In a column for the Daily Beast, political observer David Rothkopf warned American taxpayers that Donald Trump's obsession with the stock market means that they will be hit with a bill for bailouts that put corporate profitability before the needs of cash-strapped Americans who have lost their livelihoods during the mismanaged coronavirus epidemic response.
With hints of a $50 billion bailout headed to the airline industry that has been hard hit by the almost complete collapse travel, Rothkopf compared the upcoming bailout of various industries to the 2008 bailout that mainly benefited the big banks while Americans were losing their homes.
According to the columnist, the airlines could have had cash on hand to weather the storm if they hadn't used their Trump-era tax savings to buy back stock.
"Yes, the airline industry used 96% of its free cash flow during the last decade on stock buybacks. Yes, that’s tens of billions of dollars they could have used as a safety net to aid them in times like these. But Monday, in the wake of the industry saying they wanted a $50 billion handout from the government to help them get through the current downturn in travel, the President said that the U.S. will back them up as needed," he wrote before warning, "Cruise-line executives have indicated that they would need help. Energy executives hurt by plummeting oil prices are already getting help through the government’s plan to buy oil for the national strategic reserves . Hotel owners have said they may “need” assistance from our Hotelier-in-Chief, who knows something about their businesses and plenty about using other people’s money to get out of tight spots. And Monday night, even the casinos got in on the action and put their hands out. "
According to the columnist, Trump will be more than willing to run to the aid of his corporate pals because he needs a strong economy once again if he has any hope of being re-elected.
"Trump had long been planning to run for a second term on his market prowess. 'Yes, I may be a Russian asset, an accused rapist and a racist but check out what I did for your bank account' was more or less his campaign strategy," he wrote. "Now, with a recession having begun and the markets tanking, the president is palpably afraid. Freaking out. And he is trying to do anything to get the markets to stop circling the drain."
Left behind, as usual, are average Americans.
"Restaurants, bars, hotels, gyms, retail, sporting and cultural events have shuttered in major cities. Entire industries have effectively been barred from operating. And many of the workers involved in those businesses are without health insurance, without savings, without guaranteed incomes, without an alternative way to make ends meet," he wrote. "Pain is coming. And if the experience of 2008 and 2009 is any indication, big bailouts will follow—and the primary beneficiaries of those bailouts will be wealthy Americans and the politicians they call their own. Yes, in 2009, the auto industry was bailed out to save jobs. But the companies we saved and their shareholders were the biggest beneficiaries. Yes, banks were bailed out after the financial crisis to provide liquidity, ostensibly so that vulnerable businesses could protect their employees. But the reality is that the big bankers that caused the crash were never held to account for their reckless efforts to game the system, while many 'regular' Americans still aren’t whole more than a decade later."
With that, Rothkopf cited advice from Sen. Elizabeth Warren (D-MA) who recently suggested, "...any money that goes to big companies to help their employees should be used to help the employees and must come 'with strings attached to ensure that the money goes to maintain payroll, not to enrich shareholders or pay executive bonuses.'"
He then added, "We should not bailout executives so they can maintain payments on their second homes or their yachts. If a company takes money from the federal government the conditions attached should include that it be paid back with interest and upside and that the companies accept a period, say three to five years, during which they cannot do stock buybacks, top executives receive no bonuses and their compensation is frozen."
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