“Wapner brought up the question of the bailouts for main street and corporate America that the Trump Administration has packaged as part of its $2.2 trillion plan. Palihapitiya raised an issue with the program, arguing that the administration would be using taxpayer money to prop up “zombie companies.”
Wapner seemed blown away by this. Struggling to process the answer he had just been given, he followed-up, incredulously: “But how does that make sense in the broader scheme of the economy.”
Then Palihapitiya went off.
“This is a lie that’s been propagated by Wall Street. When a company fails, it does not fire its employees…it goes through a packaged bankruptcy…if anything, what happens is the employees end up owning more of the company. The people who get wiped out are the people who own the unsecured debt and the equity…but the employees don’t get wiped out and the pensions don’t get wiped out.”
“And if a bunch of hedge funds get wiped out – what’s the big deal? Let them fail. So they don’t get the summer in the Hamptons – who cares.”
Out in the real world, people say mean things about the rich all the time. But it doesn’t happen quite as often on CNBC. In fact, sometimes CNBC’s hosts seem downright confused when people don’t seem to care about asset prices above all else – like that time Rick Santelli said we should all just go get infected and let grandma die to save the stock market. What’s more, Wapner seemed almost personally insulted by Palihapitiya’s response.
How is Boeing able to so blithely bite the hand that feeds? Because it has alternatives should the bailout not come through. If Boeing really needs the money, it’s free to sell stock and raise cash – the opposite of what it did for decades when it bought up shares, shrinking its float and helping maintain a buoyant valuation.