> doctors are not working for free, why should bank employees?
Are rank-and-file bank employees getting a big chunk of those increased earnings? Seems like both doctors and bank employees are simply continuing to earn their regular paychecks, as they should. It's the banks' shareholders that are making way more money for basically zero risk. And execs, who get paid mostly in stock. That's the problem here.
But as I pointed out in the original post - the 10B in fees is in line with revenue the banks receive during normal times. And going off the earnings the banks posted last week, they are losing millions every day just keeping the lights on.
There is no increased earnings there is in fact very big losses. Which is another thing people tend to forget when discussing exec pay. The execs take a hit when business is bad, but the majority of employees continue getting paid.
Exec pay is high but you can't forget that much of the risk / responsibility should the business do poorly is on their heads not the majority of the workforce.
> you can't forget that much of the risk / responsibility should the business do poorly is on their heads
The worst outcome for any employee, exec or lowly serf, is the loss of their job. But it's far more devastating for a rank-and-filer to lose their job than for a highly-paid exec to lose theirs. So...no the majority of the workforce also takes on most of the risk should the business do poorly.
Not true actually. The majority of employees do not get fired. Only a minority do
And the minority that is let go get 3-6 months of severance and unemployment benefits until they inevitably find a new job - which btw is far easier to do when you are not an executive of a floundering business.
> The majority of employees do not get fired. Only a minority do
A minority end up fired but all of them potentially can be.
> And the minority that is let go get 3-6 months of severance
This is not written into any employment contract. 3-6 months sounds absurdly generous.
> unemployment benefits until they inevitably find a new job
UI benefits only offer partial wage replacement.
> which btw is far easier to do when you are not an executive of a floundering business.
Part of the reason execs get paid highly is to take on that risk. They have no excuse for not building up a healthy nest egg to get through periods of unemployment. Execs don't live paycheck-to-paycheck, or if they do, surely they should know better about managing money wisely. Otherwise why did they even have their jobs?
Execs also have way better personal networks for finding new jobs. Their friends are other execs in other companies. So it's not at all obvious that they'll be unemployed for longer than average Joe Pink Slip.
So businesses are not a charity, but the US taxpayer is? Why do we keep sending money into the banking system with no strings attached? In 2008 as well as now, banks have collected billions of dollars with no strings attached, and engaged in fraud and corruption with no consequences.
Doctors are not working for free, no, but they also didn't just vacuum up 10B of cash meant for patients either. Only the banking system has the tenacity and lack of shame to do such a thing.
> why should bank employees
I don't think anyone in this thread is talking about bank employees.
This program is vastly different from the 2008 bailouts. The banks collected a modest fee for doing work spreading money around to people who need to pay employees and rent.
In this situation the banks are simply a truck driver and small businesses are your local grocery store.
Im not going to fault the truck driver for asking to be paid to do work.
The 10B they collected was not from the government - it was paid by businesses applying for loans.
Except, if the truck driver consistently fails to deliver the goods, the truck driving company usually goes out of business. It is generally referred to as having actual skin in the game.
There has been no general business failure during this crisis. The government is mandating businesses be closed and businesses and employees are suffering because of it.
If you are only talking about 2008 then yes - that bailout was fucking dumb
If you know of a better way to spread 600 billion amongst 5-10 million small businesses without going through the local banks these businesses use please share with the class?
It seems apparent that the government could’ve distributed these loans to qualifying businesses if they wanted to. The government was able to distribute individual checks to people. It does not seem far fetched to extend this to business accounts.
Maybe someone else can describe technical blockers as to why the government couldn’t have done this. It seems mostly political.
The banks have a preexisting relationship with these businesses and know what they would need / qualify for. Plus provide boots on the ground for vetting.
The best the government could do was send a paltry check to pretty much EVERY american. I'm sure you'd object if they decided to send 1 million dollars to EVERY small business.
That's the best a fed government run program could accomplish with only a couple of weeks.
> The banks have a preexisting relationship with these businesses and know what they would need / qualify for. Plus provide boots on the ground for vetting.
Seems to me that the government has a comparable relationship with business. Companies report to the IRS same as individuals, and corporations are required to file annual reports with their state. You’re telling me they cant maybe slice up the market due to higher or lower risk (restaurants probably taking a way bigger hit than tech, for instance) and qualify companies according to trends in their tax filings and other data points?
Its not necessarily a question of what they could do. Its an emergency and time was valuable.
Banks have thousands if not millions of employees capable of performing basic due diligence before sending out money. A fed task force tasked with processing applications from millions of businesses would be capable of handing out money maybe summer 2021
