CNBC anchor flummoxed when investment firm CEO says US shouldn't bail out billionaires

Originally published at: https://boingboing.net/2020/04/10/cnbc-anchor-flummoxed-when-inv.html

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Chamath is MY kind of Billionaire. He gets it.

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But, but the bail outs are the key to making EVEN MORE MONEY!

Bastards.

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I really wish that he had said that getting wiped out is the risk hedge funds signed up for by speculating. It’s their business to handle risk responsibly and allow for even catastrophic failures, so if they’re wiped out, it’s their own fucking fault.

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I like that he points who owns equities — not the workers or families but the big funds. I wish he had gone on to point out that these big companies are not the reason for the economy in the first place, it’s the people on Main Street. Consumers are the real job creators. The CNBC dude might have burst into tears though.

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Money is like shit - if you pile it up it stinks, but if you spread it out it makes things grow”.
– Jimmy Dore

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This is the lie that they tell when things are going well - that they are taking HUGE risks so they “deserve” these giant returns.

The problem is that hedge funds are really only for the rich - you have to be fantastically wealthy to get into these things. So when things go south, presumably these rich people can afford to lose it.

It’s just exposing what a giant lie it all is.

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It’s almost like disgorging as much cash to shareholders as possible is a short-sighted and fragile business strategy.

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At the time I thought the US bailout of the auto industry made sense and it may still, but the airline bailout makes a lot less sense to me. If Jet Blue, Delta, SW, American and United go under, all of their assets will still be there and will be scooped up by private equity at bargain rates and will re-open as soon as demand comes back. It’s funny how hard-core capitalists suddenly want a social(ist) safety net too.

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While you’re right about the assets still existing, I’m not sure either of us want to take a flight on KKR Air.

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He actually did, at the beginning. That was his starting point, but the news face couldn’t process it, responding with, “Why does anyone deserve to be wiped out?!” He could have been more clear in his response that, “Because that’s the way the system is supposed to work.”

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I thought that was actually what he said, at about 1:07 “those are the rules of the game…”

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Whats the point of good corporate governance and fiscal responsibility? The companies that leveraged themselves to the moon, did stock buybacks to hyper-inflate their stock price, live on constant debt instead of good balance sheets are now being bailed out by unlimited QE. Free money to cover your mistakes. Why would anyone run a good business ever again? Just cheat and scheme and get bailed out later.

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It would be easier to have some sympathy for the airline industry if they had not spent the last 10 years doing everything possible to maximize profits by shrinking seat sizes, cutting amenities, adding surcharges for things that used to be part of the ticket price, cutting routes and flights to ensure that planes are always jam packed, radically increasing executive salaries, plowing the windfall from the huge tax cuts back into stock buybacks to further enrich big stockholders and hedge funds, and generally treating the average customers like cattle.

They could have saved some of that money for a rainy day, or used it to make flying a less painful experience, now they want the government (the taxpayers) to bail them out.

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I just rewatched it, and I guess he says that, but not especially clearly in my opinion. He says they deserve to be wiped out for speculating, but doesn’t really make it clear why that is: that they are explicitly claiming to take on the risks.

More or less, but he leaves figuring out what rules he’s talking about to the viewer. It would be nice if he was more explicit that he’s talking about accepting the consequences of taking on risk.

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I’m making money right now!

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Once again, we see that common sense ain’t that common.

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That CNBC anchor just demonstrated he’s no better than the most out-of-his-depth arse-licking courtier who frequented Versailles just prior to the Revolution.

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To wit:

Steve Jobs had plenty of issues and I’m by no means an apologist for him or Apple, but since he came back in ‘98(?), they began squirreling away large amounts of cash so that, in part, they wouldn’t have to face the financial issues they had in the ‘90s again. And yes, a lot of this was about tax avoidance and offshoring, but the core principle was survivability. More than half of Americans live paycheck to paycheck and it’s not because they’re blowing it on avocados or iPhones. Yet we’re expected to prop up poorly managed companies every ten years so that their quarterlies look good to the 15% of the population for whom the market represents more than their retirement fading into the horizon.

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