Why Wall Street Gets a Bailout and You Don't | Hacker News Reader

Why Wall Street Gets a Bailout and You Don't

mattstoller.substack.com

53 pointsradkapital29 comments

I wonder if it was ever considered to pay companies / individuals according to their relative tax rate. So an employee would get 30-40% of the baseline, while international companies using offshore trickery get almost nothing.

Otherwise, like the article says, a large part of US stimulus packages will ultimately end up with foreigners or in Panama or other offshore tax havens. And that wouldn't help the US economy much.

This would ensure that among individuals, those who need the stimulus most (people with lower income) would get the least money.

Good point, it seems this doesn't work well for people.

For businesses, I also agree that one would be discriminating against small businesses which were already struggling before corona and, hence, have low profits and as such low taxes.

But if your goal is to revitalize the economy in general, focusing on small businesses that used to be successful, e.g. artisan bakery and independent coffee shops, seems like a good way to spread the money around.

Good point, Trickle up instead of trickle down.

I never could see a use for cryptocurrency outside of black/greymarket transactions.

Now I can see one: a currency that a central bank can't create more of to bail out someone else's incompetence and greed.

Ok, then. I guess you also have a plan to avoid the second great depression? Lots of pain,death and suffering. The higher you climb, the harder you fall. Look at venezuela and imagine astronomically worse.

They should perhaps consider taking criminal action against execs ,create better regulation and permanetly take away equity from these companies but why do people think it's a good idea to let th fail and watch the fire burn as if they won't burn everything you have down with them?

Rewards require risks. Take away the downside and you'll find you've also destroyed the upside. This is everywhere in life, not just in economics.

Yeah, but the causative link doesn't work the other way. Sometimes you can add more downside and get no more upside. My prediction? This stimulus package won't destroy the upside.

This prediction is unverifiable, as you don't know what would have happened in 2, 5, 10 years, if the bailout did not happen.

Ah ha, that's fair. But that is just as well a problem with the original assertion. So I suppose I'm happy to listen to the prediction as to which upsides are about to be destroyed and then perhaps pick a position opposite it that's verifiable.

No, just socialize all risks and privatize all profits.

That’s the New American Way. All upside, no downside.

But only for Wallstreet and big companies that can buy all the best politicians.

Cryptocurrency doesn’t solve the problem that the stimulus purportedly does, though: giving emergency money to people who have suddenly lost most or all of their income. The problem with the stimulus isn’t the extra money itself — it’s that it’s not going to the people who need it.

$2T has already been deployed by the Fed to buy assets from banks and other financial institutions at prices that do not reflect their market value.

Small businesses and average Americans have received and will receive so little in comparison that to say we're helping people in need is only correct if the people you're imagining are JP Dimon and friends.

Except a currency that has no oversight from something like a central bank is explicitly tailored to greedy actions like pump and dumps and other malicious trading moves that rely on others incompetence

Interestingly enough, that is the use case spelled out in the very first Bitcoin block:

> The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

This pandemic will amplify the wealth inequality drastically. The poor will lose their jobs and houses, while the mega rich will find a way to tap into those trillion dollar stimulus funds.

I don’t understand why Congress wouldn’t pass a simpler, $1000 to every person with SSN and address in file + $500/dependent.

It would have been faster to process and get that money out. It would save people from losing their homes and put food on the table. IRS still hasn’t started sending those checks out and so many people will still miss out. IRS is the most effective institution that could aid millions of people in a short time.

I just don’t get why America is so afraid of being a bit socialist ? Wouldn’t this save the people & economy in the long term?

Technically I think neither way* would be more socialist than the other; the socialism part happened when the government took the money in as taxes/created the money. Socialism is in how the government and property rights interact.

Regardless; blanket handouts to everyone would be a much better choice than giving more money to the wealthy.

EDIT No, actually on reflection the bulk handouts would be more socialist; but this is bringing out the 30cm measuring stick to see which skyscraper is bigger. Government is handing out other people's money.

>I just don’t get why America is so afraid of being a bit socialist ?

Because like you pointed out, since they're that shitty at doing something like giving away money, they'd be even worse at more complicated things.

It's best to just let them do as little as necessary.

Your comment is basically, "god, the government sucks so hard, let's let them suck hard in more areas of our life!"

Baked into this line of reasoning is the assumption that the government is some kind of linear(ish), static system that monotonically increases the amount of fuck-ups with the amount of responsibly it is given. This is the same kind of gross simplification that pretends that people are "rational agents" that "maximize their utility". Let's grow up, shall we?

The problem is that there is a huge incentive-incompatibility problem at all levels of government. It is a structural problem inherent to system thereof and is the source of the inefficiency issues. It cannot be avoided by piling on more incentive-incompatibility. You cannot fix a flaw by adding more flaw. This is why they fuck up so much from your local DMV to the federal $2 trillion stimulus program.

And the entire banking system in 2008 wasn't built on a pyramid of f-ups?

What about the US healthcare system? Cable TV / internet? Or the rail network in the UK?

I'd argue that commercial systems have a stronger systemic problem which leads to inefficiencies on a larger scale than governments.

We only really see good results when we combine markets with strong government involvements to keep them fair; and that is extremely hard to get right because of regulatory capture.

After 40 years of being managed mostly by people whose ideology requires the government to be failing, the American government isn’t very good at many things. This isn’t a surprising outcome.

US is Great at all things, unfortunately the self-sabotage need to stop please.

Elizabeth Warren suggested increasing payouts to anyone who gets a social security or disability payment since the federal government is already setup to make payments regularly to those people, and since the vast majority of them will spend the money.

Yeah you ought to see how it's being rolled out in Canada.

In Ontario I filled out an incredibly short web form (address, name, child's name, bank account). And in turn they wire $200 per child into my account to buy them learning supplies. There are no financial restrictions. They just want to get the money out. I'm sure I'll pay for it later with all the tax I pay. Still proud of it. Socialism shines during crisis.

Canada is pretty dope country. Would deffo move there if real estate prices weren’t insane.

If Trump gets re-elected, I’ll have to evaluate whether I want to spend my life in US.

What does it have to do with socialism?

Article is terrible.

First, these are short-term loans, with forgiveness being discussed for small businesses (not for Wall Street).

Second, there is money going out to individuals, so the "you don't" part of the title is BS. https://www.cnn.com/2020/04/01/politics/stimulus-money-distr...

Like does this guy even read the news? What is going on?

You say the article is terrible but your problems deal just with the title. The article acknowledges the things you say it doesn’t.

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