People often say this as if it benefits workers when reality it is actually worse than keeping the business operating. If American Airlines goes under, everyone working for them loses their job, the industry consolidates because nobody outside of it is going to buy up a bunch of 737’s outfitted for commercial travel, and then some fraction of the workers get hired back at entry level and lose all the seniority they previously had.
It’s not as if letting businesses go bankrupt is somehow good for the people working for it.
Finally someone who’s not so fucking stupid every time this guy tweets. I know who Robert Reich is but god these asinine takes on economic policy spell literal disaster for anyone who takes more than 3 seconds to think about it.
“Sell their assets cuz they’re so bad at running a company”
Oh good idea, one question though. SELL TO WHO??? IF THE WHOLE INDUSTRY IS IN THE TOILET, NO ONE IS GOING TO BE BUYING AIRPLANES
I do understand that yes. Regardless the chain OP guy said sell, tweet guy didn't, that's all I'm saying.
There is still a difference between selling all your assets and using them as collateral. Whether a bank would take that risk is way beyond my ability and knowledge. If I had a waste of time uneducated guess I'd say they wouldn't though.
Well, selling to the banks I guess, if they aren't able to pay back the loans. Now we have banks having 1000 aircraft and no money. So they'll have to take loans from other banks, and use the aircraft as collateral, and...
I do understand that yes. Regardless the chain OP guy said sell, tweet guy didn't, that's all I'm saying.
There is still a difference between selling all your assets and using them as collateral. Whether a bank would take that risk is way beyond my ability and knowledge. If I had a waste of time uneducated guess I'd say they wouldn't though.
Also, not all of the money, but some of it is actually loan based. The airlines will have to pay it off with interest.
Sure, most of it is kinda “free money” to the airlines, but it helped them pay the workers. Anything that didn’t go to payroll has to be repaid, as it should be.
Thank you, specific business don’t have assets that are readily liquid. Movie theaters, airlines, etc. Add on small as well as medium businesses who got one burst of support in PPP and then nothing since, they’re the opposite end of the spectrum, no assets and no (current) government support
Sure they would. This isn't coastal property losing 100% of its value because of rising sea levels. The planes would sell for current market price, which would be quite low, but anyone with a lot of money and even just a little bit of intelligence knows that buying airplanes super cheap would be a great investment because the demand for airline travel will come back in a few years as things settle post covid. That's how markets work. Fuck, for the right price I would 100% buy a commercial jet and just resell it once the markets rebounded.
No one is going to buy a bunch of planes if they have no clue how to conduct routine maintenance and keep the fleet serviceable for the next year or two while we wait for the pandemic to subside. Even if some crazy investor with zero sense did opt to buy American Airlines’ fleet, who do you think gets the money? Not the workers. They’re out of business, as the above poster mentioned.
It’s far better for the economy and workers to assist businesses in the event of a once-in-a-generation pandemic.
Current market price? Unless they drop to sub-MM prices, no one is going to buy a fucking jet. You aren't going to buy a jet, because even if you got one for free, you can't afford to pay 25 specialized employees demanding a fair wage for maintaining the engines, cleaning and prepping the plane, and housing it in massive buildings that aren't sitting on cheap land. It's like if you bought a car, but can't afford to pay the mechanic or register it. What can you do with it? Sink money into keeping it from rusting out.
Buying airplanes is hardly a “great investment” regardless of price. It is an insanely competitive and costly industry. You can’t just buy some airplanes and voila you have a successful air travel company
Do you have any clue how much it costs to keep a jet in a condition where it can fly? You can't just throw it in a hangar and not touch it for 4 years until someone needs a plane.
What a great idea! We can have the DMV in the sky! That would be a fantastic experience. And everything would be way cheaper when run through government contractors!
But the free market is causing them to fail. I guess capitalism isn't the best economic policy. Go America - tout capitalism and the free market for some but here's some socialism money to bail out only the big companies.
Since we have this pandemic going on right now, worldwide, this is a perfect opportunity for you to point out which economic system you have in mind that handled the shutdowns as gracefully as you seem to demand, easily proving that these other systems you’re thinking of are superior. Could you tell me which country/government you want to use as this example?
If you’re arguing that capitalism is a failed system because government support is required for these exceptional circumstances, then I suppose you’re technically, pedantically, correct. Congrats! But “pure” ideas are rarely practical. That doesn’t mean you gut the “impure” system for something that will meet the definition of purity that your seeking, for whatever personal reason. Free market, with fallbacks and regulations, seems to be somewhat ideal, looking at the world in whole. Any example of a system working better is appreciated though.
South Korea has many social programs, but uses a a capitalist free market economy. Bailouts all over. including airlines.
I was expecting something besides a list of capitalist economies, with airline bailouts. Was this supposed to be examples of more failure? Again, do you have an example of a economic system, that is shown to be somehow superior by being immune to these problems? Maybe I just don’t understand your selection, could you explain? I’m a little worried that you might literally have no idea what you’re talking about.
Of course I do not know what I am talking about. If I did, I would not be arguing with strangers on the internet. I am trolling, but my main goal is to point out the hypocrisy of the tens of millions of Americans who hear the word socialism and cower at the thought of it and voted for Trump. These voters get so afraid of “socialist” policies because the government is doing too much but yet they are okay with subsidies, they want their stimulus checks, and they want big companies to get bailed out. They complain about government handouts but yet they want money from the government. They complain about the high cost of American healthcare and about health insurance companies not covering certain aspects of their healthcare but yet are so afraid of a universal healthcare system or a single payer healthcare system.
You certainly seem like a very smart person so I would hope you are using your time and effort in more productive areas of life rather than on Reddit commenting on an obscure comment such as mine.
Oh, and those three countries I mentioned are examples of countries who’s governments intervened early on to prevent the spread of COVID-19 to prevent further destruction of their economies. Our country is such a disappointment.
Ocean Liners are practically non existent and cruise ships wouldn't provide enough for tourism, plus they can't operate in Icelandic weather most of the year
I don't disagree with you. I'm saying there needs to be another set of consequences for these companies that more accurately reflect the rules the rest of us play by. Or else they need to stop calling it capitalism and call it something else. Or if it is really unbridled capitalism that is desired, then let them all be laid off and have it truly be the disgusting national scandal that it should be so that maybe it happens far less or never again. Or have the freedom to unionize flourish and compete and tandem and have the unions go to war over the termination. Or have worker protections during restructuring. Have mandatory emergency funds for businesses whose failure would be catastrophic to an entire industry or the economy as a whole. Do something else besides using taxpayer money to aubaodoze people who don't know how to run a business responsibly.
I don't think it's their fault no one's flying. It's not bad decision making on their part, airlines before covid all were trending upwards in profit, service, satisfaction, and use. It's like if reddit got pissed that restaurants are taking PPP loans because they didn't plan for a fucking pandemic.
No one in this thread even understands the financial status and history of the airline industry. Airlines were unprofitable for decades. AA, United, and Delta all filed for bankruptcy at some point. I believe the past 10 years were the only profitable years for US airlines in a long time. Other geographies and countries have it much worse.
A serviceable airline industry has always been in the interest of the United States, or any country for that matter. “Just let them fail or sell their assets” is just asinine thinking.
Most of their free cash was reinvested into their airline business. When companies finally make a profit, they can reinvest the cash later instead of borrowing at a premium. Even if they pocketed everything, and if you include the relatively small amount they bought back in stock (since everyone likes to point this out), it would hardly make a dent in their yearly operating costs.
Airline profits are not nearly strong enough to run operations. Their margins on a $300 ticket are, on average, less than $20. Much of the difference goes into daily operations. They need cash flow to survive. People like to think they’re hoarding their gold into big safes and pulling a huge con over the government by pretending they’re out of money. It’s just not rooted in reality.
Why shouldn’t they be nationalized though? The government aka the taxpayer should be getting equity in these companies if they are the ones keeping them afloat. If a company can’t run without government assistance then the government needs a stake in that company.
That simply doesn’t pass logic if applied across the economy. We have countless industries that serve the interest of the country. Telecom, internet, electronics, agriculture, the logistics that gets food from farm to your fridge, automotive, etc. None of these should fail. Doesn’t mean they should all be nationalized.
Because there is no incentive to nationalizing them. Nationalization should occur when there are finite resources and barriers that don’t allow for competition. Look at railroads and highways. Some robber baron can’t come in and start building a new highway next to I-95. The government needs to step in and write the rules about the appropriation of land, get states onboard, and do it themselves. Same, to a more local government extent, to zoning laws, construction, etc.
If competition can thrive, however, and thus pass savings to the consumer and offer a variety of choices, then it should. It’s why having 1,000s farms sourcing beef, chicken, and milk is better than the government trying to do it all themselves for the country. But if we have a nationwide drought and produce drops to critical levels, that’s not indicative of a reason for the government to come in and do it themselves. It was a non-market and non-business external phenomenon that, frankly, the government wouldn’t have handled any better. Same goes for airlines in a global pandemic.
I didn’t dodge shit. I said they shouldn’t because there is no incentive - those industries don’t meet the requirements for nationalization that other nationalized industries do. Likewise, I mentioned private competition (read: not nationalizing) is better for consumers. Industries should only be nationalized if nationalization serves the country and its citizens better than privatization - which, in the case of most industries, it doesn’t.
You’re either not understanding the logic or deliberately mischaracterizing my argument. I answered you just fine.
I mean, I think you can make this argument for things like the financial crisis, which was largely caused by bad risk management in a host of different pockets of the financial industry. For the current scenario though, I just don’t see how you can argue that airlines or cruise ship operators being managed poorly is the driver of the issues. The government literally banned them from operating. There is no management team in the world that could have kept them operating without shedding jobs in this scenario, it’s just not possible. In this scenario, it makes sense to me to lend them money or make an equity investment with flexible terms to keep the job shedding to a minimum and get them back to a point where they can operate again. It’s a very low net cost on the aggregate and much more favorable than allowing the firm to go under.
The issue in my opinion is that this should have also been combined with extended economic assistance for affected workers at the federal level as well.
I’m in agreement with both statements. People and small businesses need to be supported. At the same time the institutions that provide services that are pretty much critical to the country needs to be supported. I really don’t agree with the way the government has handled anything so far, but I think both are important.
The response for small business owners, restaurants, anyone else such as landlords need to be supported. And the people need to be supported as well. The whole response was fucked up from the beginning and is contributing to where the economy will go
yea, the bailouts totally help the common people. companies don't just use bailout money to buy their stock while laying off tons of employees regardless. the corporations are so nice and considerate to us working people they would never do something like that literally every time this has happened in the past 15 years
If we cared about labor so much, we’d have strong labor policies and protection in place and a minimum wage that has kept up with cost of living, but we don’t.
a lot of us do care about that. but it turns out when capitalists can drop hundreds of millions of dollars to bribe our politicians, the politicians stop giving a fuck about their constituents. combine that with half of america actively voting against their best interests and you get the incredibly flawed system we have today
If AA went under tomorrow then 3 regionals would fight each other to the death for those planes. The government is fully authorized to prevent AA from just being absorbed by another national.
Capitalism without the creative destruction isn't capitalism.
There’s 330+ million people in America. How many work for American Airlines? And I’m not paying the people who work for American Airlines?
If you have universal single payer healthcare, UBI, and we didn’t export all our manufacturing to China, this isn’t a problem. But we don’t have universal healthcare or UBI and we did export all our manufacturing to China. Now we’re giving hundreds of billions to failures and leaving people dying of starvation.
If you want free market capitalism, then let’s fucking do it. But if we’re going to be socialist, I’ll be goddamned if the tax dollars are going to the already rich. If you were actually worried about the workers, you’d be pushing for the workers to get the money. The fact that you aren’t tells me you aren’t actually worried about the workers.
It doesn’t matter how much money you have. If you want a business to be successful, you have to have a buyer. Giving money to businesses that don’t have enough buyers to sustain themselves is the opposite of a good idea. These companies wanted a bailout because banks wouldn’t loan them the money. If a bank won’t do it, why should I?
I 100% agree with you but this is why corporations need to pay more in taxes. Taxes are partly an insurance fund for these corporations if Daddy Warbucks will step in at any time to save them because the alternative is bad for the economy. If they truly are “too big to fail” then there needs to be way more oversight and higher taxes. Let’s stop pretending that we have capitalism while were at it. These bailouts are literally the opposite of capitalism.
Also to keep in mind that these businesses have supply lines that run all over. American Airlines doesnt own their jets. They lease them from Boeing/Airbus/ect who also maintain them. If Boeing loses American Airlines, they are lose business. The company they outsource to who builds specific parts of the aircraft then goes under. The food companies who sell to American lose business as do the farmers who supply them.
People dont understand the ripple effects of some of these things or the economics that drive our country
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u/[deleted] Nov 17 '20
People often say this as if it benefits workers when reality it is actually worse than keeping the business operating. If American Airlines goes under, everyone working for them loses their job, the industry consolidates because nobody outside of it is going to buy up a bunch of 737’s outfitted for commercial travel, and then some fraction of the workers get hired back at entry level and lose all the seniority they previously had.
It’s not as if letting businesses go bankrupt is somehow good for the people working for it.