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Businesses were never expected to be able to totally shut down for months at a time. It’s not reasonable to suggest that businesses who can’t handle that have b

Businesses were never expected to be able to totally shut down for months at a time. It’s not reasonable to suggest that businesses who can’t handle that have been irresponsible or are less deserving of help.

unethical_ban 7y ago
To say that those who can't handle it are not less responsible, is to say that those in the same industry who can handle it are not more responsible. I understand your point, that this is a major extreme that people don't tend to plan for, and for small businesses, I don't fault them at all. There is less sympathy for larger organizations like airlines who have (or should have) at least one full time team of people who prepare for all kinds of logistical scenarios: War/hostilities between nations, fuel shortages, pandemics, a broken supply chain of repair parts, green new deal legislation, the list goes on. So not only should larger organizations have been mindful that this kind of thing could happen, their cavalier use of cash on hand to inflate their imaginary value (stock price) should mean any help they get is tied to government stock in the company, a ban on stock buybacks, etc.
- gerdesj 7y ago
  Me and two others started a small business in 2000. After a year or two we developed a rule of keeping about three months of turn over in the bank at all times. It was designed to deal with say VAT and Corp tax turning up with payroll and no or late payments from a few big accounts in a perfect storm of cash flow fuck ups. No we did not factor in a global pandemic in our plans but it seems that avoiding credit to bailout your cash flow is a strategy to consider for the future. With the measures like furlough etc in the UK we have a plan for six months that leaves money in the bank and all 20 employees still on the books. I'll just be damn glad to get out the other side of this with my business and staff all in one piece. Losing the contents of the war chest for a while is the least of my worries if we are still solvent as a business and earning/paying personal incomes.
AnimalMuppet 7y ago
Not reasonable, and also not useful. That's probably 90% or 95% of businesses that were not able to pause like that. We're going to want a lot of those businesses. And the ones that are able, some are by luck or circumstance rather than wise design. Should we reward the luck as well as the design? "Don't help them" seems like throwing out ten babies with the bathwater.
- watwut 7y ago
  I mean, that logic is applied to individuals that for example get sick or simple exist in bad economy. They dont get bailout while consequences on them are disastrous. I think that anger over companies being bailed out with no conditions placed on those money is pretty much about that. Individual get homeless, but the company wont even have to go through bankruptcy and restructuralization. It gets free money instead.
  - twblalock 7y ago
    This is a totally different situation. Businesses are failing because of the government. Therefore the government should compensate them.
    - AnimalMuppet 7y ago
      Well... in this situation, individuals are also going to be failing because of the government. Therefore...
      - twblalock 7y ago
        Therefore they should be compensated too, and they are going to be. They get unemployment benefits and Federal money. The income tax due date was moved out, and many states have allowed people to stop paying rent and prevented evictions. There will probably be more help for people in the next relief bill the government passes. People aren't being helped enough, but neither are businesses. On the plus side, helping businesses can help people keep their jobs, so if you help businesses you also help their employees. People are focused on stock buybacks, but what we really ought to do is prevent businesses that receive aid from laying people off. (Of course, that does create the incentive for businesses to lay people off before they get the aid, but a smartly written law could require companies to hire those people back as a condition of aid, etc.)
HarryHirsch 7y ago
Wimbledon took out a pandemic policy year after year. Turns out they were stupid to do so, they could have invested the insurance premium in the stock market and waited for their bailout.
- gerdesj 7y ago
  Think in risk terms. When they were assessing the risk to their business posed by a pandemic then they could not foresee the govt response. An insurance policy is (almost) certain to pay out. Risk assessed and mitigated. "turns out" is not a method I use for business planning. I'm not sure what sort of bailout they would get either. My firm does not expect a loss of earnings style bailout. I would venture that they did the right thing.
  - treyfitty 7y ago
    Insurance is most certainly NOT certain to pay out. Case in point Star Cinema Grill; albeit this is an egregious case where the insurer is blatantly arguing and bluffing a lawsuit. Insurance will fight tooth and nail to not pay out. https://www.insurancebusinessmag.com/us/news/hospitality/lloyds-of-london-underwriters-hit-by-lawsuit-from-pandemiccovered-cinema-chain-219185.aspx https://www.insurancebusinessmag.com/us/news/hospitality/llo...
- ambicapter 7y ago
  Wimbledon the tennis tournament?
- tathougies 7y ago
  Wimbledon is a one time (well annual...) event. I doubt anyone would insure a company making billions in revenue against a pandemic -- an inevitable outcome in a lot of ways.
  - michaelmrose 7y ago
    If it happens once every 20 years then the money earned by investing 20 years of premiums just have to pay for it. Alternatively the company could spend 20 years socking away money instead of issuing large bonuses.
mrfusion 7y ago
Well Reddit would certainly disagree with you on that. But I agree with you. I don’t even know why we call them “bail outs” in this case. “Crisis operating grants” would be more accurate.
- twblalock 7y ago
  Or just "compensation".

unethical_ban 7y ago

To say that those who can't handle it are not less responsible, is to say that those in the same industry who can handle it are not more responsible. I understand your point, that this is a major extreme that people don't tend to plan for, and for small businesses, I don't fault them at all. There is less sympathy for larger organizations like airlines who have (or should have) at least one full time team of people who prepare for all kinds of logistical scenarios: War/hostilities between nations, fuel shortages, pandemics, a broken supply chain of repair parts, green new deal legislation, the list goes on. So not only should larger organizations have been mindful that this kind of thing could happen, their cavalier use of cash on hand to inflate their imaginary value (stock price) should mean any help they get is tied to government stock in the company, a ban on stock buybacks, etc.

gerdesj 7y ago
Me and two others started a small business in 2000. After a year or two we developed a rule of keeping about three months of turn over in the bank at all times. It was designed to deal with say VAT and Corp tax turning up with payroll and no or late payments from a few big accounts in a perfect storm of cash flow fuck ups. No we did not factor in a global pandemic in our plans but it seems that avoiding credit to bailout your cash flow is a strategy to consider for the future. With the measures like furlough etc in the UK we have a plan for six months that leaves money in the bank and all 20 employees still on the books. I'll just be damn glad to get out the other side of this with my business and staff all in one piece. Losing the contents of the war chest for a while is the least of my worries if we are still solvent as a business and earning/paying personal incomes.

AnimalMuppet 7y ago

Not reasonable, and also not useful. That's probably 90% or 95% of businesses that were not able to pause like that. We're going to want a lot of those businesses. And the ones that are able, some are by luck or circumstance rather than wise design. Should we reward the luck as well as the design? "Don't help them" seems like throwing out ten babies with the bathwater.

watwut 7y ago
I mean, that logic is applied to individuals that for example get sick or simple exist in bad economy. They dont get bailout while consequences on them are disastrous. I think that anger over companies being bailed out with no conditions placed on those money is pretty much about that. Individual get homeless, but the company wont even have to go through bankruptcy and restructuralization. It gets free money instead.
- twblalock 7y ago
  This is a totally different situation. Businesses are failing because of the government. Therefore the government should compensate them.
  - AnimalMuppet 7y ago
    Well... in this situation, individuals are also going to be failing because of the government. Therefore...
    - twblalock 7y ago
      Therefore they should be compensated too, and they are going to be. They get unemployment benefits and Federal money. The income tax due date was moved out, and many states have allowed people to stop paying rent and prevented evictions. There will probably be more help for people in the next relief bill the government passes. People aren't being helped enough, but neither are businesses. On the plus side, helping businesses can help people keep their jobs, so if you help businesses you also help their employees. People are focused on stock buybacks, but what we really ought to do is prevent businesses that receive aid from laying people off. (Of course, that does create the incentive for businesses to lay people off before they get the aid, but a smartly written law could require companies to hire those people back as a condition of aid, etc.)

HarryHirsch 7y ago

Wimbledon took out a pandemic policy year after year. Turns out they were stupid to do so, they could have invested the insurance premium in the stock market and waited for their bailout.

gerdesj 7y ago
Think in risk terms. When they were assessing the risk to their business posed by a pandemic then they could not foresee the govt response. An insurance policy is (almost) certain to pay out. Risk assessed and mitigated. "turns out" is not a method I use for business planning. I'm not sure what sort of bailout they would get either. My firm does not expect a loss of earnings style bailout. I would venture that they did the right thing.
- treyfitty 7y ago
  Insurance is most certainly NOT certain to pay out. Case in point Star Cinema Grill; albeit this is an egregious case where the insurer is blatantly arguing and bluffing a lawsuit. Insurance will fight tooth and nail to not pay out. https://www.insurancebusinessmag.com/us/news/hospitality/lloyds-of-london-underwriters-hit-by-lawsuit-from-pandemiccovered-cinema-chain-219185.aspx https://www.insurancebusinessmag.com/us/news/hospitality/llo...
ambicapter 7y ago
Wimbledon the tennis tournament?
tathougies 7y ago
Wimbledon is a one time (well annual...) event. I doubt anyone would insure a company making billions in revenue against a pandemic -- an inevitable outcome in a lot of ways.
- michaelmrose 7y ago
  If it happens once every 20 years then the money earned by investing 20 years of premiums just have to pay for it. Alternatively the company could spend 20 years socking away money instead of issuing large bonuses.

mrfusion 7y ago

Well Reddit would certainly disagree with you on that. But I agree with you. I don’t even know why we call them “bail outs” in this case. “Crisis operating grants” would be more accurate.

twblalock 7y ago
Or just "compensation".