sturg33
I
Perhaps they should be quite angry with politicians who have mandated that they must?
Economics Thread
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Perhaps they should be quite angry with politicians who have mandated that they must?
nsacpi
Expects Yuge Games
why
acesfull86
Well-known member
https://www.mercatus.org/publications/corporate-welfare/economic-case-against-second-airline-payroll-bailout
Do the Math: Bailout Number Two Isn’t about Workers
First, it is worth noting that in spite of the first bailout, the largest carriers have already separated from 30 percent of their nonunion staff. This new bailout will do nothing to bring these jobs back and, therefore, isn’t about preserving old employment levels.
Second, if 35,000 US commercial airline jobs are indeed at risk, then a bailout of $25 billion works out to about $715,000 per job saved for six months, an annualized run rate of over $1.4 million per airline job.
Third, the math does not support a claim that the bailout is about job support. If one were to assume that the 35,000 workers have annualized salaries of $100,000, then supporting their wages for six months would require only $1.75 billion, not $25 billion. In other words, the airlines are demanding more than 10 times more than is necessary to support 35,000 employees.
Furthermore, as mentioned, Southwest Airlines has announced that it won’t be furloughing any employees, at least through the end of the year. However, under this second bailout, that airline would receive another $3.3 billion.
The only significant commercial airline furloughs are coming from American Airlines (19,000) and United Airlines (13,000). These carriers are the two largest and the weakest financially, which was true even before the pandemic. Credit default swap markets have indicated that American Airlines is at an elevated risk of default on its unsecured debt. Now, therefore, is the time for American Airlines to address its long-term issue, rather than delay the inevitable with a bailout that won’t change its overall situation or resolve the need to restructure.
Do the Math: Bailout Number Two Isn’t about Workers
First, it is worth noting that in spite of the first bailout, the largest carriers have already separated from 30 percent of their nonunion staff. This new bailout will do nothing to bring these jobs back and, therefore, isn’t about preserving old employment levels.
Second, if 35,000 US commercial airline jobs are indeed at risk, then a bailout of $25 billion works out to about $715,000 per job saved for six months, an annualized run rate of over $1.4 million per airline job.
Third, the math does not support a claim that the bailout is about job support. If one were to assume that the 35,000 workers have annualized salaries of $100,000, then supporting their wages for six months would require only $1.75 billion, not $25 billion. In other words, the airlines are demanding more than 10 times more than is necessary to support 35,000 employees.
Furthermore, as mentioned, Southwest Airlines has announced that it won’t be furloughing any employees, at least through the end of the year. However, under this second bailout, that airline would receive another $3.3 billion.
The only significant commercial airline furloughs are coming from American Airlines (19,000) and United Airlines (13,000). These carriers are the two largest and the weakest financially, which was true even before the pandemic. Credit default swap markets have indicated that American Airlines is at an elevated risk of default on its unsecured debt. Now, therefore, is the time for American Airlines to address its long-term issue, rather than delay the inevitable with a bailout that won’t change its overall situation or resolve the need to restructure.
sturg33
I
We've been in socialism for a while.
It seems the market is excited about the prospect of a D/D/D branch of government as that will turn on the free money supply for years. The rich get richer on Wall Street.
Socialism always favors the elites
acesfull86
Well-known member
https://www.washingtonpost.com/opinions/socialism-is-no-longer-just-a-specter/2020/10/22/dd3453c2-14a4-11eb-ad6f-36c93e6e94fb_story.html
In 1946, after financing four years of global warfare, the national debt was 106 percent of GDP. After nine months of spending to counter covid-19’s impact on the economy — spending soon to be increased by additional trillions — the debt is about 100 percent of GDP, heading (according to the Congressional Budget Office) to almost 200 percent by 2050. And the Federal Reserve has, Eberstadt says, “crossed a Rubicon.”
Wading waist-deep into political policies, the Fed is adopting, Eberstadt says, “the role of managing and even micromanaging the American economy through credit allocation, potentially lending vast sums not only to financial institutions but also directly to firms it judges suitable for government support. The Fed already dominates the markets for U.S. Treasury debt and mortgage debt as a result of previous, lesser crises. It is by no means inconceivable that the current crisis will propel it to a comparably dominant position in domestic commercial credit.” If socialism is government allocation of economic resources (and hence of opportunity), then . . .
John Cochrane of Stanford’s Hoover Institution, who blogs as the Grumpy Economist, notes that in the 2008 financial crisis, the Federal Reserve launched “creditor bailouts, propping up asset prices to keep investors from losing money, buying unprecedented assets.” The risk of moral hazard — incentives for reckless behavior — is obvious.
Today, counter-covid-19 spending already is approximately five times larger than that triggered by the Great Recession of 2008. By 2020, Cochrane says, “once again a huge vat of debt had built up; once again, nobody kept any cash around for bad times, once again, the government stepped in and offered an enormous put option, just as, arguably everyone expected.” The Fed has propped up the prices of corporate and municipal bonds, and bailed out airlines, “or rather airline bondholders.”
“This time, however,” Cochrane writes, “I don’t even hear the promise to clean up the moral hazard. We are, apparently, permanently in a financial system in which people should load up on debt and risky assets in good times, and the government will buy them up should prices ever waver. Private gain, public loss.” Central banks buying trillions of assets are thereby “allocating credit.” Which is the essence of socialism. The Fed buying government and corporate debt creates something difficult to unwind — what Cochrane calls “an entirely government-run financial system”: an attribute of socialism.
“Modern monetary theory,” which Democrats praise and hope soon to practice, and which Republicans have been practicing without acknowledging, says: A nation with fiat money (not convertible into something — e.g., gold — valuable, but accepted by the public as a store of value) need never run short of money. It can borrow and create money as long as interest rates are, and are apt to remain, low. A theory that validates wishful thinking will not lack devotees.
Near-zero interest rates — the no-longer-new normal — create, Eberstadt says, “zombie companies” that “can only survive in a low-interest [rate] environment.” The result is rent-seeking and economic sclerosis, because “America cannot succeed unless a lot of its firms fail — including its largest ones. Bankruptcy and reallocation of resources to more productive ends are the mother’s milk of dynamic growth.”
The pandemic has propelled government toward promiscuously picking economic winners and losers. As has been said, governments are not good at picking winners, but losers are good at picking governments.
In 1946, after financing four years of global warfare, the national debt was 106 percent of GDP. After nine months of spending to counter covid-19’s impact on the economy — spending soon to be increased by additional trillions — the debt is about 100 percent of GDP, heading (according to the Congressional Budget Office) to almost 200 percent by 2050. And the Federal Reserve has, Eberstadt says, “crossed a Rubicon.”
Wading waist-deep into political policies, the Fed is adopting, Eberstadt says, “the role of managing and even micromanaging the American economy through credit allocation, potentially lending vast sums not only to financial institutions but also directly to firms it judges suitable for government support. The Fed already dominates the markets for U.S. Treasury debt and mortgage debt as a result of previous, lesser crises. It is by no means inconceivable that the current crisis will propel it to a comparably dominant position in domestic commercial credit.” If socialism is government allocation of economic resources (and hence of opportunity), then . . .
John Cochrane of Stanford’s Hoover Institution, who blogs as the Grumpy Economist, notes that in the 2008 financial crisis, the Federal Reserve launched “creditor bailouts, propping up asset prices to keep investors from losing money, buying unprecedented assets.” The risk of moral hazard — incentives for reckless behavior — is obvious.
Today, counter-covid-19 spending already is approximately five times larger than that triggered by the Great Recession of 2008. By 2020, Cochrane says, “once again a huge vat of debt had built up; once again, nobody kept any cash around for bad times, once again, the government stepped in and offered an enormous put option, just as, arguably everyone expected.” The Fed has propped up the prices of corporate and municipal bonds, and bailed out airlines, “or rather airline bondholders.”
“This time, however,” Cochrane writes, “I don’t even hear the promise to clean up the moral hazard. We are, apparently, permanently in a financial system in which people should load up on debt and risky assets in good times, and the government will buy them up should prices ever waver. Private gain, public loss.” Central banks buying trillions of assets are thereby “allocating credit.” Which is the essence of socialism. The Fed buying government and corporate debt creates something difficult to unwind — what Cochrane calls “an entirely government-run financial system”: an attribute of socialism.
“Modern monetary theory,” which Democrats praise and hope soon to practice, and which Republicans have been practicing without acknowledging, says: A nation with fiat money (not convertible into something — e.g., gold — valuable, but accepted by the public as a store of value) need never run short of money. It can borrow and create money as long as interest rates are, and are apt to remain, low. A theory that validates wishful thinking will not lack devotees.
Near-zero interest rates — the no-longer-new normal — create, Eberstadt says, “zombie companies” that “can only survive in a low-interest [rate] environment.” The result is rent-seeking and economic sclerosis, because “America cannot succeed unless a lot of its firms fail — including its largest ones. Bankruptcy and reallocation of resources to more productive ends are the mother’s milk of dynamic growth.”
The pandemic has propelled government toward promiscuously picking economic winners and losers. As has been said, governments are not good at picking winners, but losers are good at picking governments.
cajunrevenge
Well-known member
Obama's last 4 years stock market increased 45%
Trumps first 4 years stock market increased 44% as of Friday
Obama's last 4 years unemployment decreased 3%
Trumps first 4 years unemployment decreased 1% BEFORE the Trump virus
Obama's last 4 years employment grew by more than 10 million or 7.4%
Trumps first 4 years employment grew by 7 million or 4.7% through February
Obama last 4 years averaged 210,000 jobs added per month
Trumps first 4 years averaged 180,000 jobs added per month through February
To date there are 4 million less employed people than when Trump took office
Obama Left office with 4.5% unemployment
Trump is about to leave office with about unemployment almost 8%
Barring a miracle Trump is about to go down as the worst economic President since Herbert Hoover. I cant even remember the last President who left office with less people employed than when he took over.
Trumps first 4 years stock market increased 44% as of Friday
Obama's last 4 years unemployment decreased 3%
Trumps first 4 years unemployment decreased 1% BEFORE the Trump virus
Obama's last 4 years employment grew by more than 10 million or 7.4%
Trumps first 4 years employment grew by 7 million or 4.7% through February
Obama last 4 years averaged 210,000 jobs added per month
Trumps first 4 years averaged 180,000 jobs added per month through February
To date there are 4 million less employed people than when Trump took office
Obama Left office with 4.5% unemployment
Trump is about to leave office with about unemployment almost 8%
Barring a miracle Trump is about to go down as the worst economic President since Herbert Hoover. I cant even remember the last President who left office with less people employed than when he took over.
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cajunrevenge
Well-known member
Such a nasty comment, so biased against me, no ones ever been treated worse than you treat me and you know that, such a nasty person.
msstate7
Well-known member
I think most that aren't hacks will recognize COVID had a lot to do with your stats. Perhaps MJ has affected your short term memory (last 6 months or so).
GDP with a great report today...
sturg33
I
Nah man.
Trump didnt shut down the country fast enough... So he is responsible for every death.
Oh and also, the shut down economy is Trumps fault so he responsible for high unemployment!!
acesfull86
Well-known member
Heads I win, tails you lose
Runnin
Well-known member
msstate7
Well-known member
Wait, so you think this wasn't good news?
Tapate50
Well-known member
Its hard to tell when he's being serious or not. Some of his claims are so out there that you can't tell when he invokes hyperbole or not.
cajunrevenge
Well-known member
He didnt insist on having any independent person in China so we knew what was really happening. Instead he kissed Xi's butt and assured us he had it under control. When/if Xi refused he should have cut travel from China or anyone who had recently been to China. This would have been early January if it happened. He could have addressed the American people and asked people to come together and wear masks to protect each other but instead he spread conspiracy theories and it encouraged the crazies and divided people. He could have used short term lockdowns in hot spots. We lagged behind other countries in testing in the most critical early stages. There was literally a playbook for this legt to him by competent people that he threw out the window because it was made under Obama. Every other President since 1918 has dealt with these pandemics without it getting this bad. We used to be a world leader on this stuff. You can point to the rest of the world but with as central as the US is to the world I wonder if it would be so bad there if we had it under control here.
Yeah. I think Cajun has missed the whole trade war with China over the past year, the fact that the WHO covered up the virus and he thinks an American would be able to move freely throughout China and get truthful answers in regards to how the virus started?