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Private Equity Wants in on the Bailout? Spare Me

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Re: Private Equity Wants in on the Bailout? Spare Me

#121

Post by bdcravens »

arcticfox wrote: post #30
bdcravens wrote: post #28

Earlier quoted context omitted.

Couldn't the same be said for highly-leveraged workers?

What is a highly leveraged worker? Is it someone that has no savings account? If so, what does letting them fail look like to you? To me, letting an over-leveraged worker 'fail' (starve, die, become homeless, whatever it is) is categorically different than letting an over-leveraged business fail.

To me, that's someone whose debt is too high in relation to their income. Failure to me is losing assets or credit rating. I certainly don't want to see anyone starve or go homeless, but I also am not saddened to see someone lose their new BMW when a used Hyundai would have sufficed.

Re: Private Equity Wants in on the Bailout? Spare Me

#122

Post by bdcravens »

solarkraft wrote: post #38
arcticfox wrote: post #30

Earlier quoted context omitted.

What is a highly leveraged worker? Is it someone that has no savings account? If so, what does letting them fail look like to you? To me, letting an over-leveraged worker 'fail' (starve, die, become homeless, whatever it is) is categorically different than letting an over-leveraged business fail.

Despite some court verdicts (or memes resulting from them) claiming otherwise, companies are not people and should be held to different standards.

Many companies are the sole income for one person however. I think it's easy to portray business as soulless corporations, but most business in the US are small businesses. As such, the fate of those businesses is tied to the fate of the workers, of which the owner is one.

Re: Private Equity Wants in on the Bailout? Spare Me

#123

Post by kitotik »

siruncledrew wrote: post #112
kitotik wrote: post #65

Earlier quoted context omitted.

> Hopefully this is one time > congress won't sell us out. Uh, didn’t it already happen, again? Propping up aerospace and banks again with taxpayer money, sending only a fraction (call it a “token”) to SMBs, with near unchecked disbursement powers, seems like they’ve continued on their same general strategy of wealth consolidation.

When the first tweets from the executive branch were “OMG we need to save Boeing!!!!” instead of “We need doctors and supplies!!!” that kinda summed up where the priorities were.

Exactly.

Made painfully clear with the messaging that “hey, a lot of people die from car crashes and the flu every year” directly followed by quotes of “these great American companies such as Boeing are NOT replaceable”.

IOW: old and/or poor people are commodities easily replaced.

Re: Private Equity Wants in on the Bailout? Spare Me

#124

Post by TuringNYC »

bdcravens wrote: post #121
arcticfox wrote: post #30

Earlier quoted context omitted.

What is a highly leveraged worker? Is it someone that has no savings account? If so, what does letting them fail look like to you? To me, letting an over-leveraged worker 'fail' (starve, die, become homeless, whatever it is) is categorically different than letting an over-leveraged business fail.

To me, that's someone whose debt is too high in relation to their income. Failure to me is losing assets or credit rating. I certainly don't want to see anyone starve or go homeless, but I also am not saddened to see someone lose their new BMW when a used Hyundai would have sufficed.

BMWs are a straw-man argument. We just had one-time $1200 checks, there is discussion of more. No one is talking about buying BMWs, or servicing BMW-level expenses.

To put this in perspective, consider the monthly carry on rent+COBRA+food+honda (+ student loans). A one-time $1200 check wont go far.

Those who leased or bought BMWs arent really the subject of the conversation here, if they are relying on a $1200 check to get thru this, they are going under regardless (and possibly rightfully so if they got a luxury car rather than store a reserve/emergency fund.)

Re: Private Equity Wants in on the Bailout? Spare Me

#125

Post by TuringNYC »

smabie wrote: post #51
arcticfox wrote: post #30

Earlier quoted context omitted.

What is a highly leveraged worker? Is it someone that has no savings account? If so, what does letting them fail look like to you? To me, letting an over-leveraged worker 'fail' (starve, die, become homeless, whatever it is) is categorically different than letting an over-leveraged business fail.

I mean, an over-leveraged business failing is gonna create over-leveraged workers failing. I don't really see the material difference, anyways.

The difference is giving money directly to the worker vs giving it to an extraction business who might give some of it to the worker. Which seems more appropriate?

Re: Private Equity Wants in on the Bailout? Spare Me

#126

Post by rmrfstar »

smabie wrote: post #52
rmrfstar wrote: post #19

Earlier quoted context omitted.

You can make money robbing little old ladies on their way to the grocery store. Doesn't make it a socially useful activity or one that should be permitted in a civilized society.

Are you saying that buying a company and having it take on debt should be illegal?

Yeah, I think that most LBO's should be taxed out of existence. The industry is a destructive and parasitic.

https://www.youtube.com/watch?v=qs1DhA91fm0

Re: Private Equity Wants in on the Bailout? Spare Me

#127

Post by rmrfstar »

SpicyLemonZest wrote: post #86
cmrdporcupine wrote: post #82

Earlier quoted context omitted.

Americans, maybe. Worldwide, unlikely. But even saying that, having a mortgage and owning and having a few shares in your 401k ... you'd really call that owning capital? The depth of degree of difference between that and even the most minor members of a board of corporation is pretty huge. Not to mention it's very easy for us in the technical class to not even notice that the vast majority of the country isn't like u…

I certainly wouldn't dispute that rich people have more power and influence than your average Joe, or that they lead very different lives than him. I just disagree that there's such a thing as a homogenous class of capital owners, who would have or could have "created" the state as a conspiracy to "continue to own and profit from their ownership of capital".

Your belief does not reflect reality. 10% of households own 84% of equities owned by households [1]. This is actually a rosy estimate, because the denominator is "equities owned by households". Extremely wealthy households shield their assets in trusts and pooled investment vehicles that are not reflected in this figure. As we know, the distribution wealth follows a power law despite the distribution of human endowments following a Gaussian.

[1] https://www.ft.com/content/2501e154-4789-11ea-aeb3-955839e06...

Re: Private Equity Wants in on the Bailout? Spare Me

#128

Post by TomMckenny »

bhupy wrote: post #110
TomMckenny wrote: post #40

Earlier quoted context omitted.

These two options for saving the economy: corporate bailout vs social safety net essentially correspond with belief in trickle down vs Keynesian stimulus. Stated even more bluntly, it is essentially whether you believe customers or assets are most important for business. It is why the current path begins to resemble 1929 where consumer buying power spiraled downward. If the social isolation period ends with millions…

"trickle down" isn't a real thing, it's just a pejorative used against supply side economics, which is a mainstream economic view. The basic account of "trickle-down economics", goes something like this. When you give a tax cut to a rich guy, he uses the money to buy party supplies for a celebratory yacht party. The guy who owns the yacht party supply store sees an influx of cash from rich guys spending their trickle…

For want of an equally familiar term, "trickle down" is all I had. Apologies if it is critical sounding.

The crisis will end with sky high unemployment, no consumer saving but massively increased personal debt. To raise the deficit solely so companies can make twice as many widgets with half the employees would be the worst possible response. And even this assumes supply side policies do what they claim.

Re: Private Equity Wants in on the Bailout? Spare Me

#129

Post by bhupy »

TomMckenny wrote: post #128
bhupy wrote: post #110

Earlier quoted context omitted.

"trickle down" isn't a real thing, it's just a pejorative used against supply side economics, which is a mainstream economic view. The basic account of "trickle-down economics", goes something like this. When you give a tax cut to a rich guy, he uses the money to buy party supplies for a celebratory yacht party. The guy who owns the yacht party supply store sees an influx of cash from rich guys spending their trickle…

For want of an equally familiar term, "trickle down" is all I had. Apologies if it is critical sounding. The crisis will end with sky high unemployment, no consumer saving but massively increased personal debt. To raise the deficit solely so companies can make twice as many widgets with half the employees would be the worst possible response. And even this assumes supply side policies do what they claim.

> The crisis will end with sky high unemployment

Nobody knows this for sure.

At the moment, the official policy of the Federal (and most State) government is forced unemployment: a planned shutdown of the economy. To accommodate this, the CARES act includes $2400/month (on top of State UI) unemployment insurance, and that’s not even including the flat $1200 check. If you live in Minnesota, you’re looking at $5,360/month (!!!). The full state breakdown can be seen here [1]. In every state, the unemployment insurance is higher than the median wage. Businesses know this, and are proactively laying off their employees so that they may collect this benefit, with the intention of hiring them back once the planned shut-down ends. This can only happen if the businesses stay solvent, hence the corporate bridge loans.

[1] https://imgur.com/a/AifRmdD

Re: Private Equity Wants in on the Bailout? Spare Me

#130

Post by [deleted] »

kyuudou wrote: post #105
aliston wrote: post #73

Earlier quoted context omitted.

"Trickle down stimulus" is not an economic theory. It's a criticism of supply side economics, equivalent to calling Keynesian economics "money printer go brrr" stimulus. Arguably, corporate bailouts like we're seeing now ARE a Keynesian stimulus because they're meant to keep businesses afloat while consumer demand has fallen off a cliff so that they can continue to do business (i.e. maintain demand for business input…

> all the debt we've created to fuel these policies will need to be paid back, either explicitly or implicitly through inflation. And if you've been watching prices for staples or the big mac index, prices have already reflected inflation from the last decade's worth of quantitative easing. I left a cushy fed job with a full secret clearance because of the TARP bailout back in 2008 and they are about to do the same t…

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