Boots & Sabers

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Owen

Everything but tech support.
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1040, 28 Apr 20

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.

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1040, 28 April 2020

11 Comments

  1. Merlin

    These assholes are relentless and won’t stop until they find themselves downrange in the ultimate form of voting. It’s becoming more a matter of when than if. Maybe not in my lifetime, but it’s on the horizon.

     

  2. jjf

    So you’re saying the trillions went to businesses who could otherwise weather the storm?

  3. dad29

    Owen, I think you forgot to mention BK with Debtor-in-Possession,  which allows the company to continue operations albeit in a limited fashion.  It’s not too far from “belt-tightening” but the Company is protected from predators by the Court.

  4. jjf

    Dad29, let’s also talk about what happens when states open up and businesses still don’t thrive, still don’t make enough money – because, well, all the people will still be social-distancing because of their universal common sense, right?  What happens next?

  5. Merlin

    Chapter 11s are going to become very popular in the near future. It can be pretty much legalized theft that hoses everyone downstream of the filer. Even if your business/employer survives the WuFlu apocalypse the financial fallout from the re-orgs is going to touch everyone, especially if you haven’t been keeping your ARs on a very short leash the last year or so. Those 90-day clawbacks are a bitch to swallow… and there’s not a damn thing you can do about it other than whine.

  6. Kevin Scheunemann

    Awful socialists.  Just awful.

  7. dad29

    Jiffy, we don’t have anything to discuss.  You will hide from the EEEEEEEEEEEEEEEEEEEeeeeeeeeeeeevil virus, under your bed.

    I won’t.

  8. jjf

    Dad29, is that the sound you make when you want to shut out the world and its scary ideas?  You can’t even imagine that business and commerce are just going to bounce back?  Everyone’s headed back to the fish fry?

  9. jjf

    Dad29, did you see this copy-pasta on your feeds?

    This was posted by a restaurant owner in Georgia…

    It’s not a stupid move on Kemp’s part. On the contrary, it’s very calculated.

    Here’s the deal. Kemp mandates restaurants reopen, whether I reopen dining rooms or not. I file for business interruption insurance, it does not go through since I am “allowed” to operate full capacity.

    My landlord can demand all their money, since I am allowed to fully operate.

    Furloughed staff that is collecting unemployment insurance have to come back to work or I have to let them go. Their unemployment insurance then goes on my tab.

    If things blow up again, they are still on my tab not on the states, since they are no longer employed.

    Guys, this is about screwing the working class and small business, not about helping us.

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