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Ireland's political and cultural magazine
30 November 2020
T
HE ESRI hihlihts a consumption
collapse of % in the first half of the
year - the worst in Europe except
Spain and the UK. The economy is on
its knees and SMEs have only drawn
on € million of state fundin’
All that was missing from the Truman bal
-
cony of the White House was the horse. The
mad emperor was back. Only a few days previ
-
ously a seemingly healthy President Trump had
hosted a Supreme Court nomination ceremony
for Judge Amy Coney Barrett (not a horse) in
the gardens below. Historians with a fondness
for the Game of Thrones fantasy series may in
years to come refer to this Rose Garden event as
the ‘Red Wedding’ viral massacre of the Repub
-
lican leadership. The Covid-19 super-spreading
ceremony resulted in the hospitalisation of
Trump, the infection of 34 people across the
Trump White House sta and the quarantine of
most of the top brass in the US military.
Trump instructed the nation to face the Cov
-
By Gary McCarthy
In the US, UK
and Ireland
Trump, Johnson
- and throttled
SMEs - threaten
a revolution
id-19 virus without fear and witness the “immu-
nity” of their “favourite President”. There was
no mention of the now 225,000 deaths caused
by the virus, the millions of jobs lost and lev
-
els of social unrest not seen since the Vietnam
War era. The world’s foremost capitalist empire
is burning literally and politically but the Wash
-
ington DC insanity continues.
Trump wants a Supreme Court appointment
secured before a fiscal support package for the
nation’s struggling economy. The traditional
Republican and big business voices of ‘respon
-
sible capitalism’ and economic liberty for the
individual are curiously quiet and in eect en
-
abling an administration swamped by its own
corruption, lies and incompetence. US capital
-
ism has reached a crisis where the pandemic is
revealing truths which cannot be spun through
the Fox News fear factory. The deaths of more
than 225,000 people, 25% of the global total,
is already adding to the decades-long erosion
of trust in US institutions. However, the emer
-
The Death Spiral Of
Trust In Capitalism
POLITICS
November 2020 31
yet managed to appoint a horse to sit in Cabinet
but there are no shortage of donkeys in his cur-
rent administration.
The risky and complex departure from the
largest trading bloc in the world is in the hands
of serial incompetents like Gove, Patel, Wil-
liamson and Hancock. Meanwhile, the rest of
the world watches aghast as the Brexit clown
car hurtles towards economic chaos whose
enormity remains unclear. They are not just
watching, they are selling UK assets too. The
once proud benchmark of UK capitalism, the
FTSE 100 index of Britain’s fi nest, is now boast-
ing a total value which doesn’t even match the
value of one technology company, Apple Inc.
The Great British Pound now trades with a vola-
tility which would typically be associated with
emerging market currencies but the delusion of
future trade success continues. Ireland would
be tempted to laugh but not this time. The dam-
age of Brexit will have a big economic impact
here and the timing is particularly poor as the
economy faces its own K-shaped moment and a
lockdown which we boast is the most stringent
in Europe.
The appearance of institutional tension be-
tween NPHET and the Government has split the
country evenly in most polls as to whether the
economy or public health should be the im-
mediate focus. However, there is another split
taking place within the economy itself. The
good news is that the Irish economy has been
incredibly resilient through the pandemic.
Thanks to a heavy weighting in the technology
and healthcare sectors, national economic out-
put measured by GDP has managed to fl atline
while the rest of the world endures 5-10% hits
to economic activity. However, if you strip out
the contribution of the multi-national sector the
picture is very worrying.
The ESRI report in early October highlights a
consumption collapse of 20% in the fi rst half of
the year which is the worst among any country
in Europe except Spain and the UK. The do-
mestic economy is on its knees and the small
gence of a K-shaped economic recovery which
destroys the livelihoods of the asset poor and
accelerates the wealth build of the asset-own-
ing top 1% of the population might be the tip-
ping point for trust in capitalism itself.
Income inequality fueled by strong fi nan-
cial markets of recent years has been as pro-
nounced as it was in the 1930s. That’s probably
not a great decade with which to resonate.
Worryingly, the situation has worsened with
the global pandemic. UBS, the giant Swiss
wealth manager, has published a report show-
ing the world’s richest individuals grew their
wealth by a staggering 27% in the April-to-July
period of this year. US billionaires alone ac-
count for $3.5 trillion of the $10.2 trillion total.
Meanwhile, only 9 million of the 22 million US
jobs lost in pandemic shutdown have returned.
Vast swathes of the US retail, travel and hospi-
tality landscape remain in deep freeze.
Yes, there is recovery in the broader US
economy but there is a real danger of capital-
ism evolving into K-shaped ‘Kapitalism’ with a
subsequent extreme social and political back-
lash. The Trump report card will be brutal and
lay bare an exercise in mass delusion.
Twenty years of successful capitalism and
economic growth has been based on three key
drivers: technology, trade, and population/im-
migration growth. The fi nal one might surprise
but the US has added an additional 100 million
people to its current population of 330 million
in less than 40 years. The current stewards of
right-wing capitalism in the Republican party
have misty-eyed economic memories of the
Reagan years but they depend on facilitating
immigration. Trump of course has curtailed it.
Instead, the Trump economic focus is on
“clean coal” and automobile factories. Tech-
nology, science and climate change are mis-
trusted. Trade wars and ripped-up international
treaties are apparently putting America fi rst
but the US monthly trade defi cit has just hit
a 14-year high. US farmers must be thrilled.
Furthermore, the fi rst and second generation
immigrant founders of much of the US technol-
ogy sector are warning of similar unplanned
damage being infl icted on the economy if the
world’s best minds and ideas can no longer
fi nd a home in the United States.
However, the US is not the only capitalist
champion trying to convince its citizens to em-
bark on a nostalgic economic journey.
Boris Johnson and his Conservative Party
don’t even have the benefi t of a world-beating
technology sector. The recent Covid-19 testing
fi asco involving an Excel spread sheet error is
a stark reminder of how badly the UK has fallen
behind in global technology leadership. The
UK has chosen Brexit to “take back control” of
trade and immigration on an Elgar sound track
of ‘Rule Britannia!’. Sadly, dreams of empire
have spawned epic levels of delusion and in-
competence. The mad emperor Boris has not
The world’s foremost
capitalist empire burned
literally and politically
but the Washington DC
insanity continued.
and medium-sized business sector (SME) has
only drawn on €180 million of state funding via
credit guarantees and a fi re-fi ghting domestic
banking sector. Compare that to €15 billion giv-
en to UK companies in just one support scheme
of many. Something is not working in the SME-
support initiatives. Soon huge numbers of per-
sonnel will not be working. The SME sector em-
ploys over one million people in Ireland. Young
businesses and the youth are the future but are
their voices being heard in Kildare Street?
When Capitalism works for the majority trust
is maintained and economic growth is pos-
sible. Misguided policies combined with delib-
erate misrepresentation are dangerous social
cocktail when the benefi ts accrue to only a very
small part of a society. A K-shaped outcome for
large parts of the populations of the US, UK and
Ireland is kapitalism with a ‘k’ but without trust.
Then we are in Das Kapital teritory.
