The question itself isn’t worth considering. Why do we only worry about how we’re going to pay for the things that actually benefit everyone and never the things that benefit billionaires or kill foreigners?
Ask yourself why the conservative economist is so worried about how 15% of the bill is going to be paid for and not the over 50% of the bill that is a handout to the wealthy? You lose as soon as you engage this discussion as anything other than the complete steaming pile of bullshit that it is.
I’m not endorsing our usual tendencies to care more about costs in some contexts and less than others. I would love to cut military spending by like 50%. I would also like to spend more money on various forms of redistribution, universal healthcare, education, research, etc. But I think the argument you’re making is fundamentally fallacious. It doesn’t follow from the fact that we don’t usually ask these questions consistently or about the right kinds of spending that the questions aren’t ever worth considering at all.
It seems reasonable in this situation to have some concern about targeting resources somewhat efficiently. Because we don’t have unlimited resources. It’s also true that if we had been more responsible in the last 4 years we’d probably be in a better fiscal position, e.g. if we hadn’t passed Trump’s tax cuts, expanding military budgets and so on. I’m not arguing that we were right not to have considered the costs of those choices. Your complaints are legitimate as arguments in favor of voting a bunch of people out of power: they consistently do a bad job making those choices. But it’s not so valid as argument against trying to make the best possible decision now.
Bailing out corporations in tough circumstances is fine. Bailing out their owners is not. Thus, to understand the proper policy move, you need to actually pierce through the shorthand conflation of “corporations” with the “capitalist class.” The purpose of a proper bailout is to keep a corporation going and producing. It is not to prop up the balance sheets of the capitalist class.
How can you bail out a corporation without also bailing out its owners? It is very easy: have the government provide cash to the corporation in exchange for corporate equity. The issuance of this new equity dilutes out the existing shareholders, ensuring that those shareholders ultimately eat the losses of the pandemic shock.
Bailouts for equity would help reduce wealth inequality in the country. Based on my own calculations of Financial Accounts data (I, II), the top 10 percent of American households own around 80 percent of corporate equity while the bottom 50 percent owns less than 1.5 percent of it. (This figure includes each household’s share of pension assets that are invested in corporate equities and mutual fund shares.) Diluting out existing shareholders by bringing in the government as an equity holder in bailed-out companies could substantially shrink these differentials. This is especially true if you then place the new equity into a social wealth fund that all Americans own one share of, as I have proposed previously.
Bailouts for equity also pass any kind of reasonable fairness test for three reasons. First, these firms are going to go bankrupt without a government cash infusion. So the incumbent shareholders have, in a sense, already lost their money. Second, eating losses from tail risks is precisely what shareholders sign up to do. This is supposed to be why they deserve an investment return in the first place: because they take on this risk. Third, any other investor would require equity in exchange for the kind of investment the government is being asked to make. There is no reason why the public should be suckers.
Berkshire Hathaway owns almost 72 million shares of Delta Airlines (about 11% of the company). So, is Warren Buffet spending more time/resources trying to shape the nature of the airline bailout or worried about whether he’ll get a $1,200 check? The big corporate bailout $ is going to have much larger distributional impacts than letting Gates, Bezos, Buffet, or even the typical wfh middle manager get a check or two that they don’t need.
It might not be worth worrying about for a one-time $1200 check per person. I don’t know enough to have a strong opinion, but it probably isn’t worth it in that case. But I think that a single $1200 check per person may not be anywhere near enough in this situation, depending on how long this lasts.
My impression is most of the people who disagree with means testing agree with that premise, that we need to do more. The more money we’re talking about distributing, or the greater the length of time for repeated payments, the more it matters. If you’re more efficient you can also send people that need it the most more, potentially much more, money.
In this context it’s not clear to me that talking about Warren Buffett is very useful. I think you’re approaching it like some of the conversations about free tuition, where some people object because they have like a moral objection (not a practical one) to giving money to rich people who don’t need it. But I’m not objecting along those lines. I don’t care if we send Buffett a check or not.
So I literally hate means testing benefits. I think the whole concept is a right wing propaganda device to split the population between those getting benefits and those not getting benefits, which enables you to turn the ones who aren’t getting it against them.
I think every single American should be getting every single benefit the government offers (including cash support/ redistribution payments) at an equal level. Why? Because this makes them much more palatable politically and enables us to make these benefits significantly larger. It’s MUCH harder to talk about welfare queens to middle class people when they get their check as well.
And obviously we should be paying for these massively increased benefits by taxing the wealthy and upper middle class at a significantly higher level. Anyone saying that it’s wrong for the government to cut those people a check as well is being stupid. I want to see Jeff Bezos paying SEVERAL BILLION dollars a year, and in exchange for that yeah we can cut him his monthly citizens check or whatever.
CALPERS has been an absolute disaster for decades. The amount of money they’ve wasted on outside managers is absolutely staggering and their performance has, predictably, been far worse than a simple 60/40 or 80/20 Vanguard Life Strategy fund.
“Give benefits to everyone and tax them back from the wealthy” is roughly the proposal being discussed. Only here it’s narrowly constructed around just this particular stimulus package.
Yeah fuck the cruise lines. Them going out of business is firmly in the ‘pro’ column for Coronavirus. Their environmental impacts are simply nuts. Their labor record is simply nuts. Their very viability depends on a large network of policy errors that we should be looking to fix. Straight up evil is what they are.
Even without knowing all that it seems pretty obvious to me that they are’t something we should be worrying about bailing out. Car manufacturers and airlines are crucial to the function of our economy. Old people riding around on boats with fruity drinks with umbrellas in them… Not so much.
Doing a quick check of the 3 cruise lines’ wikis, the flag part checks out at least. Whether that lets them dodge employment laws I’m not sure but it’s definitely a tax dodge.
The labor law thing is 10000% accurate. If anything it’s understated massively. These guys exist in a regulation free zone when it comes to how they treat their employees and that’s very obvious from their labor practices.
