The Great Depression 2020
Some 42 million Americans went into unemployment with the lockdowns. With the reopening of some businesses on May, 2 million returned to work. Out of the 40 million, many will not find their job again due to bankruptcy/downsizing of their business.
Artificial intelligence is maturing and the layoffs by COVID-19 are the great opportunity for capital to replace workers’ positions with algorithms, robots, and 5G. All this without labor conflicts, because the workers have already been laid off.
The viral fear doesn’t end with the reopening. Not only 25% of the unemployed labor force but also all of the fearful of the future will spend the minimum, reducing global demand (consumption).
Amazón’s sales grew 81% in one month compared to last year. Millions have discovered that shopping online is more comfortable and, above all, safer, given the pandemic.
Retail trade, air travel, tourism, and hospitality are labor-intensive activities that will not return to what they were before and trade will never return, leaving millions in permanent unemployment.
Added to the 40 million unemployed and small bankrupt business owners are families with finances ruined by medical bills. 70% of salaried families live just barely making ends meet, very vulnerable when a family member becomes ill.
When unemployment insurance and savings for college or retirement are gone, and when the credit card payment is overdue and the minimum cannot be paid, the rent or mortgage will no longer be paid by millions = HOUSING CRISIS
The crisis of housing non-payment + monthly non payment of car bills + credit cards of tens of millions of victims = FINANCIAL CRISIS. The debt for credit cards only is US$1 trillion. Will there be a rescue? From whom? For whom?
If U.S. politicians seek a solution by simply spending, this can lead to A FISCAL CRISIS and a MONETARY CRISIS. The world has accepted U.S. abuses of monetary seigniorage, viewing the dollar as the last refuge.
The US external debt was US$6.37 trillion in 2008 when the 2007 financial crisis worsened. To simulate rather than to stimulate a reactivation, the “quantitative easing” of financial assets was carried out, totaling US$4.5 trillion.
The US external debt is $24.95 trillion from wars in Afghanistan, Iraq, Libya, and Syria, with $4 trillion as a down payment on the cost of the Great Depression for the rest of the world. The devaluation of the dollar and/or a WORLD EXCHANGE CRISIS will deepen the Great Depression 2020.
The Pandemic COVID-19, the Great Depression 2020, and the Second Cold War will lead to the greatest poverty and inequality increase of our lifetime. Serious redistributive measures are required.
At the international level, two redistributive measures can be taken immediately. One would be to follow Secretary-General Antonio Guterres by pressuring coercive, unilateral measure countries to immediately cease and desist from their illegal actions.
The unilateral, coercive measures countries are self-appointed vigilantes that operate in violation of international law. Who appointed them to be police, prosecutor, judge, and jailer? Who named them to be so morally superior to everyone else to be able to judge all nations?
When applying unilateral, coercive measures during times of Pandemic, the illegality is elevated to the level of a crime against humanity, according to numeral 1, literal k, of article 7 of the Statute of Rome.
The second measure is Developing countries’ debt relief. It is better for everyone that debt is condoned all at once as part of the solution, avoiding a prolonged default-by-default public debt crisis as part of the problem.
How can poverty and inequality be overcome? Markets concentrate on wealth. Redistribution requires STAT action. Measures can be redistributive, restitution of rights, capitalization of the poor, or investments in public goods for the benefit of all.
Nicaragua after 2007 represents a case of the application of all of the poverty and inequality reduction measures in one country in one decade with positive results.
When Presidente Comandante Daniel Ortega Saavedra took over the presidency, on January 10th, 2007, Nicaragua had 48.3% of its population in poverty-reducing to 24.9% nine years and extreme poverty 17.2% to 6.9%.
This occurred due to redistributive policy, capitalization of the poor, and investment in public goods, especially infrastructure, facilitating the inclusion of historically excluded groups.
The first redistributive measure applied by the Government of National Unity and Reconciliation (GRUN), was the restitution of the constitutional rights to universal and free health and education, which were curtailed during the 16 years of neoliberal governments (1990-2006).
Health and education savings represent US$845 a year for a family of 5 compared to the cost recovery applied by previous governments. Public transportation subsidies represent an annual savings of another U$D 580 for a family of five.
Capitalization of the poor includes the programs Zero Hunger that has made farmers of rural women; Zero Usury which is microcredit at 5% per annum; and the demarcation and titling of more than 37,859 km. 2 of ancestral land for indigenous and afro-descendant communities.
With regard to infrastructure, electricity has increased from 54% of households in 2007 to 97% in 2020, a powerful poverty reduction measure. Energy has gone from 26% renewable in 2007, to over 70% in 2019, with plans to reach 90%
With regard to inclusion, the Davos World Economic Forum had Nicaragua 90th in the World in 2007 in the Gender Gap Index, while Nicaragua rose to 5th place in the world in 2019.
The map “Women in politics: 2020”, created by the Inter-Parliamentary Union and UN Women, places Nicaragua in third place among the countries in the world with the highest percentage of women in ministerial posts, with 58.8%, only after Spain with 66.7% and Finland with 61.1%.
The map also shows Nicaragua in sixth place in the world in terms of women in parliament, with 47.3%, the top five places being held by Rwanda (61.3%), Cuba (53.2%), Bolivia (53.1%), the United Arab Emirates (50.0%) and Mexico (48.2%).
Nicaragua has reduced poverty and inequality significantly through the combination of a complex set of tangible and intangible factors.
The tangible factors include redistributive policies, restitution of rights, the inclusion of the excluded
Also capitalization of the poor, investment in public goods, peace and security, growth with poverty, and inequality reduction.
The intangible factors are social consciousness and support, organizational and mobilization capacities, voluntarism, and protagonism of the poor, political will.