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Lawrence W. Reed, a resident of Newnan, is president emeritus of the Foundation for Economic Education. He writes about exceptional people, including many from his book, Real Heroes: Inspiring True Stories of Courage, Character and Conviction. He can be reached at lreed@fee.org.

A socialist regime in China covers up a virus outbreak in its early weeks, lying about the nature and spread of the pathogen and jailing health professionals who try to warn the world.

In response to the virus once it gets here, the government shuts down the economy. Socialists then blame capitalism!

Thats the ridiculous response were hearing from state worshipers. They are using the crisis to stuff laws with pet projects and unrelated spending and expand the size of the state permanently.

One magazine writer even claimed that the pandemic proves the need to socialize health care and take over utilities. Illness in the land? Seize the power companies! Make doctors and nurses state employees!

This is not only stupid, illogical, opportunistic and exploitative, its just plain wrong morally and economically.

Bernie Sanders claims that the pandemic is proof we have too many competing insurance companies. Replace them, he says, with just one big politicized one in Washington. He admits he neither knows nor cares how many trillions of dollars that might cost. Thats precisely the attitude my rat terriers take regarding their vet bills.

Capitalism cant handle crisis, claimed a local person in this paper. As evidence, he cited the Great Depression and the Great Recession.

But the Great Depression was caused by easy money and cheap interest rates from the Fed, which produced a bubble that burst in 1929 when the Fed jacked rates back up.

President Hoover, whom the writer claimed was for limited government, choked off trade with record-high tariffs and then doubled the income tax. FDR prolonged the Depression by at least six years, a claim borne out by the words of his own Treasury Secretary in 1939. You can read all about it here: https://tinyurl.com/uqo43mh.

And the Great Recession was caused by another bout of easy money from the Fed and government policy of jawboning banks to make mortgage loans to people who couldnt pay them back.

No doubt that extraordinary moments require extraordinary responses, even from the government. Some temporary measures to combat an invasive virus is a matter of national defense, the most legitimate purpose of government and the one that socialists are usually the most reluctant to support.

If the pandemic truly argues for a short-term boost in government spending, lets remember that near-record, bipartisan peacetime deficits in a booming economy (mostly for stuff socialists favor and demand more of) put us in a terrible financial position to afford it.

The federal government deserves not more power, money and cult-like worship, but the harshest calumny for its hopeless financial mismanagement.

Lets pause and appreciate that its capitalism and the private sectoreven in a crisisthat bails out the government every day of the week. Where would the government be if there wasnt a private sector to pay its taxes and buy its burgeoning debt? How much could it spend if private people and businesses didnt earn it in the first place?

We should be naturally suspicious of any ideology that requires a deadly, worldwide pandemic to make its case superficially viable, if only for the short-term. Dont fall for it.

****

Lawrence W. Reed, a resident of Newnan, is president emeritus of the Foundation for Economic Education. He writes about exceptional people, including many from his book, Real Heroes: Inspiring True Stories of Courage, Character and Conviction. He can be reached at lreed@fee.org.

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Socialism: A virus worse than the one from Wuhan - Newnan Times-Herald

Ironically, just as the democratic socialist Bernie Sanders has suspended his presidential campaign in the United States, many of his policy proposals are becoming necessary around the world.

Social-distancing measures to mitigate the COVID-19 pandemic have disrupted production and household income streams alike. But the effectiveness of social distancing could be undermined by workers who lack proper health insurance, adequate sick pay, unemployment compensation, or other forms of income support or savings. These individuals will feel that they have no choice but to keep working, despite the health risks. Universal health insurance looks like the inevitable outcome, even in the US, where Sanders, virtually alone among national politicians, has advocated it for decades.

At the same time, the originalsupply and demand shocks to labor and household consumption, respectively from the COVID-19 crisis are being reinforced by the breakdown of global, national, regional, and local supply chains. And all of these real-economy shocks are causing disruptions in the financial system, too.

Under these conditions, central banks have a critical role to play in preventing disorderly financial markets from adding to the strain felt by non-financial companies and households. At a minimum, central banks must step in toensureample liquidity in key markets, including those for government debt, commercial paper, and key asset-backed securities such as residential and commercial mortgages.

But, equally important, central banks must ensure that liquidity for households and corporations does not dry up because of self-fulfilling, fear-driven withdrawals. Where appropriate, they can providemonetary financingfor fiscal stimulus (helicopter money), so that governments that otherwise might be constrained by sovereign-bond markets do not have their hands tied.

That said, central banks are not the appropriate institutions to address business-revenue shortfalls and the risk of corporate insolvencies, or household-income disruptions and the associated problems in servicing mortgage, consumer, and student debt. True, central banks can carry some of the load temporarily, by purchasing high-yield corporate debt and low-grade commercial paper. But the big job of preventing an economic disaster invariably rests with fiscal authorities.

In the case of the COVID-19 crisis, public funding and mandates are needed to ensure that everyone can get tested expeditiously for the coronavirus. Global cooperation can play an important role here, given the imperfectly synchronized nature of national outbreaks. But, ultimately, all coronavirus-related treatment (including hospitalization) will need to be covered by the state, and only national governments can marshal funding on that scale.

Likewise, the state will also need to provide full compensation for workers who lose income as a result of the crisis. To maintain aggregate demand, governments could introduce a temporary universal basic income, whereby every adult receives a periodic cash transfer for as long as the crisis lasts. Even the US under President Donald Trump has blundered toward this obvious palliative measure, by including in its recent $2.1 trillion rescue package a disbursement of $1,200 for every adult earning less than $75,000 per year.

But even with government-provided income support, companies are still likely to experience dramatic revenue shortfalls, owing to crisis-related disruptions to the labor force, domestic and external demand, and supply chains at all levels. Here, the state could step in as a buyer of last resort, or it could provide credit or credit guarantees to financially distressed companies. Such credit could be converted into equity, either immediately or once the crisis is over, in the form of non-voting preference shares, thereby impeding the slide into a centrally planned economy.

There should be no restrictions on eligibility for the various forms of financial support outlined here. Large corporations are just as likely as small- and medium-size enterprises, the self-employed, or gig workers to be affected by the demand shortfall and supply-chains disruptions. And though they may be able to tide themselves over for a while owing to their superior access to bank lending and debt markets they cannot hold out forever. Given thebuild-upof non-financial corporate debt before the pandemic, we could easily see a wave of corporate defaults and insolvencies in the absence of state intervention.

Banks and non-bank financial intermediaries did not start the crisis this time, but they will inevitably become a part of it and will also become candidates for state rescues and bailouts as the asset side of their balance sheets deteriorates. And command methods familiar from wartime market economies and centrally planned economies think of Trumps invocation of the Defense Production Act to force General Motors and 3M to produce critical supplies could well outlive the crisis.

Finally, the new socialism will also have an international dimension. Italy, for example, will need support from the European Central Bank or the European Stability Mechanism, or else through the issuance of eurozone coronavirus bonds. Among emerging and developing economies, external debt markets are already constraining the ability of many to provide fiscal support. Addressing these limitations with more foreign aid from advanced economies including a targeted increase in the International Monetary Funds Special Drawing Rights would be the morally correct and economically sound response.

As the trajectory of the COVID-19 crisis indicates, capitalist market economies will have to give way, at least temporarily, to an improvised form of socialism aimed at restoring income flows for households and revenue flows for companies. We will then see whether the consequences of this experiment with socialism last well beyond the end of the pandemic.

Willem H. Buiter, a former chief economist at Citigroup, is a visiting professor at Columbia University.This content is Project Syndicate, 2020, and is here with permission.

Originally posted here:
Willem Buiter explains why COVID-19 has made comprehensive state intervention in the economy both necessary and urgent - Interest.co.nz

Capitalism vs. Socialism: An Overview

Capitalism and socialism are the two primary economic systems used to understand the world and the way economies work. Their distinctions are many, but perhaps the fundamental difference between capitalism and socialism lies in the scope of government intervention in the economy. The capitalist economic model relies on free-market conditions to drive innovation and wealth creation and regulate corporate behavior; this liberalization of market forces allows for the freedom of choice, resulting in either success or failure. The socialist-based economy incorporates elements of centralized economic planning, utilized to ensure conformity and to encourage equality of opportunity and economic outcome.

In a capitalist economy, property and businesses are owned and controlled by individuals. The production and prices of goods and services are determined by how in-demand they are and how difficult they are to produce. Theoretically, this dynamic drives companies to make the best products they can as cheaply as they can, meaning that consumers can choose the best and cheapest products. Business owners should be driven to find more efficient ways of producing quality goods quickly and cheaply.

This emphasis on efficiency takes priority over equality, which is of little concern to the capitalist system. The argument is that inequality is the driving force that encourages innovation, which then pushes economic development. In a capitalist economy, the state does not directly employ the workforce. This can lead to unemployment during times of economic recession.

In a socialist economy, the state owns and controls the major means of production. In some socialist economic models, worker cooperatives have primacy over production. Other socialist economic models allow individual ownership of enterprise and property, albeit with high taxes and stringent government controls.

The primary concern of the socialist model, in contrast, is an equitable redistribution of wealth and resources from the rich to the poor, out of fairness and to ensure "an even playing field" in opportunity and outcome. To achieve this, the state intervenes in the labor market. In fact, in a socialist economy, the state is the primary employer. During times of economic hardship, the socialist state can order hiring, so there is full employment even if workers are not performing tasks that are particularly in demand from the market.

In reality, most countries and their economies fall in between capitalism and socialism/communism. Some countries incorporate both the private sector system of capitalism and the public sector enterprise of socialism to overcome the disadvantages of both systems. These countries are referred to as having mixed economies. In these economies, the government intervenes to prevent any individual or company from having a monopolistic stance and undue concentration of economic power. Resources in these systems may be owned by both state and individuals.

See the article here:
Capitalism vs. Socialism: What is the Difference?

By the International Editorial Board of the World Socialist Web Site 30 March 2020

On Sunday, March 29, the World Socialist Web Site and the Socialist Equality Party held an online forum, The COVID-19 pandemic: Capitalism and the making of a social and economic catastrophe. A large audience from throughout the world participated, leaving hundreds of comments on the livestream.

The forum provided the socialist response to the pandemic, in opposition to the negligence and criminal indifference of capitalist governments throughout the world. It answered the lies and evasions of the ruling class and its apologists in the media. It elaborated a perspective to mobilize the international working class to fight for emergency measures to meet urgent social needs as part of a fight against social inequality and capitalism.

The forum was chaired by WSWS writer Andre Damon and featured four speakers: Dr. Benjamin Mateus, a physician, expert on the coronavirus pandemic, and contributor to the WSWS; David North, chairman of the WSWS International Editorial Board and national chairman of the SEP (US); Joseph Kishore, national secretary and presidential candidate for the SEP (US); and Johannes Stern, a leading member of the Sozialistische Gleichheitsparteiin Germany.

The COVID-19 pandemic: Capitalism and the making of a catastrophe

Dr. Mateus began the meeting by reviewing the global scope of the pandemic. The escalating numbers of infections and deaths read like a wartime chronicle, he said. We are set to reach the one million threshold by the first week of April, by the second week of April we can potentially see ten million, and by the first part of May up to 100 million cases, which is astronomical.

The political and historical significance of the pandemic was summed up by North in his introductory comments. The pandemic, he said, has exposed in a highly concentrated form the economic, social, political, cultural and even moral bankruptcy of a society based on capitalism. He continued:

The pandemic is a trigger event. In this sense, it is comparable to the assassination of Archduke Franz Ferdinand in June 1914, which set into motion the chain of events that culminated in the outbreak of World War I five weeks later, in August 1914. The assassination did no more than determine the date of the wars outbreak. But the war itselfthat is, the explosion of the global contradictions of capitalist national rivalries and the economics of imperialismwas inevitable.

The pandemic bears the same relationship to the present crisis. No doubt, the pandemic, as a biological phenomenon, poses an immense challenge to society. But the possibility, even the inevitability of such a contagion, has been recognized for a long time. The historical character of this event arises out of the response to the pandemic, the manner in which it has so completely exposed the comprehensive failure of the existing society: the ignorance and inhumanity of its political leaders, the corruption and venality of its ruling class, the incompetence of its institutions, and the intellectual and moral bankruptcy of its phony media-created heroes and even phonier values.

Now the pandemic will at some point end. But even after the virulence of the pandemic recedes, when people emerge from isolation, there will be no going back to what existed before. The illusions that have persisted for so long have been shattered, in the same way that they were shattered by World War I. What has occurred cannot be undone.

The lives that have been lost as the result of the gross absence of preparation, which is the result of the subordination of human need to private profit, will not be forgotten. The change in consciousness is already underway. People are cheering health care workers, not bankers. There is not going to be a return to the status quo ante. Millions of people all over the world, having passed through this uniquely global experience, will perceive and think about reality in a different way.

In brief, capitalism has once again become a dirty word. This crisis will intensify and accelerate a global political crisis. Socialism and socialism of a very serious kindthe socialism of Lenin and Trotsky and Rosa Luxemburg, not the nonsense of Bernie Sanders and other politically insignificant peoplereal socialism will again emerge as a mass movement, all over the world, and most explosively in the United States.

The speakers refuted the claim that the pandemic was unforeseeable. They noted that for decades, epidemiologists and scientists have warned of such an event, but nothing was done to prepare for it. They indicted the response of world governments, which has been dictated by the interests of the ruling class, not the needs of the population.

In the United States, Kishore said, which has been the center of global ideological and political reaction, for forty years the ruling elite has subordinated everything to the endless accumulation of wealth The response to the pandemic has been conditioned by the same considerations.

Kishore noted that it was not just the Trump administration, but the entire political establishment, that was responsible. The response of the American state, he said, has been to pass, on a unanimously bipartisan basis, a bill that finances the unlimited handout of cash to Wall Street and the corporate and financial elite.

Stern explained that the conditions that prevail in the United States are present in Europe and throughout the world. A catastrophe is unfolding in Italy, Spain and throughout the continent, while governments are riven by national conflicts and focused above all on advancing the interests of their own ruling elites.

The capitalists want their state to intervene to defend them. To pour more and more resources into their bank accounts. The working class has to create its own state power; it has to fight to acquire political power and use a genuinely democratic workers state to organize society in a rational, scientific manner of society in the interest of humanity.

In his concluding remarks, North noted the rapidly growing readership of the WSWS, particularly in the working class. He called for all those listening to make the decision to join the Socialist Equality Party and the International Committee of the Fourth International.

This world must change. This isnt the last crisis, and this isnt the last existential threat. The reality is that the future is either socialism or the destruction of humanity and the destruction of this planet. The experience that we are now going through is a terrible, terrible warning. We must learn from it, and we must act on those lessons.

We urge readers to watch the entire broadcast and share it as widely as possible.

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Originally posted here:
The coronavirus pandemic and the perspective of socialism - World Socialist Web Site

Successionstar Brian Cox is the latest guest to appear with host Lauren Laverne onDesert Island Discs,where he spoke about his life, career, and favourite music.

The Golden Globe-winning actor, who plays multi-millionaire antagonist Logan Roy on the hit HBO show, said his socialism is rooted in his experience of poverty as a child.

His father died when he was eight years old, and his mother was placedin an institution after suffering from severe mental illness.

Sharing the full story, not just the headlines

When you know poverty you know what socialism is and that we have to look after our people, Coxsaid.

The 73-year-old also admitted that he is a bit of a hoarder when it comes to clothes, and chose a sewing kit as his luxury item for the island.

It is one of those things you are left with, an insecurity. It has to come out somewhere.

Cox chose tracks by The Beatles, Jacques Brel, Joni Mitchell and Johnny Cash find the full interview here.

HBO has delayed the production of Successionsseason 3 due to the ongoing coronavirus pandemic.

Link:
Brian Cox: When you know poverty you know what socialism is, and that we have to look after our people - The Independent