The $5 trillion corporate bailout bill passed the Senate by a 96 to 0 vote.
Even so called progressives like Bernie Sanders and Elizabeth Warren voted for it.
“I am disappointed that these so-called champions that ran these anti-corporate campaigns for President caved in and decided to go along with the most expensive corporate bailout of all time,” says David Dayen, executive editor of the American Prospect magazine.
Dayen is the author of a new book –Monopolized: Life in the Age of Corporate Power (New Press, July 2020).
“The CARES Act included relief for individuals and small businesses,” Dayen told Corporate Crime Reporter in an interview earlier this month. “But it also included $500 billion that would be used for a corporate bailout. And that $500 billion would be used to capitalize a credit facility at the Federal Reserve that could lever up that money to as much as $4.5 trillion.”
“Look at the proportionality of that response – you have $4.5 trillion for the largest corporations in America – almost a limitless amount of money. It can go to the corporations with very few conditions, very few strings attached. And then you have these temporary programs for millions of small businesses struggling right now, many of them that are shuttered, you have a temporary program for employment for about four months, one time checks that go out $1200 per person.”
“But all of that is crumbs compared to this money cannon that the Federal Reserve and the Treasury have control of. You see the equity in the system where you have trillions of dollars from the Fed and the Treasury, which are rapid response organizations. And then you have the Small Business Administration, one of the worst agencies in all of the federal government, trying to administer a $350 billion small business loan program. It has had a rocky rollout. You have the state unemployment system buckling under the strain of unemployment claims. And that is how the unemployment insurance relief is administered.”
“Where you stand in America is based on what programs help you in a crisis. If you don’t matter very much, you have these rickety programs that will try to get you some relief. And if you do matter and have wealth, privilege and power, you get the Federal Reserve and the Treasury to write you billions and billions of dollars on the spot. That’s the core difference.”
You call it a bailout. Others say – it’s a loan program. And in 2008, the vast majority of the loans were paid back and the same will happen here.
“These are loans. They will be paid back. However, they are loans at ultra low rates – almost nothing in terms of interest. If you give a sophisticated organization a bunch of money at near zero percent interest, if they can’t figure out how to make more than zero percent interest off that money they probably should not be in business. They are going to make a lot of money off of this capital. And whether they pay it off or not, they are still being nursed back to health in a monumental fashion with trillions of dollars of support in ways that other actors in the economic system are not.”
“There is this parsing between loans and bailouts, but they are two sides of the same coin.”
Before the House vote was taken, you wrote – “any House member could deny unanimous consent and stop this. But that would require getting to Washington, forcing everyone else back in the middle of a pandemic.”
There was a Republican who did that – Congressman Thomas Massie (R-Kentucky). If it could have been stopped, why wasn’t it stopped? He came back and tried to stop it.
“He slowed it down,” Dayen said. “He put the brakes on it by not allowing it to run through with unanimous consent. Massie is a libertarian who doesn’t believe the government should be involved in really anything. That was his rationale. He denied unanimous consent which meant they had to vote on it.”
“And they did bring people back into Congress. Some of them had coronavirus. They were in the close quarters of the House of Representatives. It was a dangerous situation. And Massie forced that to happen. He did call for a recorded vote. They did a voice vote and Massie was overruled by the chair, which is the chair’s prerogative – by saying that there wasn’t a second available for a recorded vote. And this was purely to protect the members from the consequences of recording a yes vote on this giant corporate bailout. It frustrates the ability for individual citizens to know exactly where their representatives stood on this question.”
“As the years go by and if this bailout is as damaging to society as I think it will be, you will have a lot of members of Congress saying – I would have voted against that. But without the actual recorded vote, they can say whatever they want. And the fact is, they don’t have that down in writing. This was done to protect members who didn’t want to go on the record about this.”
“What Massie did was somewhat noble. He wanted people to stand behind their vote. And we didn’t get that. And that was pretty shameful on the part of the House.”
In what way will this bailout package be damaging to society?
“Look at the disproportionate response. Millions of smaller and medium sized businesses who don’t have cash reserves are going to be struggling and many of them are likely to go out of business in this depression that we are faced with. Large businesses get access to this unlimited money cannon and they don’t have restrictions on what they can do with it. In the aftermath of this, you will have large corporations nursed back to health and they won’t have as much competition in the marketplace from smaller businesses, who don’t have access to the same lifeline and are likely to have to shutter their operations. This is going to accelerate the expansion and concentration of corporate power that we have seen over the last forty years.”
“But this is like a mass expansion of what we have seen happening in gradual form for four decades. Are we going to have a situation where the only retailers after this are Wal-Mart, Costco and Amazon? Jim Cramer of CNBC said that is probably going to be the outcome.”
“Are we going to have a situation where there are fewer and fewer businesses controlling certain economic sectors and individuals have fewer and fewer choices as workers, customers, entrepreneurs who can’t go up against powerful interests who want to keep their market share? That is going to make society unrecognizable relative to where it is right now. I see nothing that will change that right now.”
There are probably 50 to 100 progressive members of the House who agree with you. Why didn’t any of them say anything to stop this train?
“We will never know how many people were opposed to this. There was no recorded vote. The die was cast when the Senate was chosen to shepherd along this bill instead of the House. When the Senate takes the lead on this multi-trillion dollar bill, that’s Mitch McConnell who is largely writing it. And then Chuck Schumer responding to it. It’s not in the hands of Democrats driving and then the Republicans responding.”
“This bill passed 96 to 0 in the Senate. There was no recorded House vote. I don’t think there were 50 to 100 who were opposed in the House. And they would have been outvoted. But they could have slowed it down. They could have registered their dissent. Only Alexandria Ocasio-Cortez even so much gave a negative speech on the House floor.”
“This was an abdication of responsibility at all levels of government – Democrats and Republicans collaborated on this. Bernie Sanders voted for this. Elizabeth Warren voted for this. Regardless of what happened in the House, every faction of the Democratic Party reflected in the U.S. Senate gave their approval of this giant bailout. That was a terrible mistake.”
The subtitle of your book is – Life in the Age of Corporate Power. And the bailout bill seemed to prove that both parties are beholden to concentrated corporate power. The progressive Senators – Elizabeth Warren and Bernie Sanders – who ran for President have bowed out in favor of a more corporate candidate – Joe Biden. Is the new age post coronavirus going to usher in a new politics?
“It needs to usher in a new politics. It’s in these moments where you get a transformation of society and its politics. The crisis is revealing all of these cracks in our social and economic structure that need to be addressed. I am disappointed that these so-called champions that ran these anti-corporate campaigns for President caved in and decided to go along with the most expansive corporate bailout of all time. However, we will see how this transpires.”
“Joe Biden is a coalition builder, he likes to be seen in the center of the party. The goal for individuals is to speak out and force that center over to the left. History has shown that if the center moves, Joe Biden will move with it. That is something I will be reporting on and wrestling with over the next weeks and months. If Joe Biden becomes President, it will be interesting to see what his agenda will be.”
“Think back to 1932 when Franklin Roosevelt ran on balancing the budget. That’s not what he did when he got into office. There was a depression on and emergency measures needed to be taken. In a transformative crisis, the political system suddenly becomes much more open to different ways of conducting policy. We will have to see whether Biden is willing and able to change with the times and meet the moment.”
“The bailout bill that was passed was shameful. I’m disappointed in who supported it. The fact that it had such unanimous support was disappointing. There could be redemption here. We will have to see what will happen.”
[For the complete q/a format Interview with David Dayen, see page 34 Corporate Crime Reporter 17(11), April 27, 2020, print edition only.]