The Controlavirus Corporate Coup

mattstoller | Welcome to BIG, a newsletter about the politics of monopoly. This is a special edition. I need you to take this newsletter and repost it, forward it, and contact anyone you know in politics. Here’s why.

Congressional leaders are likely to put a very ugly deal in front of the American people, and if it passes, America may be unrecognizable after this pandemic. But there is a way to stop it, if people on the populist left and people on the populist right work together.

Here's the situation. Mitch McConnell, Chuck Schumer, and the Trump administration is negotiating a bailout package to address the coronavirus crisis. There's been a lot of chatter about the need to support workers as the economy goes into a freeze. This is happening around the world; the British government, for instance, is willing to pay 80% of worker wages during this downturn for those affected by the crisis. 

But in the U.S., our leaders seem to be falling prey to what can only be called a corporate frenzy of favor-seeking. “Any time there is a crisis and Washington is in the middle of it is an opportunity for guys like me," said one lobbyist. 

Now first I should say that I don’t know exactly what is going to be in the final bill, because the whole process is opaque and being negotiated right now by some untrustworthy political leaders. We will only find out the details at the last minute. So all I have to go off is rumor and reporting. But if we wait until we know the full contours, it will likely be too late to act. I hope I’m wrong, but the list of what lobbyists are asking for is long, and ugly, and often the requests for money or legislative favors are done to cover up mistakes made before the coronavirus hit. 

Take Boeing. The aerospace giant of course wants a $60 billion bailout. Financial problems for this corporation predated the crisis, with the mismanagement that led to the 737 Max as well as defense and space products that don't work (I noted last July a bailout was coming). The corporation paid out $65 billion in stock buybacks and dividends over the last ten years, and it was drawing down credit lines before this crisis hit. It is highly politically connected; the board of the corporation includes Caroline Kennedy, Ronald Reagan’s Chief of Staff Ken Duberstein, three Fortune 100 CEOs, a former US Trade Representative, and two Admirals, one of whom is the board’s only engineer. Using the excuse of the coronavirus, Boeing is trying to get the taxpayer to foot the bill for its errors, so it can go back to making more of them. 

But that's not all. Defense contractors want their payments sped up, and I've heard they want to widen a giant loophole called 'other transaction authority' to get around restrictions on profiteering. Elon Musk and Jeff Bezo want "$5 billion in grants or loans to keep commercial space company employees on the job and launch facilities open." They also want the IRS to give them cash for R&D tax credits.  

CNBC reported that hotels want $150 billion, restaurants want $145 billion, and manufacturers wants $1.4 trillion. And the International Council of Shopping Centers wants a guarantee of up to $1 trillion. The beer industry wants $5B. Candy industry wants $500M. The New York Times reported that "Adidas is seeking support for a long-sought provision allowing people to use pretax money to pay for gym memberships and fitness equipment." Gyms are of course closed. Meatpackers want special visas so they can undercut wages of their workers, and importers want to stop paying duties they incurred for harming domestic industries for illegally dumping products into the U.S.