Here is the bailout brick congress just laid
Some of this might not be true or things will change, but let's look at what we are getting:
NO rent freeze
NO student debt forgiveness
ONE time payment
$1200 per person
NO money until May
Money will be taxed
Am I being charged interest? Do some have to pay this back? Is this a loan? Cuz it’s def not relief -it’s a bullshit attempt at shutting us up. #stimulusbill
— Thia is with Bernie (@ThiaBallerina) March 25, 2020
Twelve years ago, banks asked for a bailout after years of irresponsible, highly leveraged lending. The Treasury Department put out a three-page term sheet seeking money from Congress with no strings attached, even eliminating judicial review. Democrats balked, called it a slush fund and worse, then agreed after a few mostly meaningless bits of oversight and some promises to help ordinary people. That $700 billion bailout was window dressing for trillions that came from the Federal Reserve, but it kept Congress quiet, hooking them into the rescue of the system.
Twelve years later, virtually the same course of events is taking place. After just a couple weeks of extreme social distancing measures, the Treasury Department asked for a large bailout, this time of the entire corporate sector. The bill as written initially would have made all bailout activities secret for six months. Democrats balked, called it a slush fund and worse, and then agreed to a few mostly meaningless bits of oversight and some promises to help ordinary people. In fact they’re the same bits of oversight from the 2008 TARP bailout: a five-member oversight panel and an inspector general for the program.
The enormity of this bailout is being under-reported. The number you’re hearing is $500 billion. Of that, $75 billion goes to the airline industry and the mysteriously named “businesses critical to national security.” The other $425 helps capitalize a $4.25 trillion, with a T, leveraged lending facility at the Federal Reserve. The taxpayer dollars would soak up any losses from that lending program. The loans won’t be secret anymore, but the oversight is largely after the fact, without subpoena power, and mainly reduced to writing reports. How exactly do you expect a small, underfunded panel to find fraud in a $4.25 trillion lending facility! Especially when the current administration explicitly believes they are not required to turn over anything to Congress.
So it’s not a $2 trillion bill, it’s closer to $6 trillion, and $4.3 trillion of it comes in the form of a bazooka aimed at CEOs and shareholders, with almost no conditions attached. At the moment nobody’s seen language, but there’s apparently only a buyback ban for the term of the loan. The money cannon can therefore go to executive compensation or mergers or wholesale purchases of distressed businesses or whatever other financial engineering the accounting department can muster. And once the company returns to health, it can leak out cash to investors (and during the loan too, in dividends). There’s no requirement to keep workers hired; in fact, the (necessary) provision to boost unemployment insurance for four months to 100 percent of median salary (including furloughed workers, gig workers and freelancers) means that these companies can fire with relative impunity. Members of Trump’s family can’t get bailout funds, so, yay.
This is a robbery in progress. And it’s not a bailout for the coronavirus. It’s a bailout for twelve years of corporate irresponsibility that made these companies so fragile that a few weeks of disruption would destroy them. The short-termism and lack of capital reserves funneled record profits into a bathtub of cash for investors. That’s who’s being made whole, financiers and the small slice of the public that owns more than a trivial amount of stocks. In fact they’ve already been made whole; yesterday Wall Street got the word that they’d be saved and stocks and bonds went wild. BlackRock, the world’s largest asset manager, is running these bailout programs for the Fed, and could explicitly profit if the Fed buys its funds, which it probably will.
Progressives I’ve talked to on the Hill are apoplectic. “Temporary survival money for workers, trillions in permanent economic inequality saving a bunch of executives and elites,” said one House Democratic aide. There’s particular anger reserved for the big show made of the House Democratic bill, a sideshow that never was part of the Senate-side negotiation.
Democrats will instead whine from the sidelines as money is pushed into the hands of corporate elites. That’s the way they like it: no agency and ineffectual grandstanding. Someday Larry Kudlow will write a book called Firefighting about how he saved the economy in between board meetings of the six companies left in the country. And we’ll wonder how things got so off track. Don’t wonder.
Matt Stoller has been warning that the bailout is a corporate coup.
People are not internalizing what is happening. A $6 trillion credit allocation to Wall Street isn't a corporate handout, it's a coup. These numbers are a thorough restructuring of America. https://t.co/ReYBRJNA7q
— Matt Stoller (@matthewstoller) March 24, 2020
What Matt means:
$6 trillion at 0% interest means you can buy up America, the world really, and essentially rent it back out to the peasants at 2%, 4%, 10%, 20% by buying Treasuries, housing, real estate, MBSs, REITs, ETFs, stocks, natural resources, etc. etc..
I commented on this last night:
Nailed it. This is what Obama did for the banks too. He allowed blackrock the biggest hedge fund to buy up foreclosed homes for pennies on the dollar and they took and kept them off the market blowing up housing prices and rents. Blackrock and others became slum landlords and raise rents while not keeping their properties safe and up to code. And golly gee they are going to do it again.
Saagar on vapid navel gazing: He interviews two people who have been affected by being fired.
How many people are telling this same story? They will cover as many as they can.
Dems are being applauded for sticking up to the republicans and saving the working class. Blehh. I just don't understand their tribalism and blindness.
This is a bad deal. People are not going to be saved by getting $1,200 per person once and the cutoff for help is $75,000. No cut off for the corporations that have buying their stocks back after they got their huge tax cuts. None of the money went into raising worker's wages. BTW Obama did not raise the federal wage during his tenure. In fact he put a freeze on federal wages for 2 years after the great bank implosion happened. And he did not put a freeze on giving bank CEOs huge raises.
Tiny violin for someone making $75K+ not getting a full $1200 kicker.
Yeah F you and the horse you rode in on. $75,000 doesn't go far in states where mortgages and rents are above $2-3,000.
Someone posted the above article. The response:
Don't Interrupt Dem bashing with facts.
I am awaiting a spate of diaries quoting Intercept, Common Dreams, Jacobin and such that will pick one disagreeable thing and hype it to show how Democrats are bad.
At least we were left out of this one.
F this person too. It's a bad bill that doesn't go far enough to help people who are hurting and might lose everything. What will congress do when millions more are homeless? Probably just ignore it like they have been ignoring the millions now that are.