“Bailouts allow investors to keep all the profits in good times without bearing the losses in bad times. Instead, bailouts impose losses on taxpayers, including those most in danger of losing their paychecks,” over 230 leading economists argue in a letter to Congress regarding the $2 trillion package that’s meant to mitigate the economic impact of the coronavirus outbreak.
Editor’s note: If you are a professor of Economics, Finance or Law and would like to add your name to this open letter, fill this form (for more information on this initiative, contact professor Jonathan Berk, Stanford University: jonathan.b.berk@gmail.com )
Spending taxpayer money to bail out large corporations is a huge mistake. The money should instead be spent on the people who are most affected.
There are many people who live hand to mouth. Many of them will not be paid if they cannot work. These are the people most affected by the shelter in place orders, and they are the ones the government should be helping.
Large corporations point to their employees as the justification for government relief. Workers in small businesses also need help. We should help affected workers directly.
It does not make sense to count on corporations and their bailed-out investors to act as middlemen and pass on this government relief to those who are truly affected.
When you bail out a large corporation, the people you are actually bailing out are the investors in that corporation.
Bailing investors out is grossly unfair. Investors knew when they made their investments that they would have to weather a storm or two.
The potential to earn high returns when the economy is in good shape compensates them for this risk.
Bailouts allow investors to keep all the profits in good times without bearing the losses in bad times. Instead, bailouts impose losses on taxpayers, including those most in danger of losing their paychecks.
Corporate titans looking for government handouts argue that their industries are vital to the economy, and that without a handout they would “fail.”
Bankruptcy for large corporations does not mean liquidation.
Bankruptcy protects the corporation from creditors and allows it to continue operating. It is possible to keep businesses operating without protecting investors from losses. Leaving no investor behind must not be the government’s objective.
Professor Anat Admati, Stanford University
Professor Stefania Albanesi, University of Pittsburgh
Professor Fernando Anjos, NOVA School of Business and Economics
Professor Ian Appel, Boston College
Professor Yasin Arafat, St. John’s University
Professor Salman Arif, University of Minnesota
Professor Scott Ashworth, University of Chicago
Professor Andrew Atkeson, UCLA
Professor Carlos Avenancio-Leon, Indiana University
Professor Rojhat Avsar, Columbia College – Chicago
Professor Lance Bachmeier, Kansas State University
Professor Swati Bhatt, Princeton University
Professor Todd H. Baker, Columbia University
Professor Tor-Erik Bakke, University of Illinois at Chicago
Professor Giacomo Balbinotto Neto, Universidade Federal Do Rio Grandecdo sul – Ufrgs
Professor Mehrsa Baradaran, UC Irvine School of Law
Professor Amir Barnea, HEC Montréal
Professor Richard Berner, NYU Leonard N. Stern School of Business
Professor Matteo Benetton, University of California Berkeley
Professor Jonathan Berk, Stanford University
Professor Jules van Binsbergen, University of Pennsylvania
Professor Alberto Bisin, New York University
Professor George Bittlingmayer, University of Kansas
Professor Andriy Bodnaruk, University of Illinois at Chicago
Professor Martin Boileau, University of Colorado
Nicole M Boyson, Ph.D., Northeastern University
Professor Alice Bonaime, University of Arizona
Professor David C. Brown, University of Arizona
Professor Greg Buchak, Stanford University
Professor Richard S. Carnell, Fordham University
Professor Cassio Cavalli, FGV Direito São Paulo
Professor Stephen G. Cecchetti, Brandeis International Business School
Professor Latika Chaudhary, Naval Postgraduate School
Professor Hui Chen, Massachusetts Institute of Technology
Professor Daniel Cohen, Texas A&M
Professor Lin William Cong, Cornell University
Professor Peter Conti-Brown, The Wharton School of the University of Pennsylvania
Professor John C. Coates, Harvard Law School
Professor J. Anthony Cookson, University of Colorado at Boulder
Professor Jay Cullen, University of York
Professor Da Lin, University of Richmond School of Law
Professor Robert Daines, Stanford University
Professor Peter Dorman, Evergreen State College
Professor Shaun William Davies, University of Colorado – Boulder
Professor Harry DeAngelo, University of Southern California
Professor Bradford DeLong, U.C. Berkeley
Professor George DeMartino, University of Denver
Professor Peter DeMarzo, Stanford University
Professor Andrew L. Detzel, University of Denver
Professor Gerald P. Dwyer, Clemson University
Professor Andrey Ermolov, Fordham University
Professor Isil Erel, Ohio State University
Professor Laura Casares Field, University of Delaware
Professor Andrea Ferrero, University of Oxford
Professor Daniel K. Finn, St. John’s University and the College of St. Benedict
Professor Michael Fishman, Northwestern University
Professor Vincy Fon, George Washington University
Professor Gigi Foster, University of New South Wales
Professor Anders Fremstad, Colorado State University
Professor Nicola Fusari, The Johns Hopkins Carey Business School
Professor Emily Gallagher, University of Colorado
Professor Mike Gallmeyer, University of Virginia
Professor Rohan Ganduri, Emory University
Professor Lorenzo Garbo, University of Redlands
Professor Matteo Gatti, Rutgers Law School
Professor Anna Gelpern, Georgetown University
Professor Fabio Ghironi, University of Washington
Professor Eric Ghysels, University of North Carolina Chapel Hill
Professor Alicia Girón, UNAM-MEXICO
Professor Thomas Gilbert, University of Washington
Professor Itay Goldstein, University of Pennsylvania
Professor Alexander Gorbenko, University of Southern California
Professor Pierre-Olivier Gourinchas, UC Berkeley
Professor Ilene Grabel, University of Denver
Professor Clinton A. Greene, University of Missouri-St. Louis
Professor Steven Grenadier, Stanford University
Professor Ben Griffy, SUNY, Albany
Professor Daniel Greenwald, MIT
Professor Umit Gurun, University of Texas at Dallas
Professor Valentine Haddad, UCLA
Professor John Hall, Portland State University
Professor Kristine W. Hankins, University of Kentucky
Professor Lars Peter Hansen, University of Chicago, Nobel laureate
Professor John Heaton University of Chicago
Professor Ben Hebert Stanford University
Professor Richard J. Herring, University of Pennsylvania
Professor Christoph Herpfer, Emory University
Professor Claire Hill, University of Minnesota Law School
Professor Robert Hockett, Cornell University
Professor Richard Hornbeck, University of Chicago
Professor Bo Honoré, Princeton University
Professor Jonathan Kalodimos, Oregon State University
Professor Mohsen Javdani, University of British Columbia
Professor Chris Jeffords, Indiana University of Pennsylvania
Professor Roger D Johnson, Messiah College
Professor Kathryn Judge, Columbia University
Professor Raja Junankar, UNSW
Professor Farida Khan, University of Colorado Colorado Springs
Professor Dean Karlan Northwestern University
Professor Mahsa Kaviani, Temple University
Professor Donald Keim, University of Pennsylvania
Professor Miles Kimball, University of Colorado, Boulder
Professor Mary C. King, Portland State University
Professor Laurence Kotlikoff, Boston University
Professor Yrjo Koskinen, University of Calgary
Professor Peter Koudijs Stanford University
Professor Arvind Krishnamurthy, Stanford University
Professor Philipp Krueger, University of Geneva and Swiss Finance Institute
Professor Camelia Kuhnen, University of North Carolina at Chapel Hill
Professor Pierre Lacour, NYU-SPS
Professor Katja Langenbucher, Goethe University/House of Finance
Professor Eben Lazarus, Massachusetts Institute of Technology
Professor Ryan Lewis, University of Colorado, Boulder
Professor Victor Lyonnet, Ohio State University
Professor Andrew Lo, Massachusetts Institute of Technology
Professor Erik Loualiche, University of Minnesota
Professor Deborah Lucas, Massachusetts Institute of Technology
Professor Hanno Lustig, Stanford University
Professor Hamed Mahmudi, University of Delaware
Professor Julia D. Mahoney, University of Virginia School of Law
Professor Paul Makdissi, University of Ottawa
Professor Hosein Maleki, Temple University
Professor Nadya Malenko, Boston College
Professor Jordan Martel, Indiana University Bloomington
Professor Ian Martin, London School of Economics
Professor Carlos Brunet Martins-Filho, University of Colorado at Boulder
Professor Keith Maskus, University of Colorado Boulder
Professor David Matsa, Northwestern University
Professor Egor Matveyev, Massachusetts Institute of Technology
Professor Gonzalo Maturana, Emory University
Professor W. Ben McCartney, Purdue University
Professor Patricia A. McCoy, Boston College
Professor Robert Merton, Massachusetts Institute of Technology, Nobel laureate
Professor Filippo Mezzanotti, Northwestern University
Professor Atif Mian, Princeton University
Professor Konstantin Milbradt, Kellogg School of Management, Northwestern University
Professor Partha Mohanram, University of Toronto
Professor Simon Mongey, University of Chicago
Professor Gary Mongiovi, St John’s University
Professor Nathalie Moyen, University of Colorado
Professor Edward Morey, University of Colorado Boulder
Professor Tracy Mott, University of Denver
Professor Stefan Nagel, University of Chicago
Professor Plamen Nikolov, SUNY, Binghamton
Professor Farzana Noor Bindu, Prairie View A&M University
Professor Saule T. Omarova, Cornell University
Professor Lahcen Oulhaj, Mohammed V University of Rabat
Professor Arzu Ozoguz, UNC
Professor Miguel Palacios, University of Calgary
Professor Ugo Panizza, The Graduate Institute Geneva
Professor Dimitris Papanikolaou, Northwestern University
Professor Jonathan Parker, Massachusetts Institute of Technology
Professor Paul Pfleiderer, Stanford University
Professor Ludovic Phalippou, Oxford University
Professor Monika Piazzesi, Stanford University
Professor George Pinteris, Ohio State University
Professor Amiyatosh Purnanandam, University of Michigan
Professor Meijun Qian, Australian National University
Professor Mizanur Rahman, University of Dhaka
Professor Tarun Ramadorai, Imperial College London
Professor Robert Reich, University of California at Berkeley
Professor Morgan Ricks, Vanderbilt University
Professor Julio Riutort, Universidad Adolfo Ibáñez
Professor Leopoldo Rodriguez, Portland State University
Professor Mark Roe, Harvard University
Professor Nikita Roketskiy, University College London
Professor Giacomo Rondina, UC San Diego
Professor Luis Rosero, Framingham State University
Professor Jesus Salas, Lehigh University
Professor Juliana Salomao, University of Minnesota
Professor Mehrdad Samadi, Southern Methodist University
Professor Razeen Sappideen, Western Sydney University
Professor Paola Sapienza, Northwestern University
Professor Daniel Saros, Valparaiso University
Professor Lukas Schmid, Duke University
Professor Antoinette Schoar, Massachusetts Institute of Technology
Professor Geoffrey Schneider, Bucknell University
Professor Michael Schwert, University of Pennsylvania
Professor Stephanie Seguino, University of Vermont
Professor Victor de Serière, Radboud University Nijmegen
Professor Amit Seru, Stanford University
Professor William Sharpe, Stanford University, Nobel laureate
Professor Jinfei Sheng, University of California Irvine
Professor Timothy Shields, Chapman University
Professor Tom Shohfi, Rensselaer Polytechnic Institute | Lally School of Management
Professor Justin Short, Emory University
Professor Stephan Siegel, University of Washington
Professor Stergios Skaperdas,University of California, Irvine
Professor Holger Spamann, Harvard University
Professor Kenneth Singleton, Stanford University
Professor Anup Srivastava, University of Calgary
Professor Lea Stern, University of Washington
Professor Kenneth W. Stikkers, Southern Illinois University Carbondale
Professor Ilya Strebulaev, Stanford University
Professor Per Strömberg, Stockholm School of Economics
Professor Amir Sufi, University of Chicago
Professor Kevin Sun, St. John’s University
Professor Jennifer Taub, Western New England University School of Law
Professor David Thesmar, Massachusetts Institute of Technology
Professor Stathis Tompaidis, University of Texas at Austin
Professor George Triantis, Stanford University
Professor Fred Tung, Boston University School of Law
Professor Selale Tuzel, University of Southern California
Professor Faruk Ulgen, University Grenoble Alpes
Professor Stijn Van Nieuwerburgh, Columbia University
Professor Laura Veldkamp, Columbia University
Professor Adrien Verdelhan, Massachusetts Institute of Technology
Professor Aazam Virani, University of Arizona
Professor Angela Walch, St. Mary’s University School of Law
Professor Neng Wang, Columbia University
Professor Wenyu Wang, Indiana University
Professor Ed Van Wesep, University of Colorado, Boulder
Professor Thom Wetzer, University of Oxford
Professor Toni Whited, University of Michigan
Professor Charles K. Wilber, University of Notre Dame
Professor Bonnie Wilson, Saint Louis University
Professor Jon D. Wisman, American University
Professor Timothy A. Wunder, University of Texas at Arlington
Professor Ting Xu, University of Virginia
Professor Liyan Yang, University of Toronto
Professor Zhijun Yang, Metropolitan State University
Professor Tzachi Zach, Ohio State University
Professor Miao Zhang, University of Southern California
Professor David Zalewski, Providence College
Professor Jeffrey S. Zax, University of Colorado Boulder
Professor Stavros Zenios, University of Cyprus
Professor Xingtan Zhang, University of Colorado Boulder
Professor Haoxiang Zhu, Massachusetts Institute of Technology
Professor Luigi Zingales, University of Chicago
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