You get hosed. Again.
And to hell with Covid-19 relief.
By Zach Carter
The emergency coronavirus legislation that the Senate agreed to on Tuesday can only be described as an outrage. It is not an economic rescue package, but a sentence of unprecedented economic inequality and corporate control over our politics that will resonate for a generation.
It represents a transfer of wealth and power to the super rich from the rest of us, with the support of both political parties ― a damning statement about the condition of American democracy.
Final text of the bill has not been released, but according to a legislative draft, the new law would establish a $4.5 trillion corporate bailout fund overseen by Treasury Secretary Steve Mnuchin, with few substantive constraints. Some outlets are reporting this as a $500 billion fund, but $425 billion of that can be leveraged 10 times over by the Federal Reserve, resulting in a multi-trillion-dollar program.
The bill permits bailed out companies to lay off up to 10% of their workforce over the next six months, with no restrictions thereafter. Mnuchin would have authority to waive any upside for the public in its new investments, and the bill’s restrictions on stock buybacks at bailed-out firms are too temporary to be significant. Bailed out companies could even pay dividends to their shareholders.
Democrats and Republicans have essentially decided to hold a pittance of relief for the people hit hardest hostage to the most reckless and, at the moment, unnecessary corporate welfare program ever conceived.
Bailout money will flow to the shareholders of large corporations, otherwise known as rich people. The oversight terms that Democrats secured are purely cosmetic, replicating the toothless provisions of the 2008 bank bailout that enabled watchdogs to report abuse but not actually prevent or rectify it.
“If you give vast amounts of public money to a single person with no real accountability, you won’t like what happens next,” Damon Silvers, the deputy chair of the oversight panel for the bank bailout, wrote on Tuesday.
In exchange for this takeover, Democrats got four months of more generous unemployment benefits for the millions who will be laid off and a one-time check of $1,200 per adult, eliminating a Republican restriction that would have limited poor people to just $600 and phasing out payments for six-figure incomes. These are not bad provisions, but they pale in comparison to the handout offered to the rich.
“$1,200 isn’t enough,” the Economic Security Project, a liberal think tank, tweeted on Wednesday. By agreeing to the deal, Senate Democrats in effect accept a horrendous future in exchange for a somewhat less burdensome present.
Repeat mistakes of 2008-2010 bailout
“It is a panicked and reckless legislative response,” Sarah Miller, executive director of the American Economic Liberties Project, an anti-monopoly advocacy group, said in a statement on Wednesday. It’s one that “will repeat most of the mistakes made in the 2008-2010 bailouts” and “fundamentally transform the American economy,” she added.
There is, in fact, an economic emergency right now — just not for the super rich or massive conglomerates. On Monday, the Federal Reserve announced essentially unlimited support for the banking sector and, for the first time, used its authority to directly finance corporate debt. Large corporations can get money, as Boeing CEO David Calhoun made clear on Tuesday when he said his company would “just look at all the other options, and we’ve got plenty of them,” if Congress were to demand an equity stake in the companies it assists. Bailouts will eventually be necessary, but Congress has plenty of time to craft serious programs designed to save industry, not merely people who own stock in industry. …
(Commoner Call cartoon by Mark L. Taylor, 2019. Open source and free for non-derivative use with link to www.thecommonercall.org )