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Thursday, March 26, 2020

It’s good capitalism to give federal bail-out money to Trump’s hotels

It’s bad socialism to direct manufacturers to make surgical masks, respirators and other desperately needed medical equipment
By Pat BagleySalt Lake Tribune
Despite urgent demands from public health experts, frontline nurses and doctors, and Democratic lawmakers that Donald Trump urgently utilize his authority under the Defense Production Act to order private companies to produce critically needed medical equipment to help stop the coronavirus crisis ravaging the nation, Trump on Sunday explained that to do so would be akin to "nationalization" of industries and "socialism"—a claim he made even while suggesting that a taxpayer bailout of his personal hotel empire might be necessary.

"We're a country not based on nationalizing our business," Trump said at Sunday evening press conference when asked about his reluctance to more aggressively utilize the DPA, which he officially invoked last week. "Call a person over in Venezuela," the president continued, "ask them how did nationalization of their businesses work out? Not too well."

At the same press conference, Trump refused to promise—in an evasive, rambling response to the question—that no money contained in the $500 billion corporate "slush fund" put forth by Republican Senate Majority Leader Mitch McConnell over the weekend would go to bail out his personal hotel empire.

As the Washington Post's Tory Newmyer notes, Trump's refusal to use the power of the federal government to urgently pursue emergency production of vital medical equipment in the face of an unprecedented public health emergency—coupled with his refusal to say his own hotel empire will not receive a taxpayer funded bailout—reveals a "glaring double standard" when it comes to what the term "socialism" does and does not mean:

On the one hand, the Trump administration wants $500 billion for loans and loan guarantees that Treasury Secretary Steven Mnuchin could tap for industry bailouts with few limits or oversight. That proposal helped galvanize Senate Democratic opposition to a $1.8 trillion package aimed at keeping businesses and workers afloat, throwing it into limbo and sending stock futures reeling. 

But as his administration reaches for unchecked authority to engineer a massive intervention in the marketplace, Trump is rejecting bipartisan pressure to conscript U.S. businesses to help churn out medical gear in dangerously short supply. His reasoning: Doing so would constitute a Venezuela-style violation of free market principles.

The strategy points back to the president's political interests. Trump and his team had been hoping to frame the 2020 presidential election as a contest between capitalism and socialism. They aimed to brand the Democratic Party and its eventual nominee as captive to radical ideas that would short-circuit the American wealth-creation machine.

Progressive critics characterized that central contradiction presented by Trump—and shared by his Republican allies in Congress—as not only untenable and hypocritical, but ridiculous and cruel.

According to reporting by the New York Times, "The U.S. Chamber of Commerce and the heads of major corporations have lobbied the administration against using" the DPA to force emergency production. 

With the administration apparently following that advice in this time of national emergency, Richard Yeselson of Dissent magazine said both the White House and the Chamber "have blood not just on their hands, but up to their armpits."

"Do I have this right?" asked journalist and policy analyst Marcy Wheeler following Sunday's press conference: "Trump says bailing out his own luxury hotel company is acceptable capitalism. But having the Feds guarantee a market for respirators for doctors during a pandemic is socialism?

"It even sounds like Trump hotel properties like Mar-a-Largo could receive huge bags of cash—and then fire their workers—if [Treasury Secretary] Steve Mnuchin decides to do a solid for his boss with taxpayer dollars," tweeted Sen. Elizabeth Warren on Sunday.

And as economist and former labor secretary Robert Reich noted on Saturday, Trump's latest comments fit a clear pattern: "Throughout this crisis Trump and Republicans in Congress have made it clear that they believe in generous socialism for banks, airlines, and the cruise industry, but think the American people should mostly fend for themselves."