5 ms·

Makes perfect sense when interest rates are near zero. Borrowing is practically free and saving earns you next to nothing.

Blackthorn 7y ago
Until a black swan event happens...and now they need to beg the government to save their short sighted asses.
- kick 7y ago
  If the government is almost guaranteed to bail them out, it makes sense that they would prioritize other things.
  - PenguinCoder 7y ago
    Then the Government needs to not bail them out.
    - kick 7y ago
      Obviously, but it's hard to call a company's management short-sighted for taking advantage of a corrupt government.
      - arbitrary_name 7y ago
        But they are also the ones corrupting the government, at least in part. So let them all hang.
        kick 7y ago
        Sure, they're the ones corrupting the government. The accusation, then, should be malice, not stupidity.
    - saagarjha 7y ago
      But then the economy goes down the tubes.
      - pbourke 7y ago
        There is a third way: bailouts are conditioned on the public or workers getting ownership stakes.
        markkanof 7y ago
        Agreed. Or an additional option is to let businesses fail. The value of a viable business doesn't instantly go away just because they are insolvent. Let another better managed company buy up the failed company.
    - _ph_ 7y ago
      This is a difficult call to make. Of course, the government shouldn't be the automatic fall-back solution for incompetent/greedy management. On the other side, large companies failing do have a network effect, that is why the government does bailouts in the first place. There are arguments that the 2008 crisis could have been avoided, if the government had bailed out Lehman. Lehman failing caused the crisis and in the end many more companies needed and got a bail out and still a huge economic damage was done. The only solution in my eyes for this dilemma is, that the government should do bail outs, but at the price of shares. For any money paid, which isn't just credits, the government should get company shares, which are sold off, as soon as the market stabilizes.
    - ferzul 7y ago
      no. the government merely needs to look like it will be a tough debate next time that might not go through, by having a tough debate this time that spooks businesses
- malandrew 7y ago
  To be fair, for many businesses it's government mandates that has forced them to shut down. Yes business was down, but there was some business. With shelter in place there is no business. If the government mandates something that causes total loss of business, it's fair for them to be on the hook to help out with the problems caused by their mandate.
zapttt 7y ago
by your logic everyone should have been living pay check to paycheck when interest rates get low. but that's not even the craziest thing in your comment. it's that you are probably a salaried worker making excuses for the boss. it's a crazy crazy world.
nutjob2 7y ago
That's true only if you're unwilling to put a price on risk. What dollar figure should be put on the potential demise of the company versus "saving earns you next to nothing"?

Blackthorn 7y ago

Until a black swan event happens...and now they need to beg the government to save their short sighted asses.

kick 7y ago
If the government is almost guaranteed to bail them out, it makes sense that they would prioritize other things.
- PenguinCoder 7y ago
  Then the Government needs to not bail them out.
  - kick 7y ago
    Obviously, but it's hard to call a company's management short-sighted for taking advantage of a corrupt government.
    - arbitrary_name 7y ago
      But they are also the ones corrupting the government, at least in part. So let them all hang.
      - kick 7y ago
        Sure, they're the ones corrupting the government. The accusation, then, should be malice, not stupidity.
  - saagarjha 7y ago
    But then the economy goes down the tubes.
    - pbourke 7y ago
      There is a third way: bailouts are conditioned on the public or workers getting ownership stakes.
      - markkanof 7y ago
        Agreed. Or an additional option is to let businesses fail. The value of a viable business doesn't instantly go away just because they are insolvent. Let another better managed company buy up the failed company.
  - _ph_ 7y ago
    This is a difficult call to make. Of course, the government shouldn't be the automatic fall-back solution for incompetent/greedy management. On the other side, large companies failing do have a network effect, that is why the government does bailouts in the first place. There are arguments that the 2008 crisis could have been avoided, if the government had bailed out Lehman. Lehman failing caused the crisis and in the end many more companies needed and got a bail out and still a huge economic damage was done. The only solution in my eyes for this dilemma is, that the government should do bail outs, but at the price of shares. For any money paid, which isn't just credits, the government should get company shares, which are sold off, as soon as the market stabilizes.
  - ferzul 7y ago
    no. the government merely needs to look like it will be a tough debate next time that might not go through, by having a tough debate this time that spooks businesses
malandrew 7y ago
To be fair, for many businesses it's government mandates that has forced them to shut down. Yes business was down, but there was some business. With shelter in place there is no business. If the government mandates something that causes total loss of business, it's fair for them to be on the hook to help out with the problems caused by their mandate.

zapttt 7y ago

by your logic everyone should have been living pay check to paycheck when interest rates get low. but that's not even the craziest thing in your comment. it's that you are probably a salaried worker making excuses for the boss. it's a crazy crazy world.

nutjob2 7y ago

That's true only if you're unwilling to put a price on risk. What dollar figure should be put on the potential demise of the company versus "saving earns you next to nothing"?