Government Bailouts: Your Tax Dollars at Work
It’s a good time to be a lobbyist, since their clients are presumably sparing no expense in bids for financial assistance. A review of recent headlines show unimaginable monetary needs in depth and breadth.
Here’s a sample:
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- The Wall Street Journal: Airlines Seek $50 Billion Coronavirus Aid Package
- CNBC: Travel Industry Pushes for $150 Billion in Aid as Coronavirus Cripples Business
- Washington Post: Casinos Ask Congress for Emergency Aid as Coronavirus Toll Sweeps Industry
- The Boston Globe: Airbnb, Hotels Seek US Government Aid as Demand Flattens
- The Hill: Franchise Group Calls for $300 Billion in Federal Assistance
While the need for assistance is universal, the causes are as different as the industries seeking them. For instance, the National Confectioners Association says, “… short supply of sugar and the artificially high domestic sugar price, has exacerbated pressures on the economic health of our industry.” The Pork Council is not looking for financial aid per se, but is asking the Feds to expedite visas to stave off a worker shortage.
The complexity of rendering aid to private business on behalf of taxpayers is a tricky situation. In some cases, expect the Feds to purchase shares of stock directly from companies. Alarmists will say the government is “nationalizing private industry,” but taking ownership stakes is a staple of federal crisis intervention and none of the companies that received this kind of aid during the Great Recession (i.e. Ford, GM, Goldman Sachs) are now owned by the federal government.
David R. Evanson is a financial journalist in Philadelphia.