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"If you're the President of Argentina, Trump gives you a $20 billion bailout. If you're an American whose health care premiums are about to double? Tough luck."
President Donald Trump's allegiance to Argentina's right-wing government is appearing to undermine his signature claim—for those who ever believed it—that he always puts "America first" in his policymaking, as critics continue to bash the Republican leader for his outsized support for Argentina's failing economy compared to the suffering of US consumers, farmers, and workers.
Asked by a reporter aboard Air Force One on Sunday whether he was concerned about US farmers who feel a $40 billion bailout he has helped orchestrate for the beleaguered South American nation "is benefiting Argentina more than it is them," Trump was dismissive of the reporter and the question.
"Look, Argentina is fighting for its life, young lady," Trump mansplained to the female reporter. "You don't know anything about it—they're fighting for their life. Nothing's benefiting Argentina. They are fighting for their life. You understand what that means? They have no money. They have no anything. They're fighting so hard to survive."
After slashing billions in foreign aid around the world this year, cuts that experts say are costing real lives in some of the poorest nations on earth, Trump went on to claim that it was his duty to help struggling Argentina, currently governed by his far-right friend and ally, President Javier Milei, who has driven the economy into a tailspin with his chainsaw-inspired austerity.
Q: What do you have to say to farmers who feel that the deal is benefitting Argentina more than it is them?
TRUMP: Look, Argentina is fighting for its life, young lady. You don't know anything about it. You understand what that means? They are dying pic.twitter.com/1DMyaHtcTR
— Aaron Rupar (@atrupar) October 20, 2025
"If I can help them survive in a free world," Trump suggested he would do just that for Argentina. "I happen to like the president of Argentina. I think he's trying to do the best he can. But don't make it sound like they are doing great. They are dying, alright? They're dying."
Trump admitted last week during a cabinet meeting that the $40 bailout is aimed at helping what he described as a "good financial philosophy" of Milei, the far-right libertarian who has slashed pension payments for retired workers, trashed regulations, and eviscerated public spending in deference to corporate and capitalist profits.
Writing for Jacobin, Branko Marcetic argued earlier this month that what it boils down to is that Trump will find funds to salvage the failed policies of Milei, but not healthcare or other needs for American workers or their families.
"In other words," wrote Marcetic, "Trump is sending billions of Americans’ dollars to a foreign country to prop up a failing president who has run his country into the ground by following Trump’s own policy preferences. If Milei fails, Trump’s own, very similar austerity program will take a major blow too.
Soybean farmers across the US have been outspoken about how much Trump's tariff policies have harmed them this year, with China—historically the largest importer of US soybeans—shutting them out, even as they scooped up Argentinian soybeans at bargain prices earlier this year after Milei cut his nation's export tax.
Trump has promised soybean farmers a bailout of their own, but that process has stalled amid the ongoing government shutdown, which Republicans in control of Congress have maintained despite furious calls that doing so puts the healthcare of tens of millions of Americans at risk of soaring premium hikes or lost coverage.
Leading the charge for Trump's policy on Argentina—including $20 billion in US taxpayer funds to stabilize the nation's currency as well as creating a separate $20 billion fund of private investments—is Treasury Secretary Scott Bessent, who has said supporting Argentina is vital to US interests and will continue.
However, underneath the administration's support for Argentina lurks the presence of high-profile US investors, some of them closely connected to members of the administration, including Bessent allies and Wall Street players who have backed Trump.
Popular Information's Judd Legum has reported extensively on the financial interests benefiting most from the bailout scheme— and it's not US farmers or consumers. As Legum noted last week:
While farmers struggle to survive and the federal government is shut down, Milei is riding high thanks to the cash infusion from the Trump administration. “There will be an avalanche of dollars,” Milei said in a radio interview shortly before traveling to the White House. “We’ll have dollars pouring out of our ears.”
Speaking with The New Yorker's John Cassidy, former IMF chief economist Maurice Obstfeld explained that one "worrisome" dynamic when it comes to the Argentina bailout is that Bessent is repeatedly saying we will be there for the long term and we will do whatever it takes. He is effectively saying to foreign investors, ‘You will be able to get out whole.’”
As $20 billion has quickly morphed into $40 billion in financial backing of the flailing economy led by the slash-and-burn ideology of Milei, Trump said the US government is also considering buying up beef exports in an effort to control the price for US producers.
“We would buy some beef from Argentina,” he told reporters aboard the Sunday flight on Air Force. “If we do that, that will bring our beef prices down.”
However, with the government shutdown ongoing and Republicans refusing to budge on Democratic demands that healthcare costs be contained, there's no end in sight for relief when it comes to American families facing massive spikes in monthly premiums or loss of health coverage completely.
As Sen. Bernie Sanders (I-Vt.) noted last week: "If you're the President of Argentina, Trump gives you a $20 billion bailout. If you're an American whose health care premiums are about to double? Tough luck."
"Milei was already gifted a $42 billion lifeline from the US-controlled IMF and the World Bank," said one economics writer, "but even that was not enough to stabilize Milei's crazy Austrian School experiment."
In his first meeting with a foreign head of state after being reelected president last year, Donald Trump welcomed Argentina's far-right libertarian President Javier Milei to Mar-a-Lago.
At a lavish gala, Argentina's president slathered his host with compliments, describing Trump's return to office as the "greatest political comeback in history."
Before a crowd of onlookers, Trump would return the favor, telling Milei, "The job you’ve done is incredible. Make Argentina Great Again, you know, MAGA. He’s a MAGA person.”
On Monday, less than a year later, Milei arrived in New York for this week's meeting of the United Nations General Assembly, begging for help as Argentina's economy continues its freefall and reels from nearly two years of his radical economic austerity program.
Milei's fealty to Trump bore fruit. US Treasury Secretary Scott Bessent promised that the nation's financial department "stands ready to do what is needed within its mandate to support Argentina."
In what he described as an effort to tame Argentina's runaway inflation, Milei, who has described himself as an "anarcho capitalist," has spent the time since he was elected president in 2023 instituting a brutal regime of what has been referred to as economic "shock therapy."
His agenda has centered on taking a "chainsaw" to government institutions and worker protections: slashing energy and transportation subsidies, halting public infrastructure projects, declaring war on labor unions, freezing wage and pension increases, and firing tens of thousands of government employees.
The result was predictable: By February 2025, the country had begun to rapidly deindustrialize, unemployment was soaring, and more than half of Argentinians lived in poverty.
However, this did not stop Trump from modeling his economic agenda, often explicitly, after Milei's—most notably through the exploits of the chainsaw-brandishing billionaire Elon Musk's Department of Government Efficiency (DOGE), which he used to lay waste to the administrative state. Trump, meanwhile, has signed legislation gutting social services like Medicaid and food assistance, busted public unions, and canceled numerous green energy and infrastructure contracts.
The result has likewise been a slump in economic activity, culminating in unemployment numbers critics say the administration has been desperate to bury.
The US president has already intervened once to help soften Argentina's landing. As El País notes:
Thanks to Trump’s political support, the government agreed to a $20 billion bailout with the International Monetary Fund last April—to which the country still owes another $40 billion—and achieved a measure of calm, but it lasted barely three months.
Now, with Milei facing mass street protests against his budget cut proposals, a hostile legislature that routinely vetoes his agenda, and a weakening peso in the face of continued uncertainty, he has turned to the US for another bailout, which the US hopes will help ease the country's economic woes enough to stave off a thrashing for his party in the country's general legislative elections on October 26.
Referring to Argentina as a "systemically important US ally in Latin America," Bessent said that "all options for stabilization are on the table." This, he said, "may include, but [is] not limited to, swap lines, direct currency purchases, and purchases of US dollar-denominated government debt from Treasury’s Exchange Stabilization Fund."
Notably, Bessent continued to praise Milei's "support for fiscal discipline and pro-growth reforms." Despite its catastrophic effects, he described Milei's chainsaw agenda as "necessary to break Argentina’s long history of decline."
US Sen. Elizabeth Warren (D-Mass.) denounced the bailout as another favor from Trump to one of his political allies.
"First, Trump made us pay higher coffee and beef prices to support a convicted coup-plotter in Brazil," she said, referring to Trump's attempt to use harsh tariffs to pressure the Brazilian government into dropping charges against Jair Bolsonaro, who was ultimately convicted last week of attempting to overthrow the government. "Now, he wants American taxpayers to bail out his friend Milei in Argentina."
(Video: The Geopolitical Economy Report)
But as Benjamin Norton of the Geopolitical Economy Report argues, the motivation goes deeper than simply helping out a friend. It is an effort to save the reputation of "actually existing libertarianism" and the fortunes of US investors who've cast their lot with him.
"Milei was already gifted a $42 billion lifeline from the US-controlled IMF and the World Bank (after Argentina already owed more debt to the IMF than any other country), but even that was not enough to stabilize Milei's crazy Austrian School experiment," Norton said. "The US government is doing this not only to prop up one of its most loyal puppets in Latin America, but also in order to benefit wealthy US investors who hold Argentine stocks and bonds, and US corporations that want Argentina's lithium."
With Trump having modeled his oligarch-friendly economic agenda on Milei's, journalist Jacob Silverman—author of the forthcoming book Gilded Rage: Elon Musk and the Radicalization of Silicon Valley—argued that allowing the libertarian radical to twist in the wind is not an option for Trump.
"Javier Milei can't be allowed to fail," Silverman said, "because MAGA leaders and the tech right have propped him up as a true libertarian fighting the globalists and 'doing what needs to be done': Immiserating his people on behalf of private capital."
Risk was at the center of every financial upheaval since the 1980s. What can be done to keep history from repeating itself and threatening the banking system, economy, and jobs of everyday people?
First Republic Bank became the second-biggest bank failure in U.S. history after the lender was seized by the Federal Deposit Insurance Corp. and sold to JPMorgan Chase on May 1, 2023. First Republic is the latest victim of the panic that has roiled small and midsize banks since the failure of Silicon Valley Bank in March 2023.
The collapse of SVB and now First Republic underscores how the impact of risky decisions at one bank can quickly spread into the broader financial system. It should also provide the impetus for policymakers and regulators to address a systemic problem that has plagued the banking industry from the savings and loan crisis of the 1980s to the financial crisis of 2008 to the recent turmoil following SVB’s demise: incentive structures that encourage excessive risk-taking.
The Federal Reserve’s top regulator seems to agree. On April 28, the central bank’s vice chair for supervision delivered a stinging report on the collapse of Silicon Valley Bank, blaming its failures on its weak risk management, as well as supervisory missteps.
In each of the financial upheavals since the 1980s, the common denominator was risk.
We are professors of economics who study and teach the history of financial crises. In each of the financial upheavals since the 1980s, the common denominator was risk. Banks provided incentives that encouraged executives to take big risks to boost profits, with few consequences if their bets turned bad. In other words, all carrot and no stick.
One question we are grappling with now is what can be done to keep history from repeating itself and threatening the banking system, economy, and jobs of everyday people.
The precursor to the banking crises of the 21st century was the savings and loan crisis of the 1980s.
The so-called S&L crisis, like the collapse of SVB, began in a rapidly changing interest rate environment. Savings and loan banks, also known as thrifts, provided home loans at attractive interest rates. When the Federal Reserve under Chairman Paul Volcker aggressively raised rates in the late 1970s to fight raging inflation, S&Ls were suddenly earning less on fixed-rate mortgages while having to pay higher interest to attract depositors. At one point, their losses topped US$100 billion.
S&L executives were often paid based on the size of their institutions’ assets, and they aggressively lent to commercial real estate projects, taking on riskier loans to grow their loan portfolios quickly.
To help the teetering banks, the federal government deregulated the thrift industry, allowing S&Ls to expand beyond home loans to commercial real estate. S&L executives were often paid based on the size of their institutions’ assets, and they aggressively lent to commercial real estate projects, taking on riskier loans to grow their loan portfolios quickly.
In the late 1980s, the commercial real estate boom turned bust. S&Ls, burdened by bad loans, failed in droves, requiring the federal government take over banks and delinquent commercial properties and sell the assets to recover money paid to insured depositors. Ultimately, the bailout cost taxpayers more than $100 billion.
The 2008 crisis is another obvious example of incentive structures that encourage risky strategies.
At all levels of mortgage financing–from Main Street lenders to Wall Street investment firms–executives prospered by taking excessive risks and passing them to someone else. Lenders passed mortgages made to people who could not afford them onto Wall Street firms, which in turn bundled those into securities to sell to investors. It all came crashing down when the housing bubble burst, followed by a wave of foreclosures.
Incentives rewarded short-term performance, and executives responded by taking bigger risks for immediate gains. At the Wall Street investment banks Bear Stearns and Lehman Brothers, profits grew as the firms bundled increasingly risky loans into mortgage-backed securities to sell, buy, and hold.
Incentives rewarded short-term performance, and executives responded by taking bigger risks for immediate gains.
As foreclosures spread, the value of these securities plummeted, and Bear Stearns collapsed in early 2008, providing the spark of the financial crisis. Lehman failed in September of that year, paralyzing the global financial system and plunging the U.S. economy into the worst recession since the Great Depression.
Executives at the banks, however, had already cashed in, and none were held accountable. Researchers at Harvard University estimated that top executive teams at Bear Stearns and Lehman pocketed a combined $2.4 billion in cash bonuses and stock sales from 2000 to 2008.
That brings us back to Silicon Valley Bank.
Executives tied up the bank’s assets in long-term Treasury and mortgage-backed securities, failing to protect against rising interest rates that would undermine the value of these assets. The interest rate risk was particularly acute for SVB, since a large share of depositors were startups, whose finances depend on investors’ access to cheap money.
When the Fed began raising interest rates last year, SVB was doubly exposed. As startups’ fundraising slowed, they withdrew money, which required SVB to sell long-term holdings at a loss to cover the withdrawals. When the extent of SVB’s losses became known, depositors lost trust, spurring a run that ended with SVB’s collapse.
For executives, however, there was little downside in discounting or even ignoring the risk of rising rates.
For executives, however, there was little downside in discounting or even ignoring the risk of rising rates. The cash bonus of SVB CEO Greg Becker more than doubled to $3 million in 2021 from $1.4 million in 2017, lifting his total earnings to $10 million, up 60% from four years earlier. Becker also sold nearly $30 million in stock over the past two years, including some $3.6 million in the days leading up to his bank’s failure.
The impact of the failure was not contained to SVB. Share prices of many midsize banks tumbled. Another American bank, Signature, collapsed days after SVB did.
First Republic survived the initial panic in March after it was rescued by a consortium of major banks led by JPMorgan Chase, but the damage was already done. First Republic recently reported that depositors withdrew more than $100 billion in the six weeks following SVB’s collapse, and on May 1, the FDIC seized control of the bank and engineered a sale to JPMorgan Chase.
The crisis isn’t over yet. Banks had over $620 billion in unrealized losses at the end of 2022, largely due to rapidly rising interest rates.
So, what’s to be done?
We believe the bipartisan bill recently filed in Congress, the Failed Bank Executives Clawback, would be a good start. In the event of a bank failure, the legislation would empower regulators to claw back compensation received by bank executives in the five-year period preceding the failure.
Clawbacks, however, kick in only after the fact. To prevent risky behavior, regulators could require executive compensation to prioritize long-term performance over short-term gains. And new rules could restrict the ability of bank executives to take the money and run, including requiring executives to hold substantial portions of their stock and options until they retire.
To prevent risky behavior, regulators could require executive compensation to prioritize long-term performance over short-term gains.
The Fed’s new report on what led to SVB’s failure points in this direction. The 102-page report recommends new limits on executive compensation, saying leaders “were not compensated to manage the bank’s risk,” as well as stronger stress-testing and higher liquidity requirements.
We believe these are also good steps, but probably not enough.
It comes down to this: Financial crises are less likely to happen if banks and bank executives consider the interest of the entire banking system, not just themselves, their institutions, and shareholders.
"The bailout really did protect billionaires from taking a modest haircut," one observer wrote in response to the FDIC chief.
In prepared testimony for a Senate Banking Committee hearing slated for Tuesday morning, the chair of the Federal Deposit Insurance Corporation reveals that the 10 largest deposit accounts at Silicon Valley Bank held a combined $13.3 billion, a detail that's likely to intensify criticism of federal regulators' intervention in the firm's recent collapse.
When SVB was spiraling earlier this month, the FDIC, Treasury Department, and Federal Reserve rushed in to backstop the financial system and make all depositors at the California bank whole, including those with accounts over $250,000—the total amount typically covered by FDIC insurance.
"At SVB, the depositors protected by the guarantee of uninsured depositors included not only small and mid-size business customers but also customers with very large account balances," FDIC chief Martin Gruenberg writes in his prepared testimony. "The ten largest deposit accounts at SVB held $13.3 billion, in the aggregate."
Gruenberg goes on to estimate that the FDIC's $125 billion Deposit Insurance Fund (DIF)—which is financed primarily by assessments on insured banks and "backed by the full faith and credit of the United States government"—took a $20 billion hit as a result of the SVB intervention.
According to Gruenberg, nearly 90%—$18 billion—of the DIF loss stemming from SVB is "attributable to the cost of covering uninsured deposits." He added that the DIF absorbed a roughly $1.6 billion cost to cover uninsured deposits at Signature Bank, which failed shortly after SVB.
The FDIC chair's testimony comes as federal regulators continue to face scrutiny for glaring oversight failures in the lead-up to the collapse and backlash over the emergency response, which many have characterized as a bailout for the wealthy and well-connected given SVB's role as a major lender to venture capital and tech startups.
Billionaire Peter Thiel, whose firm was accused of helping spark a bank run by advising clients to pull their money from SVB, told the Financial Times that he had $50 million in a personal account at the bank when it failed earlier this month.
"The bailout really did protect billionaires from taking a modest haircut," Matt Stoller of the American Economic Liberties Project tweeted in response to Gruenberg's testimony.
Writing for The American Prospect on Monday, Revolving Door Project researcher Dylan Gyauch-Lewis called the federal government's swift action in the wake of SVB's failure "a good illustration of the enormous class bias in American policymaking."
"As soon as corporations and the wealthy run into trouble, elites trip over themselves, discarding both law and precedent, to rescue them," Gyauch-Lewis wrote, noting that federal regulators had to classify SVB's collapse as a "systemic risk" to the financial system—a disputed characterization—in order to legally guarantee deposits over $250,000.
For contrast, Gyauch-Lewis added, "consider student loan forgiveness. The legal justification is clear as day, and the authority itself is used regularly. According to the Higher Education Relief Opportunities for Students Act of 2003, the Education Department can forgive student loans as it sees fit in a national emergency."
"At bottom, the core reason SVB's depositors got bailed out had little to do with morals or even financial risk," Gyauch-Lewis argued. "It happened because they had rich and powerful friends with the ear of the president's chief of staff. Broke students don't. The students have to organize and campaign for decades to get something far worse than what they wanted, and for that to hang in the balance at the Supreme Court. The SVB depositors just had to whine on Twitter and make a few calls."
The financial system gets another bailout.
Once again, government socialism—ultimately backed by taxpayers—is saving reckless midsized banks and their depositors. Silicon Valley Bank (S.V.B) and Signature Bank in New York greedily mismanaged their risk levels and had to be closed down. The Federal Deposit Insurance Corporation (FDIC), in return, to avoid a bank panic and a run on other midsized banks went over its $250,000 insurance cap per account and guaranteed all deposits—no matter how large, which are owned by the rich and corporations—in those banks.
Permitting such imprudent risk-taking flows directly from the Trump-GOP Congressional weakening of regulations in 2018, which was supported by dozens of Democrats, led by bank toady Senator Mark Warner (D-Va.). That bipartisan deregulation provided a filibuster-proof passage by the Senate.
The other culprit is the Federal Reserve. Its very fast interest rate hikes reduced the asset value of those two banks’ holdings in long-term Treasury bonds, which reduced their capital reserves. With the "What, me worry?" snooze of the California Department of Financial Protection and Innovation, SVB had little supervision from state regulatory examiners and compliance enforcers.
Actually, big depositors sniffed the shakiness of these two banks and acted ahead of the regulatory cops with mass withdrawals that sealed the fate of SVB. Imagine, SVB was giving out bonuses hours before its collapse. For this cluelessness, the bank's CEO, Gregory Becker, took home about eleven million dollars in pay last year.
All this was predicted by Sen. Elizabeth Warren (D-Mass.) and Rep. Katie Porter (D-Calif.). Warren, in particular, specifically opposed the 2018 Congressional lifting of stronger liquidity and capital requirements along with regular stress tests for banks with assets over $50 billion. Trump's law allowed the absence of these safeguards to cover banks with assets up to $250 billion. Such de-regulation covered SVB and Signature.
Signature Bank had former House Banking Committee Chair Barney Frank on its board of directors. His name is on the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed following the 2008 Wall Street collapse. Even Mr. Frank was clueless about what Signature's CEO Joseph DePaolo was mismanaging. (DePaulo was paid $8.6 million last year.)
Of course, the underfunded FDIC doesn't have enough money to make good all the large depositors in these two banks. So, it is increasing the fees charged to all banks for such government insurance. The banks will find ways to pass these surchargers on to their customers.
Other midsized banks may be shaky as more major depositors pull out and put their money into mega-giant banks like JPMorgan Chase, Bank of America, and Citigroup, which are universally viewed as "too big to fail." The smaller businesses harmed by these closed banks are now on their own. No corporate socialism is as yet saving them.
One of the provisions of the Dodd-Frank law was to require federal agencies to rein in bank executives' pay that incentivizes recklessness and even fraud, as Public Citizen noted. Yet after 13 years, PC declared: "a hodgepodge of federal agencies—the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Federal Reserve, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission—that is supposed to finalize the rule has so far failed to do so."
Defying mandates of Congress, often riddled with waivers from Capitol Hill, is routine for federal agencies. They know that when it comes to law and order for profiteering corporations, Congress is spineless. Have you heard of any resignations or firings from these sleepy regulatory agencies? Of course not. They continue to raise the ante for corporate socialist rescue even beyond their legal authority. For example, where does the FDIC get the authority to guarantee all the deposits in the failed banks when the Congressional limit is strictly $250,000 per account?
Some people will remember Secretary of the Treasury Henry Paulson telling the Washington Post that there were "no authorities" for massive bank bailouts—think Citigroup in 2008 during a private weekend meeting in Washington, DC— but, he said, "someone had to do it."
Meanwhile, the American people remain fearful but silent over the safety of their bank deposits. They heard Treasury Secretary Janet Yellen tell Congress that the banking system "remains sound." Some remember that's what her predecessor said in the spring of 2008 about Fannie Mae and Freddie Mac—the safest investments after Treasury bonds. By the fall, both of these giants had collapsed taking millions of trusting shareholders down with them.
Finally, all those brilliant economists at the Federal Reserve surely must know that when midsize banks lose almost 20% on the value of their 10-year Treasuries, due to the very fast interest rate hikes by Jerome Powell's Fed, trouble is on the horizon. Why didn't they anticipate this outcome and do some foreseeing and forestalling? Nah, why worry, didn't you know that the Fed prints money?
Or maybe the Federal Reserve (its budget comes from bank fees, not the Congress), couldn't see beyond fighting inflation, something it did not take seriously in time over a year and a half ago. More than a few outside economists repeatedly gave the Fed fair warning. But then the Fed, hardly ever criticized by the mainstream press, was listening to its brilliant economists.
Stay tuned. This rollercoaster ride is not over yet.
Wealth creates power; power creates more wealth. Unattended, this can become a vicious cycle.
Last week’s bailout of small banks (and it was a bank bailout) needs to be seen in the larger context of America’s soaring inequality.
The standard conservative explanation for why inequality has widened is that individuals are paid what they’re “worth” — and that a few Americans at the top are now worth extraordinary sums while most Americans are not.
Their argument is easily confused with a moral claim that people deserve what they are paid in the market. Yet the amounts people are paid are morally justifiable only if the legal and political institutions defining the market are morally justifiable, which they are not.
Markets depend on who has the power to design and enforce them — deciding what can be owned and sold and under what terms, who can join together to gain additional market power, what happens if someone cannot pay up, how to pay for what is held in common, and who gets bailed out.
These are fundamentally moral judgments. Different societies at different times have decided these questions differently. It was once thought acceptable to own and trade human beings, to take the land of indigenous people by force, to put debtors in prison, and to exercise vast monopoly power.
So we need to ask: Is it morally acceptable that the typical worker’s wage has stagnated for the last 40 years while most of the economy’s gains have gone to the top? Do we believe that people who are rich are succeeding because of their own inherent worthiness or because the game is rigged in their favor? Have people who are poor failed, or has the system failed them? Is it morally acceptable that the pay of American CEOs has gone from an average of 20 times that of the typical worker 40 years ago to over 300 times today? Are the denizens of Wall Street — who in the 1950s and 1960s earned modest sums but are now paid tens or hundreds of millions annually — really “worth” that much more now than they were worth then?
Inequality in America began widening in the late 1970s and then took off. Inequality hasn’t widened nearly as much in other advanced economies. Why not?
Corporate and financial executives in America have done everything possible to prevent the wages of most American workers from rising in tandem with productivity, in order that more of the gains go instead into corporate profits and stock prices. Their major strategy has been to make workers less secure so they accept lower real wages (adjusted for inflation).
Some of this insecurity has been the result of trade agreements that have encouraged companies to outsource jobs abroad — protecting the firms’ intellectual property and financial assets but not the labor value of the people who work for them.
Some insecurity has resulted from shredded safety nets. Public policies that emerged during the New Deal and World War II placed most economic risks on large corporations through wage contracts and employer-provided health benefits along with Social Security, workers’ compensation, and 40-hour workweeks with time-and-a-half for overtime.
Now, those safety nets are mostly gone. Full-time workers who had put in decades with a company can find themselves without a job overnight — with no severance pay, no help finding another job, and no health insurance. Today, nearly one out of every five working Americans is in a part-time job. Two-thirds live paycheck to paycheck. Employment benefits have shriveled: The portion of workers with any pension connected to their job has fallen from just over half in 1979 to under 35 percent.
Some insecurity has resulted from the government’s policy of fighting inflation by raising interest rates to slow the economy — putting most of the inflation-fighting burden on average workers who thereby lose their jobs or don’t get real wage gains, rather than on corporations through tough antitrust enforcement, laws against price gouging, and price controls.
Most basically, the prevailing insecurity is due to the demise of labor unions. Fifty years ago, when General Motors was the largest employer in America, the typical GM worker earned $35 an hour in today’s dollars. America’s largest employer is now Walmart, and the typical entry-level Walmart worker earns about $9 an hour. The GM worker was not better educated or motivated than the Walmart worker.
***
The people who now hold a record share of the nation’s wealth justify their wealth (and their low tax rates) by utilizing three myths.
The first is trickle-down economics. They claim that their wealth trickles down to everyone else as they invest it and create jobs. Yet for over 40 years, as wealth at the top has soared, almost nothing has trickled down. (Trump provided a giant tax cut to the wealthiest Americans, promising it would generate $4,000 in increased income for everyone else. Did you receive it?)
The super-wealthy do not create jobs or increase wages. Jobs are created when average working people earn enough money to buy all the goods and services they produce, forcing companies to hire more people and pay them higher wages.
The second myth is the “free market.” As I noted above, the ultra-rich claim they’re being rewarded by the impersonal market for creating and doing what people are willing to pay them for. The wages of other Americans have stagnated, they say, because most Americans are worth less in the market now that new technologies and globalization have made their jobs redundant.
Rubbish. There’s no reason why the “free market” would reward vast multiples of what the rich were rewarded decades ago. Besides, the market can induce great feats of invention and entrepreneurialism with lures of hundreds of thousands or even millions of dollars — not billions.
The ultra-wealthy have rigged the so-called “free market” in America for their own benefit. Billionaires’ campaign contributions have soared from a relatively modest $31 million in the 2010 elections to $1.2 billion in the most recent presidential cycle — a nearly 40-fold increase. What have they got for their money? Tax cuts, freedom to bash unions and monopolize markets, and government bailouts. Their pockets have been further lined by privatization and deregulation.
The third myth is that they’re superior human beings — rugged individuals who “did it on their own” and therefore deserve their billions.
Baloney. Sixty percent of America’s billionaires are heirs to fortunes passed on to them by wealthy ancestors. Others had the advantages that come with wealthy parents.
Don’t fall for these myths. Trickle-down economics is a cruel joke. The so-called “free market” has been distorted by huge campaign contributions from the ultra-rich. The ultra-rich were lucky and had connections.
There is no moral justification for today’s extraordinary concentration of wealth at the very top. It is distorting our politics, rigging our markets, and granting unprecedented power to a handful of people.
***
The last time America faced any comparable degree of inequality was at the start of the 20th century. In 1910, President Theodore Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power” could destroy American democracy.
Roosevelt’s answer was to tax wealth. The estate tax was enacted in 1916, and the capital gains tax in 1922. Since that time, both have eroded. As the rich have accumulated greater wealth, they have also amassed more political power — and have used that political power to reduce their taxes.
Years later, Franklin D. Roosevelt saw the 1929 crash not only as a financial crisis but as an occasion to renegotiate the relationship between capitalism and democracy. Accepting renomination in 1936, he spoke of the need to redeem American democracy from the despotism of concentrated economic power.
“Through new uses of corporations, banks and securities,” he said, an “industrial dictatorship” now “reached out for control over Government itself … [T]he political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor — other people’s lives … Against economic tyranny such as this, the American citizen could appeal only to the organized power of Government. The collapse of 1929 showed up the despotism for what it was. The election of 1932 was the people’s mandate to end it.”
FDR gave workers the power to organize into labor unions, the 40-hour workweek (with time-and-a-half for overtime), Social Security, unemployment insurance, and workers’ compensation for injuries. He raised taxes on the top. And he regulated finance — making banking boring.
Since then, these reforms have also eroded.
The two Roosevelts understood something about the American economy and the ultra-rich that has now reemerged, even more extreme and more dangerous. Wealth creates power; power creates more wealth. Unattended, this can become a vicious cycle.
With echoes of 2008, the collapse and bailout of Silicon Valley Bank shows little has changed for reckless financial actors. Exactly how long will we allow this to continue?
In case we need any more proof, the bailout of the Silicon Valley Bank (SVB) is yet another overt sign that we are operating within a new version of capitalism. The wealthiest among us have little fear of losing money from their most important financial investments. They know they will be bailed out, and the rest of us will pick up the tab.
The crisis at SVB has made a mockery of bank deposit insurance and private banking. In the US, bank deposits are insured up to $250,000. If the bank fails, those with accounts below that amount are fully protected. But deposits over that amount are not.
The reason is straightforward. If you insure all accounts, no matter their size, bank executives will have every incentive to maximise their profits by investing depositor money in the riskiest, highest-yielding investments they can find.
If they succeed, the bank officers and investors become rich. If they fail, the government makes the depositors whole. It’s a business model with little downside.
This logic has been understood since the first bank insurance was debated and put in place during the 1930s. (President Roosevelt worried that bank insurance would unfairly subsidise poorly run banks.) So why is this rule being breached now?
The reasons given are many. Small businesses with sums in SVB above $250,000 won’t be able to make payroll. Workers will be laid off. Cutting-edge high-tech enterprises will fail. People will lose confidence and cause bank runs. The entire financial system, it is implied, is so interconnected that a failure of one bank may take down many others, and so on.
But perhaps the major reason in the case of SVB’s bailout has to do with the very wealthy venture capitalists who are invested in many of the tech start-ups that have their money parked in SVB accounts. These VC moguls, many of whom profess to be anti-government libertarians, made it clear to the political establishment that a bailout was required – and immediately!
This time, they didn’t care about bailing out the investors or bank officers. Those days are over. The big money was wrapped up in more than $200 billion in uninsured deposits. Their argument was simple—we are just too important to America for it to allow our operations to suffer financially. We are the backbone of high tech, of innovation, of American economic leadership. (And we put a lot of money into your political campaigns.)
Gutting regulation
SVB’s failure—and the failure of New York-based Signature Bank that followed—will lead to much hand-wringing about the need to tighten regulations, which were weakened in 2018 during the Trump administration.
SVB lobbied successfully to avoid facing the same regulations as the “systemically important” mega-banks. They wriggled out of some of the strongest provisions of the Dodd-Frank banking legislation, as the bank assets threshold was increased from $50 billion to $250 billion. (Barney Frank, the Frank in Dodd-Frank, incredibly, supported the weakening of his own bill. He sits on the board of the failed Signature Bank, having received more than $2.4 million in cash and stock awards over the past seven years.)
While the need for tighter regulations will dominate the discussion, we are missing the bigger picture. The financial barons and their CEO partners have a stranglehold over our economy: They are too big to fail and too politically important to suffer any appreciable financial harm. We will always bail them out, or the economy will crash, harming millions of working people.
It wasn’t always like this.
After the Great Depression, banking in the US was tightly regulated. One measure of this government control shows up in the income received by bankers. Between WWII and 1980 or so, there was virtually no difference in income between financial and manufacturing professionals.
That changed in a hurry after the Reagan-Thatcher idea of government captured the minds of most policymakers. The goal was to get the government out of the economy and get its foot off the necks of Wall Street/City financiers. Let them be free to create, free to build, free to drive the economy forward. Let them fund mergers and hostile takeovers that weed out the weak. Let them use corporate money to buy back stocks, manipulate share prices and stuff their own pockets. Let them become rich and richer as they lead us to a brighter, better world.
Once deregulation started, money flowed to the top. In the US, the gap between the top 100 CEOs and an average worker was about 40 to 1 in 1980. Today it is closer to 1000 to 1. And as the money flowed upwards, more deregulation followed.
Both political parties tripped over themselves to compete for Wall Street cash. The Democrats, under Bill Clinton, broke through Glass Steagall—the wall created during the New Deal that separated risky investment banking from the insurance industry and commercial banking.
And they deregulated derivatives that allowed for financial betting involving tens of trillions of dollars. It was argued that these bets would stabilise the financial system by spreading risk far and wide.
Instead, it brought the system to its knees. The entire financial system froze in 2008, causing six million American workers to lose their jobs in a matter of months due to no fault of their own.
The government responded by bailing out those banks and basically guaranteeing their profits. It allowed the failed banking executives to stay in control, and none of the financial criminals were prosecuted. This announced to all who cared to notice that we had entered a phase of capitalism we could call the Billionaire Bailout Society.
To be sure, new regulations had to be passed to appease a furious public. Dodd-Frank forced the large banks to keep more cash on hand and to go through periodic stress tests. But should a crisis reach those banks, does anyone really believe they will be allowed to fail?
The question to ask right now must go beyond how to re-regulate massive for-profit private banks. The real question is, what will it take to disband the Billionaire Bailout Society?
The SVB event tells us that any bank that is well-connected or simply large enough to cause financial chaos will have its depositors bailed out – all of them. But then, how are such banks free enterprises?
The next step should be obvious. Our only realistic path away from having to bail them out over and over again is to nationalise large parts of the banking system. If these financial institutions are so interconnected that we can’t let them fail, they should be run as publicly owned utilities.
I put it this way at the end of Looting of America, written in 2009:
Let’s hope we don’t throw away much of our children’s inheritance because we did not have the courage to do the obvious: Take over the failing major banks, drastically trim their astronomical salaries, control their hazardous financial engineering, and run the damn things for the good of us all….
If by the time you read these words, we have avoided a full-scale depression, we should consider ourselves more fortunate than wise. Or as Bob Dylan lamented:
An’ here I sit so patiently
Waiting to find out what price
You have to pay to get out of
Going through all these things twice
"We cannot continue down the road of more socialism for the rich and rugged individualism for everyone else," said the U.S. Senator from Vermont.
Sen. Bernie Sanders on Sunday night called for a full repeal of the 2018 banking deregulations signed into law by former President Donald Trump and declared that "now is not the time for taxpayers bail out Silicon Valley Bank"—the California bank that collapsed Friday.
On Sunday evening, the U.S. Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) issued a joint statement outlining a plan to make all deposits for Silicon Valley Bank as well as Signature Bank, which was shuttered by New York regulators earlier in the day, available to costumers Monday morning.
In his statement, Sanders said, "If there is a bailout of Silicon Valley Bank, it must be 100 percent financed by Wall Street and large financial institutions. We cannot continue down the road of more socialism for the rich and rugged individualism for everyone else. Let us have the courage to stand up to Wall Street, repeal the disastrous 2018 bank deregulation law, break up too big to fail banks and address the needs of working families, not the risky bets of vulture capitalists."
The statement the Fed, Treasury, and FDIC noted that "no losses" associated with the rescue plan "will be borne by the taxpayer," though the extraordinary intervention—the largest of its kind since the 2008 financial collapse—is still seen by many economists and financial experts, even if bank investors and debt holders are not protected, as a "bailout" for the financial industry only made possible by taxpayers.
"Let us have the courage to stand up to Wall Street, repeal the disastrous 2018 bank deregulation law, break up too big to fail banks and address the needs of working families, not the risky bets of vulture capitalists."
Warren Gunnels, longtime staffer and top advisor to Sanders, made the connection between venture capitalists clamoring for a speedy government intervention to save the banking sector from a wider shock and the same kind of people who have adamantly opposed financial relief for the struggling middle- and working-class Americans:
As the Washington Post reports, "The decision by Treasury to backstop all deposits at SVB and Signature — not just those up to $250,000 that are insured under federal law — rested on a judgment that it was necessary to avoid a wider 'systemic' meltdown. The move will likely ignite a political firestorm over the decision to protect the assets of tech firms, venture capitalists, and other rich people in California."
In 2018, as Sen. Mike Crapo's (R-Idaho) Economic Growth, Regulatory Relief, and Consumer Protection Act was making its way through Congress, Sanders took to the floor of the U.S. Senate to oppose the bill, warning of exactly this kind of economic disaster if the deregulation was approved:
"Let's be clear," Sanders said Sunday night in his statement. "The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed. Five years ago, the Republican Director of the Congressional Budget Office released a report finding that this legislation would 'increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.'"
"Unfortunately," he added, "that is precisely what happened."
On Monday, Lindsey Owens, executive directive of the progressive economic watchdog Groundwork Collaborative, focused on the additional lending facility made available to the bank customers and said the latest actions expose a deep "rot" within the Federal Reserve—especially as the central bank squeezes workers with increasingly higher interest rates, hikes that played at least a part in the banks' failures.
"This weekend, the Federal Reserve moved mountains to protect wealthy venture capitalists from the fallout of its aggressive interest rate hikes," said Owens. " Today, the Fed will return to its core work of pushing hardworking Americans out on the street to meet its inflation goals."
Such a set of policies, said Owens, shows the Fed "is irreparably broken and can no longer be trusted to go it alone on monetary policy. As Congress works to re-regulate mid-size banks after the misguided 2018 rollbacks that set this weekend's crisis in motion, they should also address the rot at the Fed."
In a statement on Sunday ahead of the government's rescue plan announcement, Matt Stoller, research director for the American Economic Liberties Project, made the case against any taxpayer bailout for SVB.
"Silicon Valley Bank was a badly managed and corrupt institution that entangled itself with powerful actors in the technology industry," Stoller argued. "The operative question government regulators are now facing is whether to use taxpayer funds to bail out the depositors from the failures of SVB's management."
But a full bailout, Stoller warned, "will only encourage other large regional banks to take similar risks in the future, just as Silicon Valley Bank did."
While bank investors and executives will not be included in the emergency actions announced on Sunday, Rep. Ro Khanna, the California Democrat who represents Silicon Valley, applauded the actions taken by Treasury to keep depositors whole.
Among his constituents impacted by the bank's collapse, he said, were "non-profit leaders, small business owners, start-up founders, and impacted employees of small businesses."
While expressly arguing that government intervention "should not and need not ... cost taxpayers a dime" during a news interview Sunday morning, Khanna later applauded the government plan while echoing Sanders' call for a reversal of the deregulation that led to the current crisis.
"I am glad that the Department of Treasury listened and moved to protect workers, the innovation pipeline, and the economy at large," Khanna said. "But the work doesn't end here. We've known since 2008 that stronger regulations are needed to prevent exactly this type of crisis. Congress must come together to reverse the deregulation policies that were put in place under Trump to avert future instability.”
A former Federal Reserve board of governors member on Thursday called on her former colleagues to stop using Covid-19 relief funds to bail out the "dying" fossil fuel industry, calling the decision a threat to the planet's climate and a misguided use of taxpayer money.
"These concessions to the fossil fuel industry are a risky investment in the past," Sarah Bloom Raskin wrote in a New York Times op-ed. "The Fed is ignoring clear warning signs about the economic repercussions of the impending climate crisis by taking action that will lead to increases in greenhouse gas emissions at a time when even in the short term, fossil fuels are a terrible investment."
Raskin's opinion piece sparked praise from climate campaigners like 350.org co-founder Jamie Henn.
"This should cause some waves," Henn tweeted.
Henn on Thursday penned an opinion piece for Common Dreams arguing that Mike Sommers, CEO of the American Petroleum Institute (API), is spewing lies to the public when he claims the industry doesn't want--and hasn't actively pushed for--a bailout from the Fed.
As Henn wrote:
The truth is that despite Sommer's best efforts to spin a fairytale about oil companies tightening their belts and lifting themselves up by their bootstraps, corporate socialism is exactly what API wants. In fact, the fossil fuel industry, and the American Petroleum Institute in particular, have been at the forefront of corporate efforts to profit off the coronavirus pandemic and government relief efforts.
Climate advocacy group Friends of the Earth program manager Lukas Ross, in a statement Wednesday, also rejected Sommers' protestations.
"Oil lobbyists are spewing blatant lies, and we have the receipts," said Ross. "Big Oil has already nabbed $1.9 billion in giveaways thanks to corporate tax cuts from the last stimulus."
"If polluters want to deny the existence of the ongoing bailout," Ross added, "Congress should swiftly repeal these blatant corporate tax giveaways and make fossil fuels ineligible for stimulus lending programs."
The bailout is presenting taxpayers with a burden, Raskin wrote, citing the industry's debt and unsustainable business model.
"For taxpayers, shouldering these liabilities is a bad deal," wrote Raskin. "Buying this bad debt is not likely to support the creation of jobs or even ensure that existing jobs survive."
Friends of the Earth agreed.
"Trump's administration has been exploiting this pandemic to bailout Big Oil companies that have been struggling long before coronavirus," the group tweeted.
The pandemic, wrote Raskin, "provides an unexpected opportunity to build an economy that is stronger in the long term."
"The decisions that the Fed makes today will go a long way to determining whether tomorrow's economy is one that remains susceptible to more chaos and vulnerability or builds economic security and resilience," she wrote.
In 1870, abolitionist Julia Ward Howe issued her Mother's Day proclamation: a call for mothers across the United States to end war.
It was five years since the end of the Civil War and the passage of the 13th Amendment, which banned chattel slavery with one notable exception: involuntary servitude is allowed as punishment for a crime.
Nearly 150 years later, Howe's dream of ending war has yet to become a reality. And the 13th Amendment has become more significant as, over the past 40 years, the number of people being sent to prison has skyrocketed. But accompanying these soaring numbers have been calls for abolition of another kind -- to abolish prisons. It's a call that's been gaining traction and popularity over the past decade.
"Even a few days in jail can result in losing one's job, housing and even custody of one's children."
Among the numerous tactics taken by abolitionists is one focusing specifically on mothers, particularly mothers of color, who have been hard hit by both poverty and tough-on-crime policies. It also challenges the country's bail system, in which people who cannot afford to pay bail must stay in jail for months -- and sometimes years -- as their cases slowly wind their way through the court system.
When a person appears in court after being arrested, the judge has the option to release them, jail them until trial or set bail, which is a monetary amount that they or their family will have to pay. The reasoning behind bail is not that the person is deemed a risk to themselves or their communities. Instead, it's based on the logic that, by paying a certain amount, the person is more likely to return for subsequent court dates. If they fail to appear, they forfeit that money. But in reality, bail serves as a two-tiered system in which people with money are allowed to prepare for their court date at home, while those without money must languish in jail.
On any given day, 462,000 people (of all genders and races) are held in jail pretrial, meaning that they are currently awaiting their day in court. The majority are jailed simply because they cannot afford to post bail -- or a money amount assigned by the judge ostensibly to ensure that a person returns to court.
Being jailed can mean the difference between an acquittal or a conviction. Being in jail prevents a person from meeting with their attorney, showing up to court in their own clothes, or gathering evidence or witnesses that could bolster their defense. People in jail are more likely to plead guilty; 94 percent of state convictions (and 97 percent of federal convictions) are because of plea bargains.
But even a few days in jail can result in losing one's job, housing and even custody of one's children.
In the United States, #FreeBlackMamas is entering its third year. The idea started with Mary Hooks, the executive director of Southerners for New Ground, or SONG, an LGBTQ organization. Hooks proposed a mass bailout of black mothers in time to spend Mother's Day with their families instead of languishing in jail cells. The call spread across the country and over a dozen organizations -- from reproductive justice groups to organizations focused on mass incarceration and criminalization -- took up the call. They raised awareness about bail, as well as funds needed to pay it. Then they sat in courtrooms, clerks' offices and jail waiting rooms -- sometimes for hours on end -- in order to post the bail that would allow mothers to be home with their families in time for Mother's Day.
Why black mothers?
The number of women in jails across the United States has increased 14 times between 1970 and 2014. Of those women, 44 percent are black (though black women make up only 8 percent of the country's population). Eighty percent of women (of all races) are also mothers.
"Bailouts aren't limited to Mother's Day or holidays. In some states, organizations have arisen to bail people out all year round."
In 2017, #FreeBlackMamas organizers raised over $1 million in two months, enough to post bail for 106 mothers nationwide. Not only did they bail these mothers out of jail, but they also connected them with support services -- such as housing and counseling -- while also providing transportation to their follow-up court dates. Their efforts sparked other bailouts, including a Father's Day bailout and a Black August bailout, which freed 71 other people. In October 2018, the Robert F. Kennedy Center for Human Rights launched a two-week bailout of women and minors held pretrial on Rikers Island. They spent over $1.2 million posting bail for 105 people, ages 16 to 62 with bails that ranged from $750 to $100,000.
This year, groups and organizers in 17 different states -- including New York, Georgia, California, Mississippi, Colorado and Texas -- have committed to bailing out black mothers before Sunday. Each group has its own fundraiser and many have already raised tens of thousands of dollars. So far, 70 mothers have been freed in 22 cities.
In New York City, VOCAL-NY -- a grassroots organizing group of people affected by HIV, the drug war and mass incarceration -- has already posted bail for three women. The group noted that one mother was five months pregnant and might have faced the possibility of giving birth behind bars. Another had a $2,500 bail set for shoplifting. The third had a bail that took 24 hours to process. In Philadelphia, organizers have bailed out seven black mothers.
Bailouts aren't limited to Mother's Day or holidays. In some states, organizations have arisen to bail people out all year round. The Massachusetts Bail Fund has been posting bail for the past six years. In April alone, they paid nearly $48,000 to bail 100 people out of jail. Their efforts have also brought the need to eliminate cash bail into conversations about criminal justice, including in Boston's recent prosecutorial race. The winner, Rachel Rollins, signed onto a letter calling for the end of cash bail. She also promised that her office would decline to prosecute 15 low-level crimes, though organizers say she has yet to keep that promise.
In the neighboring Berkshire County, prosecutor Andrea Harrington has said that she would stop requesting bail for minor offenses. In Middlesex County, Marian Ryan, who has been the county prosecutor since 2014, issued a public memo stating that she would stop holding people for misdemeanors.
"We've changed the conversation in Massachusetts, period," said Bail Fund organizer Mallory Hanora. In other words, the collective and sustained effort of groups such as the Bail Fund and Families for Justice as Healing -- an organization of formerly incarcerated women in the Boston area -- has made cash bail impossible to ignore in criminal justice conversations.
At the same time, organizers' efforts have brought more people into conversations about bail. They're teaming up with Wee the People, an anti-oppression education program for children, for this year's Black Mamas' Bailout. The collaboration isn't just fundraising and posting bail. It's also discussing with the program's youth about the incarceration of mothers and grandmothers, as well as the federal Dignity for Incarcerated Women Act, drafted with input from formerly incarcerated women and aimed at improving conditions in women's jails and prisons.
Across the globe, in Western Australia, formerly incarcerated women and prison abolitionists have been challenging another way in which people, particularly Aboriginal women, are jailed for lack of money. In Western Australia, people are jailed for unpaid fines. These fines can be for actions as insignificant as not registering a pet dog or getting on public transportation without a ticket. But then there are additional fees and costs added to the original fine, which can bring it from the low hundreds to the low thousands of dollars. No payment plan is allowed -- the debt must be paid in full. If a person does not -- or cannot -- pay, the fine becomes a warrant. Every $250 owed becomes a day spent in jail. Western Australia is the only state that jails people for unpaid fines, and the majority of people jailed are Aboriginal women.
In 2014, the practice briefly made headlines when Ms. Dhu, a 22-year-old Aboriginal woman, died while jailed for $3,362 in unpaid fines. She would have had to spend 14.5 days in jail, but she died two days after her arrest.
In January 2019, Sisters Inside, an organization that works with women in Australian prisons, began their #FreeThePeople campaign. Organizers identify women who are either currently jailed or at risk of being jailed for unpaid fines. Then, they pay those fines.
How do they find these women? First, they put word about the campaign to Aboriginal elders, Aboriginal organizations and non-governmental organizations, asking them to help identify women with unpaid fines. Sometimes the groups will give them names -- other times, the women will contact them directly. Once they have their names, they begin the process of paying the fines so that arrests don't happen or the women can go free. (Unlike the U.S. bail system, payment for these warrants can be done over the phone or online.)
As of mid-March, 10 weeks after beginning the campaign, Sisters Inside had already paid the fines for over 100 women. Some of these fines aren't cheap: "It's worked out to an average of $3,300 [to] $3,500 per woman," said Deb Kilroy, the director of Sisters Inside and founder of the #FreeThePeople campaign. But some are much more. Kilroy recounted the story of one woman, a 23-year-old fleeing domestic violence with three children under the age of six, who had more than 10 fines adding up to $8,100. But with $9,500 in additional fees and costs, she was looking at paying $17,500 or spending 70 days in jail. Neither was an option she could afford.
"I've spoken to Aboriginal mothers who've had their fines paid in full," Kilroy tweeted. "I told them they can't be arrested. They cheered, screamed & cried. They're overwhelmed at donors' generosity. One even asked, 'What's the catch?' To which I said 'No catch you're free.'"
#FreethePeople has raised over $391,000 over the past four months. But here's the catch: In the United States, bail fund organizers can expect most, if not all, of the money posted for bail to be returned once the person completes their court case. (In some places, a non-refundable administrative fee is taken out of the bail amount.) In Western Australia, however, the court-imposed fines, fees and costs are non-refundable, meaning that Sisters Inside must constantly be raising money to keep women out of jail.
That could be a Sisyphean task if not for the second prong of the #FreeThePeople campaign -- advocating to abolish the practice, something that other Australian states have already done. People who donated to #FreeThePeople are encouraged to email the state's attorney general, John Quigley, to repeal this law. Nearly every one of the 8,000 people who donated during the first two months did so. In response to the flood of emails and the media attention raised by the campaign, Quigley's office has said that a set of reforms to the law will be introduced in July 2019. Meanwhile, Sisters Inside continues to raise funds and reach out to Aboriginal organizations to pay for women's freedom.
In the United States, black mothers who had been freed through #FreeBlackMamas in previous years traveled to Tulsa, Oklahoma, in September to participate in a convening of the National Council for Incarcerated and Formerly Incarcerated Women and Girls. They gathered on stage for the Sunday morning plenary to talk about the importance of being bailed out of jail, of being able to fight the charges against them from the outside, and of not being torn away from their children and loved ones. One mother talked about finding a year-old flier about the Mamas Day Bailout. She called her mother and asked her to call the number listed. The following week, she was bailed out and came home one day before her son was murdered. If not for the bailout, she would not even have had that last day with him.
Some had never been involved in political advocacy before being bailed out. Now, every one of the women on the stage was deeply involved in anti-prison work, including participating in and organizing this year's bailouts.