Should large corporations which have made huge profits over the last 10 years get another bail out, like 2008 but even with less strings attached in how to use the money?
It is fair to talk about government support (so much for free markets I guess ...) to companies with a large work force which are in dire need of support. A virus is comparable to a natural disaster so there is a good case to be made here. Tourism and economic life are at a minimum right now or completely seized. There are millions of jobs and livelihoods at stake.
However, we also see many medium and particularly small business being hit incredibly hard by the lock down right now much harder than most companies because smaller business are often required to use their savings to get trough weeks if not even months to get trough this time. They often do not have the capacity, knowledge or simply the leverage to negotiate with their landlords and debt holders.
It is also very cynical right now that we see a lot of discussions (like here in Germany) about loans being hand out to smaller business to cover their costs as it simply takes an a very serious issue and pushes it further in to the future. It is expected that many entrepreneurs will file for bankruptcy in the coming weeks and months. But there are still some ideas discussed on how to deal with it and what can and should be done. But it is a difficult situation. Particularly with all the bureaucracy coming with support like social welfare. Particularly when you're an entrepreneur like an artist or free-lancers.
Which brings us back to the large 100-Billion dollar bail outs of which a large number is going to big corporations. Corporations which have made very huge profits over the last few years and used a substantial number of this profit to buy back stocks, handing out bonuses and paying dividends to share holders rather than actually saving up money. It seems like many corporations have not really take the experience from the crash in 2008, preparing for another potential crash of the economy.
So there are several arguments to be made here I guess. One is to let them simply drown. Separate the wheat from the chaff. Those companies that survive, will be better off and have proven to be sturdy. This sounds maybe interesting at the first glance and a large corporation filing for bankruptcy isn't necessarily the end of the world. But then you have the issue of mass unemployment and well some services might be required after all. - To big to fail if you want. But it's an option I guess.
The other one is to simply bail them out again. No questions asked. Pour more and more billions in to the market and the economy. Very similar to 2008. Which is what some propose now. However this is also something that has it's own issues. While money doesn't seem to be much of a question there is the issue of overseight. Just handing out money to large corporations while smaller business owners and people which are laid off right now are struggling is an issue.
Then there is also another option, which we see in Denmark and a few other nations in Europe. Large corporations are only allowed support by the government if they follow certain guidelines. No tax evasion by parking money in tax heavens. No bonuses to managers. No dividends to share holders. If they follow those rules, they can file for government support and eventual bail outs. There are also a few that say companies that want support should guarantee to keep their employees. It seems to be astonishing to some that you have companies which send their workers in to short-time work unemployment benefit while handing out bonuses and paying dividends to their share holders while smaller business do not know how to pay their rent for the next month.
So yeah. Let us see what happens.
It is fair to talk about government support (so much for free markets I guess ...) to companies with a large work force which are in dire need of support. A virus is comparable to a natural disaster so there is a good case to be made here. Tourism and economic life are at a minimum right now or completely seized. There are millions of jobs and livelihoods at stake.
However, we also see many medium and particularly small business being hit incredibly hard by the lock down right now much harder than most companies because smaller business are often required to use their savings to get trough weeks if not even months to get trough this time. They often do not have the capacity, knowledge or simply the leverage to negotiate with their landlords and debt holders.
It is also very cynical right now that we see a lot of discussions (like here in Germany) about loans being hand out to smaller business to cover their costs as it simply takes an a very serious issue and pushes it further in to the future. It is expected that many entrepreneurs will file for bankruptcy in the coming weeks and months. But there are still some ideas discussed on how to deal with it and what can and should be done. But it is a difficult situation. Particularly with all the bureaucracy coming with support like social welfare. Particularly when you're an entrepreneur like an artist or free-lancers.
Which brings us back to the large 100-Billion dollar bail outs of which a large number is going to big corporations. Corporations which have made very huge profits over the last few years and used a substantial number of this profit to buy back stocks, handing out bonuses and paying dividends to share holders rather than actually saving up money. It seems like many corporations have not really take the experience from the crash in 2008, preparing for another potential crash of the economy.
So there are several arguments to be made here I guess. One is to let them simply drown. Separate the wheat from the chaff. Those companies that survive, will be better off and have proven to be sturdy. This sounds maybe interesting at the first glance and a large corporation filing for bankruptcy isn't necessarily the end of the world. But then you have the issue of mass unemployment and well some services might be required after all. - To big to fail if you want. But it's an option I guess.
The other one is to simply bail them out again. No questions asked. Pour more and more billions in to the market and the economy. Very similar to 2008. Which is what some propose now. However this is also something that has it's own issues. While money doesn't seem to be much of a question there is the issue of overseight. Just handing out money to large corporations while smaller business owners and people which are laid off right now are struggling is an issue.
Then there is also another option, which we see in Denmark and a few other nations in Europe. Large corporations are only allowed support by the government if they follow certain guidelines. No tax evasion by parking money in tax heavens. No bonuses to managers. No dividends to share holders. If they follow those rules, they can file for government support and eventual bail outs. There are also a few that say companies that want support should guarantee to keep their employees. It seems to be astonishing to some that you have companies which send their workers in to short-time work unemployment benefit while handing out bonuses and paying dividends to their share holders while smaller business do not know how to pay their rent for the next month.
So yeah. Let us see what happens.
