As Matt Levine explains, it was the optimal thing to do.

https://www.bloomberg.com/opinion/articles/2020-03-17/the-go...

Makes perfect sense when interest rates are near zero. Borrowing is practically free and saving earns you next to nothing.

Until a black swan event happens...and now they need to beg the government to save their short sighted asses.

If the government is almost guaranteed to bail them out, it makes sense that they would prioritize other things.

Then the Government needs to not bail them out.

This is a difficult call to make. Of course, the government shouldn't be the automatic fall-back solution for incompetent/greedy management. On the other side, large companies failing do have a network effect, that is why the government does bailouts in the first place. There are arguments that the 2008 crisis could have been avoided, if the government had bailed out Lehman. Lehman failing caused the crisis and in the end many more companies needed and got a bail out and still a huge economic damage was done.

The only solution in my eyes for this dilemma is, that the government should do bail outs, but at the price of shares. For any money paid, which isn't just credits, the government should get company shares, which are sold off, as soon as the market stabilizes.

Obviously, but it's hard to call a company's management short-sighted for taking advantage of a corrupt government.

But they are also the ones corrupting the government, at least in part.

So let them all hang.

Sure, they're the ones corrupting the government. The accusation, then, should be malice, not stupidity.

But then the economy goes down the tubes.

There is a third way: bailouts are conditioned on the public or workers getting ownership stakes.

Agreed. Or an additional option is to let businesses fail. The value of a viable business doesn't instantly go away just because they are insolvent. Let another better managed company buy up the failed company.

no. the government merely needs to look like it will be a tough debate next time that might not go through, by having a tough debate this time that spooks businesses

To be fair, for many businesses it's government mandates that has forced them to shut down. Yes business was down, but there was some business. With shelter in place there is no business. If the government mandates something that causes total loss of business, it's fair for them to be on the hook to help out with the problems caused by their mandate.

That's true only if you're unwilling to put a price on risk.

What dollar figure should be put on the potential demise of the company versus "saving earns you next to nothing"?

by your logic everyone should have been living pay check to paycheck when interest rates get low.

but that's not even the craziest thing in your comment. it's that you are probably a salaried worker making excuses for the boss. it's a crazy crazy world.

Somewhere out there must be a few firms with massive cash positions. Every time a company buys back stock, they're giving cash to the investor who sold the stock. Assuming the government doesn't inflate the currency to nothing, those firms are going to absolutely clean up now, with so much cash to deploy while everyone else is getting force-liquidated.

Berkshire comes to mind. Buffet has been saying he's itching for an elephant sized aquisition for a while now. Here's their chance.

Well Apple just got into credit card business maybe they can use their massive cash reserves and enter the banking business.