A Frugal Man’s guide to the CORONADEPRESSION

[ToddStarnes]

[Saz]

[John Galt]

i agree with saz. if we bailout businesses all the time it encourages bad behavior like getting tax breaks then doing stock buybacks and not having anything set aside for a rainy day and then they just cry and get money because we bail them out. AIR TRAVEL is important. AIRLINES are not. it's so important some other entity will come in, pick over the carcasses, and end up with a new airline flying people. yeah maybe your frequent flyer miles are gone. well, that sucks for you?

cut out the middleman. support people in this unprecedented time of need, but if businesses fail, they fail. in the post corona world we build things will come back stronger than ever

[ToddStarnes]

What's the quantum of "rainy day" savings that would have allowed, e.g., DAL to survive the shutdown of air travel by the government during Covid-19?

Is it justifiable economically or morally that the government can decide an industry may no longer operate, and therefor the participants in that industry must go bankrupt?

Would a post-bankruptcy world result in proliferation of carriers competing to provide customers the best services possible, or continued consolidation of market share among a few big players as seen post 2008?

Here's a good read with counterpoints. Does not address consolidation question though (or at least inadequately IMO).

https://www.mercatus.org/publications/c ... e-industry

[Saz]

[ToddStarnes]

I know, I posted it because it's a good read with counterpoints (I like opposing opinions). Thanks for sharing your insights. I largely disagree, but the bankruptcy route does have it's advantages for companies that tried and failed. Ultimately I think bailouts were appropriate here for airlines since the government decided to tell these businesses they could no longer operate; I have a much bigger beef with bailout money sucked up by mid-sized public entities through PPP.

I also don't really see the moral hazard on investment that others do from these sorts of case-specific bailouts. The much worse cases is what Spider described earlier, where risk is socialized and gain privatized. Don't really see that in this instance with airlines though.

[Saz]

[Kane]

[exploited]

Thousands, tens of thousands of people, work in healthcare insurance, payday loan places, megacorps like Amazon. Is it wrong to bust up Amazon because thousands will lose their jobs? Is it wrong to establish a single insurer because it'll wipe out a massive industry?

I mean, jobs and jobs creation gets trotted out every single time anything is proposed to regulate any kind of commerce.

Have you considered the idea that it is through embracing anticompetitive rentseeking that lost jobs has become a major problem, rather than a minor bump in the road? That perhaps companies, particularly big companies, have deliberately sought out a position where they can't be regulated or even allowed to fail without harming the economy?

The route you are proposing is a race to the bottom, where no industry, no matter how horrifically managed, is allowed to fail.

[Kane]

I agree with the sentiment but the timing is as bad as it gets. Letting it all fail now risks any sense of political stability and could lead to an outcome worse than what we currently have.

It's like arguing for austerity right now - you can do it and in every practical sense it's the right thing to do but it can make bad situations worse if you time it poorly.

Yes, it's likely that politicians won't have the fortitude to do what's right at the right time - that should be the focus. Getting the right people in office. Blowing it all up just because there's never going to be a good time to do it seems lazy to me.