Words like "aid" or "stimulus" or "relief" are one word arguments. Who doesn't like aid? These are marketing BS words. We need to use more clear language like "economic transfer". This puts us in the right frame of mind to discuss who the money is being transferred from and to.
"Pardon me, Average Joe Taxpayer. We noticed you haven't been purchasing any tickets on American Airlines lately. In order to help you with this problem, we're going to take money from you and give it to American Airlines. What's that? No, you won't be getting free flights, you silly goose. We're just going to give them your money and you get nothing in return."
> In the interview, Mnuchin also said many companies are ceasing stock buybacks and are likely to use the additional capital to retain workers.
So they are on the honor system.
> Some experts disputed that assertion. “Some companies have ceased buybacks and dividends and some haven’t. We shouldn’t have to keep our fingers crossed,” Gelzinis said.
Is there a public list of the companies that took the aid?
Absent real restrictions on the loans, the next best option might be a website that shows the amount borrowed by those companies next to any layoffs, dividends, exec bonuses, or share buybacks they did while taking the loans.
Government bailouts should come with very onerous conditions so they are used only as last resort. But I guess 2008 should have taught us that this is not going to happen.
Also egregious are companies flush with cash who are laying off workers, putting them on unemployment and costing the public hundreds of millions of dollars. Disney is one such company.
They do pay unemployment insurance, so I guess they can argue they're collecting on their insurance.
MayTheForth be with you, because your Disney paycheck won't be.
> Is there a public list of the companies that took the aid?
The latest count I’ve seen today is up to approximately 230 companies who have done so. There are some lists being compiled, but I haven’t found a definitive, complete list of all 230+ companies.
You CAN'T preserve jobs, given the economic catastrophe that is occurring. Demand for many products and services have fallen off a cliff. Air travel is but one example. It's not like demand is going to recover overnight for the airline industry. It will take many years to recover. They will have to pare back flights and they will likely have to consolidate carriers in order to remain profitable.
Propping up zombie companies does nobody any good. It just leads to capital destruction.
If the government has required your legal business to close, you should be compensated for that. Just as if they take your land to build a road, they have to give you the fair market value of the land. Otherwise, if you're not being compensated, you should be free to stay open.
These are only "zombie companies" because they've been directly shuttered by the government.
Most comments here focus on the question if "who deserves what?". This is a stupid question, as it becomes a tautology revolving around how people define the word "deserves". A more intelligent question is "what should we do to have the best outcome?". Is it better to have more companies around to provide goods, services and jobs, or more people around with stable housing and pocket money to purchase goods and services?
In an economy driven mostly by consumer spending at the bottom, definitely the latter. This is almost a chicken and egg scenario, but not quite.
You can give a company money to hire people and make product X, but it doesn't do you any good if no one has money to buy product X, or most people see X as a luxury and are tightening belts. You can counter this by giving more companies money to hire more people, so that the workers at company producing Y have money to buy product X. Then it becomes difficult to determine what companies to prop up, and which to avoid. Inevitably, who gets propped up are the industry leaders, not the tiny players, and that sector consolidates and contracts.
A better approach would be to inject the money directly at the bottom. Let consumers make these picks on which companies are economically productive and should be supported, let the free market sort this out by adding liquidity at the consumer level. 70% of our global economy is driven by consumer spending, not by blue chips paying off their corporate debt.
Warm, trickle-down economics. The people clearly aren't bothered enough by losing their jobs or receiving pittance consolation prizes, or they would've revolted by now.
Ironically, the people who I've come to respect recently are the ones protesting the quarantine. Don't get me wrong they are stupid but the fact that they are protesting something they believe is wrong says a lot about the people who have been exploited by the system and did nothing about it.
archive doesn’t work if you use CloudFlare 1.1.1.1 for your DNS because archive screws with CloudFlare DNS requests for their own reasons. Top answer is archive’s side, second answer is CloudFlare’s side: https://webapps.stackexchange.com/questions/135222/why-does-...
We need a new plan. Every single job before-covid (BC) is not coming back. Even if we opened the country at 100% tomorrow not every job will come back. There’s a paranoia that’s set into the American psyche that will take years to adjust.
It's pretty sad that this is glossed over so much. Plenty of business have folded already, let people go, broke their leases, liquidated what can be liquidated, and whoever held ownership got their portion of the remaining pie.
To bring these pieces back together, the lease, the workers, the investors, the money, is impossible. Some of these pieces are no longer in existence, and the economic conditions that enabled the company to form in the first place are no longer present. It's like trying to make a living tree from ash and smoke.
I'd start with combating the paranoia with numbers and stories that would compare realistic risks. You can even start before the acute pandemic ends, by comparing pandemic-time and post-pandemic numbers for swine flu (yes, even if it's not eventually justified for COVID).
Alas, if media circus around plane crashes in any indication, that does't pay.
So, we can only hope for lack of informed-ness, apathy and paranoia-fatigue to settle in and solve this particular aspect for us.
Why does aid for corporations rely so heavily on loans or bonds? If a continuing source of frustration and dysfunction is that profits are privatized and losses are nationalized, and if the issue is that companies need an influx of cash, why do we not ask these companies to sell the federal government a stake? If the companies recover, why shouldn't the public benefit as a result of their investment?
The idea that the federal government would take an ownership stake in companies in exchange for this cash infusion seems like it's been a fringe left wing proposal -- but I don't understand why it's fringe.
Because the notion of government ownership of the means of production is, if not the very definition of leftism, at least a key ingredient.
Of course it's not that simple, but it sounds that simple, and these days that's all that matters. People hear "government stake" and they reflexively think Cuba or Venezuela or China, not Germany.
To be fair, the Fed is buying corporate bonds, essentially lending them money with interest. Yeah, it helps businesses but then I doubt the Fed will lose any money in the long term.
The Fed can't really gain or lose money, as they create or destroy it at will. They're loaning with much lower interest than would be available on the open market, which is a direct subsidy.
Well when you have the money printer at your fingertips, it really is impossible for you to lose money. But that doesn't mean that what they're doing with the money supply and buying bonds is moral or fair.
What they're doing is monetary fascism, where they are picking the winners and losers based on arbitrary criteria. Some companies and industries will get more help than others. Whoever gets the money first will have an advantage over who gets money last. The moral hazards of this interventionism are many.
It also means that people who properly hedged for risk, the way capitalism actually works, are getting punished.
It's not a restriction on the jobs, it's a restriction on the loan or even a restriction on conditions under which the loan will be forgiven without being paid back.
Edit: Now that I've seen a mirror of the article, this program is about buying bonds that have to be paid back with interest no matter what. Point stands about the conditions being on the buying side though.
[+] [-] Consultant32452|5 years ago|reply
"Pardon me, Average Joe Taxpayer. We noticed you haven't been purchasing any tickets on American Airlines lately. In order to help you with this problem, we're going to take money from you and give it to American Airlines. What's that? No, you won't be getting free flights, you silly goose. We're just going to give them your money and you get nothing in return."
[+] [-] skybrian|5 years ago|reply
There is also no direct connection to taxes, since the Fed creates any money it needs.
[+] [-] 0x8BADF00D|5 years ago|reply
[deleted]
[+] [-] danans|5 years ago|reply
So they are on the honor system.
> Some experts disputed that assertion. “Some companies have ceased buybacks and dividends and some haven’t. We shouldn’t have to keep our fingers crossed,” Gelzinis said.
Is there a public list of the companies that took the aid?
Absent real restrictions on the loans, the next best option might be a website that shows the amount borrowed by those companies next to any layoffs, dividends, exec bonuses, or share buybacks they did while taking the loans.
[+] [-] Ididntdothis|5 years ago|reply
[+] [-] state_less|5 years ago|reply
They do pay unemployment insurance, so I guess they can argue they're collecting on their insurance.
MayTheForth be with you, because your Disney paycheck won't be.
[+] [-] bobwaycott|5 years ago|reply
The latest count I’ve seen today is up to approximately 230 companies who have done so. There are some lists being compiled, but I haven’t found a definitive, complete list of all 230+ companies.
From a few days ago, 40 of the companies: https://s-marketwatch-com.cdn.ampproject.org/i/s/s.marketwat...
[+] [-] chrisco255|5 years ago|reply
Propping up zombie companies does nobody any good. It just leads to capital destruction.
[+] [-] nostromo|5 years ago|reply
These are only "zombie companies" because they've been directly shuttered by the government.
[+] [-] craftinator|5 years ago|reply
[+] [-] asdff|5 years ago|reply
You can give a company money to hire people and make product X, but it doesn't do you any good if no one has money to buy product X, or most people see X as a luxury and are tightening belts. You can counter this by giving more companies money to hire more people, so that the workers at company producing Y have money to buy product X. Then it becomes difficult to determine what companies to prop up, and which to avoid. Inevitably, who gets propped up are the industry leaders, not the tiny players, and that sector consolidates and contracts.
A better approach would be to inject the money directly at the bottom. Let consumers make these picks on which companies are economically productive and should be supported, let the free market sort this out by adding liquidity at the consumer level. 70% of our global economy is driven by consumer spending, not by blue chips paying off their corporate debt.
[+] [-] paypalcust83|5 years ago|reply
[+] [-] curiousgal|5 years ago|reply
[+] [-] asdff|5 years ago|reply
[+] [-] pirocks|5 years ago|reply
[+] [-] robocat|5 years ago|reply
[+] [-] throwaway122378|5 years ago|reply
[+] [-] asdff|5 years ago|reply
To bring these pieces back together, the lease, the workers, the investors, the money, is impossible. Some of these pieces are no longer in existence, and the economic conditions that enabled the company to form in the first place are no longer present. It's like trying to make a living tree from ash and smoke.
Some places have been hit particularly hard. In LA county, only 45% of people have jobs right now: https://www.latimes.com/california/story/2020-04-17/usc-coro...
[+] [-] bilbo0s|5 years ago|reply
[+] [-] sershe|5 years ago|reply
Alas, if media circus around plane crashes in any indication, that does't pay. So, we can only hope for lack of informed-ness, apathy and paranoia-fatigue to settle in and solve this particular aspect for us.
[+] [-] abeppu|5 years ago|reply
The idea that the federal government would take an ownership stake in companies in exchange for this cash infusion seems like it's been a fringe left wing proposal -- but I don't understand why it's fringe.
[+] [-] CamperBob2|5 years ago|reply
Of course it's not that simple, but it sounds that simple, and these days that's all that matters. People hear "government stake" and they reflexively think Cuba or Venezuela or China, not Germany.
[+] [-] onetimemanytime|5 years ago|reply
[+] [-] mindslight|5 years ago|reply
[+] [-] rtkwe|5 years ago|reply
[+] [-] chrisco255|5 years ago|reply
What they're doing is monetary fascism, where they are picking the winners and losers based on arbitrary criteria. Some companies and industries will get more help than others. Whoever gets the money first will have an advantage over who gets money last. The moral hazards of this interventionism are many.
It also means that people who properly hedged for risk, the way capitalism actually works, are getting punished.
[+] [-] ZoomerCretin|5 years ago|reply
[+] [-] aaomidi|5 years ago|reply
[+] [-] salawat|5 years ago|reply
[+] [-] JumpCrisscross|5 years ago|reply
[+] [-] sp332|5 years ago|reply
Edit: Now that I've seen a mirror of the article, this program is about buying bonds that have to be paid back with interest no matter what. Point stands about the conditions being on the buying side though.
[+] [-] onetimemanytime|5 years ago|reply