scientists say the likelihood is that there are between five and XNUMX undiagnosed people for every confirmed case. New York (USA) authorities have requested that all citizens behave as if they were already exposed to the new coronavirus.” The Minister of Health, Luiz Mandetta, who initially qualified the coronavirus as “another flu”, announced the probability (perhaps a certainty) of a collapse of the Brazilian health system.

The protest pots against the president, with strident “Bolsonaro Out” dominating the voices, were heard in all capitals and even in medium and small cities in the country. Rede Globo acted and acts as a sort of unofficial, if not official, media spokesperson for the heterogeneous group. Interestingly, or not so much, none of the officially Protestant entities, mainly the Legislature, opened any institutional initiative aimed at preventing (impeach) who became an imminent and immediate danger to the survival of the population, especially the poorest.

This strange laziness (or “prudence”) contrasts with the speed with which legislators (of almost all political colors) began to deal with measures such as suspending contracts and cutting salaries of public and private employees, reaching up to 50% of ordered, supposedly to contain state spending (in the case of public servants), allocating more resources to combating the pandemic, and to “avoid the closure of companies”, with the payroll cut.

For countless workers, involved with real estate credit expenses, payroll loans, automatic debits for condominium expenses and services, alimony, credit for personal property, etc., such cuts would mean, in many cases, receiving a negative paycheck at the end of the month , creating a wave of social misery and defaults and repossession of goods (movable and immovable) en masse, and unbridled speculation, with only one major beneficiary at the end of the chain, big financial capital, already largely benefited by the Central Bank, which announced the availability of BRL 1,216 trillion for Brazilian banks, which is equivalent to 16,7% of GDP.

Compare this figure with the “package” announced by the government (on March 23) of R$88,2 billion to combat the pandemic: it is equivalent to 7,5% of the funds “made available” to large financial capital. The “humanitarian” funds announced by the economic team, on the other hand, basically refer to the rollover or restructuring of debts of states and municipalities, and the possible (and costly) use of credit lines, being a much smaller percentage of the amount announced the one destined to the effective increase of the sanitary capacity of the country.

“Help” for the unemployed and “self-employed” (street vendors) is not even a palliative. In other words, the “package” is perfectly within the “save yourself who can” line of the Bolsonarian clique, which follows, in addition to the president’s manifestations of ignorance and brutality (which forced public apologies on the part of his deputy and its Minister of Health) to a strict class logic, which was explicitly manifested in the days preceding the government communiqués and speeches. Behind the pandemic, there is a real class war going on.

It is sharpened by the capitalist crisis itself (not just “of neoliberalism”). Neoliberalism was defined, more empirically than theoretically, as the policy that should reinvigorate capitalism, restoring the “animal spirit”, entrepreneur and investor, supposedly deadened by the interventionist hand of the State. However, it never did. Growth rates over the past four decades have remained consistently below those of the post-war “statist” period, the so-called “Glorious Thirty Years” of capitalism.

Instead, the capitalist production system was strained. Spatially, it encompassed the world. Worried about production just-in-time, with little or no inventory and little financial leeway to deal with contingencies. Finally, socially, it put pressure on workers and outsourced suppliers of small companies, making them produce work and products based on low wages and prices and unloading all kinds of social and financial risks on them.

The ongoing ideological operation consists of presenting the economic crisis as a product of the health crisis (a supposedly random and out of control factor, which is not true) when, in fact, it preceded the pandemic, which manifested it openly. and sharpened it. The “economic package” announced in the US by Donald Trump, “model” and Bolsonaro’s representative, was qualified, for its impressive amount (US$ 3,2 trillion, which is equivalent to 150 times the Brazilian “package”) as a manifestation of the economic security of the country due to the great economic resources in the hands of the State.

In fact, in the US we are witnessing a spectacular rise in so-called “corporate debt”; in the context of decades of access to “cheap money (credit),” non-financial corporations have seen their indebtedness more than double, from US$3,2 trillion in 2007 to US$6,6 trillion in 2019, more than double of the Trump package. Corporate debt is a giant bubble works as a global crisis factor, like so-called mortgages subprime in 2007-2008. In this situation, a sudden shock to the system can trigger a wave of corporate defaults, putting the global economy at risk of collapse.

The USA qualitatively raises its public debt, placing itself on the threshold of financial bankruptcy of the State and hyperinflation, only to temporarily postpone the collapse of the entire system: “The global economy is ruined. Supply chains and travel networks have been severely disrupted, stock markets have plummeted and a recession now seems all but inevitable. Even the US government bond market, normally a bastion of safety during periods of market turmoil, has become extremely volatile.

The situation is fluid and uncertain, making projections about short-term consequences tenuous and improbable. But given the gravity of the situation, it's worth asking: Does the arrival of Covid-19 mean the day of reckoning for overburdened corporate borrowers is near? We conduct surveys that map the debt structure of US non-financial companies listed on the stock market. The evidence uncovered suggests that experts are right to be concerned about rising corporate leverage.

“But we need to be careful in specifying which corporations are most susceptible to default. By ranking debt levels for companies of different sizes, our analysis yields impressive results. What we found is that small and medium-sized businesses face the most significant debt burdens, making them especially vulnerable to a market downturn. Meanwhile, companies in the upper echelon appear to be more financially robust than they were nearly half a century ago. If Covid-19 is indeed the catalyst for a corporate debt catastrophe, it will hit the bottom. The likely result? More market turbulence, more concentration and less investment” (Joseph Baines and Sandy Brian Hager. Covid-19 and the Coming Corporate Debt Catastrophe, March 13, 2020). A recolonization of the world by big monopoly capital, especially North American, is on the geopolitical agenda, with consequences for the entire planet, first and foremost for China. Brazil is a pawn in this dispute.

We are not facing a crisis that would only affect, or would affect mainly, the financial sector: “Our productive structure, super-concentrated, exaggerated and highly weakened, should already be evaluated. The second week of March, when the WHO upgraded Covid-19 to a “global pandemic”, witnessed an unprecedented shake-up of world markets. US stock markets suffered the biggest one-day decline since the 1987 crash, despite the Federal Reserve's interest rate cut and pledge to pump trillions into the system.

It was not a comfortable “fix”. Unusually, stock exchanges, generally considered riskier, were not alone in the turmoil. Less risky bond markets also suffered, as did markets in the 'safer' asset markets, US bonds and gold markets, as investors sought liquidity. Furthermore, the pain was more than financial. As country after country imposed shutdowns and travel restrictions, airlines, cruise lines, airports and other travel-related businesses, along with vast swathes of the large, likely bloated service sector, which relies mostly on face-to-face production and consumption, suffered closures, cuts and layoffs.

Disrupted supply chains and collapsing markets put pressure on production. Furthermore, in another development, disunity between OPEC and its allies led to a price-cutting war that made US shale production uneconomical, one of the brightest stars in the economic firmament in a dismal decade, as it is dependent on of high oil prices” (Radhika Desai. The Unexpected Reckoning: Coronavirus and Capitalism, March 17, 2020).

In this global context of crisis, disputes over the cost, and over who pays the cost, of the pandemic, is the central aspect of the class struggle in the current world scenario, putting, this time, at stake the lives and survival of the majority of exploited. Historical examples abound. The plagues and pandemics of the past did not “unify”, as is often proclaimed, society, but, on the contrary, divided and confronted it as never before: the “Black Death” of 1347-1350 presided over and accelerated the decline of the feudal order in Europe (and it was the backdrop for the rise of new social classes, the struggles between which the capitalist bourgeoisie finally emerged victorious); the “Spanish flu” of 1918-1921, against the backdrop of the destruction caused by the world war, saw a revolutionary wave sweep across Europe and the world, of which the October Revolution and its consolidation was the most advanced expression.

Let us return, however, to our country and “our” pandemic, still in its early stages. Brazil is the country in Latin America with the highest number of confirmed coronavirus cases, with the highest number of deaths and the highest underreporting. For the exploited, leaving the management of the crisis in the hands of the bourgeoisie and its political representatives means a humanitarian disaster. As soon as it declares a war plan against the workers in favor of preserving their profits and a cosmetic policy against the epidemic, the Brazilian bourgeoisie takes refuge in its beach houses and its farms, while millions of workers inhabit slums without basic sanitation, without guaranteed food and without the slightest possibility of social distance.

The roadmap led by the Brazilian government corresponds to the general policy of imperialism on the coronavirus. The rejection of the quarantine to allow the mass spread of the virus was announced by the British Boris Johnson as the most cost-effective “method” for financial capital. The fantasy that mass contagion would trigger natural immunity was immediately rejected by all health experts, and popular pressure prompted Johnson to partially backtrack and initiate a policy of mitigation. The USA followed a similar line, with the only difference that its implementation abandoned any protocol and was imposed through the usual lies of Donald Trump. The result was a frightening scenario, which led governors and local authorities, as in the case of New York, to act against the clock.

Bolsonaro traveled to Florida to receive orders from Trump – getting the virus to spread throughout his entourage, becoming responsible for making the DF the third unit of the federation in number of cases of Covid-19. Unlike the British, who announced the “natural immunization” experiment for the entire country, the Bolsonaro government maneuvered and concealed information for a fait accompli policy. The underreporting of cases was the result of a government policy, with the complicity of the mainstream media.

When the number of suspected cases jumped after Carnival, contagions starting to appear in all regions of the country, the Ministry of Health began to report only confirmed cases, lagging behind the numbers reported by the Secretaries of State. The online platform that registered the cases was taken down, in parallel with Bolsonaro's insistence that the coronavirus be described as a "little flu" and defended competition from crowds in evangelical churches. The WHO warned that the fight against the epidemic required not only total restriction, but also massive tests to detect in detail the progress of the virus. The Brazilian government decided not to do one thing or the other, causing general contamination. The concealment of the real situation promoted by the Minister of Health – unanimously praised by the press as “the adult in the room” – was functional to the policy dictated by Bolsonaro.

The initial reaction of the government and the big bourgeoisie was to take advantage of the epidemic to extort Congress, through Paulo Guedes, in order to demand the approval of a package of reforms against workers (privatization, administrative reform, etc.). More than two weeks ago, Guedes was informed of a reserved study by the Central Bank that showed a spread of the coronavirus in Brazil on a greater scale than in China and Italy. A new “anti-coronavirus” economic package authorized companies to reduce wages by 50%, an insignificant monthly allowance of 200 reais (less than US$40), for three months, for 40 million workers who were thrown into informality, benefits taxes for large companies and the purchase of government bonds by the Central Bank, in response to the drought in the financial market. The clash with the Legislature ended up raising that amount to R$600, to avoid a social catastrophe that could turn into a political earthquake.

On March 20, the Minister of Health admitted that by the end of March the pandemic should start a sharp upward curve and that “clearly” the Brazilian health system would collapse at the end of April. The exponential growth phase of cases should last in April, May and June, with a plateau from July, to start falling from September. This means that, starting in May, there will be no capacity to treat serious cases that need intensive care, causing tens or hundreds of thousands to die due to lack of care. Instead of responding to this reality with the only possible policy, namely a policy of restricting movements and massive testing, there will only be “a few interruptions”.

The promise of millions of tests in an uncertain future, when catastrophe will be inevitable, is just a smokescreen to hide the government's real policy. Minister Mandetta repeated daily, until recently, that mass tests would be a “waste of resources”. The main officials of the great Brazilian capital, with FIESP at the helm, celebrated the government's decision to “not stop” and Guedes' benefits package.

Support for the government brought new benefits to the sector, with the authorization to suspend employment contracts for four months during the epidemic, without paying any wages, in addition to tax exemptions and payment of social charges. Bolsonaro appeared determined to send the working class to the slaughterhouse. The national scandal provoked by the announcement of the MP forced Bolsonaro to back off (for how long?), prevaricating by announcing “complementary” measures that will bring about similar achievements in the short term.

Under the command of Donald Trump and in search of a scapegoat, Bolsonarism launched a provocation against China, which opened a deep fissure in its political base of support. Pressure from the agribusiness bourgeoisie (China is Brazil's biggest trading partner, responsible for 30% of its exports) has placed the government in a situation of extreme weakness, in the midst of a political crisis that dances to the sound of daily pots and pans daily increase in the number of contagion cases and deaths.

The Brazilian capitalist class is deeply divided, and its political system fractured. The world's leading consulting company for assessing "political risk", "Eurasia", detected (and decreed, for potential investors) the possibility of an "institutional crisis" in Brazil (The State of S. Paulo, 24/3/2020), accelerating a capital flight that is already measurable on a daily basis. The crisis is so deep and accelerated that the bourgeoisie has begun to turn to an attempt to face the health crisis, turning health needs into a source of business. A dispute was opened to define which social class will lead the management of the crisis. The capitalist class will use the state apparatus to preserve order, property relations, and save big companies from bankruptcy, at the cost of the lives of millions of Brazilians.

The only viable way out for the workers and the exploited in general is to impose a compulsory centralization of all the country's resources, based on a single social and economic plan, under the mobilization and leadership of the workers themselves. Companies have started to lay off workers (including in the critical transport sector, which is responsible for all the logistics for distributing food and medicine!): we must demand a ban on any and all layoffs in a situation of national and social emergency. Control of the financial system by workers in the sector, to prevent capital flight and the country's depletion, is also on the agenda, putting the perspective of its nationalization on the agenda.

Combating the epidemic requires centralized action that places all of the nation's economic, material and human resources at the service of stopping the contagion, guaranteeing food and health security for the entire working population, expanding the capacity of the health system to serve everyone. patients, prioritizing the production and distribution of work items for health professionals. It is necessary to transform the production system according to the needs posed by the crisis scenario.

Health professionals denounce the lack of medical equipment and supplies. The government goes so far as to require doctors and nurses to reuse protective masks. Workers of call centers and telemarketing, industrial workers, food and medicine distributors have started struggle processes to demand guarantees of safety and hygiene. In favelas and peripheries, neighborhood and community committees take on the task of establishing sanitary surveillance to reduce the spread of the plague. The metalworkers' strike in São Paulo demanding paid vacations is the tip of an iceberg that tends to grow non-stop. It is necessary to form sanitary committees in the factories, in the workplace, in the communities, which unite in a great national movement.

At the "Manifesto in Defense of the World of Work”, signed by trade unions and professionals and various personalities, repudiates the eventual enactment of a state of siege and defends a program that we reproduce below verbatim:

1. Prohibition of the dismissal of male and female employees, servants and public servants.

2. Prohibition of the reduction of wages of male and female employees, servants and public servants.

3. Immediate interruption of work provision, in the public and private sectors, in all activities not directly related to the preservation of life, without prejudice to the full receipt of wages.

4. Immediate interruption of work provision, in the public and private sectors, of workers over 60 (sixty) years old, pregnant women and others included in risk groups, regardless of the activity carried out, without prejudice to the full receipt of wages.

5. In activities essential to the preservation of life, which cannot be interrupted, obligation to provide, by the public and private employer, including outsourced and informal workers, the means necessary for safe travel to the work environment and the equipment of individual protection and collective protection necessary to reduce risks.

6. Dialogue and effective negotiation with the workers' union, as a necessary condition for the implementation of risk restriction measures, such as the definition of essential equipment for the work of health professionals, prohibition of overtime, the practice of shifts and the reduction of working hours without decreasing wages, observing the technical notes issued by the Ministry of Labor.

7. Determination of the immediate payment of an additional payment for risking life to all professionals who cannot interrupt their activities.

8. Prohibition of hiring people to carry out essential activities through precarious contracts (intermittent or that do not guarantee labor rights – legal and conventional – minimum).

9. Immediate formalization of the employment relationship of workers who provide services to companies that own digital platforms, imposing the creation of a fund under the responsibility of these companies to protect, on an emergency basis, the income of their workers.

10. Provision and funding, by the employer, of the necessary means to carry out, within health and safety standards, work at home, when this proves to be feasible.

11. Observance of the limitation of working hours for workers subject to telework.

12. Prohibition of any measure that implies a weakening of the instruments available for the inspection of the working conditions of professionals who work in essential activities.

13. Institutional support for forms of self-organization, social and union organization and collective solidarity, including financial support, as a fundamental way to help fight the pandemic.

14. Payment of citizenship basic income for all families with income below the minimum required indicated by DIEESE, in February 2020, in the amount of BRL 4.366,51 (four thousand, three hundred and sixty-six reais and fifty-one cents ).

15. Extension of the period for receiving unemployment insurance for an indefinite period, for those who are enjoying or will enjoy the benefit, in this case, with cancellation of the minimum time required for access.

16. Repeal of Constitutional Amendment 103/19 (Social Security Reform), Constitutional Amendment 95 (limitation of expenses in the sphere of social public policies) and Law 13.467/2017 (“labor reform”), since they destroy the foundations of the State Social.

17. Immediate payment of pensions for everyone who has already achieved this right, but who, due to government policies delaying the granting of benefits, have been waiting in line for months.

18. Tax waiver for families with income below the minimum required indicated by DIEESE and for legal entities with up to 10 employees who do not use fraudulent means to mask employment relationships.

19. Remission of bank loan debt, for families with income below the minimum required indicated by DIEESE.

20. Prohibition of eviction orders for non-payment of rent and prohibition of interruption in the supply of electricity, gas, water, due to default by families that have an income equal to or less than the minimum indicated by DIEESE.

21. Suspension of collection of taxes and bills related to essential services, during the period of health crisis.

22. Priority allocation of the public budget to essential activities related to public health.

23. Suspension of debt service, largely responsible for the fiscal crisis.

24. Immediate suspension of tax benefits and prohibition of extending deadlines for paying ordinary debts to the state, in relation to large companies.

25. Immediate collection and with a very summary rite of the biggest debtors of the State.

26. Requirement for financial institutions to contribute money, equivalent to the net profit obtained in 2019, to be used for the construction of temporary hospitals and free supply of food and medicine to all who need them.

27. Permission for the nationalization of hospitals to immediately meet the needs of the general population.

28. Determination of immediate use of public or private buildings that are not fulfilling their social function, as well as hotels and similar ones, to serve as shelter for the street population, for health care centers for infected people, for people in isolation and for those who depend on the care of a third party and this person is in isolation or infected.

29. Imposition on large carriers and airlines and road companies to enable free transport of food and medicine to all Brazilian cities.

30. Control and inspection of drug, fuel and food prices, to avoid opportunistic exploitation of an extremely serious and delicate situation.

31. Infringement of patents on medicines necessary for the medical treatment of Covid-19.

32. Subsidy for the large-scale manufacture of mechanical respirators, sterilization and asepsis products and individual and collective protection equipment for the health area, to be distributed throughout the national territory.

33. Maintenance of all postgraduate scholarships and intensification of permanence policies for quota students, as well as other educational and research promotion programs, including as a way of encouraging the development of solutions to the health crisis.

34. Immediate granting of benefit from the Union budget, with subrogation of the State in the salary debt, to ensure the receipt of salaries of male and female employees of micro-enterprises.

35. Wide dissemination of information is necessary, in an accessible way, for people with disabilities (sensory and intellectual) and respect for their full rights.

36. Guarantee of internet access for all people with prepaid cell phones or popular plans, without reducing speed, cutting or charging connection while the social isolation necessary to combat Covid-19 lasts.

The program to face the crisis also involves defending, for all industries responsible for producing for the health and supply of the population, a six-hour working day, in which “social distance” and all safety and hygiene measures are taken into account. observed, which implies establishing a fourth work shift. The conversion of large industrial facilities for the production of respirators and other medical devices must be carried out under workers' control. Price and supply control by workers' and neighbors' commissions must be put on the agenda, given the scarcity and rising price of basic necessities in supermarkets, putting workers' control of production on the political agenda. The essential principle that must guide the response to the crisis is that the needs of workers must have absolute priority over the interests of private benefit. The working class must demand universal testing and free and equal access to health care; the closure of all non-essential production, with guaranteed wages for those affected; safe working conditions in essential sectors for the functioning of society; and an emergency program to build healthcare infrastructure and ensure that all healthcare workers have access to necessary medical and safety equipment. Just to start.

*Osvaldo Coggiola He is a professor at the Department of History at USP.

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