Last
month, documents published by BuzzFeed News from the US
Treasury’s Financial Crimes Enforcement Network, known as FinCEN, showed that
between 1999 and 2017, major banks has been involved in financial transactions
of $2 trillion flagged as potentially involving money laundering. The banks
involved were some of the biggest in the world including JP Morgan, HSBC and
Standard Charter Bank.
Earlier this month, JPMorgan Chase
was fined $920 million over “spoofing” activity involving the quick placing and
withdrawal of buy and sell orders to create the impression there was a surge of
activity around a particular financial asset in order to create a profitable
opportunity.
According to one of the lead
investigators in the case, “a significant number of JP Morgan traders and sales
personnel openly disregarded US laws that serve to prevent illegal activity in
the marketplace.”
But despite the fact that the
practice was not only well known but was actively promoted, no one in the upper
echelons was prosecuted, and the fine has been written off as an operating
expense.
The issue which clearly arises is: what
is the underlying cause of this system of corruption and illegality?
Commenting on the latest Goldman
case, Seth DuCharme, the acting US attorney in Brooklyn, might have gone
further than he intended when he remarked: “This case is … about the way our American
financial institutions conduct business.”
It certainly is. However, it would be
wrong to simply ascribe it to the greed of the financial executives and others,
and thereby able to be countered through tighter regulations.
Of course the greed of executives and
others exists in abundance. But their activities are, in the final analysis,
the expression of processes rooted at the very heart of the profit system—they
are the personification of objective tendencies.
While the aim and driving force of
the capitalist system is the accumulation of profit the mode of accumulation
has undergone profound changes, above all in the US. No longer is the chief
source of profit investment and production in the real economy.
It occurs through operations in the
financial system based on speculation, clever trades, the securing of fees for
the passage of money (without questioning its source) and where the “value” of
assets is determined by arcane algorithms and other forms of “financial
engineering.”
Consequently, in conditions where
profits are increasingly divorced from the underlying real economy, lies,
deception, misinformation, corruption and criminality come to dominate the
entire financial system.
Goldman
Sachs Executive Who Profited Off Housing Collapse Pours $200K into Joe Biden
Campaign The former Goldman Sachs executive who helped one of the biggest
banks profit off the nation’s housing collapse in 2008 is pouring hundreds of
thousands of dollars into Democrat presidential candidate Joe Biden and Sen.
Kamala Harris’s (D-CA) campaign.
Donald Mullen Jr., as first noted by the Washington Free
Beacon, gave $200,000 to the Biden
Victory Fund in August. Mullen was a key architect of the “Big Short” scheme
that allowed Goldman Sachs to profit from the housing collapse.
New York Magazine detailed the scheme:
In the years leading up to the financial crisis, a team of
mortgage executives and traders at Goldman Sachs predicted that the housing
market was in trouble. So they designed a massive bet against it, using
a bunch of esoteric financial instruments known as collateralized debt
obligations that would pay off in the event that housing prices fell and
homeowners defaulted on their mortgages . [Emphasis added]
That bet, now known colloquially as “the big short,” allowed Goldman
and its clients (including hedge-fund managers
like John Paulson) to avoid losses and make billions of dollars when
the housing market collapsed , at the same time that people around the
country lost their homes to foreclosure. [Emphasis added]
Meanwhile, millions of America’s working and middle class lost
their homes, as Business
Insider reported in 2018:
After the real estate bubble burst in 2008, many families
living in the US found that the cost of running their homes was no longer
affordable , resulting in many of those people losing their homes. [Emphasis
added]
The widespread consequences were that, between 2006 and
2014, nearly 10 million homeowners in America saw the foreclosure sale of their
own homes , which entailed having to give up their property to lenders or
selling it as quickly as possible via an emergency sale, according to the
Süddeutsche Zeitung. [Emphasis added]
Livelihoods were threatened and the financial damage was
colossal — not to mention the emotional damage suffered by victims of the
crisis — a 2014 study shows a correlation between
the crisis and an increased suicide rate. But where are the victims of the real
estate and financial crisis now? [Emphasis added]
It’s not just Mullen Jr. who is showering Biden with campaign
cash to defeat President Trump on November 3. Biden has taken nearly 200 contributions
from employees at Goldman Sachs — including contributions of nearly $50,000 to
$55,000 from the bank’s top executives.
Altogether, a recent CNBC analysis revealed, Wall Street has
donated more than $50 million to Biden’s
campaign this election cycle and CNN has noted that “all the
big banks” are backing Biden and Harris against Trump.
John Binder is a reporter for Breitbart News. Follow him on
Twitter at @JxhnBinder .
OBAMA AND HIS BANKSTERS:
And it all got much, much worse after 2008,
when the schemes collapsed and, as Lemann points out, Barack Obama did not
aggressively rein in Wall Street as Roosevelt had done, instead restoring the
status quo ante even when it meant ignoring a staggering white-collar crime
spree. RYAN COOPER
The Rise of Wall Street Thievery How corporations and their
apologists blew up the New Deal order and pillaged the middle class.
by Ryan Cooper
MAGAZINE
A merica has long had a
suspicious streak toward business, from the Populists and trustbusters to
Bernie Sanders and Elizabeth Warren. It’s a tendency that has increased over
the last few decades. In 1973, 36 percent of respondents told Gallup they had
only “some” confidence in big business, while 20 percent had “very little.” But
in 2019, those numbers were 41 and 32 percent—near the highs registered during
the financial crisis.
Clearly, something has
happened to make us sour on the American corporation. What was once a stable
source of long-term employment and at least a modicum of paternalistic benefits
has become an unstable, predatory engine of inequality. Exactly what went
wrong is well documented in Nicholas Lemann’s excellent new book, Transaction
Man . The title is a reference to The Organization Man , an
influential 1956 book on the corporate culture and management of that era.
Lemann, a New Yorker staff writer and Columbia journalism
professor (as well as a Washington Monthly contributing
editor), details the development of the “Organization” style through the career
of Adolf Berle, a member of Franklin D. Roosevelt’s brain trust. Berle argued
convincingly that despite most of the nation’s capital being represented by the
biggest 200 or so corporations, the ostensible owners of these firms—that is,
their shareholders—had little to no influence on their daily operations.
Control resided instead with corporate managers and executives.
Transaction Man: The Rise of the Deal and the
Decline of the American Dream
Berle
was alarmed by the wealth of these mega-corporations and the political power it
generated, but also believed that bigness was a necessary concomitant of economic
progress. He thus argued that corporations should be tamed, not broken up. The
key was to harness the corporate monstrosities, putting them to work on behalf
of the citizenry.
Berle
exerted major influence on the New Deal political economy, but he did not get
his way every time. He was a fervent supporter of the National Industrial
Recovery Act, an effort to directly control corporate prices and production,
which mostly flopped before it was declared unconstitutional. Felix
Frankfurter, an FDR adviser and a disciple of the great anti-monopolist Louis
Brandeis, used that opportunity to build significant Brandeisian elements into
New Deal structures. The New Deal social contract thus ended up being a
somewhat incoherent mash-up of Brandeis’s and Berle’s ideas. On the one hand,
antitrust did get a major focus; on the other, corporations were expected to
play a major role delivering basic public goods like health insurance and
pensions.
Lemann
then turns to his major subject, the rise and fall of the Transaction Man. The
New Deal order inspired furious resistance from the start. Conservative
businessmen and ideologues argued for a return to 1920s policies and provided
major funding for a new ideological project spearheaded by economists like
Milton Friedman, who famously wrote an article titled “The Social
Responsibility of Business Is to Increase Its Profits.” Lemann focuses on a
lesser-known economist named Michael Jensen, whose 1976 article “Theory of the
Firm,” he writes, “prepared the ground for blowing up that [New Deal] social
order.”
Jensen
and his colleagues embodied that particular brand of jaw-droppingly stupid that
only intelligent people can achieve. Only a few decades removed from a crisis
of unregulated capitalism that had sparked the worst war in history and nearly
destroyed the United States, they argued that all the careful New Deal
regulations that had prevented financial crises for decades and underpinned the
greatest economic boom in U.S. history should be burned to the ground. They were
outraged by the lack of control shareholders had over the firms they supposedly
owned, and argued for greater market discipline to remove this “principal-agent
problem”—econ-speak for businesses spending too much on irrelevant luxuries
like worker pay and investment instead of dividends and share buybacks. When
that argument unleashed hell, they doubled down: “To Jensen the answer was
clear: make the market for corporate control even more active, powerful, and
all-encompassing,” Lemann writes.
The
best part of the book is the connection Lemann draws between Washington
policymaking and the on-the-ground effects of those decisions. There was much
to criticize about the New Deal social contract—especially its relative
blindness to racism—but it underpinned a functioning society that delivered a
tolerable level of inequality and a decent standard of living to a critical
mass of citizens. Lemann tells this story through the lens of a thriving
close-knit neighborhood called Chicago Lawn. Despite how much of its culture
“was intensely provincial and based on personal, family, and ethnic ties,” he
writes, Chicago Lawn “worked because it was connected to the big organizations
that dominated American culture.” In other words, it was a functioning
democratic political economy.
Then
came the 1980s. Lemann paints a visceral picture of what it was like at street
level as Wall Street buccaneers were freed from the chains of regulation and
proceeded to tear up the New Deal social contract . Cities hemorrhaged
population and tax revenue as their factories were shipped overseas. Whole
businesses were eviscerated or even destroyed by huge debt loads from hostile
takeovers. Jobs vanished by the hundreds of thousands.
And
it all got much, much worse after 2008, when the schemes collapsed and, as
Lemann points out, Barack Obama did not aggressively rein in Wall Street as
Roosevelt had done, instead restoring the status quo ante even when it meant
ignoring a staggering white-collar crime spree. Neighborhoods drowned
under waves of foreclosures and crime as far-off financial derivatives
imploded. Car dealerships that had sheltered under the General Motors umbrella
for decades were abruptly cut loose. Bewildered Chicago Lawn residents
desperately mobilized to defend themselves, but with little success. “What they
were struggling against was a set of conditions that had been made by faraway
government officials—not one that had sprung up naturally,” Lemann writes.
T oward the end of the
book, however, Lemann starts to run out of steam. He investigates a possible
rising “Network Man” in the form of top Silicon Valley executives, who have
largely maintained control over their companies instead of serving as a sort of
esophagus for disgorging their companies’ bank accounts into the Wall Street maw.
But they turn out to be, at bottom, the same combination of blinkered and
predatory as the Transaction Men. Google and Facebook, for instance, have grown
over the last few years by devouring virtually the entire online ad market,
strangling the journalism industry as a result. And they directly employ far
too few people to serve as the kind of broad social anchor that the car
industry once did.
In
his final chapter, Lemann argues for a return to “pluralism,” a “messy,
contentious system that can’t be subordinated to one conception of the common
good. It refuses to designate good guys and bad guys. It distributes, rather
than concentrates, economic and political power.”
This
is a peculiar conclusion for someone who has just finished Lemann’s book, which
is full to bursting with profoundly bad people—men and women
who knowingly harmed their fellow citizens by the millions for their own
private profit. In his day, Roosevelt was not shy about lambasting rich people
who “had begun to consider the government of the United States as a mere
appendage to their own affairs,” as he put it in a 1936 speech in which he also
declared, “We know now that government by organized money is just as dangerous
as government by organized mob.”
If
concentrated economic power is a bad thing, then the corporate form is simply a
poor basis for a truly strong and equal society. Placing it as one of the
social foundation stones makes its workers dependent on the unreliable goodwill
and business acumen of management on the one hand and the broader marketplace
on the other. All it takes is a few ruthless Transaction Men to undermine the
entire corporate social model by outcompeting the more generous businesses. And
even at the high tide of the New Deal, far too many people were left out,
especially African Americans.
Lemann
writes that in the 1940s the United States “chose not to become a full-dress
welfare state on the European model.” But there is actually great variation
among the European welfare states. States like Germany and Switzerland went
much farther on the corporatist road than the U.S. ever did, but they do
considerably worse on metrics like inequality, poverty, and political
polarization than the Nordic social democracies, the real welfare kings.
Conversely,
for how threadbare it is, the U.S. welfare state still delivers a great deal of
vital income to the American people. The analyst Matt Bruenig recently
calculated that American welfare eliminates two-thirds of the “poverty gap,”
which is how far families are below the poverty line before government
transfers are factored in. (This happens mainly through Social Security.)
Imagine how much worse this country would be without those programs! And though
it proved rather easy for Wall Street pirates to torch the New Deal corporatist
social model without many people noticing, attempts to cut welfare are
typically very obvious, and hence unpopular.
Still,
Lemann’s book is more than worth the price of admission for the perceptive
history and excellent writing. It’s a splendid and beautifully written
illustration of the tremendous importance public policy has for the daily lives
of ordinary people.
Ryan Cooper is a national
correspondent at the Week. His work has appeared in the Washington Post, the
New Republic, and the Nation. He was an editor at the Washington Monthly from
2012 to 2014.
Fact Check: Big Banks that Kamala
Harris ‘Took on’ Now Support Her 2020
Democratic National Convention / YouTube
Volume 90%
19 Aug 202017
2:53
CLAIM: Former Labor
Secretary Hilda Solis suggested that because Sen. Kamala Harris (D-CA) “took
on” the big banks as attorney general of California, she will stand up to them
as vice president.
VERDICT: While Harris was among 49 state attorney generals
who secured a $25 billion
settlement from big banks, many executives from those banks now support her as
Democrat nominee Joe Biden’s vice presidential choice.
“When millions of
families lost their homes, my friend in California, Sen. Kamala Harris, took on
the big banks and won,” Solis said in reference to the case which
involved Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally
Bank.
BLOG EDITOR: AS ATTORNEY
GENERAL OF CALIFORNIA, KAMALA HARRIS REFUSED TO CRIMINAL PROSECUTE ANY OF HER
GENEROUS BANKSTERS DESPITE THAT FACT THAT CA WAS GROUND ZERO FOR
BANKSTER-CAUSED MORTGAGE MELTDOWN AND FORECLOSURE!
A number of executives
on Wall Street with links to Wells Fargo, Citigroup, and Bank of America
now support Harris in her
effort with Biden to defeat Trump.
As Breitbart News reported
recently, Wells Fargo Vice Chairman for Public Affairs Bill Daley, who
served as Obama’s chief of staff from 2011 to 2012, called a Harris a
“reasonable, rational person who has worked in the system.”
Citigroup
executive Ray McGuire called Harris a “great choice”
for vice president. During the Democrat presidential primary, Harris raked in
campaign donations from executives and employees with Bank of America.
In These Times reported the donations at
the time:
Then there’s California Sen.
Kamala Harris, who received a total of $44,947 from these 12 firms. Harris,
who was once branded a “bankster’s worst nightmare,” and has touted her
prosecutorial record against banks as evidence of her progressive credibility,
received donations from five executives of these firms. They include Blackstone
managing director Tia Breakley, Morgan Stanley’s new head of
international wealth management Colbert Narcisse, Bank of America
senior vice president for diversity and inclusion Alex Rhodes, and Goldman
Sachs vice president of financial crime compliance Margaret
Cullum. [Emphasis added]
Harris’s most enthusiastic
source of support among these firms, however, is Wells Fargo, from whose
employees she received a total of $16,713 — the most funding
from the bank out of any other candidate examined. The donors span multiple
tiers of the bank’s hierarchy, from bankers and consultants, to a regional
director and a manager, to executives like National Head of Cards and
Retail Services Beverly Anderson, both of whom gave the maximum individual
donation of $2,800 to Harris. [Emphasis added]
John Binder is a
reporter for Breitbart News. Follow him on Twitter at @JxhnBinder .
Goldman Sachs Bankster “King of the Foreclosures” Treasury Secretary Steven Mnuchin vows that the Goldman Sachs infested Trump Admin will hand no-strings massive socialist bailouts to Trump Hotels. Mnuchin says the welfare will exceed the Bankster-owned Democrat Party’s massive bailout of Obama crony Jamie Dimon of J P Morgan’s bailout in 2008
OBAMA CRONY DONORS Goldman Sachs , JPMorgan Chase, Bank of America and every other major US bank have been implicated in a web of scandals, including the sale of toxic mortgage securities on false pretenses, the rigging of international interest rates and global foreign exchange markets, the laundering of Mexican drug money, accounting fraud and lying to bank regulators, illegally foreclosing on the homes of delinquent borrowers, credit card fraud, illegal debt-collection practices, rigging of energy markets, and complicity in the Bernie Madoff Ponzi scheme.
Treasury Secretary Steven Mnuchin embodies the plutocratic principle that a crisis is a terrible thing to waste.
By Eric Levitz @EricLevitz
Steve Mnuchin knows his way around a crisis. Twelve years ago, the Treasury secretary was still a middling multi-millionaire of little renown or historical import. But whenever God closes a door on an underwater home-owner, he opens a window to an unscrupulous speculator, and in 2008, the Big Man began closing a lot of doors. Mnuchin didn’t miss his opening. He may have been just a humble Goldman Sachs nepotism hire turned Hollywood financier back then, but he had a few million dollars to play with and a few friends with many millions more. Together, they bought up a failing mortgage lender, rapidly foreclosed on thousands of borrowers, and resold the homes at a nifty profit. By the end of his tenure as a bank CEO, Mnuchin had earned himself the title “Foreclosure King” — and a return of $200 million. That’s the kind of money that can buy you entrance into the good graces of a Republican nominee, especially if he’s already alienating a lot of the party’s biggest donors. And from there, it’s walking distance to the White House.
Thus far, the COVID-19 crash has been as kind to Mnuchin as the Great Recession once was. If the last global economic crisis made him rich enough to purchase a lofty perch in our government, this one is making the Treasury secretary powerful enough to claim a prominent place in U.S. history. Before the novel coronavirus made its presence felt, Mnuchin’s most memorable achievement as a public servant may have been commandeering a government plane for a solar-eclipse-themed day trip. Since the pandemic sickened global markets, he has brokered the largest stimulus legislation ever passed and won control of a multi-trillion-dollar bailout fund .
Which is to say: We’ve put one of the primary beneficiaries of America’s inequitable response to the last economic crisis in charge of crafting our nation’s response to this one.
Of course, it wasn’t really God who opened the window to Mnuchin’s foreclosure profiteering or the profiteering of all the well-heeled investors who bought low during the financial crisis, then sold high amid the bailout-buoyed recovery (the Almighty contracts out those jobs to protect his brand integrity). Rather, it was an economic system that keeps a wide swath of Americans one bad break from financial ruin — and another tiny class draped in gold-plated armor.
From the first capital-gains-tax cut of the modern era in Jimmy Carter’s day to the supply-side bonanza of Donald Trump’s, this system’s essential rationale has remained the same: If capitalists cannot reap big rewards from their winning bets, they will have no incentive to take the great personal risks that fuel collective prosperity.
Mnuchin’s career and the pandemic response he has overseen belie most of that sentence’s premises. In truth, the Treasury secretary owes his success to a series of low-risk, high-reward bets of little-to-negative social value. Which makes sense. After all, if America’s brand of capitalism actually required the superrich to assume great personal risk in order to reap outsize returns, they wouldn’t be so invested in it.
Steve Mnuchin wasn’t born on third base so much as a few inches to the left of home plate. His grandfather co-founded a yacht club in the Hamptons. His father was a Yale-educated partner at Goldman Sachs. If his family’s name didn’t secure Steve’s own Yale admission, its wealth certainly covered his tuition, books, personal Porsche, and “dorm” at New Haven’s Taft Hotel. From this perch, it would have been harder for Mnuchin to tumble down America’s class ladder than to climb higher still. The former would have required prodigious acts of self-destruction; the latter mere fluency in ruling-class social mores and the art of strategic sycophancy — and the wallflower cipher Steve Mnuchin is a master of both.
At Goldman, Mnuchin’s colleagues did not consider him “especially book smart.” And some have suggested that his steady ascent at the firm was fueled less by merit than pedigree (Mnuchin’s elevation to partner in 1996 came at the expense of Kevin Ingram, an African-American trader who’d risen from a working-class childhood up through MIT’s engineering school, then Goldman’s ranks, where he struck one colleague as both “much smarter than Steven” and more “accomplished”).
After Mnuchin paid his dues at Goldman, he founded a hedge fund called Dune Capital and a motion-picture-financing company called Dune Entertainment (both named after a stretch of beach near his house in the Hamptons). He helped bankroll Avatar and the X-Men franchise, hobnobbed in Beverly Hills, and hoarded his investment profits in a tax haven. He had everything America’s “temporarily embarrassed millionaires” imagine a person could want. But Mnuchin longed for higher things. And when the housing market collapsed, he knew he was in luck.
Early in his career, Mnuchin had watched his superiors turn America’s savings-and-loan crisis into their own buying-and-selling bonanza. In the summer of 2008, Mnuchin was watching television in his New York office when an invitation to emulate his old mentors flashed across the screen: Out in California, frightened depositors were lined up outside IndyMac, one of the nation’s largest mortgage lenders, waiting to withdraw their cash. “This bank is going to end up failing, and we need to figure out how to buy it,” Mnuchin told a colleague. “I’ve seen this game before.”
He played it like a natural. Mnuchin reached out to George Soros, John Paulson, and other billionaires whose trust he’d cultivated. They marshaled a $1.6 billion bid. Eager to unload the bank — whose balance sheet was chock-full of toxic assets — the FDIC agreed to cover any losses that might accrue to the investors above a certain threshold. Which is to say, the government agreed to partially socialize Mnuchin & Co.’s downside risk. This public aid came with one major condition: The new bank, which Mnuchin dubbed OneWest, would need to make a good-faith effort to help homeowners avoid foreclosure. The FDIC would ultimately pay OneWest more than $1.2 billion.
This was not enough to buy Steve Mnuchin’s good faith.
Purchasing IndyMac secured OneWest a claim on a lot of undervalued housing. The catch, of course, was that much of it was full of broke people. And California’s foreclosure laws make the process of separating low-net-worth humans from high-value housing stock long and arduous. But this was nothing a little entrepreneurship couldn’t solve: Mnuchin’s bank (ostensibly) bet it could get away with “robo signing” and backdating documents to expedite foreclosures. One-West got caught red-handed on the first count but emerged with a slap on the wrist. Investigators at the California attorney general’s office concluded the bank was guilty on the second and requested authorization to pursue an enforcement action. It’s unclear exactly why then–Attorney General Kamala Harris denied this request. But as the investigators themselves noted, to pursue legal action against an entity with OneWest’s resources would mean investing years of time — and large sums of the public’s money — in a deeply uncertain enterprise. The government could afford to take only so many risks, which meant the idea that the state could hold all its superrich residents accountable to its laws was a bluff. Mnuchin called it.
In the spring of 2016, another promising investment opportunity caught the eye of the now-former One-West CEO. Mnuchin had crossed paths with Trump several times over the years; his hedge fund had invested in (at least) two of the mogul’s projects. So when Donald invited Steve to swing by his tower on the night he won the New York primary, Mnuchin obliged. A dozenish hours (and a glass or two of Trump-branded wine) later, Mnuchin agreed to become the finance chairman of the future GOP nominee’s campaign.
This decision baffled some of Mnuchin’s Hollywood pals. The bankroller of The LEGO Batman Movie didn’t strike them as a political animal, let alone a Trumpist. But his motives weren’t mysterious. For someone in Mnuchin’s socioeconomic position, Trump’s presidential campaign was just another low-risk, high-reward bet. Or, as Mnuchin himself put it in an interview in August 2016, “Nobody’s going to be like, ‘Well, why did he do this?,’ if I end up in the administration.”
Mnuchin is the last of the “adults in the room” — that cabal of semi-credentialed advisers whose presence in the West Wing eased the troubled minds of Never Trump pundits circa 2017. None of the others — not Rex Tillerson, Gary Cohn, James Mattis, H. R. McMaster, or John Kelly — could marshal the requisite combination of unscrupulous sycophancy and patient politicking to weather each turn in Trump’s tempestuous moods. Only the former Foreclosure King has what it takes to unequivocally defend the president’s kind words for alt-right marchers in Charlottesville or echo his attacks on NFL players who dared to protest police abuse. So when the biggest economic crisis since the Great Depression hit, Mnuchin became — in The Wall Street Journal ’s appellation — “Washington’s indispensable crisis manager.” Unburdened by ideological conviction or economic literacy, Mnuchin has proved to be the GOP’s most able dealmaker. Working out of a temporary office in the Capitol’s Lyndon Baines Johnson Room, Mnuchin spent the closing weeks of March running (and massaging) messages between the Senate’s Democratic and Republican camps as they sought consensus on a gargantuan coronavirus relief bill. “Mnuchin played the middleman, and he must have been in my office 20 times in three days,” Senate Minority Leader Chuck Schumer told the Journal, going on to praise the reliability of the Treasury secretary’s word. House Speaker Nancy Pelosi has said that she and Mnuchin can communicate through a “shorthand” devoid of time-wasting “niceties or anything like that.”
The soft skills Mnuchin had once deployed to ink billion-dollar investment deals now eased the passage of a $2.2 trillion economic-relief package. And there was much to admire in the legislation’s headline provisions: an unprecedented expansion in federal unemployment benefits that would leave many laid-off workers with as much — if not more — income than they’d earned at their old jobs, forgivable loans for small businesses that agreed to forgo layoffs during the crisis, and onetime cash payments to all nonaffluent Americans.
But this is still a Republican stimulus, however much schmoozing Steve has done with Chuck and Nancy this spring. Congress’s persistent underfunding of the small-business aid has kept America’s most vulnerable mom-and-pops out in the cold. And our nation’s decrepit unemployment-insurance offices have struggled to administer benefits as the ranks of the jobless grow millions stronger every week. The Treasury Department has allowed debt collectors to garnish the relief checks of cash-strapped Americans, and Congress has essentially refused to bail out hospitals whose budgets have suddenly been destroyed by COVID-driven shortfalls, meaning that over the next few years, whole essential health systems and services could abruptly be suspended.
Most of all, the legislation’s largest appropriation — $454 billion to backstop a $4 trillion Federal Reserve lending program to large corporations — gives Mnuchin significant personal discretion over which firms will have access to low-cost credit and on what terms, thereby leaving a connoisseur in the art of subverting federal crisis management for personal profit in charge of preventing America’s corporate titans from subverting federal crisis management for personal profit.
The White House’s next big idea for promoting economic recovery is, reportedly, to formally suspend the enforcement of labor and environmental regulations on small businesses, a measure that would enable petit bourgeois tyrants to suspend all pretense of concern for their workers’ health and well-being in the midst of a pandemic.
Nevertheless, could we have reasonably expected anything better, all things considered? A GOP president and Senate majority were always going to comfort the comfortable and toss crumbs to the afflicted. And when Congress approved $2.2 trillion in coronavirus relief funds last month, nurses were intubating patients without proper PPE, grocery-store clerks were jeopardizing their health to keep others fed, and delivery drivers were forfeiting the security of social distancing so others could more comfortably enjoy it. The legislation included zero dollars in hazard-pay benefits for those workers. It did, however, provide $90 billion in tax cuts to the owners of pass-through businesses, such as, for instance, the Trump Organization. Such “relief” was necessary, the American Enterprise Institute later explained, to mitigate the “penalty” on economic risk-takers.
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