1. We are going to bail out big corporations not just because of the virus but because Wall Street thinned out their ability to handle risk. That's what the buybacks, mergers, etc were all about. Stripping out resiliency. If we're going to inject public money let's stop that.
2. There should be five restrictions on any bailout terms. One, no bailouts for shareholders. Two, no stock buybacks. Three, strict exec comp limits. Four, no more lobbying. Five, no mergers or acquisitions for five years.
3. During the immediate viral transmission period, we may need to hit pause on any corporate bankruptcies and extend an emergency debtor-in-possession financing, which is basically loans to companies in bankruptcy to keep them functioning.
4. After that period, there will be a bunch of corporations on the hook to the government. That's when the restructuring to put these corporations through a quick resolution process should happen.
5. I have not thought through what it means to cram down equity holders when private equity predators own lots of the debt, so it's critical to put real constraints on the kind of corporate control debt holders get out of the process. No financialization and asset stripping.
6. Same terms should not apply to small and medium sized businesses, because they have not been subjected to the same load 'em up with debt style financial games. Financialization and private equity is about loading up corporations with hidden risk. We cannot afford that anymore.
7. Last point. I'm hearing Wall Street analysts talk about how this market downturn is a tremendous buying opportunity. That was true in 2008-2009, and the taxpayers financed it but didn't benefit.
If it's public money doing the buying, let's use our leverage this time.
If it's public money doing the buying, let's use our leverage this time.
