Bailout

"Last October, Congress passed the , putting $700 billion into the hands of the Treasury Department to bail out the nation’s banks at a moment of vanishing credit and peak financial panic. Over the next three months, Treasury poured nearly $239 billion into 296 of the nation’s 8,000 banks. The money went to big banks. It went to small banks. It went to banks that desperately wanted the money. It went to banks that didn’t want the money at all but had been ordered by Treasury to take it anyway. It went to banks that were quite happy to accept the windfall, and used the money simply to buy other banks. Some banks received as much as $45 billion, others as little as $1.5 million. Sixty-seven percent went to eight institutions; 33 percent went to the rest. And that was just the money that went to banks. Tens of billions more went to other companies... But once the money left the building, the government lost all track of it. The Treasury Department knew where it had sent the money, but nothing about what was done with it. Did the money aid the recovery? Was it spent for the purposes Congress intended? Did it save banks from collapse? Paulson’s Treasury Department had no idea, and didn’t seem to care. It never required the banks to explain what they did with this unprecedented infusion of capital."

"One of the most prevalent ideological mantras of Western capitalism is that the market should rule. But as the latest health and economic crises demonstrate, capitalists soon forget their worship of the market when times get tough. They scream for government money, and plenty of it. It turns out that “the market” is fine when it comes to whipping workers to accept lower wages, but when it comes to lower profits, the market can go hang. [...] Faced with the collapse of the capitalist economy, for the second time in a dozen years, with massive bankruptcies on the table and the stock market plunging by more than 30 percent and more to come, fervent advocates of the free market are now embracing government intervention to save their skins. [...] Governments around the world are now laying out money on things that just weeks ago they would have attacked as unaffordable. [...] It’s not that governments have suddenly discovered a big pot of gold in the basement of the . They say that they are taking these measures to both protect and to save the economy. But it’s obvious which takes priority. The new measures constitute the largest bailout bonanza in world history, carried out through state-administered transfers of public wealth and current and future debt to billionaires and : socialisation of losses, privatisation of profits. The outcome will be to further transfer, consolidate and concentrate wealth, just as has occurred since the GFC. While there is discussion about small handouts, nothing serious is being proposed to halt the mass layoffs now gathering steam."

"The rescue plan is better than nothing. It offers limited relief to some of those who desperately need it, and contains an ample fund to help the truly vulnerable: the piteous corporations flocking to the nanny state, hat in hand, hiding their copies of Ayn Rand and pleading once again for rescue by the public after having spent the glory years amassing vast profits and magnifying them with an orgy of stock buybacks. But no need to worry. The slush fund will be monitored by Trump and his Treasury Secretary, who can be trusted to be fair and just. And if they decide to disregard the demands of the new inspector-general and Congress, who is going to do anything about it? Barr’s Justice Department? Impeachment?"

"At the very least, the regular practice of public bailout out of the corporate sector should require stiff enforcement of a ban on stock buybacks, meaningful worker participation in management, an end to the scandalous protectionist measures of the mislabeled "free trade agreements" that guarantee huge profits for Big Pharma while raising drug prices far beyond what they would be under rational arrangements. At least."

"The COVID-19 pandemic is an unprecedented global health, social and economic crisis. Historical comparisons are few, particularly in recent decades. This tragedy constitutes nothing less than a trial for all humanity. [...] The pandemic, in other words, is now testing the capacity of our political and economic systems to cope with a global problem situated at the level of our individual interdependence, which is to say at the very foundation of our social life. [...] We equally depend on the state to help businesses of all sizes endure this trial by providing them with the financial assistance and guaranteed loans they require in order to avoid bankruptcy and retain as much of their as possible. States no longer have any qualms about spending without limits in order to save the economy ⁠— "whatever it takes!" ⁠— while just weeks ago states opposed any request to increase hospital staff, hospital beds, or emergency services, out of its obsessive concern for budgetary constraint and limiting the public debt."

"Bail out the people, not the corporations. Bail out the living world, not its destroyers. Let’s not waste our second chance."

"So let me get this straight: Extending additional unemployment benefits to out-of-work Americans during a pandemic will make them lazy and lead to socialism, but trillions in bailouts to Wall St. bankers and corporate execs is good for the economy?"

"The banks have said, leave us deregulated, we know how to run things, don't put government in to meddle. Then with that freedom of maneuver they took huge gambles, and even made illegal actions, and then broke the world system. As soon as that happened then they rushed out to say 'bail us out, bail us out, if you don't bail us out, we're too big to fail, you have to save us'. As soon as that happened, they said 'oh, don't regulate us, we know what to do'. And they almost went back to their old story, and the public is standing there, amazed, because we just bailed you out how can you be paying yourself billions of dollars of bonuses again? And the bankers say, 'well we deserve it, what's your problem'? And the problem that the Occupy Wall Street and other protesters have is: you don't deserve it, you nearly broke the system, you gamed the economy, you're paying mega fines, yet you're still in the White House you're going to the state dinners, you're paying yourself huge bonuses, what kind of system is this?"

"When I talk about this in the United States, I'm often attacked, 'oh, you don't believe in the free market economy', I say, how much free market can there be? You say deregulate, the moment the banks get in trouble, you say bail them out, the moment you bail them out, you say go back to deregulation. That's not a free market, that's a game, and we have to get out of the game. We have to get back to grown-up behaviour. ... There is a lot of greed and there's very little accountability... One wonders in the United States sometime whether the government is regulating the banks, or are the banks determining government policy?... Why have the politicians protected them all along? You know why? Very simple. They pay for the politicians."

"It’s mid-October, and the Wall Street bailout that was supposed to save the economy from collapse is a flop... Senate passage came on Thursday, Oct. 2...President Bush signed the $700 billion Wall Street bailout into law... Despite all the media hype about how the bailout measure would quickly steady the stock market, it fell and kept falling. Over the next week, ending Oct. 10, the Dow made history as stocks plunged by 18 percent in five trading days. And what about the ostensible main reason for the humongous bailout in the first place — unfreezing the credit markets? Well, in spite of the enormous media outcry for the bailout to get credit flowing, it didn’t. And the key economic factor in the recession — housing — remained just as stuck as before."

"As the Institute for Policy Studies pointed out on Oct. 1, "A real 'bailout' would target the troubled households of working American families. A $200 billion ‘Main Street Stimulus Package' could bolster the real economy and those left vulnerable by the subprime mortgage meltdown." Components of such a stimulus package could include "a $130 billion annual investment in renewable energy to stimulate good jobs anchored in local economies and reduce our dependency on oil" — and "a $50 billion outlay to help keep people in foreclosed homes through refinancing and creating new homeownership and housing opportunities” — and "a $20 billion aid package to states to address the squeeze on state and local government services that declining tax revenues are now forcing." But that kind of discourse for grassroots economic stimulus hasn’t gotten into the media storyline..."