Here we go again.

Yes, the economy is in the doldrums. And, this time we weren’t taken down by foolhardy banks leaving us with the tab. Nope. This time it’s a pandemic.  (OK, a foolhardy government that made believe the disease and its effects were a hoax.)

Of course, once businesses decided to move their factories to other countries and outsource critical components around the world, we (as a nation) were at risk even before the Chinese epidemic spread world wide.  That’s one reason why we are so short of masks, gowns, and other personal protective equipment.  They’re made in China, which is harnessing the inventory for their own needs (and playing with price gouging for the rest of the world).

And, now, there are cries that we need to bail out the airlines and the cruise lines. After all, we are no longer allowed to travel to various places- and we have been warned to stay away from places that have more than a minyan (10 people).

I don’t hear such a clamor for us to bail out the restaurants, coffee shops, and small businesses across America that have been abandoned. Many by state orders. Leaving tons of our lowest paid workers at the curb.

So, let’s consider this bailout that is being bandied about.
We’ll start with the cruise lines. Sure, they are nominally American companies. But, that’s a convenient fiction for them- like when there were pirates attacking the ships.  After all, not one of their ships don’t fly the US Flag. No, they want our government and our troops to protect them in emergencies, while they claim Liberian, Bahamian, Panamanian, among other foreign  flags for those ships. And most of their employees are from the FSU (Former Soviet Union) and Southeast Asia.

And, let’s not forget how much money these firms make- and how little benefit they afford our treasury. Carnival- the largest line in the world- grossed more than $ 20 billion last year, with a 15% profit margin. And, out of that $ 3.275 billion profit (that’s after depreciation), they shelled out $ 71 million in taxes. With only a very small part of that passed on to the US Treasury.

As a matter of fact, here’s the verbiage from their annual report justifying their lack of financial obligations to the US:

In general, under Section 883 of the Internal Revenue Code, certain non-U.S. corporations (such as our North American cruise ship businesses) are not subject to U.S. federal income tax or branch profits tax on U.S. source income derived from, or incidental to, the international operation of a ship or ships.

Which means our obligation to bail them out should be about the same. ZIP!

What about the airlines? Sure, they are American. But, we have to remember what they did the last time we bailed them out. Right after 9-11.

Do you know what they did with the money we gave them? With the profits they made over the past decade?  Did they buy new planes? Increase the pay or benefits to their employees?  (Delta is an outlier in this complaint, as I wrote here.)

Hell, no. They bought back their stock. (That also helped augment executive pay, of course.)

So, when you hear that clamoring to bail out the cruise ships and the airlines? Remember, our funds should benefit American folks- the employees that are now being dropped from the rolls like 3 day old fish.

And, any company or industry that obtains a bailout?  It has to be precluded from buying back its stock for a decade (after they pay the US treasury back) and to reduce the multiple of pay they afford their executives when compared to their employees.

It’s the American people who need our help- not foreign companies or the 1%.