Lots of people out there being like "kill the equity, save the workers, it& #39;ll be so easy!"

That& #39;s not how it works guys.

First, as they fight to survive they& #39;ll fire lots of employees and cut wages to reduce costs. GM cut 34K jobs in 2008, long before their bailout.

Then when they get their bailout they& #39;ll restructure. And by "restructure, I mean they& #39;ll fire even more people. Just like GM did in 2009. https://www.nytimes.com/2009/02/11/business/11auto.html">https://www.nytimes.com/2009/02/1...

How does all of this work out for the employees? They get gutted. Many will lose their pensions. They& #39;ll lose the equity they had in the firm. They& #39;ll lose SIXTY SEVEN PERCENT of their annual earnings over 7 years.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2276753">https://papers.ssrn.com/sol3/pape...

It& #39;s a nice narrative - kill the equity, save the workers. But a bailout that goes to workers IS A BAILOUT of the equity as it simply offsets the firm& #39;s liabilities.

There& #39;s no separating the two. You can& #39;t kill the firm and not hurt the workers. That& #39;s just not how it works.

Disclosure - I have no stake in airlines. My firm is mostly a bond management firm. I get HURT by equity bailouts.

But people are massively downplaying the amount of painful everyday people will experience if we just "burn it down".