The Great Bailout Saga

The Great bailout Saga or: Donald Trump is a Lying Liar

  Donald Trump tweet, per WaPo and all other news sources:

“Republicans had a deal until Nancy Pelosi rode into town from her extended vacation. The Democrats want the Virus to win?” Trump tweeted. “They are asking for things that have nothing to do with our great workers or companies. They want Open Borders & Green New Deal. Republicans shouldn’t agree!”

        This is so wrong that, as Nobel Physicist Wolfgang Pauli once described a student submission, “It isn’t even wrong!” In reality, Trumps tweet points out the reverse of the real issues which later, absent Trump’s interference, were hammered out into the massive relief bill passed by Both Houses of Congress. The crux of the partisan differences actually centered on “our great workers or companies,” especially workers and small businesses.  

        On St. Patrick’s Day, in a phone call between Nancy Pelosi and Mitch McConnell, the House Speaker requested that the top four congressional leaders begin negotiating a package rescuing the economy from the effects of the coronavirus pandemic. What a concept, huh?  To actually have the four senior Congressional leaders sit down and cooperate? Republicans have derided Democrats for not doing so ever since Democrats, fueled by reaction to earlier Trump malfeasances, took control of the House. Mitch McConnell’s reaction? He told her that he would bargain only with Senate Democrats and their leader, Sen. Chuck Schumer.

         This demonstrates, as well as perhaps any other single factoid, the lengths to which McConnell and his puppet master were willing to go to control relief efforts and structure them to their (Republican) view of what is important in the current crisis. Mrs. Pelosi, third senior elected official in the USA, demurred, and as conditions grew more exigent, however, that turned out not to be the final word on the matter.  Pelosi and McConnell ultimately met face to face the at an all-leaders meeting he had called to outline his bill.  Pelosi showed up with “a laundry list” of what the Senate majority leader and other Republicans viewed (and Trump falsely tweeted) as liberal demands unrelated to the crisis. Make sure you get that, since Trump’s tweet implies that “the Green New Deal and “Open Borders” were part of Republican concerns. Neither was mentioned; Donald Trump is a liar.

        So, what were the sticking points?

         One principal one was that as McConnell structured the bill, a large chunk of money was, like Bush 43’s TARP, aimed at large businesses and Trump himself when questioned as to who would provide oversight as to how it was allocated and where, stated that “I will be that authority” (said the man who still hasn’t divested himself of interest in several failing hotels!).

        Even Senate Small Business Committee chair, Florida Senator, Marco Rubio, objected to the focus and lack of independent oversight of this huge amount of money. Rubio was concerned (justifiably, I would opine) as were Senate and House Democrats, and in fairness some other Senate Republicans as well, that this money would end up channeled to corporate fat cats and not reach small business and their employees who had far fewer “fall back” resources.

        Sen. Rubio said in an interview on March 20: “America’s more than 30 million small businesses — and the 59.9 million individuals they employ — today face the prospect of going bankrupt. They face this threat due to no fault of their own, but because of a global pandemic that takes human lives and grinds productivity to a halt. Congress must set aside our normal procedural and partisan games to act without delay.” “They don’t have a few weeks before they run out of operating cash. They are (often tearfully) laying off workers all over the country, by the minute because they have no choice,” Rubio then tweeted, later Friday. “Small/mid-size business owners are also employees themselves. The trauma this is inflicting on them, their employees and our country is severe. We don’t have the luxury of days to kick around ideas or try to one-up each other. We need to reach agreement and act now.”  

        While, possibly out of fear from Trump’s well-known tendency to “revenge smear” those who disagree, Rubio was addressing the earlier McConnell version and the focus on large corporate interests and minimal oversight.  

        Pelosi and Schumer were also concerned that, in the McConnell version there were no worker protections on the corporate rescue funds. No state and local bailout fund. Not enough spending for hospitals. Why such concern? Looking backward at the only real analogous bailout bill shows why.

        Here’s one example of many:  Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. paid out a total of $18 billion in bonuses in 2008 while receiving a combined total of $45 billion in taxpayer dollars through TARP. Read that again. 40% of tax-payers’ TARP bailout funds lined the pockets of executives whose lack of oversight (or even basic understanding of the nature of the fraud [read The Big Short] in which they were complicit) led to the housing bubble collapse.   Citigroup, as well, one of the biggest recipients of government bailout money, gave employees $5.33 billion in bonuses for 2008. This is precisely what concerned Pelosi, Schumer, Rubio and others.

        “The major advantage that we had is, this is a crisis. And the Republican philosophy of little government, let the private sector do everything, diminish government, just doesn’t work,” Schumer later said in an interview with The Washington Post.

        One Senator, in particular was in the vanguard of those urging expeditious action on a compromise bill even before the real contention began.  Sen. Patty Murray (D-Wash.) third senior Senate Democrat) was concerned, well before the rest of her colleagues, based on what she had witnessed in her home state, where most of the early US coronavirus cases were concentrated. Even during the first several weeks of the year, her expressed concern was that other Senate members weren’t taking this emerging public health crisis seriously. She quickly stopped going to in-person meetings and urged Schumer to hold conference calls instead. She was adamant that her own aides stay off the congressional premises as much as possible.

        On Feb. 26, in a retreat with other Senate Democrats, she delivered a stark and prescient message as national headlines started describing the mysterious outbreak at a nursing home in Kirkland, Wash.: “What’s happening in Washington State is coming to you.” Note that, as she spoke, Trump was still minimizing the whole affair.

                The final structure, syntax and limitations related to the second large “tranche” (borrowing a word from 2008 mortgage bundling scam) of spending, which cleared Congress on March 18, was largely a product of good faith bargaining between Treasury Secretary Mnuchin and Speaker Pelosi, even though loathed  by several Senate Republicans over paid family leave provisions. Interestingly enough, Sec Treasury Mnuchin seems to be an even-handed agent of bargaining here, since his immediate superior is far too contentious and of too little real understanding.

        Oddly enough, the federal employees paid family leave issue is, and has been, opposed by such notables as Senators Cruz and  Paul, both currently self-isolating and both continuing to draw their federal paychecks, unlike those other federal employees to whom they would deny that privilege. 46 other Republicans had also voted against an earlier paid family leave proposal.  Pelosi insisted, McConnell yielded. Through this entire process, there was no mention of either “Green New Deal” or anything related to “borders,” in direct controversion of Trump’s derogatory and contentious tweet.

        “What happened was that we kept our eye on what needed to be done, which really fit the national need — much more money for hospitals than they proposed, far more accountability on corporate bailouts than they proposed,” Schumer later said in a WaPo interview. “Money for state and localities, which they had none of. And more stuff for working and unemployed people, and they really, our Republican friends, didn't have much to say.”

        Except for one, that is: After all the hiccups and bloody shirt waving, one last complication arose when one single Republican Representative forced House colleagues to return to D. C. to ensure a quorum, vice a simple voice vote as proposed.  Rep. Thomas Massie (R-Ky.) raised procedural objections that required a majority of the House to be physically present to vote. In an interview Massie further stated that his real objection was that the bill would “raise the deficit.”  Analyzing that statement makes me wonder how he regarded the last three consecutive Trump budgets, all of which include massive deficits. (Can you say “Showboat?”)  Once they did return (or at least enough for a quorum), the House passed the legislation by voice vote shortly before 1:30 p.m. Friday and sent it to the president who signed it hours later.

         The legislation had easily passed in the Senate, with 88 yeas and no vote in opposition(!) Senator Patty Murray stood on the edge of the chamber for the vote, unwilling to enter a place that was about to close up for its own deep cleaning. Most senators don’t even know when they will return to vote again. She held her finger up waiting for a clerk to notice her, standing in relative shadow, before finally Senator Schumer pointed at clerks to recognize her. She gave the bill an enthusiastic thumbs up.

        Worthy of note and indicative of the nature if the Liar in Chief, no Democrats were (invited to be) present at the signing of what ended up as a bi-partisan effort to pass this critical legislation. Pay close attention to Trump’s characterizations of the Bill and those Democrats involved. If you are a working American and still support this man, get professional help.