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“Let Them Fail” – Billionaire Explains To Gobsmacked CNBC Host How Capitalism Is Supposed To Work

With millions of Americans sitting at home working on their laptops, the passive viewership of cable news channels like CNBC must be waaaay up this month, as finance nerds welcome normies to the strange and often hilarious world of live markets news.

In terms of drama, CNBC is usually pretty staid. But every once in a while, there’s a fight, or a contentious interview, that really grabs people’s attention. On Thursday, such a confrontation occurred during “the Halftime Report” as Scott “The Judge” Wapner interviewed early Facebook investor and uber-wealthy VC investor Chamath Palihapitiya.

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.”

Then Wapner asked: “Are you arguing to let airlines fail?

Palihapitiya, who was speaking on the phone, responded with a very assertive “Yes.”

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.”

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