CORONAVIRUS is spreading around the world, sparking a global economic collapse. For seven days in a row financial markets have fallen. The crisis has hit the UK and the US markets hard, making for the worst financial crisis since the banking crash of 2007/8.
The IMF last week warned that coronavirus threatens to crash the world economy and their worst fears have been born out.
The UK’s stock market, and the Dow Jones Index, had their biggest ever one-day falls on Thursday, with shares plummeting over 1,100 points, a historic plunge into the abyss.
S&P Dow Jones’ Howard Silverblatt said: ‘Global markets were down $1.83 trillion, with the US down $1.33 trillion,’ adding that over the last week global markets erased $6 trillion, with US markets losing $4 trillion.
However, the crisis for capitalism and the capitalist class has only just begun!
Writing in the Telegraph on Thursday, Ambrose Evans-Pritchard expressed the well-founded fears of the bourgeoisie. He writes: ‘Three weeks ago there was much talk of a “Chernobyl moment” for China’s Communist Party.’ However, he continues: ‘Covid-19 is more likely to be a Chernobyl moment for Donald Trump.’
On Thursday, Trump announced that he has appointed Vice-President Mike Pence to co-ordinate the US government’s response to the coronavirus outbreak. US President Trump claimed: ‘We’re very, very ready for this,’ adding that Pence has ‘got a certain talent for this’.
In fact, both before and as the coronavirus threat was developing, Trump was CUTTING funds for the US Centre for Disease Control (CDC) by 9%. This month, he proposed slashing it by a further 16%! Trump has already got rid of the US Complex Crises Fund which deals with pandemics. Trump’s ‘readiness’ claim could not be further from the truth.
Just days ago, Trump was boasting about how strong the US was industrially and financially. Then came the crash, in a situation where interest rates are at their lowest ever. Quantitative easing has been tried in full, and debt throughout the capitalist world is gigantic.
The US is completely and utterly reliant on Chinese industry. Even the quintessentially American company Apple’s factories are based in none other than China. And Chinese industry has been all but shut down to stop the spread of the virus.
China, the workshop of the world, supplies parts globally for most computers and for most cars, and is no longer supplying them. The knock-on effects on industry worldwide are devastating.
Hyundai, number five in global car sales, has been forced to close all its factories at home in Korea for lack of key components. Volkswagen, Toyota, General Motors and Tesla have all downed tools at their Chinese plants, as has Apple’s iPhone supplier Foxconn.
German manufacturing is already in free fall, falling 8.4% in a year and now also faces shutdown as it is heavily reliant on Chinese parts. 90% of the top 1,000 companies in the US rely on China for the supply of vital components.
On Thursday, California and federal officials were in the midst of a desperate effort to retrace the movements of a northern California woman believed to be the first person in the US to contract the highly contagious coronavirus with no known connection to travel abroad or other known causes.
California Governor Gavin Newsom said the state has only received about 200 testing kits for the virus, an amount he called ‘simply inadequate’.
Trump is about to fight an election amidst the threat of both a virus pandemic and an economic collapse. The very worst nightmare, as far as the US and world bourgeoisie are concerned, is becoming a reality.
Socialist candidate Bernie Sanders is gaining popularity while Trump’s popularity is set to crash as the economic and coronavirus crisis grows. Sanders, the socialist frontrunner to become the Democratic Presidential candidate, can only gain out of this situation.
His policies have already connected with millions of Americans whose standard of living has been destroyed by Trump, who has cut Medicare and Medicaid, axed food stamps and driven down wages.
Boris Johnson, who thought he would be rescued by a US trade deal, will now have to face the UK working class on his own.
Now is the time to build the Fourth International worldwide to organise and lead the world socialist revolution to its victory. This is the real message from the raging crisis!