Well, no Professor Reich, not really

But the airlines are big enough to get their own loans from banks at rock-bottom interest rates. Their planes and landing slots are more than adequate collateral.

Remarkable how little he knows about business, isn’t it?

Given that no one’s flying at present the planes and slots aren’t worth all that much. Not because they won’t have long term value, but because no one has any money to buy them today. This their value as collateral is pretty low.

Note the usual casuistry:

Senate Republican relief package, giving airlines $58bn

Lending, not giving.

the Republican bill is absurdly stingy toward people, stipulating a one-time payment of up to $1,200 for every adult

Giving not lending. And stating it per person rather obscures that it’s $300 billion or so, very much more than the *loans* to the airlines.

The more I hear from Reich the more I despise him.

30 thoughts on “Well, no Professor Reich, not really”

  1. The Meissen Bison

    The slots are poor collateral not so much because of their value but because airlines are unable to assign them to a lender. The planes are poor collateral if they are already subject to a mortgage which they in all likelihood are.

  2. Start writing/phoning your MPs now. And Tory HQ. Cos two weeks might be all we have before stuff starts to unwind past the point we can ravel it up again. Let the fuckerrs hear our voices.

  3. Knock off the lockdown bullshit and re-open the businesses Theo. Or do you prefer economic ruin to a Puny Plague that will give 99% a sniffle at worst.

    Doubtless you are comfortably off–but that might not last given the general fuck up on the way.

    Take steps to protect the elderly and stop pissing our pants about a germ that kills only those in death’s waiting room.

  4. 1. An economic pause is not economic ruin. Once the economic pause is ended, there will be a boom. The recession will be short, sharp and steeply V-shaped with a vigorous recovery. Which is why I’m buying shares now for my grandson’s junior ISA. There are incredible bargains out there.

    2. “…Puny Plague that will give 99% a sniffle at worst…germ that kills only those in death’s waiting room.” Many young people are at risk – like my 34yo son-in-law who has asthma and Crohn’s Disease. Some 53m UK people are under 65. If just 0.1% of those under-65s (53,000) become seriously ill in a relatively short period, we have a major problem…

  5. Philip Scott Thomas

    What Theophrastus said.

    This is not a systemic problem; there is no contagion (heh) in the system as there was in 2008. It’s just a liquidity problem. Once the restrictions are ended and we get back to work the problem will be solved.

  6. 1–A “pause” Theo? You have the Tory gift for bullshit. A pause that for many businesses will prove to be permanent as they will not re-open. Blojo is doing NOTHING to help the s/e–a supposed Tory backbone–and wagers over 2500. So A can’t pay B and B can’t pay C —etc and so on down the chain. Add in the fact that the funny fucking money to pay for it will drive inflation way up.And a boom? No –just no. Even Radders recognises that if you can’t get a monthly haircut for 4 months –the resolution of that is one haircut and the barber is down the rest of the business.

    2- Sorry about your son etc. But he is an exception. The disease is weakest with against the young. And it does not infect 100%–no disease EVER has and this POS is no exception.

    We are flushing ourselves for fuckall so political shite can virtue signal.

  7. Re: lockdown.

    Steve is not a doctor and his Stevenessence doesn’t extend to epididymitis or whatever the fuck Chinese Virus 19 is.

    However, knowing human beans as I think I do, the shutdown won’t last long, because it can’t.

    How long do you think people can be reasonably expected to remain indoors? Months? Try weeks at most.

    People are going to start getting bored and annoyed with this state of affairs very quickly, and there’s nothing the cops and Army can do about that when the public stops being afraid.

    Barring mountains of skulls forming outside A&E, there’s no way to keep the populace fearful and compliant for very long, and the state has no real power to lock down an unwilling public.

    Very quickly, the moral arithmetic will change from “if it saves just one life…” to “fuck this shit, I want a pint”.

  8. Theophrastus said:
    “If just 0.1% of those under-65s (53,000) become seriously ill in a relatively short period, we have a major problem…”

    Depends what you mean by “seriously ill”. If you mean hospitalised, then that’s double the normal winter flu death rate so yes, might be some problems.

    If it’s “needs a couple of weeks off work to recover” then that’s going to add less than 1% to the usual sickness rate, which isn’t even big enough to be a statistical blip.

    Current experience is that, for under-65s, it’s the second rather than the first.

    Yes, great sympathy for those who do have more serious problems, but is it legitimate – or even sensible – to apply the same precautions to the whole population?

  9. Steve said:
    “Very quickly, the moral arithmetic will change from “if it saves just one life…” to “fuck this shit, I want a pint”.”

    Some of us are there already. I hope you’re right and that the balance will switch over.

  10. Well Ecksie on this occasion I don’t agree with you.

    In view of where we are at there is no choice but to implement a general lockdown in order to halt human to human transmission in its tracks and thereby put an end to the epidemic. This will have the advantage of buyin g time to equip a large number of hospital beds with ventialtors nd other criticla care equipment and provide sufficient PPE for medical staff.

    You might not have seen on the news the columns of army lorries carrying dead people away from a Bergamo hospital to be cremated elsewhere because there is no capacity locally, but it was chilling.

    And without serious steps to reduce contagion that is coming to a hospital near you in oooh 10 days max? except the UK has half the number of critical care beds per capita than Italy, and lombardy are the best equipped in the country.

    So as our yankee cousins might say go figure.

  11. We are considering digging a pit in the back garden. It would be useful if we have to dispose of our own rubbish and it’s best to try to dig it before the clay turns brick hard. We may have to wait a little until it dries out a bit, though.

    And you never know it might trap a deer for us.

  12. I wonder if the government has ever heard of joined up thinking, or taking a holistic approach.

    On the one hand, they say not to panic buy.
    Then in the next press conference they’re threatening to shut parks because this virus is so dangerous and introduce french style permission slips to go outside.
    What do they think is going to happen? Nobody wants to not stock up only to find that they’re suddenly under lockdown for three months with only two tins of beans, a stale loaf of bread and half a block of cheese.

    Either we should be worried and taking precautions, or not worried and not tanking the economy and people’s livelihoods.

    Good luck keeping people inside. We’ve just finished a rather pants winter and the weather just turned nice. Obviously everyone wants to go outside and enjoy the big yellow ball of happy in the sky.

    We have also seen BoJo’s true colours now.
    Ecks was right.
    His whole “act responsibly or I’ll take away your going outside priviliges” speech showed his true fascist core. It seems like he thinks we are incapable of making our own decisions.

  13. If you discard all morality then I can see a silver lining. The virus attacks the weak and already ill. So that helps reduce the welfare bill. People grow more risk averse with age, so killing off the oldies accelerates the inheritance of a younger generation. If there is a significant mortality then supply in the housing market increases, leading to a property recession, so the inheritance is more likely to go into start up business than home ownership. There could be an economic boom in the medium term.

  14. Jack the Dog–Sorry but you are wrong.

    I am sick of pointing out Italy’s special circs. And is it true that the UK has less healthcare per capita or by any other measure than Italy? I can’t say but I hope someone else can.

    Once more:
    1-More shared households with elderly folk
    2–Kissy customs
    3-TB epidemic
    4-100,000 imported Chicoms –and more arriving/back and forth by rail until recently–who have had the chance to mix the infection up in North Italy.
    5- From 4 above very likely MANY more Italians have had this POS and got over it. The larger the number of cases the fewer the death rate in comparison.
    6- Italian recording practices. As has been said Germans only recording definite coro deaths–still older/ill. Italians recording any thing respiratory as coro. Not clear what tests done and with a test that gives up to 47% false positives not clear how useful it is anyway. Those lorrys are likely carting off some of Italy’s annual flu/pneumo/common cold deaths mislabelled.

    Jack I respect you and yours right to self isolate. But I and an increasingly large number of people aren’t going to see the country ruined over a blown-out-of-a-proportion Gubmint Frightmare circus. Maybe we can’t stop it–but in the ensuing God-Awful mess we can say we tried.

  15. philip said:
    “If you discard all morality then I can see a silver lining. The virus attacks the weak and already ill. So that helps reduce the welfare bill. ”

    Your silver linings all require a death toll significantly greater than the normal winter ‘flu levels. It’s still looking like we’re going to get the economic problems caused by the government shutting down the economy, but without any other effects that might compensate.

  16. I cannot see the marginal benefit of stopping people going out in the sun. UV pouring down from the sky, plenty of fresh air and space. There is no problem in terms of infection in that. We COULD lock down only those on the government’s list of 1.5 million. (People over 70 seem to die at the rate of 1,000 a day averaged over the year. We are looking at 50 from the virus, so it’s a big SFW.). Lock down the likely victims, fire up the economy again with the rest.

  17. Ecksy,

    Sean Gaab over at Mises Uk has an interesting take on it:

    So what is happening? One possibility is that the outbreak is a convenient excuse for at least the British and American Governments to do in a state of emergency what they want to do, but would have trouble doing in the normal course of politics. What they may want – and this is congruent with the promises made by Mr Johnson and Mr Trump – is a deflation of the financial sector and a shortening of supply chains and a tightening of borders, all in the interests of greater security and equality for ordinary people. They have confected a panic, or gone along with an autonomous panic. This has brought on a wholly self-inflicted supply shock. The British Government in particular is taking large new financial liabilities. But this is a supply shock from which recovery should be fast and complete. The financial liabilities put money directly into the pockets of those most immediately harmed by the shock – and the ceiling of £2,500 per month on the wage subsidy will involve a progressively greater loss for those earning more than the average.

    The usual suspects are asking for a delay to our full departure from the European Union. This is probably not on the agenda, as it goes against the underlying principle of the emergency measures. This includes a real tightening of border control and an encouragement of domestic manufacture. Again, ordinary people will benefit from the raising of wage rates. As a libertarian, I am not supposed to approve of anything that looks like protectionism. On the other hand, using China as a giant sweatshop is almost certainly not the outcome of any clean market process. More likely, the current pattern of world production and trade has nothing to do with Ricardian comparative advantage, but is the outcome of various hidden subsidies and prohibitions that mainly benefit the rich and well-connected. Removing these and allowing the emergence of shorter supply chains might improve the lives of ordinary people.

    And improving the lives of ordinary people might be good for the cause of liberty. After 1979, the Government kicked the bottom out of the world for the working classes. Millions were thrown out of work. Millions more eventually found employment in menial and insecure jobs. One result was to end the threat of trade union militancy. Another was to remove people from some connection with scientific rationality – even the lowest industrial labour is a kind of applied science – and to leave them open to every stupid superstition and moral panic the media cared to promote. Restore something like the broad industrial economy of the past, and we might see a rebirth of liberal opinion in the old sense of the words.

    As for the gathering financial collapse, the wage subsidy will protect ordinary people from the worst effects. Its most notable effect may be the liquidation of the debt and credit bubble that was blown up after 2008 and that has now become unsustainable. I doubt we shall reach the point where those glass towers that disfigure Central London are remade into flats and workshops. If that were to happen, though, it would be no cause for regret – except to those enriched by the present order of things.


  18. Ecksy:

    “…if you can’t get a monthly haircut for 4 months –the resolution of that is one haircut and the barber is down the rest of the business.”

    Barbers, yes. But once restrictions are eased or lifted, huge pent-up demand from consumers will be unleashed – for clothing, meals out, hotel accommodation, day trips,houses, cars, etc, etc. Several economists and forecasters have made this point – and are predicting a boom.


    I meant hospitalised by “seriously ill”. Btw, you do realise that there are no reliable figures for UK flu cases, don’t you? Public Health England releases vague estimates and it does not publish a mortality rate for the flu.

    “Current experience is that, for under-65s, it’s the second rather than the first.”

    Not for the millions of under-65s with diabetes (4.7m of all ages), on immuno-suppressants, with asthma (5.4m of all ages, including 1.1 children), etc

    “Yes, great sympathy for those who do have more serious problems, but is it legitimate – or even sensible – to apply the same precautions to the whole population?”

    That’s not the case yet. And if it comes to that, then it would be acceptable for a few weeks.

    Nowhere with a lockdown has stopped people going shopping for food…

  19. “It’s still looking like we’re going to get the economic problems caused by the government shutting down the economy, but without any other effects that might compensate.”

    Zactly. Trump is even talking about blowing $4T to make it all better.

  20. You should meet him. All 4’11” of him.

    Is that true? Is he really that short? And to think, he could have had a useful and worthwhile career as a jockey. Perhaps the left is correct – people often do make bad choices.

  21. Pent up demand Theo? After your job/business is fucked where do you get the money for “pent up demand”? Meals out and hotels –that have gone out of business and laid off their workers? Fantasy Theo.

    Much like Sean Gabb’s piece above. The debt bubble is vastly greater than the 2008 tripe. If the lot starts to crash funny money just means hyper-inflation not salvation.

  22. Reich is ignorant and seldom makes any sense. He advertises himself as an expert in a couple areas but has never delivered. One would think even the liberals would be embarrassed by his nonsense.

  23. was thinking of cruises as the Alaska season is due to start and always busy downtown when they are docked, they are issuing credits right now as ships are banned from docking at least until July.
    Assuming they squeeze in August/September then how much of that is already booked or will be people cashing in credits and how much of next years season is going to be people cashing in their credits. They are looking at revenue shortages well past the end of lockdown, same with a lot of the travel industry I’d guess

  24. The 4′ 11″ probably does say something about him.

    Says the 6′ 5.5″ Lud.

    Make of that what you will.

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