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Capitalist Bulls, Socialist Bears
How the rich have convinced the masses to subsidize their risks
There are two types of compensation in the business world — salary and equity.
The former gives you a steady stream of income and you are not affected by erratic market movements. The latter gives you ownership of the company, and accordingly, the perks and the dangers if the company soars or crashes.
The Risk-Reward tradeoff is key to efficient markets.
However, the rich rarely suffer, do they?
Amid the current market turmoil owing to the COVID pandemic, companies are laying off employees with little discretion. Normal people are expected to save for a rainy day. They are told to get a second job if one does not suffice. When the government pays them because they were laid off, or suffered an injury, its called “benefits” or “handouts”. But multi-billion dollar behemoths have started screaming “save us!” in less than two months since the global pandemic reared its ugly head.
Companies (at least in India) are terminating employees, sending them on forced “unpaid leave”, or just slashing salaries by 25%-50%.
