“Today I cut my pay to $0. I'm committed to laying off 0 of our employees.” • Hacker News Board

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#131

Post by mst » Sun, Mar 29, 2020, 7:17 PM UTC

ttul wrote: post #109

speleding wrote: post #101

Earlier quoted context omitted.

If you pay your employees and you pay taxes then saving your company is already a worthwhile investment for the taxpayer. Governments are typically not very good at owning companies.

They don’t have to own the whole thing. However at some point owning a small non voting stake... I just don’t see the downside. You want cheap money? Uncle Sam is going on your cap table.

I'd been thinking about this.

My thought was that rather than going straight onto the cap table, the government would get a sort of option set where either you pay back the loan with interest or if for whatever reason you need to defer/reduce payments then they get the shares. Not honestly for your benefit so much as because accounting for and disposing of that shareholding is not something the government is set up to do efficiently so avoiding them needing to as much as possible seems sane.

(also a business owner here, but a purely bootstrapped one hence my vagueness around the terminology - but hopefully the idea makes some sort of sense and if it actually sounds useful then somebody who does grok the cap table side of things can flesh it out ;)

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#132

Post by mistermann » Sun, Mar 29, 2020, 7:17 PM UTC

nostromo wrote: post #111

praptak wrote: post #34

Earlier quoted context omitted.

"And the principle of really existing free market theory is: free markets are fine for you, but not for me. That’s, again, near a universal. So you — whoever you may be — you have to learn responsibility, and be subjected to market discipline, it’s good for your character, it’s tough love, and so on, and so forth. But me, I need the nanny State, to protect me from market discipline, so that I’ll be able to rant and r…

First, this is nothing like 2008, to which it's being compared. In 2008 you had misbehaving companies taking huge risks with the (correct) assumption that they were too big to fail. But what we have now is the government forcing businesses closed. It only makes sense that the government provide some assistance to those companies. It feels great to quote Chomsky and to feel morally pure, I've certainly done it. But th…

> First, this is nothing like 2008, to which it's being compared.

I could easily list off tens of similarities between now and 2008.

I think what you mean is this situation isn't identical to 2008?

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#133

Post by throwawaynerdy » Sun, Mar 29, 2020, 7:18 PM UTC

outside1234 wrote: post #77

Is he the majority shareholder? If so, is he really making a sacrifice here or just deferring when or how he is getting returns.

This is exactly what I was thinking.

This is an expensive (?) HR and PR Ad.

In 10 years the popularity of the company should be higher than today, the company will be sold and gutted.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#134

Post by mst » Sun, Mar 29, 2020, 7:23 PM UTC

ttul wrote: post #108

pdeuchler wrote: post #104

Earlier quoted context omitted.

If a 50% drop in expected revenue _growth_ causes you to default on your debt you are either a startup that had trouble raising money, in which case now you know that you do not have a viable business plan, or you are running a completely unsustainable business that only existed because of easy access to cheap debt the past couple of years.

Common misconception. It’s not uncommon for companies to use leverage to fuel growth. High yield venture debt is often tied to growth metrics. It’s not a mistake to operate a company using venture debt. In a highly competitive market, if you don’t lever up, your competitors will eat your market.

Something I often explain to customers (shadow.cat is a consultancy so we usually don't arrive until several years into a company's life) is that, yes, they've accumulated a shitload of technical debt, and yes, I get they're embarassed about it, but if you don't cut some corners in the early days your competitors who do will drive you out of business before it ever matters.

Then I politely point out to them that they're still in business, and their codebase is doing something sufficiently useful to customers that it's making enough money to be able to support a budget for us to help, so clearly they did something right and I'm not going to hold against them the choices without which they'd've never become a customer anyway.

(anybody doing similar work please feel free to steal my spiel, it's so nice to get the in-house developers to realise they're not going to be judged because it makes it much easier to get on with the part where you work with them to unfuck the codebase :)

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#135

Post by kitotik » Sun, Mar 29, 2020, 7:25 PM UTC

SpicyLemonZest wrote: post #86

kitotik wrote: post #80

Earlier quoted context omitted.

The U.S. could give each household ~$15k instead of trying the trickle-down experiment again. This is not a bailout, it’s another transfer of wealth using the same model that was prototyped during the last financial crisis.

I don't think it's fair to call it a trickle-down experiment. We're bailing out companies because we think it would be bad for society if they all went bankrupt, not because we expect that money to trickle down as such.

How is propping up the “top” of the economy not a trickle down approach? It’s the definition. The opposite approach would be “bottoms up” aka propping up the workers.

It will be bad for society if the companies at the top all go bankrupt.

It will likely be worse for society if the results are even remotely similar to the previous crisis: further concentration of assets/wealth resulting in increased income disparity and loss of workers rights.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#136

Post by jdkee » Sun, Mar 29, 2020, 7:26 PM UTC

brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

This. The money needs to go to individuals/families so they can survive and stimulate demand. Corporations are nothing more than fictitious entities that organize people for particular tasks and goals. If equity goes to zero, that is simply creative destruction and new corporations can be organized to fulfill the needed roles.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#137

Post by hyperpape » Sun, Mar 29, 2020, 7:32 PM UTC

klyrs wrote: post #98

hyperpape wrote: post #81

Earlier quoted context omitted.

There's a good reason to support businesses: if you airdrop money to individuals, businesses will go under because they don't have any revenue. That'll result in job losses, and when the virus is under control, there won't be jobs for people (you can't start a business and ramp up to a large number of employees overnight--it's a big organizational problem). But the support for businesses should be limited to those th…

A huge number of folks, perhaps an overwhelming majority of americans, are living paycheck to paycheck[1]. When they get "airdrop" money, these folks tend to pay their outstanding bills or make large purchases that they would otherwise need to save up for. Who's getting that money in the end? Businesses whose services are in demand. This, in turn, incentivizes hiring and maintaining capacity to deliver their services…

It's a hard pill for people to swallow that they deserved to be laid off because their employer was non-essential. In an advanced economy, an enormous number (maybe even the majority) of jobs are non-essential. If they all disappear overnight, we'd have to rebuild the majority of the economy, and we'd extend the economic crisis by years.

"Non-essential" businesses that are in trouble under major social distancing include: most retail, gyms, yoga studios, massage therapy, most things related to office supplies/maintenance/provisioning, hotels, auto mechanics (they'll have some business but a lot less), airlines, coffee shops, restaurants, probably some manufacturing...there's really no way I can give a complete list.

Some large corporations will go out of business, though lots will be fine. The real hit will be small businesses, which typically have less than 2 months of cash reserves.

Note that I'm not advocating that more should be given to businesses than individuals, just that keeping businesses from closing is an important part of having an economy to recover. Giving money to individuals is the most important thing--it has an immediate impact, and targets the most vulnerable people now. But avoiding business closures is also important, and is important to ensuring we don't have 25% unemployment 12 months from now.

I do see how my original post wasn't strong enough in saying helping individuals is the most important thing. But please don't confuse the claims "the current stimulus is a poorly targeted shitshow full of bailouts for wealthy corporations" (true) with "nothing needs to be done for businesses" (false).

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#138

Post by tomp » Sun, Mar 29, 2020, 7:34 PM UTC

kitotik wrote: post #80

ViViDboarder wrote: post #57

Earlier quoted context omitted.

Some may do that, but if we don’t offer loans or bailouts to many companies (as well as bolster unemployment for the individuals) companies will surely lay even more people off, no?

The U.S. could give each household ~$15k instead of trying the trickle-down experiment again. This is not a bailout, it’s another transfer of wealth using the same model that was prototyped during the last financial crisis.

Guess what happens when everybody has $15k more money to buy stuff and there's no companies left to produce said stuff...

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#139

Post by [deleted] » Sun, Mar 29, 2020, 7:35 PM UTC

kitotik wrote: post #135

SpicyLemonZest wrote: post #86

Earlier quoted context omitted.

I don't think it's fair to call it a trickle-down experiment. We're bailing out companies because we think it would be bad for society if they all went bankrupt, not because we expect that money to trickle down as such.

How is propping up the “top” of the economy not a trickle down approach? It’s the definition. The opposite approach would be “bottoms up” aka propping up the workers. It will be bad for society if the companies at the top all go bankrupt. It will likely be worse for society if the results are even remotely similar to the previous crisis: further concentration of assets/wealth resulting in increased income disparity a…

[deleted]

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#140

Post by liamcardenas » Sun, Mar 29, 2020, 7:43 PM UTC

Ididntdothis wrote: post #6

amelius wrote: post #3

Sounds like how it should be. Business owners are taking the risks, but also profit more in good times.

These days I wold argue that especially in small businesses and startups the first employees are the real risk takers. The owners/founders will usually find a way to get some money when a company is failing while the employees get nothing.

I think there is small class of founders who fail and end up better off than their employees but it is not the majority of cases. If you factor in resume/connections/experience, that number is certainly higher -- but that seems fair to me.