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Then the airlines should have to borrow the money. We can not afford to have industries that are too big to fail that are not nationalized.
by rednerrus 7y ago
Then the airlines should have to borrow the money. We can not afford to have industries that are too big to fail that are not nationalized.
- JMTQp8lwXL 7y agoWhen banks were bailed out, they paid back every penny. Holding the airline industry to the same standard would be equitable.
- lovich 7y agoDid they payback every real penny or nominal penny? The paybacks weren't instantaneous and iirc they were given low interest loans.
- spaced-out 7y agoThis is not mentioned enough. I see people often state that the government made money on the TARP bailout, without taking into account inflation. As this Wikipedia article points out, with multiple citations, the government made a 0.6% annualized return on TARP, at a time when inflation was ~1.5%. https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#Timeline_of_changes_to_the_TARP_program https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#...
- philwelch 7y agoI would suspect that the entire world economy not collapsing even further than it did would make up for that last 0.9%.
- spaced-out 7y agoThere are 2nd order effects to consider, though. We've created a huge moral hazard in the financial markets by rewarding financially risky behavior and cementing the idea that if a company gets large enough it's not allowed to fail. Airlines spending every spare penny they had, and in some cases taking out debt, to gamble on the market and keeping nothing in the bank as a safety net is one such side-effect.
- philwelch 7y agoThe fact that Lehman Brothers, Bear Sterns, and Washington Mutual no longer exist somewhat refutes that narrative.
- spaced-out 7y agoThe people who ran those companies retired rich. Do you really think anyone going into business or finance looks at those people's careers as a cautionary tale? I know I'd trade my career for theirs in a heartbeat.