For the second time in little over a decade, the world economy is in a
state of breakdown, this time on a far greater scale than 2008.
Investment bank Goldman Sachs announced on Friday that it expects the US
economy to contract by an unprecedented 24 percent in the second
quarter of the year (April-June), as production and service industries
grind to a halt. This would be the largest quarterly contraction in US
history, far surpassing even what took place during the Great
Depression.
The International Labor Organization reports that up to 25 million
workers worldwide could lose their jobs over the next several months,
but this is a vast underestimation. In the United States alone, 14
million jobs in the leisure and hospitality sector will be affected by
mandatory shutdowns. Moody’s Analytics reports that nearly 80 million
jobs, or half of the US economy, are at risk.
While the pandemic has triggered the crisis, the causes of the
economic breakdown lie far deeper. The process of financialization—the
systemic and unrestrained separation of the accumulation of staggering
levels of wealth from real productive activity—created a massively
unstable global economy, based on the unlimited transfusion of liquidity
by the central banks (i.e., quantitative easing) to drive up the equity
markets to ever more unrealistic and unsustainable levels.
-- Joseph Kishore and David North, "The spread of the pandemic and the lessons of the past week" (WSWS).