2. The Federal Reserve likes to imagine it is politically neutral, that it doesn't pick winners and losers. But it does. Boeing just got a $25 billion bailout through the Fed-supported bond market. And it will now layoff 16k workers.https://www.nytimes.com/2020/04/29/business/boeing-layoffs-coronavirus.html …
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3. General Electric will cut 13,000 workers. Congress put direct money for these companies in the CARES, but they refused to take it because that money restricted layoffs. So they got money from the Fed and did the firings anyway.https://www.barrons.com/articles/ge-stock-slides-back-toward-coronavirus-lows-after-announcing-more-job-cuts-51588603449 …
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4. Low interest rate loans often seem like a way to increase economic activity. But in a depression, letting corporations borrow at low rates can lead to mergers and layoffs. That's what happened in 2008-2010.https://www.huffpost.com/entry/federal-reserve-mergers-coronavirus-bailout_n_5eb454d3c5b61471aa0ac94f …
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5. In 2009, Pfizer Inc acquired Wyeth for $67.2 billion, laying off 19,500 employees even as Wyeth executives received $75 million between them in severance.https://www.cbsnews.com/news/as-layoffs-begin-wyeth-execs-get-75-million-severance-package/ …
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6. In 2008, InBev NV acquired Anheuser-Busch Cos Inc for $52.2 billion, and proceeded to cut 10-15% of its full-time salaried workforce, roughly 3,000 jobs. Beer prices rose 5% a year on average, for several years after the merger. https://money.cnn.com/2008/12/08/news/companies/anheuser_job_cuts/index.htm …
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7. In 2008, Bank of America Corp acquired Merrill Lynch & Co Inc for $48.8 billion, with more than 35,000 in layoffs as a result. The combined entity approved $5.8 billion in bonuses that year.https://pbn.com/job-cuts-keep-bofa-paying-full-construction-bond52490/ …
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8. The same year, JPMorgan Chase acquired Bear Stearns for $1.4 billion, laying off about 7,000 people. JPMorgan paid $1.12 billion in bonuses in 2008, and CEO Jamie Dimon said that the year of the global financial crisis was his bank’s “finest year ever.”https://www.economicliberties.us/press-release/the-federal-reserve-must-not-finance-a-merger-wave/ …
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9. In 2009, Roche Holdings AG acquired Genentech Inc for $46.7 billion. The corporation laid out 1,000 job losses in New Jersey.https://www.nytimes.com/2012/06/27/business/roche-to-shut-down-former-us-headquarters-after-83-years.html …
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10. In 2010, Oracle acquired Sun Microsystems for $7.4 billion, laying off 1,000 employees. It cut products and tried for retroactive price increases.https://www.cleveland.com/business/2010/01/oracle_ceo_about_1000_layoffs.html …
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11. The Federal Reserve's mandate is full employment and price stability. Mergers often lead to job losses, as do private equity leveraged buyouts. So the Fed's goal in this crisis should be to support business enterprises, but discourage mergers. It has authority to do that.
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12. It is using its emergency lending facilities for its various bailouts, and those facilities "shall be subject to such limitations, restrictions, and regulations as the Board of Governors of the Federal Reserve System may prescribe." https://www.federalreserve.gov/aboutthefed/section13.htm …
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13. Ultimately the Fed is, as
@adam_tooze put it, at the “center of our economic governance.” That means it can't look away as it supports corporations who lay off their workers or merge away competition. It must act to actively prevent that. And one more thing...Show this thread -
14. The Fed has *direct* authority over bank mergers. And there it has failed dramatically, not officially blocking a single merger since 2006. As
@DavidSegalRI noted, the Fed let Suntrust and BB&T merge last year, they are now engaged in big layoffs while still paying dividends.Show this thread
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