8 ms·

If we give bail outs, we should get stock/control. End of story. All bailed out companies should be nationalized to some extent, depending on the value of their

• JumpCrisscross 7y ago
  > A board/council of nationally elected representatives should manage whatever share of these companies the government owns This has succeeded practically zero times in the history of nationalisation. Transitioning a culture from private ownership to public is highly value destroying. And putting electeds in charge of companies goes about as one would expect in terms of venality and competence. The better strategy is to have a board appointed by elected representatives with a finite term and mandate to return the assets to private ownership.
  • orthecreedence 7y ago
    > Transitioning a culture from private ownership to public is highly value destroying You know what else is value-destroying? Giving money to failed companies for free. Everyone's a capitalist until something bad happens, then they go running to Free Money Center to pick up their welfare check. > And putting electeds in charge of companies goes about as one would expect in terms of venality and competence. Yes, failing companies are a paragon of competence.
    • JumpCrisscross 7y ago
      > You know what else is value-destroying? Giving money to failed companies for free. We agree on this. I think companies should be allowed to fail. If we can’t afford that, their shareholders (and managements’ parachutes) should be wiped out, and the public should get economic upside. Bailouts should be a painful last resort. But the public should not get control. Particularly not open-ended control by a board of politicians.
    • golergka 7y ago
      > Giving money to failed companies for free. That's not what bailouts are.
• threatofrain 7y ago
  These companies were shut down under extraordinary circumstances, and the economy also shut down in a very uneven way and for an indefinite time, with another potential shutdown to counter a winter resurgence. About half of Americans are still not under lockdown. The picture to me is that the country does not consider itself as in the same boat.
  • jacobolus 7y ago
    These companies have made incredible profits for many years by nickel-and-diming customers, squeezing employees, and ignoring large-scale environmental costs, and then diverted the proceeds into the pockets of a small number of extremely wealthy people instead of using it to prepare for possible shocks. If the people are going to bail them out, the people should get an ownership stake.
    • nickff 7y ago
      The airline industry is famously unprofitable; they make a bit of money for a few years, then lose all that money, and repeat the cycle. From what I understand, it has been this way for at least 40 years. https://www.mcgill.ca/iasl/files/iasl/ASPL614-Five-Reasons-Airline-Never-Profitable.pdf https://www.mcgill.ca/iasl/files/iasl/ASPL614-Five-Reasons-A...
      • MrBuddyCasino 7y ago
        It used to be that way. Recently airlines have been profitable enough to have no better idea what to do with their money than buying back stock for billions of dollars.
      • oh_sigh 7y ago
        Why does anyone put their money into airlines then?
      • TrinaryWorksToo 7y ago
        Maybe that's telling us something.
• dominotw 7y ago
  >All bailed out companies should be nationalized to some extent Is there an example of nationalized company that operates in free market and still manages to turn a profit for the investors(citizens). I wouldn't make an investment in usps or amtrak as a citizen with profit motive as a tax payer.
  • lonelappde 7y ago
    Nationalised companies like USPS and local utilities turn a profit for the customers and externalities to promote the general welfare, as it should be.
  • sadfklsjlkjwt 7y ago
    Equinor (formerly Statoil) does fairly well for Norway.
    • adventured 7y ago
      The reason Norway does well with oil in a socialized manner is because their oil per capita is extreme, and the action of extracting and exporting oil from a well-known oil zone is a predictable industrial activity (prices are the primary wild card that you adapt to). It's among the highest per capita oil production in the world. That is not a scenario that replicates to our incompetent Congress managing airlines for a couple hundred million people, and such that the airline finances are a rounding error for the American people (annual checks for maybe $20 per adult), while we shovel more complexity and bloat on the Congressional plate (when they're not doing their job well as it is; do not give them anything else to manage that isn't absolutely necessary). The better way is to implement payback / return requirements for any bailout. There is a good reason why Norway doesn't lead the world in very many things industrially, a reason why there are not plentiful other examples out of Norway of this model working.
  • dboreham 7y ago
    Yes but not many because Chicago School Economics says you immediately privatize them in that case.
  • 7y ago
• T-hawk 7y ago
  Serious question: do we have historical comparisons, can we refer to instances where nationalizing in the wake of a bailout led to positive results? The one comparable I can think of in the US is Amtrak, which is functional although not exactly wildly successful.
  • orthecreedence 7y ago
    This is why I suggest operating the companies via a democratically-elected board. If the management sucks, vote them out.
    • deleted 7y ago
      [deleted]
  • tehwebguy 7y ago
    This is a bad faith question. The real question is, “Why were the airlines so poorly equipped to handle a cataclysmic event when the last one was only 19 years ago?” The answer is short term profitability. And the follow up question is, “Why would ANYONE bail any for-profit company out to the benefit of the shareholders only, ever?”
    • chki 7y ago
      How could an airline company possibly be equipped to handle this kind of situation? If you want to be competitive on the market you need to lower costs and cut down on margins. You can't just have a big pile of money lying around "in case all flight is halted for a few weeks/months"
      • TeMPOraL 7y ago
        Or, legislation could be used to ensure everyone has to have that big pile of money / mitigation strategies present, so that they won't get cut out by competitive pressure. (And then the hard trick is ensuring the next folks in office won't dismantle that legislation to make some cash on the side.)
• steve76 7y ago
  Grinding wheat with sandstone plagued Ancient Egypt. If you're a god, why do your teeth rot? All these devices made with bail outs spread a killer flu. "I'll just die!" says our amoral, win at all costs celebrity driven society, while we go into debt to increase the price of oil. Recent developments suggest the human brain lives long after death. Even if the brain is destroyed, I'm sure we can rip your consciousness back out of creation somehow. If it's not right, don't do it. Stay at home. Contribute knowledge. Get a box of free stuff. I'm not spending trillions just so rich people can have a restaurant.
• dionian 7y ago
  Bailouts for government-mandated shutdowns in crises are different than saving the banks for screwing up while trying to make more money.
  • mvid 7y ago
    People were flying less and cancelling flights far before the govt mandated lockdowns
    • nickff 7y ago
      But it was exogenous to the airlines, unlike the financial crisis, which was caused by malinvestment (by the banks themselves,) among other things.
      • mnm1 7y ago
        The airline companies are the major spreaders of c19. While unintentional, this is a fact as is their ability to have put in some safeguards to slow down prevention like forcing sick people to wear masks and gloves (and ideally to fly on separate planes when possible) and disinfecting their planes after each flight. In this case, they directly caused a huge part of this crisis, much more so than in 2008. Also, airlines that have done stock buybacks should never be bailed out. They knowingly put themselves into a poor situation that should bankrupt them. In all of these cases, the airlines themselves are culpable and don't deserve any bailouts.
        • dageshi 7y ago
          Well when you put it like that, WE that is to say the public are really directly responsible for the spread of the virus, by travelling when sick. People are not responsible, the government who could've mandated such measures aren't responsible but the airlines are?
          • mnm1 7y ago
            The government is definitely responsible. They fucked up testing. They fucked up contact tracing. They fucked up stocking for supplies. They fucked up handling travelers and quarantining them. They are still lying to people about the effectiveness of masks. They called it a hoax and pretended it wasn't happening. In fact, I can't think of a single thing the US government didn't fuck up. Most other governments were not much better. But I understand you want to blame the people, most of whom were asymptomatic, for spreading a disease they didn't know about that, at least in the US, was called a hoax, that the Chinese arrested people for talking about. Yes, it's their fault not the fault of the government that is supposed to prepare and handle such issues. Absurd. And yes, the airlines played their part in it too, not disinfecting, not requiring masks, not caring a single bit about the safety of their passengers. Now they want a bailout because they couldn't manage their cash properly and decided to increase their stock price with stock buybacks instead of saving cash for a rainy day like this one. Absurd.
• rdiddly 7y ago
  Any private investor would demand the same.
• clairity 7y ago
  a short-term oversight is warranted to get a company reorganized (happens in bankruptcies, for example), but long-term oversight can be detrimental to the best interests of citizens by keeping companies overly constrained from feeling and responding to market conditions. and as others have noted, the return to citizens of such companies goes beyond its profits, so it's wise not to get to focused just on distributing those profits. beyond that, let's make sure the shareholders and executives feel the pain of their decisions, so they can adjust for risk in the future. let shareholders take a serious haircut (you can cram them down by creating a large pool of new, unallocated stock) and for execs, take back all incentives beyond a reasonable salary for the past 5 years. you can take that reclaimed incentive and form forward-going incentives the execs can work for again.
• SubiculumCode 7y ago
  At the very least, demand planes give passengers 1-2 more inches to every seat.
• uncletammy 7y ago
  I wholeheartedly agree with this sentiment but I don't trust "elected representatives" to fairly represent my interests. I want voting shares issued directly to me in an amount equal to my financial contribution (tax dollars / currency devaluation) towards their bailout.
  • gumby 7y ago
    In practice this is both hard to do (denominator issue) and leaves control in the hands of a small number. The latter problem is also the argument against index funds (which I’m in favor if, but I appreciate the argument)
    • uncletammy 7y ago
      > ...leaves control in the hands of a small number. Yes but it would still provide a considerably larger number of controllers (and with more diverse interests) than our current system. > In practice this is both hard to do (denominator issue) ... Excellent point here. It would be incredibly difficult. Here's a thought though ... Warning! I'm about to talk about cryptocurrency. Everyone might want to put on their futurism hats and keep their downvoting finger at bay, at least until I finish. This problem wouldn't be very hard at all to solve in a world where the bailout currency has similar properties to blockchain based cryptocurrencies. Company shares could be issued as an "airdropped" token to everyone holding the currency at the block height during which the bailout is agreed upon. Those tokens could be used directly to vote on shareholder matters and in a way that is fully fair and transparent. Yes I know. We are still many decades (and maybe centuries) out from a world in which cryptocurrency actually works how it's meant to. One day though...it's gonna be glorious. Alright, I'm done. Downvote away.
      • pasabagi 7y ago
        I didn't really follow the blockchain thing - but now I'm curious - is blockchain (as tech) essentially money with built-in metadata? The whole 'proof-of-work' thing seemed a bit potlatch to me, but building publicly-accessable metadata into money seems like an interesting (although possibly scary) idea.
• golergka 7y ago
  > It's time the citizens started getting a return on their tax dollars if they're being used for private investment. US citizens have already seen massive return on their 2008 bailout. These bailouts aren't free money, they're just loans that get paid back, with interest.
  • MetalGuru 7y ago
    While I think the widespread negative reaction to bailouts is generally uninformed, the interest rates on bank bailouts was ridiculously low. And from what I understand, banks spent it in self-serving ways like stock buybacks and fat executive bonuses. I mean, why wouldn’t they. Without oversight, their priority is to shareholders.
    • golergka 7y ago
      It's overall $100b profit over $700b investment: https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/ and that doesn't account for the positive effect it had on overall economy by reassuring everyone. I'd say it's not so low at all. And if you lend someone money and then he returns it back with interest, does it matter what he did with it?
• wdr1 7y ago
  Why not just make it a loan?