Here should be an objective of Government itself, to provide at least as much assistance to the little fellow as it is now giving to the large banks and corporations.--Franklin D. Roosevelt, April 7, 1932
Because I haven't been feeling well these past weeks, I haven't been going in to work. And because I'm an independent contractor, paid by the hour, when I don't go to work, I don't get paid.
In the little town where I grew up, there were definitely some people in business for themselves—doctors and dentists in private practice; mechanics with their own shops; the funeral director; the pharmacist; a visual artist; some clammers and fishermen. But most people worked for other people or companies. They were paid a salary, they got paid sick leave and vacation time, and they had pensions waiting for them on the other side of retirement.
Many of the people in my world today are like me—contracted vendors who get paid an hourly rate. No work, no scrilla.
Those kinds of workplace benefits and safety nets that mostly everybody had when I was growing up are pretty rare nowadays. And a robust public safety net, the kind of benefits and safeguards that can create a redundancy of protection (or simply a single layer of protection between an individual and disaster), like you see in the UK and the Scandinavian countries—well that type of security and help has never really been part of the landscape here. Clearly, though, it offers a way to stand prepared for the unexpected—a way to protect and care for people when an infectious pandemic coexists with natural disasters and economic dissolution. It's a way to plan for surprises, to acknowledge that things won't always be rosy, to allow for the unimaginable.
It got me thinking about how this model can mean great flexibility and freedom for the people who earn enough to have margins in which to enjoy that flexibility and freedom. But for people whose earnings don't allow margins, this model means vulnerability and exposure.
Remember when our government bailed out the banks in 2008 because they were "too big to fail"? I never understood that phrase. I mean, capitalism is a system based on survival of the fittest. If an entity doesn't survive, it fails and creates a space into which a new, presumably more nimble, entity can move. Failure is built into capitalism; we see it all the time when small businesses and individual households declare bankruptcy.
So we don't really know if those banks were "too big to fail" because we didn't allow that natural process--where poor management, bad behavior, and flawed decision-making lead to failure—we didn't allow that process to unfold. Our government jumped in with a safety net so the banks would not have to reap the inevitable results of what they had sown.
Our more recent $2.2 trillion bailout, the CARES Act, which was supposed to help American households and small business owners to survive the pandemic and its necessary economic contraction, turned out to simply be more socialism for the rich. You've heard that the CARES Act represents the biggest upward transfer of wealth in our nation in the history of forever. It happened again, folks. Our "representatives" in Congress decided to give away our hard-earned tax dollars to fatten the coffers of Harvard, Yale, and big corporations while small mom-and-pop operations died. So it's socialism for the wealthy, and capitalism for the poor and working classes, who are simply on their own, left to taste the failure that our banks and deep-pocket corporations and individuals are protected from. Working people are lucky if they can manage to get unemployment.
Here are four pandemic-related examples of how our government falls all over itself to offer assistance to the wealthy:
*Mortgage forbearance, where banks allow mortgage holders to skip payments because of economic hardship resulting from the pandemic, sounded like a good idea on paper. But here's the way it was structured with the bank that holds our loan in California: You could forebear for three months, but in the fourth month, you would be expected to pay not only that month's mortgage, but the three previous months you had skipped as well. I have heard about other banks that allowed three months' forbearance and then tacked those skipped payments onto the end of the loan. That's better, of course, but I actually think banks could find it in their shriveled, cadaverous hearts to do more.
Here's my thing: After we bailed out the too-big-to-fail banks in 2008, we created a debt. Banks owe us. We saved their sorry asses. Our tax money bailed them out while individual homeowners were foreclosed upon. Banks could give back now, could help struggling homeowners, by eating the losses for three months. For Christ's sake, just give people a break! I have anxiety over money issues right now and I know I am not living as close to the bone as many are. People need to be allowed to exhale. A government that gave a shit would require this of the banks.
During the mortgage crisis of the Great Depression, FDR stepped up big and bold to protect burdened homeowners and preserve the concept and reality of home ownership. He created the Home Owners' Loan Corporation (HOLC). HOLC issued new loans to address and replace the liens on homeowners in default. It wasn't a freebie; applicants to the program had to prove willingness to pay their loan and to demonstrate a history of fiscal responsibility. But the program also responded to individual circumstances, and included debt counseling and budgeting assistance.
The banks had to eat some loss with this program, but not as much as if all homeowners threatened with foreclosure actually defaulted.
My point? We have a historical example of genuine mortgage relief from our own country that included some sacrifice on the part of the banks, but was committed primarily to helping individual homeowners evade ruin.
If we did it once, we can do it again.
*Fast forward to the CARES Act again. One provision in the act was the Paycheck Protection Program (PPP), created to give small businesses federally-backed loans that would transmute into grants that didn't need to be repayed as long as the funds were used to keep employees on payroll. Good idea, right? Except the act required banks to act as intermediaries in disbursing these funds. And the banks didn't bother to figure out what small businesses most needed the money; they were more likely to grant PPP funds to bigger, more established companies that they already had relationships with.
If I can remember back to the 2008 financial crisis caused by banks and their rapaciousness, and I can recall how untrustworthy people making decisions at banks were/are, and, based on that, I can clearly understand that banks—if we must use them for this disbursement process at all, which I question—banks will need incentives and clear, enforceable guidelines for distributing money. If I can remember that, as just a regular Jane, how could our "representatives" in Congress forget? Or was it simply that this way of arranging things benefitted our "representatives" and their donors?
Why did we choose banks to disburse the funds? Why would you ask Dracula to distribute pints from the blood bank?
A couple of big, fat, multimillion-dollar corporations, such as Ruth's Chris Steakhouse and Shake Shack landed PPP loans. After public outcry over their greediness, both companies gave back the $$.
I don't know what happened with the money that was returned, whether it was disbursed, and if so, if it helped small businesses that really needed it. There's a certain opacity to issues surrounding the CARES Act, including understanding which Congresspeople voted for it, which against. The CARES Act was passed using a "voice vote," a method usually reserved to speed through uncontroversial legislation, such as what to name a post office building; there is no recorded vote for the CARES Act, and the law passed after only three hours of "debate." Why so mysterious?
*The CARES Act earmarked $14 billion for universities and colleges, primarily to help with student financial aid. So, of course, one would hope that the single parents and working poor in community college classes would get the bulk of this money to help them make ends meet. Surprise! That's not who got the money!
Congress developed a dopey formula to dole out the cash. Schools with the highest number of full-time Pell Grant recipients physically on campus before the pandemic were first in line. So community college students, many of whom go to school part-time while they raise children or hold down one or more jobs, were way, way down on the list.
This formula guaranteed that funds would go to the wealthiest schools, where students are full-time and physically on campus. Harvard and Yale both raked up their CARES Act freebies—despite huge endowments, owning large tracts of real estate in their respective cities, and paying no taxes because they are technically nonprofits—until public outcry, as with Ruth's Chris Steakhouse and Shake Shack, inspired them to give back the $$.
One can only assume that, had their not been a public outcry, there would have been no reckoning. Returning the money wasn't the result of an examination of conscience, but rather a measured response to icky bad PR.
Again, I have not been able to discover what happened with the funds that were returned by universities that shouldn't have taken them in the first place. Opacity around this money—our tax dollars and what exactly is happening with them—remains the operating principle.
*Our government recently bailed out the airlines and the cruise industry (as we've done in the past with auto manufacturers, the financial industry, and airlines, which apparently seem to get themselves into financial trouble a lot).
Wouldn't that money have more appropriately landed in the pockets of individuals and families who are struggling? To eat and keep a roof over their heads?
Never mind that both the cruise industry and the airlines are ecological bad actors. Cruise ships dump hazardous waste, oily waste, solid waste, and sewage into the waters they move through, creating imbalances in the globe's waters that result in toxic algal blooms that eat away at beleaguered coral reefs. As if that's not enough, they rely on fossil fuels and they cause direct, mechanical damage to coral reefs. Airlines, too, rely on fossil fuels, and the industry's carbon emissions are reliable contributors to climate change.
In a genuinely capitalist ecosystem, failing industries—like the banks in 2008, as mentioned above—wouldn't be bailed out, they'd be left to die. I acknowledge that there are people who work in these industries who would lose their jobs, but they would be eligible for unemployment. The infrastructure would remain—there would still be planes, there would be airports, there would be runways. At some point, someone with sufficient capital would come along and buy themselves an airline at fire sale prices, perhaps after doing extensive research on how to cut emissions. That's life in a capitalist ecosystem.
But our government steps in and bails out these industries not because they're essential or because they offer services that we couldn't possibly survive without. We bail them out so that shareholders in these companies never have to take a hit, so CEOs never skip a bonus.
Doesn't it seem weird that, with the economy essentially screeched to a halt, or at least operating at a small fraction of its pre-pandemic capacity, with whole sectors completely tranquilized, the stock market hasn't totally tanked? Instead, it's enjoying an upward trend? There was that one big dip in March 2020, but it was short-lived. It's as if our system of welfare and protection, such as it is, exists to protect the welfare of shareholders and company CEOs, not individual citizens who are suffering.
This is a vicious kind of dog-eat-dog capitalism for the poor and working poor, and unabashed, generous, deep-pocketed socialism for the rich.
The moral of the story? If you're a working person, don't get sick and don't lose your job because no one is looking out for you. You are very much on your own. On the other hand, if you are a bank or a wealthy institution or corporation, you can deal whatever damage you like, you can manage irresponsibly and poorly and hurt a lot of people and the planet, you can grab and hoard resources that are meant for others with much greater need, i.e., Behave as badly as you please; you will always have a safety net.