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American Corporatism on Display: The COVID-19 Response

In a recent piece for this site, I suggested that the response of the Trump Administration put ideology before people. Well, Congress has just proven that theory correct with its economic package in response to the virus. To the surprise of precisely no-one, the corporate socialism rolls on while the peasants beg for crumbs. In this piece, I want to look at the provisions of the plan, sourced from a Senior Democratic Aide in the Senate. Various news articles will fill in the other details.

Background and Overview: The Package: From Original to Final Version

The watering down process that is legislative negotiation in the Senate worked its magic on this package. The grand rhetoric that was Trump’s initial address got hit in the face with the shovel that is Congress. Talk of covering ‘the cost of the healthcare for the coronavirus’ soon became covering the testing, without mention of the actual treatment. Talk of ongoing Universal Basic Income (UBI) soon became a one-off, means-tested payment. More details on this below, but you can see the bigger picture here. What began as good ideas (even if they likely did not go far enough) became weak half-measures during the legislative process. But we have not even gotten to the corporate socialism aspects yet. I would like to focus first on the weak measures designed to help the people. After an overview and setting the scene, we now turn to some of the details.

The Package, Part One: Sick Leave

You could be forgiven for thinking that the opposition to payments to, and legislative protection of, the peasants came from Republicans. However, the majority of the opposition, and caveats, to the idea of UBI actually came from Democrats, specifically the leadership, Senator Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA). Originally, broad sweeping worker protections were in place, specifically a $104b package focused chiefly on paid sick leave. Then, as you might expect, cries of ‘what of the profits’ came forth on cue from the GOP. To his credit, Senate Majority Leader Mitch McConnell (R-KY), did say to his caucus to essentially shut up and vote for it, but the intent was clear.

Apparently, however, McConnell does not quite have the level of control over his troops that he thought he did. Republicans put forth amendments that watered down the bill, naturally, and now merely 20% of workers will actually receive paid sick leave. The amendments exempted some types of businesses from the paid sick leave provision and provided various other pro-corporate loopholes. Nothing changes, just the date.

The Package, Part Two a): Attack of the Democrats! Direct Stimulus and UBI

Initially, both President Trump and his Treasury Secretary supported an emergency UBI. This represented direct cheques being made out to the population to keep the economy going. Capitalism survives by people having money to spend, and UBI would have addressed this. So this was a good idea and credit where it is due. Then came the Democrats. The Week reports that House Speaker Nancy Pelosi first floated the idea of means-testing stimulus payments. The rationale was that she did not want to ‘write checks to millionaires’. The ability of the Speaker to say that with a straight face is impressive since she is a renowned corporate sellout.

The Speaker also does not seem to understand the concept of universal inherent in universal basic income. Her suggestion that writing cheques to millionaires somehow delegitimises a good idea is ridiculous. By her logic, the wealthy should not be able to benefit from medicare or other universal programmes. Such programmes are funded by tax revenue like the rest of the government. To suggest that the wealthy are somehow immune to this crisis is absurd on its face. Now, is it true that the wealthy would be able to financially weather the crisis more easily than the average person? Yes, but universal means just that: for all. Bernie Sanders’ Medicare for All does not exclude the wealthy: why should UBI? Pandemics do not care about your income level!

The Package, Part Two b): Political Ineptitude in Focus: The Democrats 

Trump and his Administration are outflanking the Democrats on their left. The sheer political ineptitude of the Democrats is remarkable. The ostensible party of workers is being outflanked on the left by a faux-populist. Trump essentially said get the cheques out now – and he was right. The Democrats and their paperwork and their means-testing are precisely not what is called for in a crisis! It is this utter lack of leadership, compassion and basic common sense that will cause Biden to lose to Trump in November! How politically tone-deaf are the Democrats?! They have allowed Trump to assume the mantle of popular leader in a crisis through their insistence on playing politics. Thank you, you inept buffoons, for handing Trump a sledgehammer with which to hit you. 

The Package, Part Three a): Corporate Socialism 

A Senior Democratic Aide in the Senate unearthed the corporate socialism aspects of the bill

  1. a $500b corporate slush fund
  2. Weak stock buy-back language that the Treasury Secretary can ignore.
  3. Executive compensation limits only last two years
  4. Language on ‘worker retention’ is weak with various outs for companies
  5. No language to guarantee that workers will benefit from the bill
  6. Little transparency of the bailout process (how much and where it goes)
  7. No specific provision to eliminate eviction or foreclosure.

Ok, so we have half a trillion dollars for the corporate sector with essentially non-existent or weak as p*ss rules attached. Basically let the corporations loot the treasury and be quiet. 2008 ring any bells? Now to be fair corporations did not cause this crisis. A pandemic is genuinely unforeseeable. To that extent, I understand a limited business bailout. But the attached rules are pathetic.

Focus for a moment on one issue, stock buybacks. This is businesses buying their own stock to artificially inflate its value. This should be illegal since it is fraud: buying your own stock (which you clearly think is a good buy) which creates artificial confidence around it which you then use to sell at a higher price? The language in this bill is notably weak and places very few constraints or limitations on the money paid to the corporate sector or what they do with it. Would I go so far as to temporarily nationalise businesses (or even industries) that receive a government bailout? Perhaps that goes a little far. However, it would be a nice turnabout on the dogma of ‘privatise the profits, nationalise the losses’.

The Package, Part Three b): Austerity?

The staffer outlines more problems, but the highlights are these

  1. No additional funding for Food Stamps
  2. No funds to help with the treatment of the uninsured

In other words, the most vulnerable are on their own. Recall too that Republicans have cut Food Stamps multiple times in recent years. To not increase the meagre amount of Food Stamps, even temporarily, in the midst of a crisis shows a remarkable degree of callousness. Finally, health insurance companies will be allowed to make an exorbitant profit from this crisis on the backs of the most vulnerable.

I end with a quote from Stephen Colbert. This was done in character many years ago, and its relevance has only increased with time

If this is going to be a Christian nation that doesn’t help the poor, either we have to pretend that Jesus was just as selfish as we are, or we’ve got to acknowledge that He commanded us to love the poor and serve the needy without condition and then admit that we just don’t want to do it

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11 comments

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  1. Phil Pryor

    The USA ( a part of the two Americas) has been formed and shaped over centuries of immigration, and the desperates, rebels, dropouts, dissenters, avaricious dreamers and assorted crumbs left homelands on a dream of gaining paradise, riches, a place, freedom. So, the nation has a long history, of murder, slavery, indigenous extermination, acquisition, exploitation, unfettered grabbing, gouging, double crossing, intruding, invading, pillaging, pocketing and boasting of glory, greatness, success, arrival, and size. There is no general will of policy or consensus to do well for the people or the environment. Money is god, never mind Rome or Mecca. The nearest to a royal family is Kennedy history, all built on graft, corruption, illegalities, prohibition cheating. Trump the orange orifice is an extension of the idiot will to be supreme, to dominate people, land, others, space itself. Is there hope for a decent USA response to crises now? The Huge Hoarders, the Gates, Buffet, Bezos, Soros, Zuckerberg types, and plenty more, just count the bags of cash and look in the mirror. Why not? If you can cheat, lie, confuse and distort your way to the top, loving yourself to bits is easy.

  2. pat

    nicely encapsulated -the truth for all to see thanks Phil

  3. New England Cocky

    Standing back and looking at the present evidence of economic mismanagement of the COVID-19 situation, a political skeptic could reasonably conclude that corporate socialism, as expected, remains the core value of Liarbral Nazional$ ideology and the Smirkie Sacked from Marketing misgovernment is prepared to send Australian voters bankrupt rather than cut the flow of misgovernment largesse to the too many corporate financial donors of the Parties.

    I mean, how can you fund the newly created unemployed when the bosses want all the misgovernment largesse for themselves?

  4. Phil Gorman

    Corpocracy is as corpocracy does. The current crisis is a once in a century opportunity to reset the system. The Universal Basic Income is an obvious, simple and radical move in this process.

    It should be accompanied by the much delayed “root and branch” rejig of the tax system to do away with all regressive taxes and replace them with taxes to enhance equity and the public good. For instance: Tobin Tax, Wealth Tax and Land Tax. These alone would bring in an era of genuine common wealth. They would compliment the UBI. At the same time all natural monopolies, utilities and essential service should be nationalised by a genuinely Commonwealth Government. There should also be unified educational, health, welfare, legal and judicial system for all jurisdictions.

    Far from complicating governance and bureaucracy such measures would streamline and simplify public administration, cutting costs, avoiding duplication and improving efficiency at every level.

  5. Kerri

    Why is it so hard for people of all stripes to grasp a Universal Basic Income???

  6. paul walter

    Just giving the Drum a second and you could have knocked my socks off (some thing I missed first time around) at how slack the government is in its handouts to business DONE ON TRUST against the still stringent conditions and onus of proof placed on those down the line.

    If I haven’t botched this, listen closely to the exchange between Law Professor Andrew Stewart and Ellen Fanning from about the 35 minute mark on tonight’s Drum- true broadsheet.

    https://www.facebook.com/abcthedrum/videos/686714352073444/?notif_id=1585040043695352&notif_t=comment_mention

  7. Roland Flickett

    Corporatism, and principally US corporatism, has so corrupted the world order that any individual who MIGHT be capable of resolving this and other crises is crushed before they get an opportunity to lead. See what the US did and tried to do when Chavez took over in Venezuela. Like Castro, Chavez was subjected to incredible plots and attempts to overthrow him. Whatever his faults, Chavez ousted the kind of people that Castro ousted from Cuba (the people that now dictate the spite and vindictiveness that the US still displays), and those people are now at the forefront of the US attempts to overthrow Maduro.
    We – the entire world – are in an unprecedented situation, possibly but not certainly caused by national enmities. Whether the Chinese or the USA manufacture this virus is irrelevant, now. It’s out, and cannot be controlled.
    And who are we looking to for guidance and leadership? Clueless sociopathic narcissistic creatures like Donald Trump, Boris Johnson, Scott Morrison, Macron, and so on.
    The only world leader of any merit was Merkel, but she made the mistake of showing compassion for hordes of people made refugees by the activities of – principally – the US and it’s fellow-travellers.
    One of the first medical experts to study Ebola said that nature could conceivably produce a virus as portable as flu and as virulent as a Ebola. This is probably not it, but chemical warfare laboratories have been trying to produce a killer germ for decades. Despite what one poster says, the CIA is still involved with the labs in Fort Detrick, and a few years ago was reportedly trying to fuse the Spanish Flu virus and the SARS virus to ‘nullify the dangers they presented.’ Detrick was supposedly closed down by Nixon, but it was still at it in August 2019, when it was again censured.
    Call in conspiracy theory if you like. But research the activities of the British Porton Down facility which experimented with flooding London’s underground system with toxins in the 1960s. It’s not a ‘theory’ but an established fact.
    They only get censured when they get caught out.

  8. Matters Not

    paul walter, don’t think you botched it. Seems as though government money is being given to business on the basis of trust that they will do the right thing and see that it’s spread around. Guess capitalism is undergoing a metamorphosis of sorts. But probably not. Both the good Professor Stewart (first appearance I believe) and Fanning were taken aback when viewed last night.

  9. Egalitarian

    $10,000 payment for an unspoken contract between government and small and medium businesses; what a Joke.It’s like Corporate Welfare again.I’d get rid of The Job Network system and save the government millions and stop will the ridiculous job search requirements for the unemployed.Throw this government out now.

  10. Roland Flickett

    Phil Prior

    As I’ve mentioned before, Columbus was really Colon (the correct name reflected In the name of the currency of at least one American country). A quite appropriate name, since the USA is controlled by arseholes, with a shithead Prez’dent.

  11. paul walter

    Thanks MN. Saw red.

    At myself for getting caught off guard with the PM’s slither.

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