{"id":9861,"date":"2020-05-14T09:18:41","date_gmt":"2020-05-14T16:18:41","guid":{"rendered":"https:\/\/worldcampaign.net\/?p=9861"},"modified":"2020-05-14T21:04:43","modified_gmt":"2020-05-15T04:04:43","slug":"the-bailout-is-working-for-the-rich-propublica","status":"publish","type":"post","link":"https:\/\/worldcampaign.net\/?p=9861","title":{"rendered":"“The Bailout Is Working \u2014 for the Rich”, ProPublica"},"content":{"rendered":"

by Jesse Eisinger,\u00a0

The economy is in free fall but Wall Street is thriving, and stocks of big private equity firms are soaring dramatically higher. That tells you who investors think is the real beneficiary of the federal government\u2019s massive rescue efforts.<\/em><\/p>\n

Ten weeks into the worst crisis in 90 years, the government\u2019s effort to save the economy has been both a spectacular success and a catastrophic failure.<\/p>\n

The clearest illustration of that came on Friday, when the government reported that 20.5 million people lost their jobs in April. It marked a period of unfathomable pain across the country not seen since the Great Depression. Also on Friday, the stock market rallied.<\/p>\n

The S&P 500 is now up 30% from its lows in mid-March and back to where it was last October, when the outlook for 2020 corporate earnings looked sunshiny. Companies have sold record amounts of debt<\/a> in recent weeks for investment-grade<\/a> companies. Junk bonds, historically dodgy during an economic swoon, have roared back.<\/p>\n

If you\u2019re looking for investors\u2019 verdict on who has won the bailout, consider these returns: Shares of Apollo Group, the giant private equity firm, have soared 80% from their lows. The stock of Blackstone, another private equity behemoth, has risen 50%.<\/p>\n

The reason: Asset holders like Apollo and Blackstone \u2014 disproportionately the wealthiest and most influential \u2014 have been insured by the world\u2019s most powerful central bank. This largess is boundless and without conditions. \u201cEven if a second wave of outbreaks were to occur,\u201d JPMorgan economists wrote in a celebratory note on Friday, \u201cthe Fed has explicitly indicated that there is no dollar limit and no danger of running out of ammunition.\u201d<\/p>\n

Many aspects of the coronavirus bailout that assist individuals or small businesses, meanwhile, are short-term or contingent. Aid to small businesses comes with conditions on what they can do with the money. The sums allocated by the CARES Act for stimulus and expanded unemployment insurance are vast by historical standards. But the relief they provide didn\u2019t prevent tens of millions from losing their jobs. The assistance runs out in weeks, and the jobless live at the mercy of a divided Congress, which will decide whether that help gets extended and, if so, for how long.<\/p>\n