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It's morally repulsive how corporations are exploiting this crisis. Workers will suffer
By Robert Reich www.theguardian.com Sun 22 Mar 2020 09.27 EDTLast modified on Mon 23 Mar 2020 12.03 EDT
<snip>
In normal times, corporations get special favors from Washington in exchange for generous campaign contributions, and no one bats an eye. Recall the Trump tax cut, which delivered $1.9tn to big corporations and the wealthy.
The coronavirus should have altered business as usual. But last week’s Senate Republican relief package, giving airlines $58bn and billions more to other industries, is pure Burring.
The Senate majority leader, Mitch McConnell, tried lamely to distinguish it from the notorious bank bailouts of 2008. “We are not talking about a taxpayer-funded cushion for companies that made mistakes. We are talking about loans, which must be repaid, for American employers whom the government itself is temporarily crushing for the sake of public health.”
But the airlines are big enough to get their own loans from banks at rock-bottom interest rates. Their planes and landing slots are more than adequate collateral.
Why do airlines deserve to be bailed out? Over the last decade they spent 96%of their free cashflow, including billions in tax savings from the Trump tax cut, to buy back shares of their own stock. This boosted executive bonuses and pleased wealthy investors but did nothing to strengthen the airlines for the long term. Meanwhile, the four biggest carriers gained so much market power they jacked up prices on popular routes and slashed services (remember legroom and free bag checks?). LINK
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Good article by Robert Reich. I like the way Reich explains things[SIZE=11pt]—although [/SIZE]I don't necessarily agree with all of his political views. There is an excellent documentary by Reich on Netflix right now.
By Robert Reich www.theguardian.com Sun 22 Mar 2020 09.27 EDTLast modified on Mon 23 Mar 2020 12.03 EDT
<snip>
In normal times, corporations get special favors from Washington in exchange for generous campaign contributions, and no one bats an eye. Recall the Trump tax cut, which delivered $1.9tn to big corporations and the wealthy.
The coronavirus should have altered business as usual. But last week’s Senate Republican relief package, giving airlines $58bn and billions more to other industries, is pure Burring.
The Senate majority leader, Mitch McConnell, tried lamely to distinguish it from the notorious bank bailouts of 2008. “We are not talking about a taxpayer-funded cushion for companies that made mistakes. We are talking about loans, which must be repaid, for American employers whom the government itself is temporarily crushing for the sake of public health.”
But the airlines are big enough to get their own loans from banks at rock-bottom interest rates. Their planes and landing slots are more than adequate collateral.
Why do airlines deserve to be bailed out? Over the last decade they spent 96%of their free cashflow, including billions in tax savings from the Trump tax cut, to buy back shares of their own stock. This boosted executive bonuses and pleased wealthy investors but did nothing to strengthen the airlines for the long term. Meanwhile, the four biggest carriers gained so much market power they jacked up prices on popular routes and slashed services (remember legroom and free bag checks?). LINK
====================================================================================
Good article by Robert Reich. I like the way Reich explains things[SIZE=11pt]—although [/SIZE]I don't necessarily agree with all of his political views. There is an excellent documentary by Reich on Netflix right now.
