Tag Archives: Steve Inskeep

We Should Attach Strings to Corporate Bailouts

Image result for empty airport

It’s the end of the world as we know it and the banks and airlines feel fine because even in the midst of economic collapse CEOs can sleep soundly at night, secure in the knowledge that the American taxpayer will bail them out. Again.

All they have to do is wait a respectable 6 to 12 months after the wire transfer clears to start giving themselves raises, renovating executive suites and buying back their stock.

That’s exactly what happened during and after the 2008-09 global economic crisis that followed the subprime mortgage meltdown. In 2008 alone banks that received government bailouts spent $1.6 billion on executive salaries, bonuses and benefits including “cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management,” the AP reported.

It has been a week since securities markets began a terrifying fall. Again, shamelessly, acting under the assumption that we have completely forgotten what they did last time, corporate lobbying groups like Airlines for America are already asking for a $60 billion bailout. Some people in the media are asking the right questions. Steve Inskeep of NPR’s Morning Edition asked an AFA spokesman about the $10 to $15 billion in profits the airlines have been raking in annually. Didn’t they save any of that? According to Bloomberg, the idiots spent 96% of their cash to buy back their stock even as they accumulated a mountain of debt.

As a society, however, Americans ought to be asking a bigger question: are we going to allow ourselves to be conned by these corporate douches the way we have been in the past?

Clearly the United States economy cannot recover from the coronavirus shock without a viable transportation system. That includes airlines. Similarly, we can’t allow banks to fail. But we should not repeat the mistakes of the Bush and Obama administrations, who bailed out Wall Street at the expense of Main Street.

The federal government handed over $7 trillion interest-free, no strings attached, to the big banks in exchange for increasing liquidity in the credit markets—which they never did. It’s still too hard to get a mortgage or other type of loan. After 9/11 the feds gave $15 billion to the airline industry which has since treated American airline passengers like crap.

As with the bank bailout, much of the money was wasted and stolen.

As George W. Bush said, fool me once, shame on, shame on you, fool me, you can’t get fooled again. Or something like that.

I have little expectation that they will do this, but the Trump Administration should target federal assistance toward ordinary citizens who are losing their jobs rather than corporations. Not only is this the right thing to do, you get twice the bang for your buck. If Obama had helped distressed and unemployed people pay their mortgages and rent, it would have kept them in their homes, propped up the underlying mortgages that tanked derivatives and therefore saved the banks indirectly. Reducing the number of evictions would have mitigated the real estate crash caused by the deterioration of vacant houses.

To their credit, White House officials seem to be considering direct payments to prop up the economy during the coronavirus crisis. There’s even talk of a $1000 per person per month guaranteed minimum income reminiscent of Andrew Yang’s proposal. Seems like a lot of money but not when you compare it to the defense budget. Maybe we can take a break from killing Muslims?

But I would be surprised if they did that. The political class is just not that into us.

Trump should offer distressed corporations two options in exchange for being rescued from the financial downturn caused by the coronavirus pandemic.

Option one: nationalization.

If we save your automobile company or your oil company or your airline, we own it. All your stock gets transferred to the property of the U.S. Treasury. If the bailout is partial, we take a proportionate share based on a discounted rate of your devalued stock prices. If you are a competent CEO, you get to stay, but obviously at a greatly reduced salary. Once you start to do better, we deserve your profits.

You’re welcome.

Option two: we get to tell you how to run your company.

I’m picking on banks and airlines because they are particularly mean to their customers but you can extrapolate these principles to other lines of business.

If the U.S. taxpayer saves your bank, the U.S. taxpayer has the right to be treated like a human being when he or she does business with you. That means closing the gap between interest rates. It’s insane that banks pay out 0.5% interest on savings accounts while taking in 25% from credit cards. It’s immoral to charge lower fees to rich people with high bank balances than to poor people with hardly any money. Before we dole out money to these institutions, they must promise in writing to do better.

The list of sins of our widely-despised airlines is endless: seats packed so closely together that they would be difficult to evacuate in case of emergency, high flight change fees and baggage fees that have by themselves poured billions of dollars into airline coffers. As Columbia law professor Tim Wu says, “The change fees don’t just irritate; they are also a drag on the broader economy, making the transport system less flexible and discouraging what would otherwise be efficient changes to travel plans.”

 The anti-American caste system—first class, business, coach, basic economy—should be abolished. If your flight gets canceled for a reason other than bad weather, you should be compensated. I’m tired of seeing my flights canceled because there would have been some empty seats. Even in case of bad weather, they should put you up in a decent hotel until it clears.

Big bailouts come with big strings. Not one dime of taxpayer money should ever find its way into executive salaries. And no stock buybacks.

Think I’m being draconian? If so, think of all the times you have asked an institution like a bank or an airline to cut you a break. How many times did they say yes? They had all the power and they used it to crush you. Thanks to the coronavirus the tables are turned. We, the people, have the power over the money that these jerks need to survive.

Let’s leverage the hell out of it.

 (Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, is the author of the biography “Bernie.” You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)

SYNDICATED COLUMN: Big Bird is a 1%er

Romney’s Silly But Salient Point on PBS

“I like PBS. I love Big Bird. Actually, I like you, too,” Mitt Romney told Jim Lehrer in the most quoted line from the first presidential debate. “But I’m not going to keep on spending money on things to borrow money from China to pay for.”

Huge news!

If deficit spending will be verboten under the Mittocracy, what will happen to all those out-of-work soldiers and defense contractors? Where will the drones crash after they run out of gas?

But let’s not talk about that either. Apparently I’m the only person in America who noticed that the military-industrial complex is about to go out of business.

People are instead focusing on Romney’s call to cut the $445 million a year the federal government–which amounts to a paltry 1.2% of 1% of the federal budget–contributes to the Corporation for Public Broadcasting, which subsidizes PBS and NPR.

My fellow political cartoonists are having a field day, echoing President Obama’s hat tip to the O.J. case: “Elmo has been seen in a white Suburban.  He’s driving for the border.” The New York Times’ Charles M. Blow riffed: “Big Bird is the man. He’s eight feet tall. He can sing and roller skate and ride a unicycle and dance. Can you do that, Mr. Romney?” A co-creator of “Sesame Street” dismissed Romney as “silly.”

Silly? Definitely.

But is Romney right? Probably.

Candidates and parties aren’t important. Ideas are. If we’re ideologically consistent, if we want to appear credible when we criticize right-wingers like Romney, we left-of-center types have to hold ourselves to the same (or higher) standards as those to which we subject our enemies. We have to admit when they’re correct, even–especially–when it’s about something as trivial as this.

This is a time when we have to give the devil his due.

Until recently I was unaware of the exorbitant salaries received by executives and top employees of federally-subsidized broadcasting networks. In a 2011 op-ed for The Wall Street Journal, Senator Jim DeMint (R-SC) pointed out that PBS paid its president, Paula Kerger, over $600,000 a year–more than the President of the United States. “Kevin Klose, president emeritus of NPR…received more than $1.2 million in compensation, according to the tax forms the nonprofit filed in 2009,” wrote DeMint. “Sesame Workshop President and CEO Gary Knell received $956,513 in compensation in 2008.” (Now Knell runs NPR, which pays him about $575,000.)

Actor Carroll Spinney, who plays Big Bird and Oscar the Grouch, was paid more than $314,000 last year.

The liberal Center for American Progress countered: “While those numbers are not exactly chump change, it’s pennies compared to the salaries of another industry the U.S. taxpayers subsidize at much higher cost–Big Oil.”

But that’s red-herring sophistry.

Wasteful federal spending on overpaid executives is wrong, whether it’s for planet-murdering energy corporations, or on a network that airs free educational TV that helps ready kids for school with basics like counting, math and even Spanish.

Kill both.

“Like for-profit media companies, Sesame [and PBS] needs to pay top dollar to attract talent,” MSN’s Jonathan Berr argues, sounding like a Fortune 500 corporation defending sky-high CEO paychecks.

I disagree.

NPR and PBS do an OK job reporting the news–as long as it happens on a weekday–but that’s not the point.

If you accept public money, you’re in public service and should get paid accordingly. Which is to say, fairly–and at the lowest fair cost to taxpayers.

If you can’t find someone qualified to run NPR or PBS, or an actor up to the task of playing Big Bird, for $100,000 a year–especially in this job market–you’re not looking hard enough. Something is off-kilter when the studios of publicly-funded shows like NPR’s “All Things Considered” are centrally located and sumptuously furnished with mahogany tables and the latest high-tech gadgetry, while those of privately-owned 50,000-watt talk-radio powerhouses are situated in the slums and look like 1970s-era flophouses.

Salary figures for NPR “stars” like Robert Siegel ($341,992), Renee Montagne ($328,309), Steve Inskeep ($320,950), Scott Simon ($311,958) and Michele Norris ($279,909) are three to four times more than top-rated talk-radio hosts in the biggest markets get. How dare these 1%ers shake us down during pledge drives, much less collect federal taxdollars?

PBS only receives 15% of its funding from the feds. For NPR it’s 2%. As a former NPR exec confided, given the political heat they take over it, they’d might be better off cutting the strings. Then they’d be free to stop giving lying conservatives “equal time” to seem “fair.”

Why is the government giving broadcasters money they don’t need? There’s a much stronger argument for propping up newspapers, which remain the original source of 95% of news stories. Print media is in big trouble: the newspaper industry has shrunk 43% since 2000. Analysts say that even that chart-filled ubiquitous denizen of hotels USA Today may fold. If the feds want to do something good for journalism–and the well-informed populace required for vibrant democracy–they should start by subsidizing print newspapers.

But only if their editors and publishers don’t get paid ridiculous salaries.

(Ted Rall‘s new book is “The Book of Obama: How We Went From Hope and Change to the Age of Revolt.” His website is tedrall.com. This column originally appeared at MSNBC’s Lean Forward blog.)

COPYRIGHT 2012 TED RALL