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Comment by ajsnigrutin | Hacker News Reader

In some indistries, that means thousands of people without work, and hundreds of other companies in the supply chain going bankrupt, and even more people without work. Sometimes it's cheaper to bail out the main company, then to deal with the unemployed, many more bankrupt companies etc.

But some regulation should be put in place... if a CEO fscked up the company so much, it needed government bailout, they don't deserve a bonus, no matter what their contract says. A good system would also be, to turn a bailout into a 'long-term loan' from the government, and have a mandatory percentage of the companies profits go to repaying the 'loan', with some regulation on internal business (to prevent dumping everything to a new, 'clean' company, and letting the old shell fail).

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> In some indistries, that means thousands of people without work, and hundreds of other companies in the supply chain going bankrupt, and even more people without work.

A popular counter-argument is that governments should plan to spend money on unemployment relief for individuals if it looks like a lot of big companies won’t make it. Let companies fail but cushion the blow for people affected.

Unemployment relief is a temporary solution because people are usually single skilled. For example an airplane engineer doesn't easily get a new job in another industry.

Wouldn't former AA employees find jobs in the new company formed by whoever bought up the assets formerly owned by AA? Why would they need to change industries? The need for airlines won't go away.

This is where the criticism against too big to fail comes in. We have a lot of eggs (jobs, contracts) in one basket.

> if a CEO fscked up the company so much, it needed government bailout, they don't deserve a bonus, no matter what their contract says

What the CEO really is, is a marionette for the shareholders. That's why all the CEOs act in the same way and that's why they always get their bonuses. Also they got lots of bonuses in the previous year for running these schemes.

can you explain to me, why we can not regulate the very same companies in the good times then?

In good times, companies work "at capacity" and all the problems are between the owners and the managers. If managers fsck up, the owners will deal with them, or lose their own money. If something fails, people will still excpect those products, other companies will take the workers, etc. (so if you're a pilot, AA goes under, people will still need to travel, so other companies will need more pilots). In the time of crisis (like now), (almost) noone flies, and no company needs pilots (neither their own, nor new employees). In some countries (eg. mine, slovenia), the government has also forbiden flights (and other modes of public transport). In this case, where you have a successful company, and the government says you're not allowed to do your core business, but also not allowed to lay off employees, and they still expect all the taxes, dues and paycheks paid, ...'something' has to be done (either bailouts, or special laws (like here now), where you don't have to pay some government fees, can put workers to "wait for work" (less pay, but still employed), etc.).

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