Big Business Bailout Debate

August 5, 2020

00:00:00

Big Business Bailout Debate

Be it resolved, the COVID-19 bailout of financial markets and big business will end up hurting, not helping, the economic recovery.

Soaring levels of unemployment. Surging bankruptcies. Lines at food banks that echo the Great Depression. To address the devastating economic impacts of COVID-19, Western governments have unleashed an unprecedented wave of monetary and fiscal stimulus. The US stimulus package includes trillions of dollars of liquidity for financial markets, the direct purchase of billions in corporate debt by central banks, and billions more in low interest loans and wage supports for big businesses. Supporters of these measures believe they are vital to preventing a severe recession from turning into a Great Depression. Large corporations, and the financial markets they rely on, support tens of millions of jobs and are the key to any economic recovery. Critics charge that we are repeating the mistakes of the Great Financial Crisis by once again bailing out big business on the backs of taxpayers. The result, just like in 2008-2009, will be soaring economic inequality and a stalled economic recovery that further concentrates economic power in the hands of big business and the 1%. To get our economies moving again Main Street, not Wall Street, should be the focus of the COVID-19 economic response.

“Up to $10 trillion of fiscal and Federal Reserve response has gone disproportionately to large corporations and wealthy individuals, exacerbating inequality.”

– Nomi Prins

“This has not been a bail out but a genuinely well-targeted attempt to preserve the cash flow needs of the private sector.”

– Douglas Holtz-Eakin