Economics, Law and Finance Professors from Major Universities Write to Congress : “Bail Out People Before Large Corporations”

“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, Stanford University, 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 Boris Vallee, Harvard Business School

 

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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