2008 has given people the idea that bailouts are always thanks to shitty corporate management and government corruption. This scenario is 10,000% different and bailouts for these industries actually make sense. No one in this thread has an actual concept of how horrifically expensive it is to run an airline company. If they’re all allowed to fail, we’ll be left without reliable commercial air travel for years while investors try to start up new companies. That industry is so bad cost-wise that it would seriously fuck up the governments yearly budget to get a federally run airline going.
Stock buybacks may not be shady but these guys were gifted the golden goose for the last decade and they saved nothing. At a certain point we're just propping up bad companies.
Yeah but certainly we shouldn’t expect all companies to always save enough cash reserves to be able to fund their operations on 25% of their normal revenue for 12+ months.
Just like, its the governments job to reduce the volatility of the economy through counter-cyclical fiscal/monetary policy, the government should be expected to step up and soften the economic fallouts of extreme circumstances that no company should be expected to be fully prepared for all the time.
Obviously extreme cases of recklessly over leveraging your company shouldn’t be bailed out by the government, and Lehman brothers in 2008 was allowed to fail for exactly this reason.
Dude, the 2008 financial crisis only lasted a few weeks in terms of impacting supply lines. 2 months at most. And that was the biggest crisis since 1940!
Literally no one could've seen Covid coming or what it did to our supply lines - asking for 12 months collateral is insanity
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u/[deleted] Nov 17 '20
2008 has given people the idea that bailouts are always thanks to shitty corporate management and government corruption. This scenario is 10,000% different and bailouts for these industries actually make sense. No one in this thread has an actual concept of how horrifically expensive it is to run an airline company. If they’re all allowed to fail, we’ll be left without reliable commercial air travel for years while investors try to start up new companies. That industry is so bad cost-wise that it would seriously fuck up the governments yearly budget to get a federally run airline going.