Donald Trump has declared that he's the enemy of socialism. But Robert Reich writes that what he stands for is socialism for the rich. Capitalism is for everyone else:
In the conservative mind, socialism means getting something for doing nothing. That pretty much describes the $21bn saved by the nation’s largest banks last year thanks to Trump’s tax cuts, some of which went into massive bonuses for bank executives. On the other hand, more than 4,000 lower-level bank employees got a big dose of harsh capitalism. They lost their jobs.
Banks that are too big to fail – courtesy of the 2008 bank bailout – enjoy a hidden subsidy of some $83bn a year, because creditors facing less risk accept lower interest on deposits and loans. Last year, Wall Street’s bonus pool was $31.4bn. Take away the hidden subsidy and the bonus pool disappears.
That policy is on full display at General Motors:
GM has got more than $600m in federal contracts, plus $500m in tax breaks. Some of this has gone into the pockets of GM executives. Chairman and CEO Mary Barra raked in almost $22m in total compensation in 2017 alone.
But GM employees are subject to harsh capitalism. GM is planning to lay off more than 14,000 workers and close three assembly plants and two component factories in North America by the end of 2019.
And Trump, the businessman, followed the same playbook:
When he was in business, Trump perfected the art of using bankruptcy to shield himself from the consequences of bad decisions – socialism for the rich at its worst – while leaving employees twisting in the wind.
Now, all over America, executives who run their companies into the ground are getting gold-plated exit packages while their workers get pink slips.Consider what has been happening throughout the United States:
Sears is doling out $25m to the executives who stripped its remaining assets and drove it into bankruptcy, but has no money for the thousands of workers it laid off.
As Pacific Gas and Electric hurdles toward bankruptcy, the person who was in charge when the deadly infernos roared through Northern California last year (caused in part by PG&E’s faulty equipment) has departed with a cash severance package of $2.5m . The PG&E executive in charge of gas operations when records were allegedly falsified left in 2017 with $6.9m.
Under socialism for the rich, you can screw up big time and still reap big rewards. Equifax’s Richard Smith retired in 2017 with an $18m pension in the wake of a security breach that exposed the personal information of 145 million consumers to hackers.
It's called fraud. And Trump personifies it.