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anti-nucleaRist bloG#283/ 31 Mar 2020 My coRona-veRious, Your fascist-CoRpoRate: sleaze WondeRmeRe

anti-nucleaRist bloG#283/ 31 Mar 2020

My coRona-veRious, Your fascist-CoRpoRate: sleaze WondeRmeRe



There may yet be a shoRtage of ‘we-People” discussing’ all the pRimary-Points about how and why american-Socialist could not let the current “super-cRisis” covid-19-spReadions”. The egRegiousness-Effect has ghotten in the weigh-ins we peRveRse-AdveRsities, again. That is as sleazy as “Gaudis and Guaido” or is that zionist-Fascists and Natanyahooey w tRumpeTer holding the escape adder up– on the fire-escape platform– instead of stabilizing and bReaking falls from deep-State fascist head-long in search of bashed-bRains from the concrete-Grey: sidewalk.      “R”


“The  $2 trillion relief bill of spending and tax breaks to bolster the hobbled U.S. economy hard hit by the COVID-19 pandemic was signed into law on March 27. While offering some relief to workers, it does little to directly address broken supply chains for vital items like ventilators. It does not require manufacturers to coordinate production of equipment and therapeutics in short supply, or ensure that masks and ventilators are distributed to where they’re most needed.

It does, however, offer bonanzas to corporations. The federal government is open for coronavirus business, and the race to get  some of the $2 trillion has become a frenzy.  Lobbyists are  descending on Washington seeking lucrative contracts. Some are advocating for companies producing a mist spray for killing the virus on airplanes, others for recyclable hospital curtains, still others for a host of disinfectants competing against each other. Companies making test kits and masks are also in competition.

Ventilators are the most the most important piece of equipment for keeping COVID-19 patients in crisis alive. Yet there is an acute shortage. New York State, overwhelmed with with 60,000 virus cases and 1,000 deaths, has made an urgent plea to the White house for 30,000 ventilators. In New Orleans, where there has been a surge of COVID-19 cases, Gov. John Bel Edwards warned that the city could run out of ventilators in days.

Why weren’t ventilators and personal protective equipment prioritized in the $2 trillion bill? Why weren’t they produced and stocked two months ago when the alarm was sounded that the virus would affect the United States?  Why is there no federal plan to fight the virus?


The Trump administration has had the authority to invoke the Defense Production Act, a 1950 law which allow him to harness U.S. factories, and to organize, centralize and prioritize production of what  is needed in time of crisis. Trump could have re-fitted factories for producing ventilators and their parts, even compelling competing companies to work together for rapid and streamlined production.

Biggest businesses  said ‘no’ to Defense Production Act

He hasn’t done this because Wall Street is against it. For weeks the U.S. Chamber of Commerce has strongly lobbied the government against using the Defense Production Act because invoking and implementing it would cut into their profit margins. The  Chamber of Commerce represents the interest of the largest U.S. corporations, the ones whose very existence defines the world “capitalism.”

The Trump Administration is listening to Wall Street, not the needs of the people. Following the instructions of the Chamber of Commerce, the  U.S. government has opted for “corporate volunteering.” The argument is that, through the magic of the marketplace, corporations will automatically, on a voluntary basis, produce what is needed for the COVID-19 crisis, and make money too.

But corporations are making money not by mass producing what is needed, but

by jacking up the prices of  the scarce supplies that already exist, making the crisis much worse. The Trump administration has the authority to stop this price-gouging, but it has not.

The current health crisis has exposed the bankruptcy of the capitalist system and the state that serves it. The crisis has shown that a system obsessed with profits is neither willing nor able to meet the needs of the people no matter what the cost in human lives.


New York a test case for rest of country

The need for PPE and especially for ventilators is there for all to see. With 40 percent of the country’s virus cases, on March 24 New York State Governor Mario Cuomo made an impassioned and urgent plea to the federal government for as many ventilators as can be found, calling the need “critical and desperate.”

New York State, has 7,000 ventilators, Cuomo said, but needs 30,000. New York City Mayor Bill De Blasio has said that 15,000 are needed for NYC alone, which has the most cases in the country. The state had received only 400 ventilators from the federal government.

The shortage of life saving equipment is so acute that on March 26,  New York approved an experimental technique of putting two persons on one ventilator because “we have no alternative,” said  Cuomo. Veterinary hospitals and schools are donating their ventilators for human use.

U.S. cities short 135,000 ventilators

Other cities see in New York what could happen to them down the road. A March 24 survey by the U.S. Conference of Mayors found that 192 cities didn’t have needed supplies to fight the virus. The cities need 135,000 ventilators, 28.5 million face masks, 24.4 million other items of personal protection equipment, 7.9 million test kits and more. Counted were PPE items needed just for health care personnel. Many thousands more workers need masks and other equipment because they come in direct contact with the public.

Competition between states raises prices for PPE

There is no central coordination for getting supplies. The states have been advised by the federal government to buy ventilators and PPE on the open market. This has forced states to compete against each other for what exists. Corporations  have responded to the demand by jacking up prices.

“Price gouging is a tremendous problem, and it’s only getting worse,” Cuomo said. The cost of a single ventilator has risen from $25,000 to $40,000. Face masks for front-line staff, normally about 58 cents each, have been quoted by sellers at $7.50, according to Cuomo’s office. Thermometers are going for twice their usual price, latex gloves triple. Portable X-ray machines that help diagnose the virus cost as much as 20 times what they were selling for before the emergency.

Why cooperative production needed

Centralization and prioritization of production is needed to save lives. Laws are needed to punish those who price gouge. This could be done under the Defense Production Act. After waffling, Trump finally invoked the DPA on March 27, but only regarding one company, GM, which had already agreed to produce ventilators. This is merely giving lip service.

With cities needing at least 135,000 ventilators right away, GM said it could only ship by April or May, and then only 5,000 to 7,500 units. These ventilators would not reach the cities in time for this first, devastating wave of the virus.

If seriously invoked two months ago, the Defense Production Act could have  re-tooled and re-directed  thousands of plants, and found domestic substitutes for components made overseas. This would have been most helpful for complex goods such as ventilators, which are assembled from hundreds of individual parts.

But the Trump administration sat on its hands.

Workers take initiative: Find supplies; demand refitting to make ventilators

With the federal government so derelict in its duties, working people and their unions have filled the gap. Presidents of the Service Employees International Union,  the American Federation of State, County and Municipal Employees,  the American Federation of Teachers and the  National Education Association wrote a letter to Chamber of Commerce CEO Tom Donohue on March 29:

“We condemn the Chamber’s efforts to lobby President Trump against using the Defense Production Act to direct emergency production of life-saving PPE and medical equipment such as ventilators….The idea that the Chamber would put bottom-line profits and adherence to some mistaken principle of capitalism ahead of the safety of American workers and the public at large is difficult to fathom.”

Service Employees International Union United Healthcare Workers West, concerned with their members’ safety, has located 39 million N95 masks and is making them available to state and local governments and health care systems. The union found a supplier that can produce 20 million protective masks per week and another that can supply millions of protective face shields.

Workers at General Electric’s Lynn, Massachusetts factory walked off the job on March 30 to demand that the company stop making jet engines at the plant and make ventilators instead. They were backed by their union, the Communication Workers of America.

Socialist planning needed

Unable to get ventilators in the U.S., New York State has purchased 15,000 ventilators in China. Why does China have ventilators when the U.S. doesn’t?

China has ventilators because, while there are capitalist businesses there, China has the centralized government of a socialized country. This government prioritized meeting human needs and saving human lives. In marked contrast to the U.S foot-dragging, when the seriousness of the virus became evident, the Chinese government immediately centralized the retooling of more than 1,000 factories to produce needed supplies. Applying science and the principles of public health, China has contained COVID-19. Now it is producing for export many thousands of ventilators, masks, gowns, test kits and other PPE , often given these as gifts to countries hardest hit.

Cuba, a socialist country whose government puts people’s needs first, instituted science-based practices to protect its population. It has very few COVID-19 cases, and is sending anti-viral medications and doctors around the world to assist other countries.

The coronavirus pandemic has revealed the capitalist system to be so bankrupt that, for the sake of humanity, it must be put out if its misery.  Capitalism is the virus and socialism is the cure.”[1]


In case the readoR did not know, this is the last bloG postas my health demands more movement from sedentary viscosity. Time to edit my wRitings and oRganize my iMaGeS and hike, lift-Metals and get back affirmed stRengths. The coRona-veRious is not laughing anti-Matter and another rufugees-Styled: ensconcement. The shoRtages, as I stated above, would not have happened under a socialist-Leadership. Period.         “R”


“On March 16, 2020, the chief of the International Monetary Fund (IMF) Kristalina Georgieva wrote a blog post on the Fund’s website; it represents the kind of generosity necessary in the midst of a global pandemic. “The IMF stands ready to mobilize its $1-trillion lending capacity to help our membership,” she wrote. Countries with “urgent balance-of-payments needs” could be helped by the IMF’s “flexible and rapid-disbursing emergency response toolkit.” Through these mechanisms, the IMF said that it could provide $50-billion to developing countries and $10-billion to low-income countries at a zero-interest rate.

The day before Georgieva made this public statement, the foreign ministry of the government of Venezuela sent a letter to the IMF asking for funds to finance the government’s “detection and response systems” for its efforts against the coronavirus. In the letter, President Nicolas Maduro wrote that his government is “taking different preventive measures and following through strict and exhaustive controls to protect the Venezuelan people.” These measures require funding, which is why the government is “turning to your honor-able organization to request its evaluation about the possibility of authorizing Venezuela a financing line of $5-billion from the Rapid Financing Instrument emergency fund.”

Georgieva’s policy to provide special assistance to countries should have been sufficient for the IMF to provide the assistance that the Venezuelan government had requested. But, very quickly, the Fund declined the request from Venezuela.

It is important to underline the fact that the IMF made this denial at a time when the coronavirus had begun to spread in Venezuela. On March 15, when Venezuelan President Nicolas Maduro’s government sent the letter to the IMF, Maduro met with senior government officials in Caracas. The Venezuelan pharmaceutical body (CIFAR) and the Venezuelan medical equipment companies said that they would be able to increase production of machines and medicines to stem the crisis; but, they said, they would need key raw materials that have to be imported. It is to pay for these imports that the Venezuelan government went to the IMF. The denial of the loan will directly punish the Venezuelan health apparatus and prevent Venezuela from properly tackling the coronavirus pandemic.

“This is the most serious situation we have ever faced,” said President Maduro as he put in place new measures. The Venezuelan government imposed an indefinite national quarantine and has put in place – building on the local self-government (communes) – a process to distribute food and key supplies. All the institutions of the state are now involved in doing their part in helping “flatten the curve” and “break the chain” of contagion. But, because of the IMF loan denial, the country will have a harder time producing testing kits, respirators, and key medicines for those infected with the virus.

Venezuela and the IMF

Venezuela is a founding member of the IMF. It has, despite being an oil-rich state, come to the IMF several times for various forms of assistance. The cycle of IMF interventions in Venezuela in the 1980s and early 1990s led to an uprising in 1989 that delegitimized the Venezuelan elite; it was on the back of the popular protests against the IMF that Hugo Chávez built the coalition that propelled him to office in 1998 and which started the Bolivarian Revolution in 1999. By 2007, Venezuela paid off its outstanding debts to both the IMF and the World Bank; Venezuela cut its ties to these institutions, hoping to build a Bank of the South – rooted in Latin America – as an alternative. But before this Bank could be set up, a round of crises struck Latin America, forced by a fall in commodity prices.

Venezuela’s economy relied upon foreign oil exports to generate the revenue necessary to import goods. With the fall in oil prices came a directed attack on Venezuela by a new round of unilateral sanctions from the United States. These sanctions prevented oil companies and transportation firms from doing business with Venezuela; international banks seized Venezuela’s holdings in their vaults (including $1.2-billion in gold in the Bank of England) and stopped doing business with Venezuela. This sanctions regime, tightened further after Donald Trump became the president of the United States, deeply hurt Venezuela’s ability to sell its oil and buy products, including supplies for its state health sector.

The IMF Takes Sides

In January 2019, the US government attempted a coup against the government of President Maduro. It chose as its instrument Juan Guaidó, whom the US named as the actual president of the country. US banks hastily seized the Venezuelan state assets held by them and turned them over to Guaidó. Then, in a startling move, the IMF said that the Venezuelan government would no longer be allowed to use its $400-million in special drawing rights (SDRs), the currency of the IMF. It said that it had taken this action because of the political uncertainty in Venezuela. In other words, because of the attempted coup, which failed, the IMF said it would not “take sides” in Venezuela; by not “taking sides,” the IMF refused to allow the government of Venezuela to access its own funds. Strikingly, Guaidó adviser Ricardo Hausmann, a former IMF development committee chair and head of the Inter-American Development Bank, said at that time that he expected that when the regime change occurs, the money will be available to the new government. This is the IMF directly interfering in Venezuelan politics.

Neither at that time nor now has the IMF actually denied that the government of Nico-las Maduro is the legitimate government in Venezuela. The IMF continues to acknowledge on its website that the representative of Venezuela in the IMF is Simon Alejandro Zerpa Delgado, the minister of finance in Maduro’s government. One of the reasons why this is so is that Guaidó could not prove that he had the support of the majority of the member-states of the IMF. Since he could not prove his standing, the IMF – again extraordinarily – has denied the Maduro government its legitimate right to its own funds and to borrow against facilities provided by the Fund to its members.

The IMF Denies

Normally, the IMF takes time when it gets a request for funds. The request has to be studied by the analysts, who look at the situation in the country and see whether the request is legitimate. In this case, the IMF responded immediately. It said no.

A spokesperson for the Fund – Raphael Anspach – would not answer specific questions about this denial; in 2019, he had been similarly cautious about saying anything about the denial of access to the $400-million in SDRs. This time, Anspach sent us a formal statement that the IMF has released to the media. The statement said that while the IMF sympathizes with the predicament of the people of Venezuela, “it is not in a position to consider this request.” Why is this so? Because, the IMF says, its “engagement with member countries is predicated on official government recognition by the international community.” “There is,” the statement says, “no clarity on recognition at this time.”

But there is clarity. The IMF continues to list the Venezuelan foreign minister on its website. The United Nations continues to recognize the Venezuelan government. That should be the official standard for the IMF to make its determination. But it is not. It is taking dictation from the US government. In April 2019, US Vice President Mike Pence went to the UN Security Council, where he said that the UN should accept Juan Guaidó as the legitimate president of Venezuela; he turned to the Venezuelan ambassador to the UN – Samuel Moncada Acosta – and said, “You shouldn’t be here.” This is a moment of great symbolism, the United States acting as if the UN is its home and that it can invite whomsoever it wants.

The IMF denial of the $5-billion request from Venezuela follows Pence’s sentiment. It is a violation of the spirit of international cooperation that is at the heart of the UN Charter. •

This article was produced by Globetrotter, a project of the Independent Media Institute.

Vijay Prashad is an Indian historian, editor and journalist. He is author of Red Star Over the Third World (LeftWord, 2017) and the Chief Editor of LeftWord Books.

Paola Estrada is in the Secretariat of the International Peoples Assembly and is a member of the Brazilian chapter of ALBA Movements (Continental Coordination of Social Movements toward the Bolivarian Alliance for the Peoples of Our America).

Ana Maldonado is in the Frente Francisco de Miranda (Venezuela).

Zoe PC is a journalist with Peoples Dispatch and reports on people’s movements in Lat-in America. She is also associated with Congreso de los Pueblos in Colombia.



The verity to ruin the eRathe came from w.i. psychopathic-Sicknesses for masse`’ murder to encircle: capitalist-Totalitarianism. This is the cRux of the issues as health-Needs must continue TO BE MET AGAIN, AND FORTHRIGHTLY, w.o. lame-Duck oligarchs-Congress mis-leadership: associated. Vote the socialist-Parties into US-congRess this FALL.

My two “books” are already taken from my 11-Volumes, started in 1966–yet looking for return data fRom w.i. Oro Bar Studio (1989).

Allow me to know if 13,000 pages wRitten werks and 20,000 slides are being held for the “pRopeRty retuRn”?        “R”


After a decade-long, worldwide corporate debt binge, the bill has come due: huge swaths of the corporate world are now at risk of default, with only governments able to save them. This time, any bailouts must place corporate investment under public control.

The coronavirus shutdown is hammering supply and demand across the globe. That has forced the real economy into a sharp recession and triggered a rolling financial crisis. Below is a primer on one key piece of this mess: the crisis in corporate debt markets. This branch of finance is vitally important because even healthy companies often need access to credit. If they do not get it, they go under.In 2008, the vector of crisis ran from mortgage-backed securities to the rest of the financial sector and then to the real economy. This time, the real economy is being hit directly, and the damage is reverberating back into financial markets.  The failing markets, in feedback-loop fashion, further threaten the real economy as corporations find it harder to borrow. As the corporate debt markets sour, major companies will go bankrupt. Unemployment is skyrocketing. Some analysts expect the economy to contract by an annualized rate of 30 percent during the second quarter of 2020.

Already, US financial markets are on public life support. The Federal Reserve has committed to unlimited purchases of all sorts of assets: US Treasuries, mortgage-backed securities, car loans, municipal debts, and, in a historic step, both short term and long-term corporate debt. But the crisis will require more than a financial rescue.

The key political question now is: What sort of controls will come with the state intervention? Corporate greed and self-dealing need to be checked not merely in the name of fairness but also to make sure public bailout money is actually invested in the real economy rather than just gambled away, as it was after the 2008 crash and rescue.


The Rise of Corporate Debt

Since 2008, household debt levels have actually declined and are now lower than they were going into the last crash. But not corporate debt. Measured as a firm’s “net debt” compared to its EBITDA (earnings before interest, tax, depreciation, and amortization), corporate debt has doubled since the last crash. In 2009, the average American company owed $2 of debt for every $1 in earnings. Today, the average firm carries net debt to EBITDA of 3 to 1, and many firms — like Ford Motor, CarMax, Harley-Davidson, and General Motors — carry ratios ranging from 8 to 1, to as high as 15 to 1. Boeing, a special case because of its 737 MAX crisis, carries a ratio of 37 to 1. Over the last two decades, corporate America’s credit rating has collapsed. In the early ’90s, more than sixty companies held AAA credit ratings. Today, only two US firms are AAA rated: Johnson & Johnson and Microsoft. In 2001, fewer than one in five “investment-grade” firms were rated BBB. Today half of all investment-grade corporate debt belongs to firms rated “triple-B” (BBB) or lower. A third of those firms are rated triple-B minus (BBB-), one notch away from speculative or “junk” status.

Already many triple-B-rated corporate bonds are trading on secondary markets at unusually low prices and high yields, often above 5 percent; that means even “investment grade” bonds are being treated as junk. Soon many triple-B-rated corporations will be formally downgraded to junk. That will drive up their borrowing costs and restrict their access to credit. Even healthy companies often need access to ready credit. If they do not get it, they go under. The rating agency Moody’s estimates the default rate for “speculative-grade” debt — companies with ratings lower than Baa from Moody’s Investors Service, or a rating lower than BBB from Standard & Poor’s — might reach 10 percent this year, up from 2.3 percent last year. The consequences of all this will reverberate throughout the wider economy, deepening and extending the recession.

Total global corporate debt, including bonds and loans, is approximately $66 trillion; more than double what it was a decade ago. For comparison, the combined gross national product of all economies was estimated at $80.27 trillion in 2017. About a quarter of that is the US economy.


What They Did With the Money

After the 2008 crash, the world’s central banks, with the US Federal Reserve in the lead, spent the next decade pushing money into the financial markets by way of super-low interest rates and the direct public purchase of financial assets from the private sector via quantitative easing (QE).The cheap credit encouraged lots of corporate borrowing in the form of loans from banks and massive issuance of corporate bonds. Unlike loans, which can be routinely extended, or sometimes abruptly terminated, or have interest rates that float up and down, corporate bonds are debt instruments issued by a company committing to repay borrowed money on a specified schedule at a specified, usually fixed, rate of interest.

Corporations have been borrowing for a variety of reasons that range from shrewd arbitrage to stupid and reckless asset stripping. For a struggling and unprofitable company, for example JCPenney, debt can be a lifeline. For a profitable firm, borrowing money can be a way to raise capital without diluting existing shareholders’ claim on the company’s profits, which would happen if the firm issued stock.

Even some profitable firms with piles of cash borrowed rather than spend their cash, in part for the firepower effect: letting other competitors and market entrants know that the firm has enough money on hand to buy out any threatening start-ups, and showing the world the firm is ready to ride out any economic crisis.

Will the Federal Reserve Make Trump a New Herbert Hoover? Is the US Economy Primed for a 1929-style Shock?

Some firms used their borrowed money to buy other firms. This helped fuel a post-2008 wave of mergers and acquisitions (M&As). Deloitte reported “more than $10 trillion in [M&A] domestic transactions since 2013.” Targeted companies borrowed to stockpile cash as a defense against such takeovers.

Firms also borrowed to fund CEO compensation, distributions to investors via dividends, and stock buybacks. Companies buy back their own stock so as to boost its price. A rising stock price is useful in many ways: it can keep away hostile raiders by making a targeted company too expensive to take over, but it can also draw in friendly suitors because (with some creative accounting) a rising stock value can make a weak firm appear more profitable. Corporate executives like a rising stock price because compensation packages are both tied to stock performance and almost always include some payment in company stock, so the higher the stock price, the higher the executives’ payout.

Sometimes, firms even invested their borrowed money in actual production. The capital-intensive oil and gas industry did that, but as we explain below, it still faces a crisis, perhaps more salient than other sectors.


Bad Credit as Perverse Incentive

The end result of all the borrowing was declining corporate credit-worthiness: corporate debt soon badly outpaced their earnings growth and cash balances. This led to widespread credit-rating downgrades.Perversely, lower credit ratings did not slow the borrowing binge, but rather spurred on further lending and borrowing, because as corporate credit ratings slipped, the interest rate that the downgraded firms had to pay on their loans and bonds increased. And, thus, so too did the lenders’ profits.

Corporate debt and stock prices entered into a twisted dialectic, each driving the other. As the stock market continued to inflate over the last decade, it provided the confidence investors required to continue their purchases of risky corporate bonds.

Keep in mind that many of the lending banks and asset funds were actually or essentially borrowing from Uncle Sam at inflation-adjusted rates close to zero, then lending to companies with triple-B and triple-B minus ratings at 5 percent interest. Profits like that meant there were always banks and asset funds eager to lend to debt-burdened corporations.

Investors could directly purchase specific corporations’ bonds, or, as is more often the case, invest in mutual funds or exchange-traded funds (ETFs) that target an array of corporate bonds. High-risk loans were also sliced and diced and repackaged into bundles called “collateralized loan obligations” (CLOs), a class of securities backed by an underlying portfolio of corporate loans.

According to the Federal Reserve Board of Governors, the majority of American CLOs are held by US institutional investors, including insurance companies, mutual funds, and depository institutions. This means that when the debt is unable to be serviced, the pain will be absorbed within the US economy, much of it by the unassuming customers of these financial behemoths.As was the case with the mortgage-backed securities of the 2008 crash, these funds helped “distribute risk” and thus gave an appearance of safety. The logic was that owning 1 percent of a hundred different loans would be safer, even if some loans went bad, than owning the entirety of a single debt security. The logic is not entirely wrong. And that is part of the problem: it encouraged yet more lending. As long as the economic forecast was optimistic, there was no reason for the debt spree to let up.

Zombies and Others

Corporate debt, like much of the economy, is a story of disparities. Not every corporation is burdened by debt. Some firms are actually awash in cash. Microsoft, Berkshire Hathaway, Alphabet Inc, and Apple each sit on more than $100 billion in cash. As a whole, corporate America has been sitting on record amounts of cash in recent years. But at the same time, Morgan Stanley Investment Management estimates that one in six US companies cannot cover even the interest payments on their debts.At the heart of the problem are “leveraged loans” and so-called zombie firms. Leveraged loans are a type of expensive, high-risk credit extended to already heavily indebted companies. Since the 2008 crash, the leveraged loan market has doubled to $1.2 trillion. Now, leveraged loans in the United States are being re-sold at only 84 cents on the dollar, their lowest price since August 2009. The majority of leveraged loans — more than half — are in the form of the aforementioned CLOs. In the fourth quarter of 2018, there were $617 billion of CLOs outstanding.

Zombie firms are defined by the Bank for International Settlements as heavily indebted, well-established companies that have failed to be profitable over an extended period and have low expected profitability in the future. In other words, heavily indebted start-ups do not qualify as zombies. The most threatened sectors are energy, automotive, insurance, capital goods (meaning equipment and machinery), telecoms, aerospace and defense, and some parts of retail.

The bull market of rising, often overvalued, stock prices allowed many uncompetitive and unprofitable companies to appear healthy based solely on their stock’s performance. Even before the markets started to crash on March 9, some analysts were prescient enough to call the market’s bluff at the beginning of the year.

But in this rapidly developing crisis, firms all across the economy may soon find it impossible to meet their liabilities. With the coronavirus breaking supply chains and forcing massive constrictions in consumer demand, corporate earnings are contracting fast, which in turn will badly hurt corporate debt servicing.

Like a hypertrophied organ rupturing, the putrefaction of unsustainable corporate debt now threatens to create a generalized economic sepsis that will hurt even healthy firms.


Profiles in Debt

Airlines. The top six major US airlines spent enormous sums to buy back their stock over the last decade. US airlines (as a whole) spent 96 percent of their borrowed money on buying back stock. Now, revenue from flights is plummeting. United Airlines’ bookings have fallen by 70 percent. Back in 2011, American Airlines filed for Chapter 11 bankruptcy with $29 billion in liabilities; today, they have over $34 billion in debt. Yields on some of their bonds reached a whopping 12 percent, a particularly distressing sign as interest rates have been slashed by the Fed in an effort to relieve credit markets.Energy. Even before the effects of coronavirus eviscerated demand for fossil fuels, US energy companies were suffering due to high fixed costs and low energy prices. In the last five years, 208 US energy companies have declared bankruptcy. Energy prices have been pushed down by the fracking revolution, the rise of renewable energy, and oil overproduction due to struggles between large producers like Saudi Arabia, Russia, and the United States.

Now the coronavirus shock is pushing firms over the edge. Occidental Petroleum — which has $40 billion in debt, while its market value (the value of all of its stocks combined) is less than $11 billion — recently had its debt downgraded to junk.

Energy mutual funds reveal the crisis in the energy sector as a whole. Vanguard Energy Fund, considered one of the top four oil mutual funds, has lost over 41 percent of its value since the beginning of the year. Of course, the biggest oil companies, the “Oil Majors” (such as BP, Exxon Mobil, and Royal Dutch Shell) have enough resources, market power, and government support to survive the crisis. But the effects on the less established firms stretch beyond the energy industry itself.

Lenders. As the oil and gas firms go into crisis, the banks that extended them credit may also face defaults. Loans outstanding to the petroleum sector from regional banks in North America exceed $100 billion. Banks financing oil companies in Texas and Oklahoma saw their share prices drop nearly 30 percent. In oil-dependent states, public budgets will hurt as tax revenues decline sharply.

Retail. A number of important retailers carry net debt to EBITDA ratios that are too high to be sustainable under current conditions. For example, Rite Aid owes $15.80 for every dollar it earns. For JCPenney, the ratio is $8.30 to $1; for Walgreens Boots Alliance, it is $5.80 to $1. Office Depot owes $4.60 compared to every dollar earned.


Beyond Bailout

Bailing out distressed companies, even taking them under public ownership for a while, may staunch the bleeding. And the bubble can eventually be reinflated with enough effort. But a replay of the 2008 bailout, which involved lots of public money but very little public regulation and planning, will only mean a long slump followed by a bubble for the rich.The American economy is a sick beast. It needs not only government handouts and ownership — which it is getting — it also needs planning.

Oil, airlines, and cruise ships — these are high-emission industries that, in the face of climate crisis, must be radically transformed or cease to exist. With government ownership and planning, these industries could be unwound and their resources redeployed.

Although COVID-19 set off our current recession, it was the indulgence of the 1 percent built into the 2008 rescue that is responsible for the depth and severity of our current economic crisis. Without guidance, money was poured into the financial system. Not surprisingly, it blossomed alongside the mutually reinforcing dynamic of artificially inflated stock prices and ballooning corporate debt.

Capitulation to the gluttony of financiers is deeply unjust. But it is also unworkable in purely technical terms. Without constraints on greed, there will be another bubble and crash and a longer slump, more suffering, greater inequality, and more social instability. We have to force government to use its legal and financial power to steer the American economy toward more egalitarian, socially rational, and environmentally sustainable purposes. We have to make this bailout work for the majority of us.

Note to readers: please click the share buttons above or below. Forward this article to your email lists. Crosspost on your blog site, internet forums. etc.

Christian Parenti is associate professor of economics at John Jay College, City University of New York. His most recent book is Tropic of Chaos: Climate Change and the New Geography of Violence (2011). His forthcoming book is Radical Hamilton: Economic Lessons from a Misunderstood Founder (Verso, Summer 2020).

Dante Dallavalle is an adjunct professor of economics at John Jay College, City University of New York.”[3]


Do you think that “Universal Health has been had N-O-W? Here are summary of tags ti import into the bRainscAPe: covid-19 now a pandemic, capitalism exacerbates crisis, u.s. imperialism exploits coronavirus as weapon of war, atheism manifesto case against christianity, judaism islam, i.p.b., health care instead military exercises,, codepink 17 Mar 2020, Information about a.i.d.s. as biological warfare agent, cuba to Italy’s aid by sending team of doctors ‘n nurses, covid-19 in iran coronavirus outbreak, measures ‘n impact, coronavirus covid-19 made china made in America.Maybe “health-Medicare should have dental-Health” if we need economy and not merely non-coRpoRate politics?          “R”


There is so much conflagRation in americas-Life, we all need the self-Self,


the peace-Warrior


Tags/ how wall st. & trump created the ventilator crisis, i.m.f. refuses aid to venezuela in midst of coronavirus crisis, coronavirus shutdown the worldwide corporate debt crisis,


[1] “How Wall St. & Trump created the ventilator crisis” Liberation News, by Joyce Wilcox 30 Mar 2020

[2] “IMF Refuses Aid to Venezuela in the Midst of the Coronavirus Crisis” LATIN AMERICA, PUBLIC GOODS 30 Mar, 2020 Vijay Prashad, Paola Estrada, Ana Maldonado and Zoe PC

[3] “Coronavirus Shutdown and the Worldwide Corporate Debt Crisis” by Christian Parenti and Dante Dallavalle, Global Research, 30 Mar 2020 Jacobin 26 March 2020 they say,“Corporations Are Broke. It’s Time to Cut Up Their Credit Cards. This time, any industry bailouts must place corporate investment under public control.” 


Bio-sketch (2-27-16)…

I started into believing that I would be able to show my data and my photogRapHics in 1996. By 1998 I was learning computers would gain ascendant methods thru technics of programming for a future connected to data and information. That was nuclear-Molecular finding(s) to share and my personal-Activism w first account specifics and engendering(s).

As cameras went 'digital-Tech' I fond that editing was also to follow in 2004. Then, in 2005 my first digital camera had replaced usage(s) of s.l.r. 35 mm's. I have no mercy nor pity for the thieves who have stolen my hard werk, as anxiety of what I allowed was mid-stReam--anyway! Those asshole-Pukes have cost me $1,000's on a fixed income and I remain single, sole-Survivor of two-Families w.o. offspring!

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