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Comment by nodesocket | Hacker News Reader

Without businesses there are no jobs. I don't understand why people are so outraged about small business and corporate stimulas during this crisis. What exactly is their counter plan?

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It's just a continuation of the trickle-down approach that's been concentrating wealth in the US for the past four decades.

The US was founded in large part as a revolt against British crown corporations. And until the mid 1800s, only public-interest corporations were allowed. But once the railroads had bought enough of the government, corporations got human rights, and the US was managed for their benefit.

Almost half of all Americans in the workforce are employed by small businesses. The false dichotomy between the interests of the individual worker and the massive, faceless corporation on the other hand is not tremendously helpful in this context.

How many small business owners are doing stock buybacks?

I don't think anyone taking the money will be doing any stock buybacks

The stimulus package includes guaranteed loans for small businesses.

I have nothing against small businesses, even if they're incorporated. I was a small business, in one of my careers. What I find disgusting is bailing out the wealthy, while barely helping the working class.

I don't know how financialization fits with respect to trick down economics. Particularly consumer financialization. They both seem to accelerate winner-takes-all processes.

I just (re)learned, via Against The Rules podcast, that repealing prohibitions against usury debt was an important deflection point. Here's an apparently good writeup about South Dakota, Citibank, and credit cards:

https://www.pbs.org/wgbh/pages/frontline/shows/credit/more/r...

https://atrpodcast.com

Rather than bailout the corporations, bailout the workers who lost their jobs.

This isn't an argument. It's a bumper sticker.

I don't even understand this rhetoric. You can't 'bailout' workers. You can send workers cash, which the government does, but you also should help businesses, because that's where people go to work in the first place.

I'm not really sure what the purpose of this antagonism is, as if protecting employment isn't in the interest of workers, or as if helping businesses and workers is mutually exclusive.

Where do you think workers spend their money?

We need to stop propping up companies incapable of weathering a rainy day.

This moral hazard madness needs to end.

So do we just keep sending them the same benefits when they can’t find work because the businesses failed?

Cross that bridge if we get to it.

In that scenario the money sent to them still gets spent locally. They’ll still need to pay rent or mortgage, buy groceries, etc etc. They’re not going to sit on it like corporations do.

Corporations reinvest it and create jobs, the better idea would be to bail out companies but ban stock buybacks. You need businesses, or else jobs won’t exists.

People last longer than corporations. The entrepreneurs on this site often create multiple corporations.

Corporations only "reinvest and create jobs" if they have now choice i.e. the only add more waiters if they have too many customers.

TED Talk: Nick Hanauer "Rich people don't create jobs" https://www.youtube.com/watch?v=CKCvf8E7V1g

As you noted, the spend and windfall on buybacks or maybe automation.

https://arstechnica.com/tech-policy/2019/05/att-promised-700...

Scott Galloway on Recode's Pivot podcast made an excellent point:

Government intervention to corporations should only be loans, convertible to equity.

Galloway observes that USA taxpayers actually made money from the 2008-2009 bailouts to corporations.

I'm pretty sure I agree with this policy. I'd like to learn more.

Along with prohibitions on stock buybacks, bonuses for execs, and all the other clever ways people exfiltrate cash from corporations.

When the workers lose their jobs, a portion of them will start new businesses, and some of them will succeed, creating the next uptrend.

That is, unless they're starving and homeless.

The absolutely worst mistake to do is to pay support to large corporations.

The potential downside and risk is that more people become permanently unemployed than entrepreneurs.

What is a company supposed to do with the money currently? Hoarding cash is the only sensible option currently and this doesn't help the economy.

Avoid bankruptcy with the requisite layoff of employees, and / or remain open to rehire employees when people are allowed to work again.

You can freeze all loans temporarily. You can freeze all rents temporarily-- and even if you disagree with it, many, myself included will simply not pay it come April 1st and we will outnumber the police. The government can exchange cash for equity, then instead of selling it back or selling it on the open market, the government can give or sell it directly to the workers over time.

One solution I find interesting is that the government exchange equity for the bailout and hand it over to the American workers.

There is a article about that here:

https://www.peoplespolicyproject.org/2020/03/23/how-to-think...

They could hold onto the equity themselves, which is giving it to all Americans.

I disagree. It would be much worse from the perspective of allowing workers ownership of the means of production. When the government owns something, the people do not

Yes. It seems that innovating accounting technology to be able to diffuse ownership more flexibly across networks can be productive.

My family and friends who lost their jobs or got furloughed can't pay their rent with equity.

When I suggested equity for bailout, I mean the the government would provide cash. Instead of it just being a handout to businesses , they would receive equity in exchange

Is anyone talking about bailouts without equity? I thought that was implied, since it's how they handled the automaker bailout 12 years ago.

But regardless I don't see the efficacy of bailouts for most companies. Besides a few critical businesses like the airlines and Boeing, the money would do very little to help the workers who have been laid off or furloughed. The government needs to pick up that tab directly, or else the cash isn't going to be used for it.

My understanding is that they are talking about "free" bailouts without equity. This article [1] suggests this is the case for the airlines, which would receive a "grant", and small businesses, which would receiving tax credits. It is unclear to me if this is just a mischaracterization by the MSM.

I expect that workers will see very little of the 2 trillion dollar bill. $1000 for an estimated 30 million workers (~10X current numbers) would be about 1.5% of the bailout. 3 months of unemployment for the same would be about 10% of the total.

[1] https://www.cnbc.com/2020/03/25/coronavirus-stimulus-bill-up...

The checks are going to a more like 120 million households (ballpark, haven't checked the BLS), and your unemployment ballpark is 10 million shy of the estimates.

This would be a portion of the plan, not the whole thing.

Well, without workers there are no businesses.

The robots don’t agree with this statement

Try selling them anything.

Robots are hardly pervasive though.

And without businesses there are no wages to pay workers. The problem is that the match between employees and business and the match between customers and business are both very valuable and can take a long time to replace (think about built up institutional knowledge, personal relationships which are how things really get done rather than formal structures, brand trust, etc). So you only really want to break those links if the business isn't viable and there's an economic need to redeploy those resources elsewhere.

You're absolutely right. Those things are important.

While businesses are shuttering down, they are essentially laying off massive amounts of people. Or they simply stop paying wages, or reduce those wages. That's already happening. All the things you mention between parentheses (institutional knowledge, personal relationships,...) are already in the process of being destroyed.

For instance, a significant part of the workforce works through outsourcing, temp contracts or freelancing. So, those contracts are now rapidly getting terminated in order to keep expenses down. Meaning that you get a domino effect.

At the same time, businesses will get a contribution that partly replaces lost income...

> an economic need

The idea of supporting people directly over businesses can be easily motivated: because the underlying motivation is to save lives.

Businesses can be rebuild. Lives can't. The ghoulish statistics media espouse every hour do represent very real people. Friends, family, co-workers,... You could apply calculus and "write off" a part of the population in order to safeguard businesses, but the true cost of dealing with a massive death toll is a collective mental trauma that will have lasting effects for generations to come.

The sad part is that there's not much middle ground. Many will die, many will impoverish. Whatever actions are taken now and over the next months and years, it's damage control.

Yes, agreed. Both businesses and individuals need support, and I think it would be reasonable to tie business support to them keeping their employees on the books.

Companies in SF are still laying off staff.

This money isn't going to bring those people their jobs back, for a while.

So, no... the companies are safer for the near-term, but people who'd rather be working are going to be on unemployment, and probably for a while.

The bailout doesn't really seem to help with that.

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