Managers might have been fired and equity wiped out but they still have all the rent and bonuses that were extracted during the high risk high reward activities.
That’s why it’s a morale hazard and the fed taking over it doesn’t solve it.
That’s why it’s a morale hazard and the fed taking over it doesn’t solve it.
Basically, VCs did not wanted to pay for that and were rewarded. They advised or forced their startups to not insure money too. Also, before someone makes that point, these are supposed to be highly sophisticated operators. They are supposed to have know how. The people being bailed out are not Johny-the-cleaner working on his small busines.