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> But Palihapitiya argued that rather giving workers relatively small $1,200 checks, the U.S. would be better off giving everyone larger payments directly, and
by mrosett 6y ago
> But Palihapitiya argued that rather giving workers relatively small $1,200 checks, the U.S. would be better off giving everyone larger payments directly, and skip businesses entirely.
> “It would be better for the Fed to have given half a million to every man, woman and child in the United States,” he said.
Yes, we can definitely spend checks notes 150 trillion dollars on that. How do people keep making the exact same arithmetic mistake? And why are we expected to listen to people who can't do simple arithmetic?
> Palihapitiya’s argument, basically, is: Let those businesses fail, but without layoffs, and let the rich stakeholders absorb the pain.
> When a business typically fails, Palihapitiya said, “it does not fire their employees,” instead going though a bankruptcy process that often preserves pensions, and employees end up owning more of the company in the end.
Sometimes bankruptcy works out the way he's describing. Sometimes the assets get sold for scrap and the workers are all out of a job. I'm less sanguine than this guy is that letting a whole bunch of companies fail all at once would be a windfall for workers (not to mention everyone else.)
Mind you, I do think that equity holders should be taking a big hit. (That's what equity holders are for.) I just think the details would be a lot messier than he's imagining.
- infogulch 6y agoMatt Parker made a video that tries to explain how people keep getting this basic arithmetic completely wrong. https://youtu.be/6egeUxIEQnM https://youtu.be/6egeUxIEQnM
- wmf 6y agoI think it's more likely that he's being provocative instead of getting the math wrong. If we're willing to print money and give it to people, where's the limit? What is the right amount?
- asdfasgasdgasdg 6y agoI know that inflation (exclusive of higher education and housing) has been pretty low for a while. But I feel pretty confident in saying that if you just airdropped $1M or so into each household, that would cause significant inflation in ~whatever~ people decided to spend the money on.
- lumberingjack 6y agoAnd now door dash delivery costs $50 per order.....
- rrrrrrrrrrrryan 6y agoNot necessarily the worst thing in the world, as long as wage growth keeps up with inflation. (Huge caveat, I know.) Inflation is both criticized as a wealth-transfer from savers to borrowers, and praised as a wealth-transfer from the rich to poor (or the old to the young, etc). But there's also a time element to it, so in reality it's a release valve that causes idle wealth to slowly evaporate, and overly burdensome debt to slowly become more manageable with time, and it's why most economists agree that a bit of inflation is healthy to encourage the productive use of assets.
- asdfasgasdgasdg 6y agoSome inflation is fine, and good. Giving the median American money equivalent to a decade of their income is not going to cause just some inflation, though. I'm talking about instantly doubling the price of housing in many cities. Instantly doubling the price of college, etc. It would be extremely disruptive.
- ardme 6y agoHe made the same mistake on the "Pomp" podcast the other day too. He was saying we send 50k to every person in the USA for the stimulus. Well, no. 2 trillion divided by by 327 million is $6,116 dollars. So yeah maybe we should divide the 2 trillion up between the people but he got a decimal point wrong. Personally it seems more effective to send most of the money to hospitals and medical organizations because people wouldn't necessarily be able to use stimulus money for anything now anyway. Seems like it makes sense to prop up businesses since you can't build a business overnight and most people would not be able to start one easily. I like some of his arguments but basically give them any real thought and this guy is just trying to get attention by saying shocking things.
- asdff 6y agoPeople aren't going to be buying stuff with this. They will be paying rent, other bills, and debts, because a lot of people have been laid off already with more layoffs coming every week. These people are going to be in a world of hurt without any intervention; 4 in 10 americans can't come up with $400.
- ykevinator 6y agoYeah but hospital ceos make >$5m
- totalZero 6y agoAirline assets are only worth putting into service when there is demand. If there is demand from travelers, then -- bankruptcy or not -- aircraft, crew, and support staff will find jobs as assets change hands. If there is no demand from travelers, then -- again, bankruptcy or not -- those employees will be out of a job. Remember during the Financial Crisis when Lehman Bros went under and Barclay's swooped in to buy a large chunk of their real estate and trading operations. Makes way more sense to pay employees directly than to give money to their corporate overlords. Btw-- Don't focus on the arithmetic. His main point is correct. "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickled down. Put it uphill and let it go and it will reach the dryest little spot. But he dident know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night anyhow. But it will at least have passed through the poor fellow’s hands." Will Rogers