Coronavirus storyline #8: government support for companies and industries

March 17: On the table in the United States $50 billion for airlines. Many industries are coming to the table asking for handouts.

  1. Casino industry
  2. Cruise ships and hotels could be on the table as well.
  3. Tourism industry asks for $150 billion.

There can and should be resistance to the government just handing out cash to the corporations. See this nice Op-Ed by Tim Wu. For years airlines have abused their market power to saddle consumers with absurdly awful service, high feeds, and low quality, while making record profits. Instead of saving the profits for a rainy day, they have saddled the companies with debt, and used most of their cash flow for dividends and buybacks.

In France, a number of packages are being considered: €32 billion in deferred tax and social security, €8.5 billion for two month payments to workers temporarily laid off, €300 billion for bank loans for businesses.

Jacob Robbins

Author: Jacob Robbins

Jacob Robbins is an assistant professor of economics at the University of Illinois at Chicago.

2 thoughts on “Coronavirus storyline #8: government support for companies and industries”

Leave a Reply