Olivia Michael CNBC
If the government approves additional incentive funds, they should allocate them to individual consumers and small businesses, venture capitalist Chamat Palihapitiya said on Wednesday.
In a scathing diatribe against the troubled sector, the CEO of Social Capital expanded on comments he made earlier this year to CNBC, saying that troubled airlines should not be rescued because they are so poorly managed.
Palihapitiya said that before the pandemic, companies had already made “the most horrible and idiotic form of capital distribution imaginable.”
“No extra dollars should go to these companies,” he added.
Among the bad decisions he cites are not investing in research and development, saving or investing more resources in the workforce. Instead, they used the money to buy back shares and raise stock prices.
“This has been happening for the last 15 or 20 years,” Palihapitia said in a speech at the Delivering Alpha conference, presented by CNBC and Institutional Investor. “If you were going to give money to these people, you had to create much tighter guardrails for what you would do in the future.”
Instead of direct funding to rescue large companies, as has been done under pandemic programs approved by Congress and the Federal Reserve, future resources should go to small business owners and individuals, he added.
“If you really believe in the drip economy, then let’s actually see how the economy would work. Put money in the hands of ordinary Americans,” Palihapitia said in remarks similar to those he had made before opposing hedge fund bailouts. and poorly managed companies. “What I guarantee you will do is that they will spend.”
He spoke amid a tense atmosphere in Washington as Treasury Secretary Stephen Mnuchin and Parliament Speaker Nancy Pelosi (D-California) continue to try to reach a pleasant spending deal for those still affected by the Covid spread. -19.
At the same time, investors continue to analyze the election between President Donald Trump and former Vice President Joe Biden. The two faced a noisy debate on Tuesday night, which, while controversial and reckless, did not worsen investor sentiment as shares soared in trading on Wednesday.
Palihapitiya characterizes the debate as a “chamomile fire dumpster” that is “so bad” but is also “in some ways … incredibly clarifying.”
“The stock market has said that at the moment this is an election without harm,” he said. “They voted with their dollars.”
However, he warned that politics has become more of a brand than an entity, even warning that one day reality TV star Kim Kardashian could become president.