October 5, 2010

Bailout Lies – Corporate Paper Version

Filed under: Corporatism — Tags: — Russ @ 2:52 am


The NYT had a piece yesterday about another crime of the Bailout. Since 2008 the government has been stealing taxpayer money to prop up the corporate paper market. The lie was that without this bailout this essential market would collapse, you won’t have an economy, smoking crater, dogs and cats living together, mass hysteria, etc., etc.
Instead, as any honest observer could have predicted, the program has simply been used as a looting binge by big corporations. The NYT piece has economists calling this “rational”. It quotes a more honest corporate flack calling it “opportunistic borrowing”. Another commenter says corporations will use it to cut jobs. It is indeed a windfall. It proves that this aspect of the Bailout, like every other, was never needed or intended to help the American people, but only to enable corporate looting. Like with everything else this government does, the intent is to loot the people.
And as usual the NYT’s intent is to whitewash it. The piece is actually a good example of how we can get the truth out of it as long as we ignore the propaganda. Here’s a good summary of the truth slathered with lies:

As many households and small businesses are being turned away by bank loan officers, large corporations are borrowing vast sums of money for next to nothing — simply because they can.

Companies like Microsoft are raising billions of dollars by issuing bonds at ultra-low interest rates, but few of them are actually spending the money on new factories, equipment or jobs. Instead, they are stockpiling the cash until the economy improves.

The development presents something of a chicken-and-egg situation: Corporations keep saving, waiting for the economy to perk up — but the economy is unlikely to perk up if corporations keep saving.

This situation underscores the limits of Washington policy makers’ power to stimulate the economy. The Federal Reserve has held official interest rates near zero for almost two years, which allows corporations to sell bonds with only slightly higher returns — even below 1 percent. But most companies are not doing what the easy monetary policy was intended to get them to do: invest and create jobs.

The Fed’s low rates have in fact hurt many Americans, especially retirees whose incomes from savings have fallen substantially. Big companies like Johnson & Johnson, PepsiCo and I.B.M. seem to have been among the major beneficiaries……

That is part of what has become the great question of this long, jobless recovery: When will corporate America start to feel confident enough to put its cash to work, building factories and putting some of the nation’s 14.9 million unemployed to work?

Businesses are holding on to their protective cash cushions, worried perhaps that the economy could slip back into recession or at least grow too lethargically to make an investment worthwhile.

The nation’s corporations will be strong, well capitalized and ready to act aggressively when executives finally decide it is time to expand their businesses……

In addition, many of the new machines and computers may be replacing older machines companies put off retiring in the recession. Businesses are playing catch-up, and little expansion is occurring.

“They may actually be using this new investment to be more efficient and cut jobs,” said Michael Gapen, an economist at Barclays Capital. “The mix of signals right now is still telling corporations to sit tight and wait.”

It’s a lie. On its face it’s obvious that they’re doing exactly what the government intended, because if the government didn’t intend this, why are they allowing it?
Why isn’t Steve Ballmer under arrest? If the government props up cheap corporate paper on the premise that the money will be productively invested, if that’s the intent, then anyone borrowing money under the program is at least implicitly affirming that he’ll use it for immediate investment.
If he instead hoards it, that’s a criminal fraud. So why aren’t Steve Ballmer and the rest on trial? Why is taxpayer money still being handed out under these circumstances?
Simple: No part of the Bailout, including the corporate paper backstop, ever had any purpose but robbery. That’s the one and only intent of this criminal government and of both criminal Washington parties.


  1. I wonder if the STATUS of “person” accorded to the corporation could encourage people to indulge in the PERSONIFICATION of the corporation. People from all walks of life, but particularly people working at top levels of the corporations, and that elusive “elite” who “owns” them.
    In this case… the corporation AS PERSON, is saving for a rainy day. (Just like.. the BOURGEOIS tends to save for a rainy day. CAREFUL, I am not justifying or saying this is good, but it could help us to understand the psychological mechanisms behind what is going on.)
    Generally speaking, the RICH save for a rainy day (the poor don’t have enough money to do so).
    But I’m wondering how the revolution is going to come about AGAINST a PERSONIFIED abstraction, whose “owners” may be spread over several continents ?
    At least the king was there.. IN FLESH AND BLOOD…

    Comment by debra — October 5, 2010 @ 3:08 am

    • If we could destroy the corporation and restitute what it stole here in America, it wouldn’t matter much if some of the individual criminals rotted penniless and powerless overseas.

      It sure was funny the way after 1917 Russian ex-bigshots and tough guys had to scrape out a living in western Europe as waiters, taxi drivers, etc.

      Comment by Russ — October 5, 2010 @ 3:18 am

      • Not really worth the collateral damage though, was it?

        Comment by Andy Lewis — October 5, 2010 @ 3:27 pm

      • You mean the way the Bolsheviks hijacked the revolution? Yes, that wrecked it all right.

        Comment by Russ — October 5, 2010 @ 3:36 pm

  2. Sigh. Are you talking about the White Revolution ?
    Have you seen.. “Ninotchka” by Lubitsch ?
    I definitely recommend it. Delicious, effervescent entertainment that makes you THINK too.
    The golden age of the cinema.

    Comment by debra — October 5, 2010 @ 11:38 am

    • I was responding to your idea that it matters what the ex-bigshots stranded somewhere do once their power has been destroyed where it counts. What are orphaned and stranded corporatists going to do once the corporations are dissolved? They’ll be nothing.

      I haven’t seen the movie.

      Comment by Russ — October 5, 2010 @ 3:43 pm

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