The "It's the companies fault for not being prepared" line originated as a satirical jab at the "personal responsibility" rhetoric the right has used for decades to systematically dismantle any semblance of a social safety net in the United States.

>...vital interests and the infrastructure we depend on is secure and that’s going to take a pragmatic approach.

I argue for letting these businesses fail, even if vital, because, it seems, the powers that be have forgotten to take care of them, regulate them, and not get captured by private interests, for decades now. Infrastructure across the the country is literally crumbling. Major dams have failed this year. I fully expect to suffer much more before those with the power to delegate resources where needed will find the will too.

Moral hazard. Why would anyone waste money planning for something that could make the business fail, when they know there will be trillions in bailouts?

We'll solve the problem eventually, I guess, when it becomes clear that there's no money left for bailouts.

Money will never run out. Government will just print more money resulting in inflation and other problems. Most of the currencies are free floating and are not backed up by something tangible like gold.

Oh, sure, money itself may conjured such that it never runs out, but the ability of the government to tap the economy's output is definitely finite.

If you start just conjuring money to bridge the gap, you're basically robbing whoever holds money (or other financial instruments denominated in your currency). These parties then work very hard to stop holding money. When that process is done, you're back where you started, only with less trust, higher transaction costs, and elevated risk burdens depressing output across the economy.

>any company that set aside resources to protect against a pandemic after the Spanish Flu would have been operating with increased costs for a full 100 years

It's not so much setting aside money for a certain very rare event, it's realizing that there are a LOT of low-probability events that are close to catastrophic and the chance of encountering one of these events is quite high in aggregate even if the chance of a specific event in the pool is low.

> and the chance of encountering one of these events is quite high

Indeed, and there are a lot of overlapping disaster preparedness steps that make sense no matter what the triggering event happened to be, so it makes sense to establish, e.g.: robust command and control infrastructure that doesn't rely on primary infrastructure, including communications and chains of command; stockpiles of strategic durable goods like medical equipment, rations, batteries, etc.

Unfortunately, long term, people tend to abandon them. US had many stockpiles before that it no longer does, because they were all sold off as "unneeded".

Setting aside money as "pandemic" is a problem. Setting aside money for "emergency" helps reduce impact.

1970 gas shortages 2000 dotcom bubble burst 2008 housing crisis

> 1970 gas shortages 2000 dotcom bubble burst 2008 housing crisis

All missed opportunities to change broken institutional structures and to do things differently.

The ability of money to timeshift resources is magical when it works: I can forego goods and services now, save more money, and then purchase more goods and services later.

However, this has limits. It doesn't work for large scale shortages like the oil shocks of the seventies. If everybody had saved money beforehand, there still wouldn't be more oil available in total. When the oil price doubles, you'll only be able to buy half as much with your savings.

What are the preparations that a company would have needed to do in the last 100 years to protect themselves in the event of a new pandemic? Wouldn't they need a plan to restructure to cut costs or find new revenue, and be able to cover cash flow in the n months it takes to do that restructuring? Is it that crazy to expect that from a large profitable company with long-term goals? Consider that it's common "financial advice" for individuals to be able to cover n months of living expenses in the event of an emergency, and that is often much more infeasible for an individual than it ought to be for a large profitable company.

Doesn’t appear to be a problem. Print money to accelerate out of the quagmire seems sensible.

Capitalism doesn't seem to really incentivize "vision and pragmatism" at any level of government these days. Social media and entertainment-journalism have compressed attention cycles so much that planning for next year or next administration might as well be lumped in with planning for the next global catastrophe 100 years from now in terms of payoff and optics.

the unstated prerequisite is for regulation to stipulate a minimum reserve so that the competitive field remains level, otherwise the dynamics would lead to risk ignorers eventually crowding out the disadvantaged risk mitigators. for business risks, i'd support a reserve requirement of 12 months, which phases in as a fledgling company reaches sustainability.

but, a pandemic is not an idiosyncratic risk of individuals or firms, but rather a broad systemic risk, and as such, should be bourne by society as a whole, not each individual and business separately.

Let me understand this: you want a business to have enough capital to pay its expenses for 12 months on zero revenue?

Holy Jesus; that's massive.

Capital is not free. Typical costs of capital today are about 8% (1). You're proposing, essentially, an 8% tax — not on a firm's profits, but on a firm's expenses. I don't want you to think, "oh, that will push a few firms into failure, rendering their entire business unviable." I want you to think, "it will spare a few firms." I also shudder to think of what happens to firm formation in the face of the steep, steep barriers to entry this raises.

You propose a very, very expensive way to build resilience. You're right, though, that the costs would be borne by all of society. Maybe it's worth it? But it's a hell of an ask, and I'm skeptical.

(1) if you have better figures than http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/... then I'm all for 'em

it's not that incredible. most going concerns already have the working capital, current assets, and receivables to hold out 3-6 months.

and the cost of capital isn't the right rate to be applying here. a better estimate is the spread between the cost of debt and their short-term securities rate (like the interest rate on current assets), which could even be negative (that is, making money). certain businesses can even be financed via their receivables alone.

damodaran is a good reference. his book was the basis of my finance and valuation classes. but it's dense and not easy to implement without going all in. it really taught me that finance and valuation are arguments, not analytical solutions.