UK Circling the Drain – Crisis what Crisis? 

It is now almost five years since the start of the COVID event. The public was told there was a deadly disease that would affect the entire population, and everyone was at risk.

However, in order to truly understand COVID, that event must be situated within a framework that examines the underlying economic determinants. In fact, many on the “left” are notable for having failed to undertake such an analysis and merely capitulated to the mainstream narrative.

The COVID event had little if anything to do with public health. It was a policy mechanism deployed to manage an impending financial crisis.

COVID policies served as a pretext for halting economic activity in a controlled manner to address systemic contradictions within neoliberal capitalism. Unprecedented fiscal and monetary interventions were strategic tools to stabilise the economy and prevent a deeper collapse of financial markets. 

The lockdowns, framed as public health necessities, effectively suspended economic activity in ways that allowed capital to regroup and restructure. This included consolidating corporate power (e.g. through increased reliance on digital platforms), and creating conditions for new rounds of capital investment post-crisis, facilitated by a convenient debt crisis and World Bank loans with pro-neoliberal strings-attached conditionalities. 

The framing of COVID-19 as a health crisis obscured its role in facilitating economic restructuring under the guise of emergency management. It also helped promote the notion of a benign, well-intentioned state that really cares about the well-being of the population.

They really care about you

Neoliberalism has dominated economic thought since the late 20th century, characterised by deregulation, privatisation and a focus on market-driven solutions. This framework led to systemic failures, particularly evident in the lead-up to the COVID event.

Financial markets were on the brink of collapse immediately prior to COVID. Quantitative easing (QE) had been put in overdrive following the financial crisis of 2008. QE was used as a tool to prop up a failing system.

What we saw following the 2008 crash was ordinary people being pushed further to the edge. We witnessed more than a decade of ‘austerity’ in the UK, a neoliberal assault on the living conditions of ordinary people carried out under the guise of reining in public debt following the bank bail outs.

During that period, a leading UN poverty expert compared the Conservative government’s welfare policies to the creation of 19th-century workhouses and warned that, unless austerity is ended, the UK’s poorest people face lives that are “solitary, poor, nasty, brutish, and short”. Philip Alston, the UN rapporteur on extreme poverty, accused ministers of being in a state of denial about the impact of policies. He accused them of the “systematic immiseration of a significant part of the British population”.

In a 2019 report, the Institute for Public Policy Research think tank laid the blame for more than 130,000 deaths in the UK since 2012 at the door of government policies. It claimed that these deaths could have been prevented if improvements in public health policy had not stalled as a direct result of austerity cuts.

And in a report on poverty in the UK by Professor David Gordon of the University of Bristol, it was found that almost 18 million could not afford adequate housing conditions, 12 million were too poor to engage in common social activities, one in three could not afford to heat their homes adequately in winter and four million children and adults were not properly fed (Britain’s population is estimated at around 66 million).

Meanwhile, The Equality Trust in 2018 reported that the ‘austerity years’ were just fine for the richest 1,000 people in the UK. They had increased their wealth by £66 billion in one year alone (2017-2018), by £274 billion in five years (2013-2018) and had increased their total wealth to £724 billion – significantly more than the poorest 40% of households combined (£567 billion).

And in early 2020, all this hardship was to be compounded by lockdowns to avert another financial meltdown. After treating millions of ordinary people as described above, we were informed that the elite now wanted to save everyone by locking them up and injecting them!

Managing the crisis

Looking at Europe, investigative journalist Michael Byrant says that €1.5 trillion was needed to deal with the financial crisis in Europe alone in 2020. The financial collapse staring European central bankers in the face came to a head in 2019.

Byrant stated that all talk about big finance bankrupting the nation (again) by looting public funds, politicians destroying public services at the behest of large investors and the depredations of the casino economy was conveniently washed away with COVID.

He adds that predators who saw their financial empires coming apart resolved to shut down society. To solve the problems they created, they needed a cover story, which appeared in the form of a ‘novel virus’.

The European Central Bank agreed to a €1.31 trillion bailout of banks followed by the EU agreeing to a €750 billion recovery fund for European states and corporations. This package of long-term, ultra-cheap credit to hundreds of banks was sold to the public as a necessary programme to cushion the impact of ‘the pandemic’ on businesses and workers.

What happened in Europe was part of a strategy to avert the wider systemic collapse of the financial system.

And what we have seen since COVID is a massive increase in global debt, inflation and more ‘austerity’ imposed on ordinary people.

Since 2020, in the UK, poverty has increased in two-thirds of communities, food banks are now a necessary part of life for millions of people and living standards are plummeting. The poorest families have been enduring a ‘frightening’ collapse in living standards, resulting in life-changing and life-limiting poverty.

Lockdowns were not imposed for public health reasons; they were implemented to prevent hyperinflation and manage a crisis of capitalism. Professor Fabio Vighi of Cardiff University argues that by suspending economic activity via lockdowns, governments aimed to mitigate inflationary pressures resulting from excessive liquidity injected into the economy through QE.

The lockdowns also facilitated a restructuring of the economy, allowing larger corporations to absorb smaller businesses struggling to survive during this period.

Prior to 2020, government reliance on financial markets and monetary policy tools like QE did not address underlying social and economic issues but instead perpetuated the system and existing inequalities.

Policies rolled out as part of the COVID event reflected a continuation of neoliberal principles, with governments opting for temporary fixes rather than comprehensive reforms that prioritise public welfare. The extraordinary monetary policies (lockdowns) served to maintain financial stability at the expense of broader societal needs.

In the run up to COVID, QE created an illusion of stability within financial markets, allowing governments to avoid confronting deeper structural issues. This policy led to asset bubbles and increased volatility, creating a precarious situation where any attempt to tighten monetary policy could trigger significant market disruptions.

So, has anyone challenged this analysis of locating COVID policies within a framework that emphasises underlying economic determinants? In mainstream discourse, it has been ignored. That’s not too surprising because it would put the final nail in the coffin of the dominant COVID narrative.

While the Ukraine war and supply chain disruptions are often cited as primary inflation drivers once COVID-related restrictions were lifted, some economists predicted that once lockdowns had ended, inflation could surge dramatically.

As Deutsche Bank noted, after 30 years of low inflation, this “benign era could end abruptly once lockdowns are lifted”. Deutsche Bank also stated that the biggest financial bailout in history took place during the COVID era.

Challenging is heresy

Meanwhile, most economists would probably dismiss out of hand the arguments stated above rather than engage with them critically. Challenging the prevailing economic orthodoxy never goes down well. Highlighting systemic failures associated with neoliberal frameworks and questioning the efficacy of measures like QE in addressing underlying issues requires open dialogue rather than heavy handed pushback.

During COVID, the UK government implemented several financial measures to support workers and businesses, with a significant focus on the Coronavirus Job Retention Scheme (CJRS), commonly known as the furlough scheme.

The CJRS cost the UK government approximately £70 billion. This scheme enabled employers to claim grants covering up to 80% of employees’ wages, with a cap of £2,500 per month per employee.

To finance this unprecedented level of support, the UK government increased its borrowing significantly. This borrowing was necessary to cover not only the furlough scheme but also other COVID policy measures.

The increase in borrowing led to a substantial rise in public debt, which was exacerbated by the economic downturn caused by lockdowns and restrictions. Much of this debt was financed through mechanisms such as QE by the Bank of England, which involved purchasing government bonds.

In the fiscal year 2019/20, prior to the COVID event, the UK government borrowed approximately £62.3 billion. This figure represented about 2.8% of the country’s Gross Domestic Product (GDP) at that time.

In stark contrast, during the fiscal year 2020/21, government borrowing surged to around £303 billion.

This significant increase in borrowing reflects the unprecedented financial measures taken by the UK government.

Rachel Reeves, the Chancellor, recently highlighted a £22 billion “gap” in public finances attributed to the previous administration. Keir Starmer is warning of unprecedented economic challenges — promises of ongoing economic woe (for ordinary people) that echo what economist Huw Pill said a couple of years ago — that people should ‘accept’ being poorer.

Of course, COVID lockdowns and restrictions were all about ‘saving granny’. And if you challenged the narrative or did not comply, you were beyond the moral pale.

Those who recognise the manipulation of public sentiment by those who control the global economy might be forgiven for viewing the ‘saving granny’ narrative as the height of cynicism, coming from individuals who have demonstrated a lack of moral standards for decades with their wars, destructive economic policies and complete disregard for ordinary working people.

And although people like Klaus Schwab and Bill Gates were often singled out for criticism by those who challenged the mainstream narrative on COVID, when referring to the ‘controllers of the global economy’, this means those who largely remain in the shadows, the powerful and unscrupulous banking families and their handmaidens discussed by Dean Henderson in a detailed five-part series of articles back in 2011.

Meanwhile, in the UK, there continues to be money available (to date almost £13 billion) to send to Ukraine to ensure the killing and dying continues in order to guarantee that those bastions of morality — BlackRock, J P Morgan and all — get their slice of the post-war honey pot.

CST Research