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Those things didn't cause covid, but they did cause the companies to be unable to handle the crisis. The outrage is mostly centered around companies who are wil

Those things didn't cause covid, but they did cause the companies to be unable to handle the crisis. The outrage is mostly centered around companies who are wildly profitable and/or spend tons of money on stock buybacks and dividends instead of planning for an inevitable disaster. Look at this: in 2019 Delta Airlines spent around $2b buying their own stock [1]. They also spent $300m buying their own stock in March 2020. In April 2020 they received $5b in government assistance [2]. What if instead of spending billions of dollars to improve their stock price, they saved some of that money in case they ever had a crisis to deal with? It's not like this is the first time the airlines have been bailed out before, either. 9/11 wasn't that long ago. [1] https://ycharts.com/companies/DAL/stock_buyback https://ycharts.com/companies/DAL/stock_buyback [2] https://finance.yahoo.com/news/major-u-airlines-accept-government-015610935.html https://finance.yahoo.com/news/major-u-airlines-accept-gover...

digitaltrees 6y ago
Valid points. My argument though is that focusing on these types of cases will result in preventing other, more deserving businesses from getting and using funds. When the SBA threatened criminal prosecution to stop companies that are public, highly profitable and well financed from using PPP the real effect was to scare EVERY business and loans stopped almost immediately. I know a few businesses that need funds that chose to go out of business because the owner “didn’t want to go to jail”. The thing is, if we don’t want to help companies that conduct stock buy backs during times of plenty, then need help during times of famine, 1. The time of famine or pandemic is not the time to fight that battle. Let’s revise stock but back law later. 2. Honestly, no policy can be designed to handle a global pandemic. This is not a normal time. Let’s leave the blame and moralizing for a few years from now. Stock buy backs used to be illegal. Maybe they should be again. Or maybe only after a company has passed a financial stress test. The thing is, the more we design the system for these unexpected edge cases the more complicated it gets. Maybe it just be better to have something like FDIC insurance that all companies buy and kicks in automatically.

digitaltrees 6y ago

Valid points. My argument though is that focusing on these types of cases will result in preventing other, more deserving businesses from getting and using funds. When the SBA threatened criminal prosecution to stop companies that are public, highly profitable and well financed from using PPP the real effect was to scare EVERY business and loans stopped almost immediately. I know a few businesses that need funds that chose to go out of business because the owner “didn’t want to go to jail”. The thing is, if we don’t want to help companies that conduct stock buy backs during times of plenty, then need help during times of famine, 1. The time of famine or pandemic is not the time to fight that battle. Let’s revise stock but back law later. 2. Honestly, no policy can be designed to handle a global pandemic. This is not a normal time. Let’s leave the blame and moralizing for a few years from now. Stock buy backs used to be illegal. Maybe they should be again. Or maybe only after a company has passed a financial stress test. The thing is, the more we design the system for these unexpected edge cases the more complicated it gets. Maybe it just be better to have something like FDIC insurance that all companies buy and kicks in automatically.