Socialists Propose Mass Business Bankruptcies

They have no idea how the economy functions.

Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) are set to introduce legislation that would put a moratorium on mergers involving large companies during the coronavirus pandemic.

The Pandemic Anti-Monopoly Act would freeze mergers that include companies that have more than $100 million in revenue, are run by hedge funds or private equity firms or that have exclusive patents impacted by the crisis, like key medical equipment.

Additionally all mergers that must be reported to the Federal Trade Commission under current law, which in 2020 is any valued over $94 million, would be frozen as well.

As the economy crumbles, the larger companies are the ones with the most assets and diversification to survive. Many smaller and medium businesses will be harder hit. So let’s imagine that you are a business with some great people, some intellectual property or other hard assets that have value, and some wonderful customers that you are struggling to serve as revenue dries up. What are your choices? You can try to sell your company to another company so that your employees and customers will continue to be supported. You can try to tighten your belt and survive – perhaps with a government handout with strings attached. Or you can declare bankruptcy, fire everyone, and close the business.

What Warren and AOC are proposing is to take the “sell the company” option off the table for the vast majority of struggling companies. The remaining two options are for businesses to accept a bailout with whatever strings come attached (read: ceding control of the company to the government) or shut down. The cruel game that the socialists are setting up are “accept your new government overlords or shut down and go on the dole.” Either way, the socialists take more control and the people are hurt. Win/win, in their eyes.