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> If there is any long-term profit to be made, a wealthy investor will come in, buy up the assets at a low price, hire the employees who are now jobless, and pi
by mekael 7y ago
> If there is any long-term profit to be made, a wealthy investor will come in, buy up the assets at a low price, hire the employees who are now jobless, and pick up the torch where the previous ownership left off.
This makes the assumption that at least one of the following is true:
1. There are wealthy investors to fund the purchase
2. There are wealthy investors who realize there is a long term profit to be made
3. That wealthy investors care about long term profit
> A government bailout is bad for every other American, because it introduces an incentive to making poor decisions and not planning for market downturns.
There are events which no company can plan for, either because they are once in a several lifetime events or because they are so cataclysmic that they shake the foundations of a global economy.
- chii 7y ago> 1. There are wealthy investors to fund the purchase 2. There are wealthy investors who realize there is a long term profit to be made 3. That wealthy investors care about long term profit all of those are true. Not just one. > no company can plan for and yet, in the filings for american arline, they have mentioned pandemics as one of the risks. No company wanted to plan for this, because they perceive the cost to not be commensurate with the reward - perhaps because they, after seeing 2008, know that the gov't bailout is a possibility, and that's cheaper for them than to save for a rainy day. AKA, moral hazard. It needs to stop.
- creato 7y agoWhat would "planning for a pandemic" look like for an airline? And if they did that, would they have survived for decades competing with airlines that did "riskier" planning for a pandemic?
- chii 7y ago> would they have survived for decades competing with airlines that did "riskier" planning for a pandemic? if the other riskier airline didn't get a bailout, they would've bankrupted today. So in good times, the riskier airline returns more money to shareholders. But those shareholders should know that it's taking a bigger risk. And the difference isn't so much that an airline will be pushed out of the market by not returning 100% of the earnings to shareholders.
- sooheon 7y ago100% agreed. Privatization of profits, socialization of losses needs to stop.