Stimulus Debate in the time of Corona

Is this true?

What about the job losses?

What about all of the people who jobs depends on the airlines.

What about the people who are not eligible for pensions?

Either I am missing something or this guy is being way to simplistic or pandering to the burn it down crowd.

Help?

 

Full Interview:



Also:
https://nymag.com/intelligencer/2013/10/silicon-valleys-dysfunction-fetish.html

https://www.businessinsider.in/stoc...e-for-opportunities-/articleshow/75130278.cms

https://www.kqed.org/news/11808522/chase-center-workers-left-unemployed-and-uninsured

https://www.businessinsider.com/warriors-rick-welts-sports-arenas-public-money-2019-3

 

Thanks, Obama

 

Never a bad time to buy.

 

I think chamath thinks that the bankruptcy path (if the business does fail) will help protect the workers .

as far as stocks and 401k’s ... the market will eventually rebound . It does suck if you were planning on retiring this year .

there are gonna be winners and losers regardless...

 

No matter how many times some people complain about poor people getting money they shouldn't, its often the wealthiest that actually take the money from those that really need it most...

How to stop the business loan program from benefiting the rich
ANALYSIS: The loans were so easy to get that many wealthy people were able to benefit, while smaller companies were left behind when the money ran out.

https://www.nbcnews.com/business/ec...-benefiting-rich-n1185811?cid=sm_npd_nn_tw_ma

 

And yet, trump is trying to push responsibility for testing and much of the rest of the battle against COVID-19 onto the states?

 

How does bankruptcy help protect workers?

After Bankruptcy wages are usually frozen or cut.

Layoffs happen.

Businesses close.

I am not an advocate for bailouts I just don't see how not helping protects the workers.

 

So it seems he believes in a let them eat cake strategy.

 

Chamath is talking about concepts like anti-fragility and creative destruction.

In good times, relatively poorly run companies can be profitable. In bad times, those companies should go bankrupt and get bought up by companies that perform better. This is healthy long term. We want capital being diverted to those that use it most efficiently.

But that process of capital reallocation (creative destruction) involves near term job losses that are very visible. It can be viewed as a form of Darwinism where the weak are destroyed. So there is pressure to bailout the poorly run companies, to effectively reward their risky behavior and poor operations.

A company that operates with the presumption they can be bailed out if something goes wrong is a fragile company. They are incentivized to make themselves fragile, to over-borrow instead of saving up a rainy day fund.

Chamath is asking why the taxpayer must pay for the risks taken by these companies.

It used to be a bedrock principle of personal finance for individuals and companies to calibrate their lifestyle/operations so they can maintain an emergency fund of liquid cash for 6 months worth of expenses. That allows you to be anti-fragile, even to thrive in hard times. Bailouts and money printing (which devalues any savings stored in cash) discourage this behavior.

Of course, the public and politicians don't agree with this view, and so the money printing, bailouts, universal income measures will continue in the near-term. Intuitively, we all know that printing money has consequences. Nothing is free.

Fortunately, for the first time in human history, technology offers us a voluntary off-ramp from this death spiral...

 

Yeah, they really need to require people to show revenue shortfalls or things like that to get forgiveness. Right now, companies that are essential and operating normally are the ones benefiting the most - they just get the government to unnecessarily pay wages for them. The money should be focused on the businesses that are shut down or don't have customers, but it's really just the opposite. Those businesses won't get forgiveness since they aren't spending on payroll.

 

I agree with most of this but how does any of this protect the worker, which he is claiming.

What does the Corona virus have to do companies who are poorly run are you saying only poorly run companies need financial assistance because of the virus?

And once again please explain how not doing anything helps the worker?

 

I'm saying we need a system where workers don't need help.

 

it helps in long run

my preferred policy is to not bail out business and instead put money directly in people’s hands

people will lose jobs

imo anyone not working has “lost their job” and these bailouts are keeping them employed artificially .

but the PPP has only helped a small proportion of small business . We don’t even know how the big business slush fund is being distributed right now .I do agree with that chamath guy .

what do you make about his point that when delta went through bankruptcy last time they only let go of 157 out of 55k employees ?

( I haven’t verified this)

We are trying to keep people “employed” because we think it will lead to a fast snap back ? I’m not sure if I see it . It’s not like employers don’t have a list of old employees and can’t give them a call once they are ready to open up . People are citing training costs etc and that doesn’t even make sense for many businesses.

i think his point is more about long run . And IMO there are much better ways to get resources into people hands vs insisting that people are employed and get paychecks . What we are doing now is propping **** up on continually unsteady ground .

In our efforts to help only those that deserve it , the well connected are the ones reaping the benefits and the ppp well ran dry almost immediately.

 

Long run?

How long and how does that work?

 

long run could be a month , it could be 5 months , it could be a year , it could be until the next downturn when we have to try and bail out businesses that are too big to fail again .

short term we need help . I just think we are going about it the wrong way

Look , the main problem with this stoppage is the fixed costs. People paying bills and rent etc. think about a restaurant, if they were closed and didn’t have to buy food or pay workers to make their products they won’t be making money but they wouldn’t be losing it either ... the reason they are in a bind is because they have overhead , namely pay for the building .

at the end of the day during a stoppage , someone is gonna have to eat it .

in 1 year who do you think will be in the best position relative to where they were pre corona : big business , small business , households ? To me it seems obvious that big business will suffer the least , especially given the fact we are bailing them out .

what do you LIKE about what we’ve done so far ?

We have the expectation for a household to have saved and be able to withstand some time without income , but billion dollar business couldn’t do the same ?

at the end of the day business make money by being able to sell **** to people . If people don’t have any money they can’t buy anything . The argument (misplaced IMO) is that people won’t have money if they don’t have jobs . What is a job ? You do work in return for pay ... if you aren’t working then being “employed” is a false description imo . you can put resources in individuals hands during times when people don’t have the ability to work.

I don’t know everything, but I’m pretty confident that our approach to this has not been anywhere near optimal .

 

Not trying to be funny but I have no idea what this has to do with my question.

This guy is saying letting companies go bankrupt will help the workers.

I am asking how does that work?

Nothing more nothing less.

 

I don’t think letting them go bankrupt and doing nothing else helps workers

I do think that if instead of propping up companies you just did direct stimulus that would help workers.

I think his argument is that we are propping up the company to “save” the worker and many of these companies are going to lay off workers soon enough anyways .

I think that if the question is bailout vs no action he might choose bailout because even though it might place people in a precarious situation in a few months we need short term help now .

I dunno . I think he might have been talking about in terms of opportunity cost.

for 2 trillion you could have given every American 6k immediately ... and that’s all 330 mil of us .

In a vacuum I think not bailing out “hurts” but there are many other things you could do with those resources