zlacker

Marginal businesses of any size are going to fail, and the less marginal will become marginal.

Larger businesses have a proportionately larger need for money to sustain themselves. Big business doesn't mean rich business. Look what's happening to the airlines.

>>Walter+(OP)
You mean like American Airlines that had a profit of $7.6 billion in 2015, and didn't save dollar one for a rainy day? Instead, it bought back $15 billion worth of stock over six years while raising fees and shrinking seats?

“I don’t think we’re ever going to lose money again,” -Doug Parker, American Airlines CEO, 2017.

Let 'em fail.

>>reaper+F5
Letting them all fail would do more harm to others than warranted.

But letting the weakest one fail as a warning to the others that the bailouts are over and perhaps they should learn to save against rainy days isn't the worst idea.

>>_jal+5b
If they fail and there’s a market for flights their assets will be bought and operated by someone else. Let them fail.

Given climate change, air travel is not a public good we should be prioritising.

>>Walter+(OP)
The problem is that certain industries now just assume they will be bailed out during crisis. The airline industry, the financial industry. It’s almost baked into their mode of operation at this point.

>>Walter+(OP)
That's the principle, but it doesn't reflect to the reality around us, or at least my reality.

I am in the tourism industry, owning a small-medium hotel.

If I stop paying any loans and generally I am left out of cash-flow I am pretty much screwed for the next few years, if not closing down.

I know though a few people around my area with massive resorts and a debt over 100mil that have already stopped paying quite a few loans themselvs and they are getting away with a slap on their wrist. The gov gets involved cause the debt is enough to damage a bank, and the people that are going to be left without a job are enough to cause a mini crisis. Then the bank itself... well for them its not just about ceasing the asset as its gonna be a hard thing to sell or manage.

Meanwhile the owners are taking out massive salaries + bonuses for their personal accounts and don't care about their balance sheet being a mess and their debts growing.

>>_jal+5b
Letting them all fail would do more harm to others than warranted.

"Too big to fail?" We fell for that once before.

>>muse90+De
“If you owe a bank a million bucks and can’t pay, you have a problem. If you owe a hundred million bucks and can’t pay, the bank has a problem.”

>>_jal+5b
If that's the case, if they are that necessary for society, then nationalization should be on the table.

>>Walter+(OP)
The building I live in has a sitting space on the roof I’ve been working from while waiting for the internet to get installed in my apartment (I didn’t think I’d need it so I waited and now I’m regretting it.) One of the other people teleworking from up there is an accountant(?) for a major airline who has been for the past couple days trying to figure out how to keep it from going under. It’s kind of sad hearing all the phone calls he’s making sorting things out like older pilots trying to retire and so on.

>>_jal+5b
You let them fail and wipe out the shareholders. Let the shareholders cover debts. Forgive the rest of the debt. Wipe out the management team as well.

Airline comes out nimble and debt free. Average Joe still has airline competition. Shareholders get wiped out, but that’s the risk you run for yield.

>>reaper+gg
...and it was true then

>>_jal+5b
The government buys the airlines after they declare bankruptcy. Sell them to the highest bidder when the market recovers.