An article published by “Finance Watch” claims the additional public money due to flow into the coffers of private banks so as to shield them against the effects of Covid is not justified. Well if OTHER firms and corporations are to receive public money to shield them from the effects of Covid, it’s hard to see why banks should not “join in the fun”, so to speak.
A better argument against giving public money to employers and corporations is perhaps that normal bankruptcy procedures cope perfectly well with Covid type disasters: firms go bust, shareholders and possibly also bondholders are wiped out, but the ASSETS of relevant firms do not of course vanish into thin air. Assuming those assets look like being a good bet in the long term, then someone will buy them up at a bargain basement price and put them to good use once the Covid problem is cracked. And there are plenty of corporations and people out there with piles of cash: after all, the enormous amounts of cash created and spent by governments and central banks so as to deal with Covid, must be out there somewhere. E.g. Apple has $192bn!!!!!
Moreover, there is a distinct downside to trying to preserve every firm and corporation in its present form, namely that patterns of employment post Covid may be very different: e.g. more people working from home. Thus there is much to be said for letting firms which cannot make it thru Covid just wither, while keeping demand as high as possible. New firms and forms of economic activity will then make use of that demand.
Unfortunately the above points about the possible merits of bog standard bankruptcy proceedings does not seem to have occurred to Finance Watch.