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Comment by capdeck | Hacker News Reader

What I saw today driving through the neighboring small town - half of the main street shops and restaurants are closed. Not just temporarily, but the space is empty and there is a big "for rent" sign in the window. I've been going to some of those restaurants for decades - and now they are all but a memory.

It is not enough to give corporations money for payroll - in NY large part of the cost of running business is the space itself. Also I don't understand all these "lending" programs - all they do is defer an even larger payment for later - most of the businesses will not be able to repay that if they have been closed for months. You are basically taking a loan to pay the rent so you can go bankrupt later. Doesn't make any sense.

I don't know what to do but we need to give money and healthcare to people independent of work. Let businesses fail (big and small) and rebuild new ones once this blows over. Corporations will only buy back stocks and and line shareholders' pockets with dividends. Single digit percentage points of the stimulus money will reach employees.

Bankruptcies aren't that bad - usually companies are not dissolved, but go through restructuring and gain a new management team (which one, knowing there is no bailout in the future, will plan better for emergencies like this one).

What we are doing now is perpetuating corporate negligence that will now factor in 100% government bailout and run on even thinner margins and bigger stock price growth and dividends for the shareholders.

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Driving downtown is apocalyptic, huh. Like nothing else. Feels like end of days.

I will partially defend PPP here: the money is forgiven if "loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs." So it's more of a stipulated grant than a loan. As it should be.

The failure of PPP is administrative. Congress authorized this much money: who gets it? The Small Business Administration was supposed to administer it, but they are not equipped to do so, so they delegated it to banks, which favored businesses with existing banking relationships. That's a stupid way to distribute a stupidly-small pot of money.

I agree with "give money and healthcare to people independent of work" to the extent that this crisis continues. Congress should authorize enormous monies, and the Fed should commit to back it, until the infection rate declines to manageable levels. We can pay for it now or pay more for it later.

I do not agree that "bankruptcies aren't that bad." I do not want my hometown's businesses to be "restructured." After this crisis, we will have an economy that is massively distorted towards delivery. Amazon is going to come out of this so much stronger than my neighborhood grocery store - but there was never a problem with that grocery store.

"Corporate negligence" is a real issue: some authorized money may go to paying dividends, or executive bonuses, or other garbage, even while they impose layoffs. But if you impose oversight, you delay help to firms that really need it. One thing you can do is post-facto oversight: don't block spending, but let the American people know where the money was spent. And the CARES act sets that up pretty well.

The forced economic shutdown has decimated the entrepreneurial class in the US, particularly small businesses, I anecdotally know of many (non-tech) examples in my own circle of friends.

The jobs they created will not come back for the foreseeable future in many cases. It isn’t like they can just reboot with a clean slate, much of their capital was destroyed in the process. For a lot of businesses, “pausing” them is a death sentence, and there won’t be nearly as many people stepping up to replace them.

> there won’t be nearly as many people stepping up to replace them.

Strongly disagree with the last point. If there is one lesson that I remember from the history of US -- entrepreneurial spirit is the reason this country exists in the first place. My only worry is that Google, Amazon and Facebook will use this time for huge land grabs in all niches.

Many stores that closed have already been on their last legs. And in the digital realm there can only be one winner (try beating Amazon at online sales or Google in search...) So you are right in the sense that it will be even harder for many people to step up against the tech giants - but this is a whole different issue.

Sorry, but that is a naive view. If you destroy the life savings of half the people that had the courage and interest to start a business, you’ve removed them from the game. You can’t start a business with no money. Do you really believe in this environment that millions of people will suddenly have the newfound urge to invest all of their (depleted) life savings in a small business? Many of the businesses that closed were profitable businesses in every sense. The government essentially outlawed most small businesses but left the business owners holding all the liabilities of their business. Few small business owners are wealthy enough to eat that kind of loss.

Imagine if the government unilaterally destroyed your house but left you with the mortgage. What are the odds that you can buy another house at that point? Pretty slim I’d say.

This assumes there's a choice. If there's no jobs to be had, then the choice is "sell stuff or starve".

Not all small businesses need capital to start. And a lot that did start with capital didn't really need to (I've seen so many people rent an office as their first move, for a business they could easily run from home).

To use your analogy: imagine if the government wrecked your house, but left you with the mortgage. You can't move anywhere, can't buy another place, can't rent anywhere. You'll have to rebuild from the rubble.

So what you’re essentially saying is that it’s small businesses that should be paying for COVID-19?

Nobody should be paying for COVID-19, but everyone will be. I don't think there's any amount of financial magic or government support that can rescue small businesses from an indefinite loss of all their revenue.

Sure, that would make an inspiring Hollywood movie.

But in real world terms, it just sounds like a large number of Uber drivers.

"You'll have to rebuild from the rubble."

This terrifies people more than anything...and the more entitled someone is, the more they fear it.

You are the one that is naive. I will translate.

You want to keep kicking the can down the road, so that someone that isn't you will hold the bag. Because someone will hold the bag for all this, and it isn't fair. So? Life isn't fair. Pandemics happen, and the government can't possibly bail out everyone.

He's right. Add a UBI and nationalize healthcare. It's not complicated; the elites just don't want it. The ones like you.

Perhaps you can translate for me too, because I read the reply and agreed that the risk appetite for new small business owners might not be as robust given the current set of rules, which is what the commenter was saying. At least that's my interpretation. You seem to see something else in this comment.

As a result I have some clarification questions... How do they want to "keep kicking the can down the road" exactly? Your comment about the government not being able to bail out everyone only serves to reinforce the point about the risk of starting a small business.

What do you mean by "He's right"? He's right that people will line up to start new businesses and put their diminished life savings on the line after what's transpired?

Then you flippantly say "Add UBI and nationalized healthcare", as if it's just something you add to a shopping cart and "it's not complicated". So it sounds like you assume these features as part of the assumption that people will flock to starting businesses. That's not part of the discussion at all, but it's an interesting point to discuss whether that would spur the activity. It very well might as it's the "social safety net" one would need to have more confidence.

About the only thing you said that resonated with me is "the elites just don't want it". Given the growing wealth disparity and the relative flat to down real income of the average American in the last 40 years I'd say that's a fair statement.

Your final statement comes out of nowhere as you lump the commenter into this group of elites when all they were saying is "hey man, I'm not so sure people will be lining up to risk their life savings to start a small business".

Care to try again with a gentler, more constructive tone and explain how the commenter, and by extension myself, are naive with the summarized viewpoint I stated at the outset?

It's not an opinion. I'm an engineer who also trained as an economist, and I know the answers to these questions. It's just math.

It's all about the money supply. The elite want to bail out because it inflates the money supply.

You can bail in instead of bail out. Bankruptcies happen and equity holders lose, but the problem is that bankruptices reduce the money supply. Money effectively disappears when debt is restructured.

The problem we now face is that equity holders today have decided that bail outs are necessary politically. Equity is the most speculative ownership of productive capacity, but you wouldn't guess it with the way it's discussed. Wouldn't you expect that that kind of security to lose value in an unforeseen circumstance like this? The system eventually doesn't function if the government hamfistedly tries to alter price discovery to such an extent that markets stop working. That's where we are today.

So bail in. Give everyone free money. I give you an ID number and a bank account number, and I receive cash every month. That's a hell of lot simpler. Nationalize healthcare. Wouldn't a nationalized system be simpler? The lines of code per person have to be higher in a country with fifty different systems. It will cause inflation, but we don't really have a choice.

Sorry if my tone is a bit flippant, but someone has to argue for sanity here. The United States is going down a dark path in nationalizing so many USD assets. Somebody has to try to explain why.

> It's not an opinion. I'm an engineer who also trained as an economist, and I know the answers to these questions. It's just math.

Considering how many economists seem to disagree on what the proper response here is, I highly doubt it's just math.

And regarding nationalizing healthcare... That's a whole truck full of worms, and seems unrelated to an economic recovery. Couldn't you also argue that seeing the government nationalize an entire industry would decrease entrepreneurial spirit in other industries in fear of the same thing happening there?

I'm not an academic that likes to write up econometric models with 40 years of data to make myself feel smart, so I am not so ignorant to reality.

It really is just math. Every dollar we waste today on unproductive capacities is a dollar that your children will never have.

"I'm not an academic and have real world experience, therefore I'm right"

I don't think it works like that.

In a time where economists have a lot of soul searching to do, the realists are a good place to start.

> In a time where economists have a lot of soul searching to do

This might be true, but I don't know that there's been an obviously wrong set of recommendations yet during the coronavirus crisis. Do you have an example?

> the realists are a good place to start

This is almost certainly false - at least if you're including yourself in "realists". Personally, I'd look at the heretical economists first.

> It's just math.

You seem to be missing a lot of other points from your analysis.

> The elite want to bail out because it inflates the money supply...The problem we now face is that equity holders today have decided that bail outs are necessary politically.

Let's check the numbers. Collective wealth of all the billionaires in the entire world is 8.6-8.7T USD [1]. Collective retirement and pension assets in just the US is 19.1T USD [2]. So it seems that commoners, relying on the retirement and pension assets, would benefit much more from a stock market recovery than the elites.

> Nationalize healthcare. Wouldn't a nationalized system be simpler?

Maybe yes, maybe not? UK / France / Italy / Germany / Spain all have public healthcare and have ~320M people between them, roughly the same as the US. And yet, their COVID-19 deaths are ~100K vs ~55K for the US when both the continents had fairly similar advanced warnings. Why is this simpler (and presumably better, from your tone) system producing a far worse outcome?

[1] https://en.wikipedia.org/wiki/Billionaire#Statistics [2] https://en.wikipedia.org/wiki/Pension_fund#United_States

> Let's check the numbers. Collective wealth of all the billionaires in the entire world is 8.6-8.7T USD [1]. Collective retirement and pension assets in just the US is 19.1T USD [2]. So it seems that commoners, relying on the retirement and pension assets, would benefit much more from a stock market recovery than the elites.

Pensions are not equity. Pensions also usually fall very high on the cap table, saving them from restructuring in bankruptcy.

> Maybe yes, maybe not? UK / France / Italy / Germany / Spain all have public healthcare and have ~320M people between them, roughly the same as the US. And yet, their COVID-19 deaths are ~100K vs ~55K for the US when both the continents had fairly similar advanced warnings. Why is this simpler (and presumably better, from your tone) system producing a far worse outcome?

That's not really how pandemics work for one; the Milan fashion show arguably killed tens of thousands of people as a superspreading event. The US healthcare system is terrible, whichever way you slice it (cost, infant mortality, outcomes).

> Pensions are not equity. Pensions also usually fall very high on the cap table

I am talking about pension funds which have to invest their money in something, with public stock market being an obvious choice for such investments.

I'm not sure what you are going on about, you read far more into my post than I actually wrote. No policy action was promoted or implied.

My point is that the assumption that most small business owners will be able to reboot their businesses when the economic shutdown ends is almost certainly not true due to the mass destruction of their working capital. No one said anything about fairness or bailing them out, just about the unrealistic expectation that these people will be able to start new businesses, so that life will go back to normal for their customers, or that millions of people that have never run a small business will have a sudden desire to fill that gap. Many jobs will be disappearing as a result.

Another poster suggested what is likely to happen and I already see the wheels turning in my city: cash-rich investors/companies will swoop in to pick the carcasses of dead or distressed small businesses, acquiring the assets of the best ones at a steep discount to what would have been required pre-shutdown. That is a poor outcome for small business owners and will change their risk calculus going forward.

"You can’t start a business with no money."

Yes it costs maybe a couple hundred dollars to legally start a business. So you are correct in the most literal sense, that it does take some $ to start!

But if you have a mindset that it takes anything more than that, I'm here to tell you from firsthand experience that you're wrong :/

The odds of being able to buy another house are far higher if I had the money to pay off the first mortgage. The government literally and figuratively prints money. In trying to avoid as deep a global recession as we are headed into, it seems the government could use this ability in some fashion to help those who's houses have been destroyed, to buy another house.

> My only worry is that Google, Amazon and Facebook will use this time for huge land grabs in all niches.

That is exactly what I was thinking of while reading the grandparent comment: that one of the worst things to fear from this crisis, is coming out of it into a world with further consolidation of global power into a handful of entities, and even more authoritarian governments.

The pieces are already being put into place, like contact tracing APIs, however well-intentioned they may be.

The stratification between the rulers (who can already still go anywhere and comfortably wait out a global crisis on private estates or islands) and the ruled, the monitors and the monitored, could end up being worse than any fictional dystopia.

> like contact tracing APIs, however well-intentioned they may be

I share many of the concerns you've expressed, but worrying about the contract tracing API that was recently put forward is (hopefully) unwarranted. A faithful implementation of the joint spec published by Apple and Google would preserve your anonymity until and unless you published your secret keys. Moreover, the overall design is cryptographically sound (unless I missed something recently?) and appears to be decentralized (at least in principle) so in theory you won't have to trust the behavior of any binary blobs unless you choose to do so.

For more insight into the design (and security) of such systems, you might take a look at the TCN protocol (https://github.com/TCNCoalition/TCN) or the DP-3T protocol (https://github.com/DP-3T/documents).

Let's assume there is no technical way the contact API can be misused. You've still conditioned massive swaths of the population to be electronically tracked, boiling frog and all.

> You've still conditioned massive swaths of the population to be electronically tracked, boiling frog and all.

I don't understand what you mean by tracked here? Until and unless you release your secret keys, the numbers your phone was broadcasting are just random gibberish to anyone other than you.

If you have Bluetooth enabled in the first place, you're already broadcasting a MAC address. Many devices now rotate that specifically to prevent tracking, making it equivalent. In fact the only real differences from your device's MAC are the bit width (tracing numbers are significantly larger) and the fact that tracing numbers are cryptographically derived from an underlying secret.

As far as conditioning massive swaths of the population to be electronically tracked, I'm afraid that ship sailed quite some time ago. Cellphones inherently reveal your (coarse) location in order to operate, modern vehicles carry extensive electronics packages that phone home to the manufacturer, and a seeming majority of people voluntarily upload significant portions of their geotagged lives to various service providers.

I'm about as privacy conscious as you'll find these days, but my only concerns regarding the contract tracing API relate to battery life and the security implications of leaving Bluetooth on all the time (it seems like there's always another zero day being announced).

There is precedent - losing a war. Economies do recover. Germany recovered from being bombed/burned/bankrupted flat in WW2 to become the economic powerhouse of Europe.

Other countries did not recover so well, mainly because they chose more socialist economic polices.

No, it wasn't because of the Marshall Plan. Most of the MP money went to other countries, not Germany.

Unfortunately it took a couple of generations! At a macro level, everything will be fine eventually, you're right. But short term pain regardless.

It took from 1948 or so to the 1960s, less than one generation.

Germany also had the problem of wholesale death of its men of working age. The currency was repudiated. The government at all levels had ceased to function.

But there was also a lot of capital brought in from outside (which isn't quite the same as a money printing spree that happens everywhere at once) and what was left of pre-war financial elite was more concerned with keeping a low profile and pretending that they were on vacation or something like that for that last ten years than with leveraging their power into an even firmer grip. It's a very different situation and those differences could be very meaningful for the outcome.

I don't see any reference to that in things about the German Economic Miracle.

After the 1st world war, Germany was paying crippling amounts of reparations to the winner countries. That wasn't so successful, lead to hyperinflation and the Nazi power grab. So after the 2nd world war you had the Marshall plan, debt forgiveness, and trade integration between the western European countries. This was the basis of the EU pacts that live till now.

I need to ask, what so socialist policies are you suggesting and which countries?

This should give a start:

https://www.britannica.com/topic/socialism/Postwar-socialism

https://thehill.com/opinion/campaign/479355-socialism-ruined...

And for Germany:

https://www.investopedia.com/articles/economics/09/german-ec...

Just to fill in the gaps. Countries in the Russian sphere of influence actually refused the Marshall plan because it would make the commies look bad. And they didn't have nearly as good recovery as Western Europe. So it probably had some effect.

The eastern bloc countries never caught up with any of the western countries. Their economies didn't really get into gear until after the collapse of the USSR.

The strong correlation of postwar prosperity is with how much of a free market was embraced.

It's the same with post-war Japan. They embraced the free market after being burned flat in WW2, and rose to world dominance by the 1980's.

Alternatively, one could argue that postwar prosperity was strongly correlated with friendly diplomatic relations with the US, the only major world power that didn't have its entire industrial capacity reduced to rubble during the war. Saying that the Eastern Bloc countries floundered solely because of a lack of a free market when they were militarily occupied by a disastrously incompetent foreign power sounds like an oversimplification to me.

It was more about central planning, collectivisation of private property, and lack of management (directors where assigned based on politics), than occupation by force. Austria was under soviet occupation till 1955, but they were still lucky to become a free market country afterwards. Romania was occupied till 1958, Hungary from 1956, Czechoslovakia from 1968. Poland and Bulgaria were not occupied after 2nd world war, but their economy was still in shambles.

I think it will be worst for small businesses that have a strong component of physical "means of production" ownership: the means won't go away but they'll be owned by whoever happens to have access to cash at the massively parallel firesale.

Business that have been based on rented property anyways are much easier to restart and landlords of otherwise healthy businesses might lose less long term if they allow skipped rent in the crisis instead of enforcing it now and then go through a lot of idle months from fluctuation due țo a series of failing new tenants.

In the first days of the Italian lockdown I picked up some mentions on international news that they were intending to pause mortgages and rents for the time of the lockdown, shifting some of the economic burden on banks (who'd be far more practical to bail out) and the rentier class. Anyone able to chime in with more details about that? Was it just an announcement that was quickly subdued by well connected landlords? This approach sounds incredibly helpful and practical to me, but I could easily imagine attempts to put it in concrete legal terms to fail miserably.

"The forced economic shutdown has decimated the entrepreneurial class in the US..."

Not all entrepreneurs are "decimated"...many are in a position to prosper :)

Technically, "decimated" denotes the destruction of a minority subset, which is how I was using it. :)

My business is as good as it has ever been, and I do not work in any of the obvious verticals that would benefit from COVID-19, but all evidence suggests my case is an outlier.

That's nuanced yet fair; TIL

"decimated" means to reduce by 1/10th. I doubt that's what you meant here.

>which one, knowing there is no bailout in the future, will plan better for emergencies like this one

The government making your business illegal for multiple months is not an emergency businesses should have expected, or be expected to expect.

>and run on even thinner margins and bigger stock price growth and dividends for the shareholders.

Thinner margins, stock price growth, and dividends for shareholders are all good things that we want more of not less.

It's also bullshit to call financial aid from the government, that's needed because of government action, a bail out. It's compensation.

It is true that current emergency is not the one to be expected. But it is made much worse for the people which depend on everything to come from the employer. If healthcare comes from a "job" - shouldn't the "job" anticipate pandemic in that case? Employers enjoy the benefits of employee's dependency during normal times, but the second things go sideways - they don't want to pay extra to guarantee medical coverage when it is needed the most.

I agree on your second point but this is a flip side of market economy that we have all subscribed to - there are good times and bad. If capitalism is the way to go, then companies that can't survive (for whatever reason) should go under. This pandemic and government decisions affect everyone equally. Lets put our money where our mouth is. Otherwise we should switch to socialism and call it a day.

> It's also bullshit to call financial aid from the government, that's needed because of government action, a bail out.

No it’s not bullshit and it’s because of a pandemic mostly, very little because of government action. The government will make it legal again soon to open your business but many will still need aid for time to come because there will be less demand.

Will we be subsidising empty restaurants, hotels and airplanes for an entire year or more because it is not ‘their fault’?

Probably, because if we don't then we'll face a shortage when demand for those things rebounds.

> Thinner margins, stock price growth, and dividends for shareholders are all good things that we want more of not less.

This isn't a recipe for a robust economy, it's a recipe to enrich the rich. You might want that, but the majority of the population is not benefitting from that. Employees benefit from robust companies who have some money saved up for a rainy day, and from wages that track cost of living. When a majority of workers are impoverished and can't afford a month without income, that's directly related to thinner margins and dividends for shareholders.

Small business failures aren't like tech startups where you can go raise a new VC round next week.

Many people will have their livelihoods and retirements destroyed and can't even restart their existing business, let alone start something brand new. And that's assuming they don't get sick with the coronavirus.

One solution could be some form of mandatory rent holiday, although it might already be too late.

The sensible landlords should not be charging rent to their small business tenants right now. If the lose them all, then their properties will be worth considerably less when the dust settles.

The property values are not going to be affected by any individual landlord, but keeping a reliable tenant may be extremely valuable during the recovery. Getting a good tenant is often difficult, and getting any tenant at all can be near-impossible in a recession.

Some landlords have mortgages to pay too - so in that case "rent holiday" is basically "landlord pays for tenant". But commercial real estate seems to be a different beast. I've witnessed a large amount of commercial property being empty for years at a time (5+) in a fairly expensive area of NY. Commercial landlords in this case probably owned the buildings outright and were in agreement to keep rents high even if it made it longer to find the next tenant. It probably is not like that everywhere, but I was really surprised that half of the building would just sit unoccupied for so long.

My naive understanding is that the empty storefronts offset as a tax loss from a more lucrative line of business from the matrixed holding company that owns the property. The empty storefront on 5th Ave. doesn't matter to the owners because the numbers work out on a spreadsheet.

Losses reduce the taxable income, they are not tax credits. If you're paying a 20% tax rate, you still lose 80% of those losses.

Suspending mortgage payments should be looked at also

They have forebearance of 180 days and you can extend another 180. But this will unwind very badly because it's still due yet the renters and homeowners won't be in a position to pay lump sums. From a Planet Money episode, essentially the mortgage servicers will go bankrupt as they are the only ones that can't defer payments in the flow. You have renters, landlords, banks, mortgage servicers, investors and the federal government guarantees a lot of mortgages. It seems most plausible that homeowners who don't pay will end up with longer mortgages versus a balloon payment they won't be able to handle.

Do you also default on all of the bonds that are backed by mortgages?

The current proposal in Congress reimburses landlords and mortgage holders with taxpayer money subject to stipulations. This proposal is actually much cheaper than the UBI esque one.

I have heard that with commercial space you can take building depreciation costs and write that off as an expense so it might be not as expensive for a landlord to keep the property vacant as you would imagine. Also sometimes as I understand it is new tenant who has to clean up and bring the building up to code to open, and if there is plenty of other properties to lend they might find something with less upfront costs.

Location is everything in cities like NY, especially for businesses that rely on people traffic so few hundred feet closed to rail station might be a lot more expensive so they just wait for tenant that can utilize that.

The landlords have bills of their own. Very few of them own their properties completely (which doesn't make sense anyway with low interest rates).

If you stop rent payments then you must also help landlords and property owners with their mortgage.

That's a false equivalence. Landlords have huge equity advantages that the renters do not.

That said, I agree, we should be deferring mortgages and canceling rents.

Here’s what I don’t get

Everyone is paying downstream until you hit the lenders.

What are the lenders’ costs? What if they pause repayment for 3 months and tack it on to the end of their loans?

Presumably if all the lenders downstream did this, we could really hit pause.

You think the lenders don't have anyone to pay? Many mortgages are packaged up into bonds [1]. Those bond coupon payments are often times what retired people are using for their fixed income to pay their bills.

[1] https://en.wikipedia.org/wiki/Mortgage-backed_security#Marke...

Alright, but didn’t we send those retired people checks?

By the way this is another reason why UBI is good in a crisis. It creates a floor for people to buy food etc. while we suspend rent payments and mortgages for a few months. And with no disincentive to work like we have now.

Anyway... so who do the retired people need to pay when everything is on pause? Social Security and Medicare cover a lot of the basics. If they have investments yielding enough for them to live on, then they have savings that they can use 0.5% of in three months.

Not to mention, the stock market is down, we can pause bond yields for the retirees for a few months also. The only thing I wouldn’t pause is sovereign debt, since we can print money to service it and confidence in that is paramount.

(Another reason why McConnell’s stance on letting states go bankrupt is dangerous. I would have liked to see states and cities have the ability to issue their own complementary currencies.)

That advantage only works at time of sale, and that only happens when there are people around that can buy what is being sold. Houses here were stacked ten high and ten deep for miles with foreclosure signs in front during the last recession; a lot of them stayed that way for a long time.

What's false about it? Equity only exists if they paid into it, and is no different than any other savings.

Is it now unfair that some people have saved more cash than others?

Individual bankruptcies are not bad.

Mass bankruptcies are terrible.

Agreed. Most important thing is to flatten the bankruptcy curve.

Completely agree with the sentiment and view of the situation.

One nitpick, there are two types of bankruptcy for businesses, chapter 7 and chapter 11.

Chapter 11 is for restructuring the business and keep it running, but it's very expensive (around $100k in legal fees in California), and it only really makes sense for businesses that have a decent outlook for the future, so it's mostly an option for mid/big-size businesses.

Chapter 7 implies shutting down a business for good. Assets are liquidated and the business completely terminated. There are also big legal risks for the company owners/officials of starting the same or similar business again after bankruptcy, as they can be accused of fraud (basically mis-using chapter 7 to avoid debt liability to then continue pursuing the same business).

Usually chapter 7 is the only real alternative to small businesses, and given the legal risks, it's unlikely they can come back to life afterwards.

This crisis will be truly devastating for a lot of businesses.

> Bankruptcies aren't that bad - usually companies are not dissolved, but go through restructuring and gain a new management team (which one, knowing there is no bailout in the future, will plan better for emergencies like this one).

That is what i was thinking lately too. We have bankruptcy procedures for a reason, big companies wont disappear they will be restructured and continue to exist and shareholders can decided with their pockets if they want to refinance a certain business. Going back to its intended way that "shareholder value" is a two way street. It cant always be sunny.

Changing the incentive structure would benefit us all.

And probably the best thing to get everything back on track is pumping money through the population and not single big entities.

To be honest, I don't think the president would like the rent to be pardonned, like France is doing.

It's too much loss for his private "business" and of his son in law.

The current proposal in Congress reimburses landlords for their loss. It has stipulations though, such as a 5 year rent freeze.

Congress is housed by the democrats. Then it still has to be approved by the senate + signed by the president I presume.

We'll c

Congress is the House and the Senate combined.

> Not just temporarily, but the space is empty and there is a big "for rent" sign in the window.

That's crazy. I can't imagine much demand for retail space at the moment, so why would a landlord kick out a previously good customer in order to let it go empty.

Once places open back up, nobody is going to be opening new resturants any time soon, so rents will be way down on any new tenant.

> why would a landlord kick out a previously good customer

I don't think they did. If I owned a small restaurant or a book store - having been closed for a month would be devastating in itself. Seeing no light at the end of the tunnel (another month to re-open, and then probably months of very few customers, on top of a crazy unemployment rate) I'd voluntarily cut my losses and settle with landlord to end the lease early. I'd assume that what had happened.

There's no reason to pay rent if your lease expires. My current company has no office because the lease expired in the shutdown. There's no new office lined up, because they don't know when they'll need one.

Yep, governments mistaking a solvency crisis for a liquidity crisis is going to kill lots of businesses that otherwise could’ve survived.

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