I don't disagree that the support for, say, airlines, are bailouts, but the connotation that word has from 2008-2009 mischaracterizes what's going on right now. When this all blows over, you absolutely want airlines ready for business. Letting heavily impacted businesses fail is a recipe for a depression.
The same excuse was used for banks during the recession. We need banks when the economy recovers, and we need people who know the system to unwind the major screw ups they did. What happened is most of the people who were responsible for the recession remained in power making a lot of money. Lessons were not really learned, other than that being too big to fail is a good position to be in.
Did they? Airline stock prices have collapsed, so unless insiders sold everything in January, "enrich themselves" really means standard executive pay...which might be high, but that's another issue. Airlines, as businesses, didn't behave especially irresponsibly for the past decade. It's nothing like the banking excesses in 2007 that causes 2008.
Air travel in the US was significantly more expensive when it was heavily regulated. By your logic, you very quickly get to a Chinese level of state ownership of businesses. Practically every large cap company would be on that list.
Does your discounted unregulated fare rate include the cost of the all the bailouts over the decades? Are you fine with letting the airlines fail this time?
Great call. Every time I watch a presidential press conference, my first thought is "Wow, when this all blows over, I hope these people are running the airlines."
Maybe it's not such a bad thing to ask the question of who do we want running these huge ventures, which seem so entangled to the health of the economy and citizens. That applies to the government and private sector.
It's not. It shouldn't be "another issue" every single time we discuss a company having financial trouble, just because it's widespread.
> By your logic, you very quickly get to a Chinese level of state ownership of businesses. Practically every large cap company would be on that list.
Not really. Any company that's not a natural monopoly can go ahead and go bankrupt. Utilities and transit would be on the list. Banks could be on or off the list depending on how you handle them. Not much else would be on the list.
Now when times are tough they have no cash reserves and are seeking government bailouts.
Just appalling.
Also interesting: The farm subsidies over the last two years, supposed to compensate them for their business losses due to Trump’s trade war, cost a multiple of the 2008 bailout (2x or 3x IIRC). None of that will be recovered.
But I'm against airlines getting bailed out. It's a huge moral hazard imo to just remove the risks of investing in... a risky sector. Bankruptcy courts should deal with this and lenders should take the hit too. Still, blaming this on share buybacks doesn't make a lot of sense... A corporation hoarding money is bad.