| From a seperate thread a few days ago: As someone who leans heavily free markets, even I buy the argument that it's not wise to let every airline in the country fail simultaneously, regardless of fault. Here's the thing, there is nothing unfree market about demanding terms for those bailouts, it should be a negotiation, not an ultimatum from the airline industry. So for example, if you enforced all bonuses to be canceled for the next three years and retroactively fined for the last three years, set executive pay at a max of $50k for the next three years (and banned any new stock incentives during that time), fined the executives equal to 125% of capital gains they made on stock incentives, during the stock buyback period, and made all bailouts loans not grants at above market rates, you could ostensibly let them decide how much bailout they wanted without continuing this endless cycle of letting them run at losses knowing the public will foot the bill. And if they don't take it, then let them die. Basically the end result of the bailout has to be drastically net negative over the last 3-5 years for every airline executive for this not to create moral hazard. I think that is achievable. Unfortunately well probably just hand them $50 billion and make poor people pay for it. note: I get the issue that a lot of execs would just walk away. You'd have to think how to structure it to hold them on the hook. It's just an example. |
Executives and wall street like to talk about free markets when they're fucking the public, but when their company loses, that's the last thing they want.
The worst ever was handing the pensions over the xxx (whatever the Gov pension guarantee thing is) because "hey it will let us avert bankruptcy" which would land the pension fund there anyway. It became a way out rather than a safety net.