COVID-19 Small & Big Business Bailouts

Bloomberg Businessweek March 30, 2020 pp12-14. Business Bailouts “Wheel of Bailouts” “Businesses are lining up to request government aid in the wake of the coronavirus. But do even critical companies like Boeing really deserve it?”

Requested Bailouts (Loan Guarantees)

Hotels $150B

Airlines $68B

U.S. Aerospace $60B

Airports $10B


After years of consolidation the remaining airlines are essentially key to the American transportation infrastructure and “widely considered too big to fail”.


Boeing has “17,000 suppliers and supports 2.5 million jobs” accouting in total for "20% of all U.S. manufacturing jobs". Key for Boeing and America some would argue is ensuring their supply chain remains intact and they start producing ASAP after the pandemic. Unlike many companies. Boeing has $15B in cash reserves but in time that too will run out.

Large businesses, like Boeing, want “no strings attached” bailouts. They don’t want government taking equity or restricting their business activities including the ability to buyback their own stock to enrich shareholders and executives. Some congressional leaders and citizens wonder why Boeing should get help when they spent “$40B on stock buybacks in that last decade”. Further, many point to Boeing's incompetency citing the 737 MAX debacle leading to “deadly crashes that killed 346 people” and the grounding of the entire 737 MAX fleet. Reportedly, one “pilot told a colleague that the Max had been ‘designed by clowns, who in turn are supervised by monkeys’”.

Major negatives nothwithstanding Boeing “still symbolizes American industrial might [especially] as China and Russia sharpen their efforts to take on the Boeing-Airbus duopoly”.

Reportedly, as part of the bailout package stock buybacks will be prohibited until the bailout loans are repaid in full.

Anti-Bailout Point-Of-View

Robert Reich chimes in on “Bad Bailouts”. Reich’s POV is that taxpayer dollars should be used as follows: 1) provide income for people, 2) provide healthcare support for people as needed and 3) provide funds for critical healthcare supplies like ventilators and PPE for hospitals. He feels there should be no bailouts because “corporate trickle-down economics…doesn’t work”. He suggests big corporations use “Chapter 11 of the bankruptcy code” and resolve debts that way. Employees of big corporations are supported by using unemployment and direct COVID-19 payouts.

How to Best Help Small Business

Glen Hubbard on “Small Business Grants”. Hubbard’s POV is “replace 80% of a businesse’s revenue loss for as long as the pandemic lasts”. “…that loan…be forgiven…[after]…the pandemic” if employees are retained through the pandemic. In this way, “when the lights come back on…you’re ready”.