Puerile partisan populism is going to end up costing Americans millions of jobs.
One imagines most Americans would rather rescue their jobs from the ravages of coronavirus-induced downturn than lose them and just get a government check. Yet on Sunday, Democrats blocked a procedural vote on a coronavirus relief package in the Senate, arguing that the fiscal rescue package favored corporations over individuals.
Even if it were true, so what? Yes, lots of Americans already need financial help. Congress should send checks. But at this stage, Washington has a responsibility to focus on salvaging businesses, because that’s the most effective way to rescue individuals. And this doesn’t only mean small businesses, which everyone loves, but the big, nefarious, and callous corporations that employ around 40 percent of our workforce, and remain the conduit for tens of millions of private health insurance plans and retirement funds.
The Federal Reserve announced today that it would expand on its $700 billion in bond purchases, and buy as much as needed to keep markets functioning and stable. But it also opened programs to extend more credit for student, car, and business loans. The Fed has done far more than Congress because it isn’t weighed down by political considerations.
“A big reason the Senate can’t pass a bailout bill is that Republicans are refusing to require big companies that get bailouts to refrain from firing workers or imposing pay cuts,” explains one New York Times editorial board member.
If Congress wants to temporarily freeze executive pay, they should go for it. But for many companies, cutting pay and trimming workforces may be the only ways to survive, even with a bailout package, a loan, and the Fed pumping money into the economy. We should be unknotting regulatory strictures that constrain companies to help them outlast this giant, unforeseen economic hit, not adding more.
Democrats spent yesterday dishonestly claiming that a $500 billion Treasury Department loan program was a “slush fund” simply because the Trump administration was elected in 2016 to oversee the Treasury Department. Elizabeth Warren, a champion of top-down economic control, had the temerity to oppose the program because it would “boost favored companies,” and the liberal punditry followed her lead without offering any proof that there was something inherently corrupt about the program other than “Trump.”
Of course the Treasury Department would hand loans out to favored companies — if by “favored” you mean largely retail businesses that wouldn’t survive without help. One of the most ridiculous sticking points, in fact, is the Democrats’ demand that the Treasury rule out lending to any of the president’s companies. Trump’s companies employ around 20,000 Americans. Why shouldn’t his employees benefit, if they qualify?
Don’t get me wrong. When the federal government signs trillions in checks, bad behavior is inevitable. The chances of crafting a perfect bill in this situation — or any, for that matter — is nil. The point, though, is to try to quickly mitigate some of the massive damage that a once-in-a-century pandemic is causing.
The Senate bill was put together in a bipartisan fashion. I know this because Chuck Schumer was on cable television telling me it was. But apparently House speaker Nancy Pelosi controls the Senate as well, as she flew back from California on Sunday and sank the agreement. The bill is already filled with goodies for Democrats, $100 billion going straight to hospitals, and all kinds of government interventions. She wants more. According to Townhall’s Guy Benson, Democrats are demanding more collective bargaining powers for unions, increased fuel-emissions standards for airlines, and expansion of wind and solar tax credits.
Right now, though, this inane anti-capitalist rhetoric is destructive. This isn’t a case of executives’ acting corruptly or businesses being “greedy” or rent-seeking, it isn’t about consumers recklessly borrowing, and it’s not about any cyclical economic event. Unlike the 2008 financial crisis, there’s no real moral hazard in saving businesses. I’m about as anti-bailout as they come. But the fact is that government is the one forcing the economy to shut down in an effort to save lives due to an existential threat that no one could be prepared for properly. Trying to save corporations should be Congress’s first task.