Last week the Senate voted 96 to 0 on a bill that fundamentally reorients American politics. The relief package includes direct cash payouts to families that run into the hundreds of billions, and corporate bailouts for casinos, aerospace companies, airlines, hotel chains, and Wall Street firms that White House adviser Larry Kudlow
argues will total $6 trillion. There are loans and grants to small businesses, as well as money for hospitals, states and cities, real estate interests, and obscure guarantees of risky bank debt.
The bill places immense power in the hands of a few actors, who will organize these programs and manage which financial institutions move the money into our commercial realm. Treasury secretary Steven Mnuchin has discretion over essentially unlimited financing for banks and big businesses, with aid from Federal Reserve chair Jay Powell, Small Business Administration head Jovita Carranza, and labor secretary Eugene Scalia.
In other words, government control over large swaths of the economy is our new normal. We are now living in a planned economy in which the financial futures of American families and businesses alike will be purely a function of political choices by Donald Trump’s cabinet. Our success in combating the coronavirus and restarting our economy depends on those decisions, and on the political pressure we the people apply in response.
While it’s tempting to see this bailout package as being similar to that of 2008, the analogy is flawed. During the Great Recession, the bailouts of Wall Street were an attempt to keep private credit flowing. The coronavirus relief bill, however, is an explicit takeover of Main Street-level activity by the state. It’s hard to wrap your mind around the ideological change that has taken place. Before this disease, Democrats were deeply skeptical of power grabs by the Trump administration. Today, Democrats are angry the President isn’t more aggressively commandeering private corporations and forcing them to make medical supplies. Think about what it means in a capitalist society for the government to take over the means of production. Now think about what it means for Democrats to demand that Trump seize more executive authority. Both of those things just happened.
