>They don't need months or years of runway.

Obviously they do if they're demanding bailouts. That's three times in the last 20 years that the federal government has had to bail out "too big to fail" businesses... airlines in 2001, banks/automakers in 2008, and everything in 2020.

Like mbrameld said, the only reason they don't have runway is because the government will bail them out.

If the federal government is actually the implicit insurer of these companies, then the federal government should be collecting premiums.

They just buy politicians, which is cheaper than premiums would be.

That would be corporate taxes, and in fact at least some people are asking if maybe we need to roll back the recent corporate tax cuts.

> They don't need months or years of runway.

Isn't that only because bailouts are available for unforseen hardships that would otherwise require a runway?

MBAs strategically weaken businesses with debt instruments so they aren't "leaving money on the table". We shouldn't be excusing this sort of behavior. Businesses schools need to start teaching their acolytes about planning for a future more than three months away. Everyone wants to look like Apple with a juiced vanity stock price but they won't squirrel away the cash needed to survive a rainy day.

Business schools teach what will be relevant on the job. If large corporate bankruptcies were an issue, MBA programs would teach it.

So ... the business equivalent of "Generals are always fighting the last war"?

Funny how you can also use that exact sentence to say business schools are bad at teaching.

I'm sympathetic to this view. It doesn't seem very efficient to have businesses compete on whether they can predict major disasters. That means some of them will be unprofitable most of the time, and then have a monopoly once their day comes.

OTOH, you also don't want businesses to be/look profitable simply by running on super short runways while high on debt. There are all kinds of non-black-swan things that they need to anticipate riding out if they want to be solid businesses. The culture of running on that model (as the neighboring comments note) needs to die.

A middle ground might be to just require businesses to contribute to a common "rainy day fund" that activates whenever the government has to fight a major disaster, and, as public policy, bans entire businesses.

But then, I don't see a major economic/financial difference between that, and just paying unemployment/bailouts out of general tax revenue. The only difference would be "who bears the burden" -- but it's not much a difference, given that disasters affect the whole economy at once, and most everyone is thus affected.

I'm not advocating a position -- not in this comment, anyway -- just wanted to give an overview of the dynamics.

They absolutely should have runway and understand the risk they are taking when investing in companies with negative margins and hedge their bets early.

If they know the government will bail them out in the end, they can continue to freely burn money at the expense of the Japanese people.