“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.
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When we invested in stocks and bonds, we knew we might have to face a storm or two. The high returns we received on our investments compensated us for this risk. When the government bails out a corporation, it is letting investors like me keep all the profits in good times without bearing the losses in bad times.
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Supporting industries is necessary to mitigate the economic impact of the pandemic. But using the coronavirus as an excuse, Boeing and other companies are trying to get taxpayers to foot the bill for their managerial errors. It is not too late to put a limit on corporate subsidies.
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Restaurant owners, retailers, and the like employ more than 50 percent of the US workforce, yet neither have cash buffers nor access to Federal Reserve support. In the present situation, we do not need to stimulate new business and spending. Instead, policy nowadays should be aimed at stabilizing impaired balance sheets and avoiding business closures via evergreening.
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Equity markets in the EU and US dropped by as much as 30 percent, which means that investors have revised downward their estimate of future profits by as much as 30 percent. This leads to an estimate that GDP growth over the next year will be down by 2.6 percent in both the US and the EU. However, investors expect the current crisis to be shorter than the 2008 global financial meltdown.
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At the SEC, Jordan Thomas had a leadership role in developing the program to protect and reward employees who report corporate wrongdoing. Now, he is a lawyer who exclusively represents SEC whistleblowers: “The award is not the only driver, nor the primary driver, but it is an important factor to help people feel comfortable in coming forward”.
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Corruption, lobbying, corporate malfeasance, and frauds: a weekly unconventional selection of must-read articles by investigative journalist Bethany McLean.
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Amazon announced restrictions on the type of merchandise it will allow sellers and vendors to send into its warehouses because Amazon’s fulfillment services (FBA) has reached its maximum capacity in light of the evolving crisis. Amazon’s failure to make necessary adjustments might jeopardize the economic prospects of tens of thousands of firms that rely on its platform on the eve of a recession.
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Princeton Professor Markus Brunnermeier and Torsten Slok, Chief Economist for Deutsche Bank Securities, discuss what happened during Wall Street’s worst week since the 2008 financial crisis. Did financial markets overact to recent news on the coronavirus outbreak and its economic consequences, or did they simply react accordingly? Should governments restore funding by bypassing the financial sector?
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In March 2018, Tesla’s Board of Directors granted Musk a potential bonus of 20,264,042 stock option awards under a plan that uses “adjusted EBITDA” as one of its metrics. According to general accounting principles, Tesla recorded a 2019 net loss of $862 million, but thanks to using different accounting principles this loss became an adjusted EBITDA profit of $2.985 billion.
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In an extensive interview, former Governor of the Reserve Bank of India and Chicago Booth professor Raghuram Rajan discusses the pandemic’s impact on financial markets and policy reactions. “Monetary policy can be useful in providing some confidence. But targeted measures, both against the spread of the virus and against the consequences of the disease, are really the first element of government action”.
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Compared to 2016, turnout was 22 percent higher (on average) for states voting on Super Tuesday, before Covid-19 emergency measures in the United States. This week, the situation changed dramatically: Average growth across states voting on March 17th was just 3 percent. Here’s how States can promote health-conscious participation in elections and what we can learn from the 1918 Spanish Influenza.
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