
‘Stealth bailout’ shovels millions of dollars to oil companies - laurex
https://www.bloomberg.com/news/articles/2020-05-15/-stealth-bailout-shovels-millions-of-dollars-to-oil-companies
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archgoon
My personal feeling is that we should have just cut everyone a 10k check and
be done with it. Some direct funding to hospitals maybe; but 95% of the
stimulus should have just been direct cash. Seems like the best way to ensure
that people who need it got it, and also give people a cushion to figure out
what to do next in the new economy; and not feel compelled to prop up the old
one.

I'm sure there's some very good reason we didn't do it. Love to hear it.

~~~
georgeecollins
There is not really a mechanism to do that. The US does not have the mailing
address of every citizen, or no sure knowledge which SSNs belong to dead
people, and what the current address is that corresponds to an SSN, etc. The
closest is tax returns. There are about 100m more people in the US than tax
returns, and some people file more than one return (companies, trusts). I am
sure the US has the correct information for half the population. But if you
start thinking about millions of $10k checks being sent to the wrong address
the potential for fraud is pretty mind boggling.

I don't think that is the only reason, but it is something to consider.

~~~
oneplane
That seems rather silly. How can a country function well if you don't have
basic information to connect with the people?

~~~
georgeecollins
There are people in the US that don't like the idea of a national id card. The
US has a very special love / hate relationship with government.

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jlbnjmn
Meanwhile millions of people approved for unemployment benefits still aren't
getting paid.

Not cool.

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sremani
83% of US energy portfolio is connected to Oil, Gas and Coal.

Either you prop energy industry now, or fight KSA's wars and ideological
misadventures in ME.

For what its worth, saving ONG jobs in US at least gives us better policy
options than being energy hostage.

Green tech is not there yet to pick heavy load. In the interim you need ONG.

~~~
wolco
Why not let the free market decide.

~~~
reducesuffering
It isn't a free market. OPEC+ is literally a cartel trying to gain
monopolistic control over oil prices. With NA ONG bankrupt, they can proceed
to gouge oil prices for the next half decade, until NA ONG can be
recapitalized and operating at full capacity again. In the meantime, KSA will
then be given large amounts arms and wealth to prop up their shenanigans in
the ME.

~~~
madhadron
Easy enough to fix. Tell the Saudis that they don't get anymore hardware or
support unless they sell us oil cheap, and otherwise we'll send all that
support to Israel instead.

~~~
MiroF
This comment shows you don't understand ME politics. KSA couldn't care less if
we give arms to Israel.

~~~
madhadron
So maybe Israel is irrelevant. They're a US puppet state, though, and the US
could pull those strings.

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MattGaiser
My understanding is that the change was to allow the stimulus loans to be used
to pay off and refinance loans they currently have as well as claim back past
losses on taxes.

While questionable in many ways, why is that specific to the oil and gas
industry other than them having many past profits?

~~~
toomuchtodo
Because they were already over leveraged businesses that shouldn't have been
given access to stimulus capital. This is exactly the problem causing "zombie
companies" [1], companies that are only able to survive with cheap capital
(similar to the VC model funding business models that are never going to be
profitable at any scale).

And of all companies to provide stimulus for, oil and gas is not what we
should be wasting even more fiat on. This is a handout, plain and simple, no
different than the governor of North Dakota trying to prop up a coal plant
that hasn't been profitable in years _that the owners themselves want to shut
down_ [2] [3].

[1]
[https://en.wikipedia.org/wiki/Zombie_company](https://en.wikipedia.org/wiki/Zombie_company)

[2] [https://www.cnbc.com/2020/05/11/north-dakotas-largest-
power-...](https://www.cnbc.com/2020/05/11/north-dakotas-largest-power-plant-
set-to-close-as-owner-bets-on-wind.html)

[3] [https://www.utilitydive.com/news/north-dakota-governor-
oppos...](https://www.utilitydive.com/news/north-dakota-governor-opposes-
Great-River-energy-coal-exit/577660/)

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vmception
eh this just temporarily reinstates the prior tax code before the 2017 Tax act
changes.

The 2017 law removed the ability to carry back net operating losses, only
leaving carry forwards. We had carry backs for at least 3 decades.

The CARES Act temporarily reinstated carry backs. I think it is disingenuous
to say thats a problem, when its more normal than anything else that has
happened.

Regarding how it was sold for the "little guy", who cares? Like imagine being
that naive not to notice that everything gets consensus in this country by
catering to the constituents that can gain consensus. Consensus needs numbers,
you don't sell a bill by saying "in this esoteric accounting standard that you
will never encounter, we need to make a rule change regarding carrying losses
to encourage growth ACT", you cater to things most people will encounter, and
that the representatives of those people will relate to, and get phone calls
and emails from their people about.

I take social cues from other people, so I can tell I feel differently, as in
feel nothing, from this. But I think you should too.

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blackoil
Should not be surprising, particularly now when there is a 3-way turf war on
between Russia, Saudis and US.

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sand_castles
You must live in the Truman Show to believe Uncle Sam would let anything
happen to Oil and Gas companies.

