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These bailouts need to be punitive to investors or behavior doesn’t change. We need these bailouts to keep people employed and to maintain the infrastructure/se
by cascom 6y ago
These bailouts need to be punitive to investors or behavior doesn’t change. We need these bailouts to keep people employed and to maintain the infrastructure/service, but if you take a government bailout, it should be automatic chapter 11, automatic equity wipeout, and government $’s should look like DIP financing...or something like that... watch balance sheets become more conservative in industries that need a bailout every ten years
- eganist 6y agoAn argument can be made that you risk losing the talent to lead these companies to much more economically viable industries. I'm not sure I completely subscribe to the argument, but I think to some degree corporate welfare is as necessary as general welfare to help give a leg up to industries that are necessary but would otherwise have a harder time being successful. Hot take, I know. That said, I do agree with your premise and think a disproportionately high government stake in a bailed out company makes a ton of sense.