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I think the reason is very simple, aid needed to be targets because those industries are hit harder. ex. If you send everyone a check for $5k, during the quara

I think the reason is very simple, aid needed to be targets because those industries are hit harder. ex. If you send everyone a check for $5k, during the quarantine, no one is using that $5k to purchase gasoline or flights, so the oil/airline industry is going to be burning money during that time. Oil and air travel are particularly important to have healthy for after we get back to normal.

jakelazaroff 6y ago
This argument would be more convincing if these companies were actually spending bailout money on operations and employees, rather than, say, declaring bankruptcy, laying people off and giving millions of dollars to executives. U.S. airlines spent 96% (!!) of their free cash flow in the last decade on stock buybacks [0]. That turned out to be a bad bet. Why don't the executives buy back the billions of dollars of stock they sold to the airlines, rather than asking the taxpayers to foot the bill? [0] https://www.bloomberg.com/news/articles/2020-03-16/u-s-airlines-spent-96-of-free-cash-flow-on-buybacks-chart https://www.bloomberg.com/news/articles/2020-03-16/u-s-airli...
kitotik 6y ago
That’s not a very free market approach. This also assumes demand will just magically bounce back. If demand goes away, why not let these suppliers fail and let the market sort out how/when/if demand returns.
MiroF 6y ago
If a business fails because it didn't plan for a black swan event, let it fail. Otherwise you create a moral hazard and ensure stuff like this happens over and over again. It's bad when these businesses fail because it hurts the employees, that's why they should direct transfer cash to employees.
- text70 6y ago
  There is an idea that I have been playing with which kind of tests this idea, sort of a social pen-testing for companies, and seeing where the weak points are in a company's philosophical and behavioral hierarchy. This idea basically boils down to business ethics, and the idea of long-term gains can beat a stochastic market and lessen risk if the player and its subsidiaries behave ethically, independent of direct cooperation events. So this means that it doesn't matter whether a company seeks to compete or not, as long as it makes civically minded choices. The problem is that when neither government nor private business makes good civically minded choices that chaos eventually erupts; essentially, the cause and effect are interlinked and correlated.

jakelazaroff 6y ago

This argument would be more convincing if these companies were actually spending bailout money on operations and employees, rather than, say, declaring bankruptcy, laying people off and giving millions of dollars to executives. U.S. airlines spent 96% (!!) of their free cash flow in the last decade on stock buybacks [0]. That turned out to be a bad bet. Why don't the executives buy back the billions of dollars of stock they sold to the airlines, rather than asking the taxpayers to foot the bill? [0] https://www.bloomberg.com/news/articles/2020-03-16/u-s-airlines-spent-96-of-free-cash-flow-on-buybacks-chart https://www.bloomberg.com/news/articles/2020-03-16/u-s-airli...

kitotik 6y ago

That’s not a very free market approach. This also assumes demand will just magically bounce back. If demand goes away, why not let these suppliers fail and let the market sort out how/when/if demand returns.

MiroF 6y ago

If a business fails because it didn't plan for a black swan event, let it fail. Otherwise you create a moral hazard and ensure stuff like this happens over and over again. It's bad when these businesses fail because it hurts the employees, that's why they should direct transfer cash to employees.

text70 6y ago
There is an idea that I have been playing with which kind of tests this idea, sort of a social pen-testing for companies, and seeing where the weak points are in a company's philosophical and behavioral hierarchy. This idea basically boils down to business ethics, and the idea of long-term gains can beat a stochastic market and lessen risk if the player and its subsidiaries behave ethically, independent of direct cooperation events. So this means that it doesn't matter whether a company seeks to compete or not, as long as it makes civically minded choices. The problem is that when neither government nor private business makes good civically minded choices that chaos eventually erupts; essentially, the cause and effect are interlinked and correlated.