So who determines a marginal company from a well run company...and how? Or should the government just shut down all companies for say 4 months with no compensation...and the strong will emerge? Should the government let the airlines die and then be in a big pickle when it tries to open up and there is no travel?
How would you feel if you still owned your company...no pension yet and were forced to shut down without any income for 4 months. You were obviously a marginal company as you went under on your own without a shutdown.
You talk about the people starving...where would these starving people go to work if their "marginal" company goes out of business during the shutdown?
Alan, you seem to complain about everything an awful lot. Rather than complain which is a destructive action...what are your solutions to all these complaints?
The solution is to let free markets work. That's what capitalistic economies are about. The government is not involved. What's happened is that government caused the problem in the first place. By keeping interest rates too low and giving too much money out, they encourage debt and created bubbles. Companies went into business that shouldn’t and bought too much stuff because of cheap debt. Now when there's a turn down, they're in trouble. Also, the government didn't allow the recessions to occur either in 2001 after the dot com boom, after the 2008 housing crisis and now again with coronavirus. The Fed just keeps pumping money in blowing up an inflated bubbles. Recessions are good. They allow the natural forces of economics to wean the sick and marginal companies regularly. We hadn’t allowed that to happen.
If someone gets into trouble with their credit cards, you don't solve their problem by giving them another card. That's what the government has been doing with the economy and recessions.
Regarding companies that are in trouble, let them use bankruptcy law. That’s what they’re for. When they file for bankruptcy, everything freezes including creditor debt. They’re allowed a chance to reorganize. An airline could sell off all the planes they don’t need. Cut staff. Maybe they can join with another airline in trouble and create a single airline rather than two. Airlines had been doing that for years. Where’s TWA? Pan Am? Eastern? Trump Airlines?
They were absorbed by other more profitable airlines. After all, who needs all these airlines? No one’s flying. What’s the point giving them billions and billions to waste with airplanes idle? Additionally, this would make the remaining airlines more successful to get through the crises. The government is creating unnatural competition by supporting losing companies against other companies that could survive if it were not for government helping the less competitive competition. Otherwise you just create zombie corporations where executives are going to give themselves big bonuses before the whole corporation collapses anyway.
