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Is there a reason to bail those companies out of bankruptcy with tax payer dollars? If you're simply pointing out the potential advantage that a large number o
by modoc 18y ago
Is there a reason to bail those companies out of bankruptcy with tax payer dollars?
If you're simply pointing out the potential advantage that a large number of higher risk competitors may hold, remember that advantage is tempered by lacking the pole position and the resources that the large company typically enjoys.
My startup is competing against some very large companies, and while we are faster, cheaper, better service, etc... They have existing marketshare, long term contracts, huge advertising/sales budgets, long track records, massive good-ol-boy networks, etc... We're doing great (we only want/need a few customers, not the whole market), but I doubt we'll ever "out-compete" the big fish to the point that they fail or we lead the market space. Being the big fish has a ton of advantages, even if they are slow moving.
- Goladus 18y ago> Is there a reason to bail those companies out of bankruptcy with tax payer dollars? If it's a company that would be almost certainly successful and profitable but is caught in a bind because of the freeze in capital, then it can be a good idea. The resulting economic slowdown can cost taxpayers significantly.
- byrneseyeview 18y agoIf it's a company that would be almost certainly successful and profitable but is caught in a bind because of the freeze in capital... Then Warren Buffett will buy it out. If it's a company that is a bad, high-risk investment, its managers will skip asking big outside investors (there are plenty of hedge funds and private equity shops with spare cash on hand) and go straight to the government.
- Goladus 18y agoDo you have evidence that supports this assertion? Warren Buffet is not all-knowing or infinitely wealthy.