President Trump: The NEW one and only politics thread

If we need functioning air traffic, supply and demand can determine it for itself.

Let 'em go broke = a bankruptcy. I appreciate the "No need to socialize their failure" talk, but there is no reason for the process to be ANYTHING excepted "privatized," as you call it. Their creditors have a pecking order in which they deserve to be paid back, but since the debt situation is dire, realistically they would be in the position of deciding if they want equity (i.e. to be in the airline business) of if they want to force a a sale ofwhat is there. The airlines would continue to operate through that bankruptcy process, and regardless of who ends up in control of whatever assets are left over when it all settles, demand for airline travel is what creates that "functioning air travel."

What you are describing doesn't socialize the costs, but it puts our government in the position of stealing from the lenders who have a right to the assets. That is an abomination, too.

 

If they let it happen. ... It's not like Boeing (or any of these companies) doesn't have assets. If you lent in a collateralized way, that collateral is yours. If you lent in an unsecured way, get in line. There is a legal pecking order. If by some miracle all the creditors can be paid back and there is something left over, then the owners (equity holders) can keep what is left.

But we went through this in 2009, unfortunately, with the bailouts. It got politicized and what the administration at the time did to GM's creditors flew under the radar screen for most people, but it should have been criminal, because it was government sanctioned and enforced robbery. The government stepped in and forced a debt for equity swap. Which is something that could have happened in an actual bankruptcy. But rather than allowing that equity to go to the creditors based on where they were in the pecking order, and how much debt they were owed, the government stole a very large chunk of that equity, kept most of it for itself and gave the rest to the unions (to buy votes from a large constituent). It was goverment theft.

The reason this is so destructive is that when you set that precedent, you are messing with credit and lending, which in a free market, is vital to a healthy economy. You are telling people NOT to lend money because the government might step in in a crisis and rob you. You are really making your country weaker every time you do this and make it the norm.