History repeats - corporations screw up, screw people, ask for bailouts

I'm sensing a theme.

From 2014-2018 American Airlines used $11 billion to buy back stock, making investors and executives rich.

During that same time, many gate agents saw no raises other than those mandated by minimum wage hikes.

Remember that, when they ask for a no-strings bailout.

— Chris Murphy (@ChrisMurphyCT) March 18, 2020

Imagine if 96% of their free cash flow did not go to share buy backs https://t.co/0CDVHuTOfc

— Stephanie Ruhle (@SRuhle) March 16, 2020

Holy shit, Boeing spent *$43 billion* on stock buybacks, helping more than double its stock price in 2017-2018, enriching shareholders, only to meltdown from its mass produced faulty planes and the current coronavirus crisis. Now they need a bailout? https://t.co/q0obrCrWki

— Lee Fang (@lhfang) March 18, 2020

So you're saying that cutting taxes on corporations led to self-absorbed, risky behavior that now leaves them no cushion when the economy turns bad? YOU DON'T SAY!

Dean Baker of the Center for Economic and Policy Research has a different idea on how to deal with these now-broke companies. And it would be a different tack from what was done in 2008 with the banks, who were equally reckless with disastrous results.

[In 2008], the initial downturn surely would have been somewhat worse had we gone the no bailout route, but there is no economic reason we could not have quickly lifted the economy out of a downturn with a massive stimulus following a collapse of the major banks. We held the cards and could have dictated the terms of any bailout for the banks.

Unfortunately, this argument was not heard at the time. I remember I wrote a column for the Guardian with the headline “the banks have a gun pointed to their heads and are threatening to pull the trigger.” The paper flipped the headline so that the guns were pointed to our heads.

Anyhow, we can’t let the same mistake happen twice. Congress can dictate terms of any bailout. I would suggest following the auto-industry model — wipe out shareholders first. And, bailout recipients have to commit to keeping workers on the payroll with current pay and benefits.

There also should be strict caps on executive compensation. Let’s make it $2 million in total compensation. (That includes insurance policies, health care, pensions, etc.) And to ensure that there are no silly mistakes, jail time for board members who sign contracts exceeding this figure.

If the airlines, cruise ships etc. don’t like it, let them go elsewhere for money.

Policymakers hold the power and the money in this situation, and they can direct it as they wish. If they choose to use it.

Right now, the people in need are those losing their jobs and incomes, and who need to pay their bills to avoid going into bankruptcy. They weren't the ones who used the GOP's Tax Scam to borrow recklessly and reward shareholders over workers. They're the ones who got crumbs for doing (what we are told) is the "right way", just working and trying to get ahead.

Can I retweet this 100 times? https://t.co/jD8iriUgeZ

— Elizabeth Warren (@SenWarren) March 19, 2020

Pay the people first, the corporations last (if at all).