- Chamath Palihapitiya, CEO of the financial investment business Social Capital, told CNBC the US should refuse to bail out companies owned by billionaires throughout the coronavirus pandemic.
- Palihapitiya stated that workers would not be fired if huge business filed for bankruptcy, rather speculators would take the hit.
Social Capital CEO Chamath Palihapitiya said that poor-performing billionaires, hedge funds, and massive business– including airlines– deserve to be “wiped out” throughout the coronavirus pandemic, in an interview with CNBC
Palihapitiya firmly insisted throughout the interview that “zombie” companies run by billionaires that aren’t performing well should not be propped up during the public health crisis, they must be exposed to the market forces at play.
But Palihapitiya highlighted that the employees of these companies would not be at risk if the companies went under.
— CNBC (@CNBC) April 10, 2020
” When a company stops working, it does not fire their staff members, it goes through a packaged insolvency,” Palihapitiya informed CNBC. “If anything, what takes place is individuals who have pensions inside those business, the employees of these companies, wind up owning more of the business.”
” Just to be clear, who are we speaking about? We’re talking about a hedge fund that serves a bunch of billionaire family offices?” he said. “Who cares? Let them get erased. Who cares? They don’t get to summer in the Hamptons? Who cares?”
As the economy slips into further chaos the United States government stepped in.
The Senate passed the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, almost two weeks back in order to support people, businesses, and the healthcare system. And the Federal Reserve also prepares to enhance the economy by offering $2.3 trillion in aid which includes loans to businesses, big and small.
Yet, Palihapitiya stressed the concept that the economy would be better off if the Fed offered money to average Americans rather than funding companies.
” I’m not disagreeing with what the Fed has to do,” Palihapitiya stated. “What I’m stating is it’s producing a ground mine, and it’s creating a bill that will have to come due.”