Tyler Cowen: evaluation

Transcript context

…Well, I’m not sure what, I’m like you, I want to minimize what we do particularly if it’s likely to be permanent, makes me really uneasy. We’re at risk that this becomes a watershed moment. I think actually, it’s probably too late. Everyone just expects the government to quote, solve this. Again, they neglect the things that we’ve done on our own. I understand the things that we can’t do on our own to fix macroeconomic cascades. I’m not suggesting that we’re going to avoid all the problems if we just leave things alone. I know that’s not true. But I know there are a lot of things happening. People are buying gift certificates from their rest favorite restaurants and other things to keep them going. They’re doing takeout. Obviously that’s not going to be enough. If people aren’t flying, there’s going to be airlines going bankrupt. But the idea that somehow we can make everyone whole. I really don’t like the idea of big business as whole. I’d much rather make individuals whole and I think that’s just really hard to do. This idea of giving everybody $1,000, I don’t need $1,000. Presumably you don’t need $1,000 and do we want to allow every American, you know, is it to make it easy? Should we do that? But it’s clear there’s going to be terrible hardship on individuals who can’t get in to work or shouldn’t go to work. There’s no quote free market solution to that that’s obvious. There may be some of those things that are necessary to reduce the spread of the virus, but they’re so blunt and it discourages me tremendously to think about the consequences of how that will be going forward. Both in how it affects behavior that everyone thinks, “Oh, I don’t have to worry about fill in the blank because eventually I’ll get a check from the government. Here’s one of the tricks when it comes to bailouts. It’s a common line to say, well we want to keep services up and running, but we don’t want to bailout shareholders. You and I probably share that intuition in a very significant majority of cases. But look, think about the airlines. Why do you feel safe flying? To a modest degree it’s because of government regulations, but mainly it’s because there’s equity capital in those companies and the shareholders want to keep the flight safe because they don’t want to lose their capital. If you have major or for that matter, minor airlines all operating at margins where that equity capital essentially has been wiped out. I think that’s a world where flying is no longer very safe. The old recipe of we’ll just have the equity holders eat as much of these losses as they possibly can. I don’t know if that works for the airlines. You mentioned a check to each individual for $1,000. That is one thing I would do if only to help people pay their rent or stock up on groceries. I think some of that is just symbolic. There will be other things we will need to do. Maybe we’re not sure what, but if you haven’t sent some aid to every American, you will be damned for doing those other things for all eternity and that will be harder next time around. I do think that $1,000 will genuinely help people, but I think it has to be viewed as part of a broader package and that is what makes the entire broader package palatable to most voters. I would do that. Well, as I suggested earlier. I think it’s palliative more than stimulative. I mean I think it’s……

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