Where some see a crisis, others see opportunity.
The Trump administration is talking bailouts already for the
airlines, hotels and others. What he can pass remains to be seen. Trump has no friends on the other side of the House and slim chance of making any. Even if he can get something approved, how effective will it be? The omens are ominous.
If you want to imagine what a Trump bailout will look like, look no further than his 2017 tax cuts.
“The rich will not be gaining at all with this plan,” Trump promised as he pushed through the $1.7tn cuts that the, then booming, US economy neither needed and which the future could
ill afford.
The tax cuts were sold on a lie. “Our focus is on helping the folks who work in the mailrooms and the machine shops of America. The plumbers, the carpenters, the cops, the teachers, the truck drivers, the pipe-fitters, the people that like me best,” promised Trump.
In fact, more than 60% of the tax savings went to the most wealthy 20%, according to the non-partisan
Tax Policy Center. Quite a number of them were
in Congress.
Companies including AT&T, General Motors and Wells Fargo all promised to invest in new jobs.
Instead they bought back their own shares and
laid people off.
Sure, the tax cuts helped boost the 401k retirement savings plans most Americans now rely on in lieu of a pension. But the rises in share price disproportionately benefit the economic elite. The wealthiest 10% of Americans own 84% of all stocks and the top 1% of households own nearly 38% of all stock, according to
research by the New York University economist Edward Wolff.
The tax cuts were such a dud that
even Republican voters don’t like them. Bailouts for big business as the average American struggles with the Covid-19 crisis on top of healthcare costs, student debts and persistent low wages could be political suicide for Trump. Nevertheless he will have to do something – we can’t rely on the Fed any more.