Thread by @bencasselman

With businesses big and small on the brink of failure, Congress is weighing massive bailouts. The memories (and maybe lessons) of 2008 loom large.
nytimes.com/2020/03/18/bus…

Economist Patrick Anderson, who opposed the 2008 bailouts: “This is different. It’s not a bailout if you, the government, tell a business to close, and then they ask you to help cover payroll while they’re closed. That’s not a bailout — you told them to close.”

Several economists stressed that the goal shouldn't be to preserve companies' profits -- it's to keep them solvent so they can get back to business once the crisis passes.

“You can make sure that the loss in spending doesn’t become an insolvency problem,” @DianeSwonk told me. “You’re trying to keep individuals and firms solvent.”

One idea being promoted by various people in DC: Federal assistance covering payroll. As @DennisKelleher (no fan of bailouts!) said, the best way to get $$$ in the hands of workers is to make sure they don't lose their jobs.

But a warning from Kelleher: “There is still a strong view in this country that in 2008, Wall Street got bailed out and Main Street got the bill,... So that kindling is already there throughout the American population, and it’s not going to take much to ignite that kindling.”

@jimtankersley talked to @SenWarren:
“During this crisis, we cannot do a no-strings bailout for corporations like we did in 2008... It’s got to be clear that the money will be used in ways that will help workers and strengthen the whole economy.”

Very notable thought that people like Warren and Kelleher are saying "bailouts with strings" NOT no bailouts. I heard similar things in other conversations today.

The reason: If tens of thousands of biz across the U.S. close, it will make this crisis MUCH worse and longer lasting. That will hit banking, real estate, etc. Makes a swift recovery essentially impossible.

Much more in my story with @jimtankersley. LOTS still to be worked out here.
nytimes.com/2020/03/18/bus…