Why Certain Corporations Get Bailed Out & What You Might Do About it
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With the COVID-19 pandemic and ensuing government-mandated shutdowns of commerce bringing economic activity in many sectors worldwide to a grinding halt, we see adversely affected large corporations seeking what amount to bailouts. Corporate bailouts, of course, occurred during the 2007–2009 crisis and catalyzed public outrage. But perhaps that outrage reflects a misunderstanding about why corporate bailouts occur. I offer one explanation for why they happen and then show how equity capital requirements generally, like those applied to banks (but higher), might work to prevent certain large corporate bankruptcies and bailouts in the first place.
Why Certain Corporations Get Bailed Out & What You Might Do About it
Why Certain Corporations Get Bailed Out …
Why Certain Corporations Get Bailed Out & What You Might Do About it
With the COVID-19 pandemic and ensuing government-mandated shutdowns of commerce bringing economic activity in many sectors worldwide to a grinding halt, we see adversely affected large corporations seeking what amount to bailouts. Corporate bailouts, of course, occurred during the 2007–2009 crisis and catalyzed public outrage. But perhaps that outrage reflects a misunderstanding about why corporate bailouts occur. I offer one explanation for why they happen and then show how equity capital requirements generally, like those applied to banks (but higher), might work to prevent certain large corporate bankruptcies and bailouts in the first place.