Author Topic: Let Rent-Seekers Fail  (Read 5155 times)


  • Jr. Member
  • **
  • Posts: 60
Let Rent-Seekers Fail
« on: April 28, 2020, 10:03:01 AM »
Where did we get the insane notion that the taxpayers must rescue people who made dumb decisions while they tried to collect economic rent? Take a look at the latest sob story in the Wall Street Journal:

The poor, poor AirBNB owners who thought they were hoteliers are now shocked - shocked - that they made a Faustian bargain and that rents and house prices don’t always go straight up. Predictably, political influence was brought to bear to ‘help’ them through these tough times:

Nearly one in five hosts that Airbnb recently surveyed said hosting on the platform helped them avoid eviction or foreclosure. The company presented these findings to U.S. Congressional leaders and successfully lobbied to have hosts covered under the Coronavirus Aid, Relief, and Economic Security Act—known as the Cares Act—making them potentially eligible for small-business loans and unemployment assistance, among other things.

In the past months alone we have bailed out - or have heard cries for bailouts - from:

  • Management teams that bought back billions worth of stock at market highs, issuing themselves more options and telling shareholders that the dilution was a “non-cash expense”
  • Private equity firms that scooped up marginal franchises to lever them up based on “adjusted” EBITDA
  • Energy zombie companies whose breakeven cost of production make them unprofitable even with WTI at 3x the current price
  • The piggish funds who bought the debt of those energy zombies in a reach for yield
  • Universities that pay "diversity" and "student life" administrators $250k salaries while adjuncts starve
  • States and local governments that offer $150k / yr defined benefit pensions to retired civil servants
  • AirBNB owners who purchased property at 90%+ LTV in urban areas with artificially constrained supply
  • NIMBYs in those urban areas who carry enormous HELOCs and who voted against housing development to ride the wave of house price appreciation
  • Idiot VCs trying to dump their scooter companies on the public at 15x sales

It’s quite a show. All of the rentiers are steadily proceeding to the trough to claim that they are “systemically important” and that if you the taxpayer don’t help them RIGHT NOW, everything will collapse. This isn’t negotiation; it’s thuggery and extortion, plain and simple. If this continues, we in the West will have our own class of Russian-style oligarchs who attained their fortunes not through prudent risk taking or innovation, but political connections and bilking the citizenry.

It seems we don’t have capitalism anymore - we just have looting.
« Last Edit: April 29, 2020, 07:44:48 AM by Nomad »


  • Hero Member
  • *****
  • Posts: 1177
Re: Let Rentiers Fail
« Reply #1 on: April 28, 2020, 10:10:56 AM »
Freedom to pursue happiness (and possibly fail)

Has morphed into

Freedom to pursue and pursue and pursue and pursue. Failure is now only the result of “interference” and a bailout is now apparently appropriate?

Edit: Epic post
« Last Edit: April 28, 2020, 12:57:10 PM by Castanza »


  • Full Member
  • ***
  • Posts: 129
Re: Let Rentiers Fail
« Reply #2 on: April 28, 2020, 10:31:20 AM »
Nomad, great thread. I agree wholeheartedly.

I'm disgusted and disheartened by the latest actions and narrative from all areas of government and industry regarding bailouts. They pretend we're in a capitalist system yet, at the first sign of trouble, are willing to save everyone from failure. It's the same story every time, "this time is different", "it would create a much bigger problem if we didn't save...", etc.

Speculation is being encouraged in all areas but the downside is being protected.


  • Full Member
  • ***
  • Posts: 177
Re: Let Rentiers Fail
« Reply #3 on: April 28, 2020, 10:35:13 AM »
Amen, brother.


I'm sick of it.

As Munger would say, the incentives have gone very much in the wrong direction.


  • Hero Member
  • *****
  • Posts: 2599
Re: Let Rentiers Fail
« Reply #4 on: April 28, 2020, 11:04:11 AM »
Agreed. Airbnb hosts too a risk. Live with the outcome of that risk.

Airbnb can bail out the hosts if it wants to. American taxpayers should have no part it in it outside of the forebearance arrangements already in place for ALL homeowners/renters.

Disclosure - I used to be an Airbnb host in NYC from 2011 to 2017. I had thought plenty of times of getting multiple more units, but consciously made the decision to avoid the risk of not being able to cover the monthly payments with my salary. The rewards were not lucrative enough for the additional risks.

These others should not be rewarded for failing to adequately prepare for the risks they were taking - particularly since they were milking massive profits along the way and obviously didn't reinvest into safety nets.
« Last Edit: April 28, 2020, 11:07:12 AM by TwoCitiesCapital »


  • Hero Member
  • *****
  • Posts: 748
Re: Let Rentiers Fail
« Reply #5 on: April 28, 2020, 11:09:22 AM »


  • Hero Member
  • *****
  • Posts: 2260
  • ♪ 🎶 ♫ ♪ 🎶 ♫
Re: Let Rentiers Fail
« Reply #6 on: April 28, 2020, 11:14:03 AM »
I'd be happy to bail out an individual AirBnB host with an assumable mortgage, if I like the property.

AFL // BRK.B // CLB an incredibly stupid move // DIS // EW // GPC // MO an incredibly stupid ex-CEO // NVO // PSX // ULTA // VDE // VLGEA // WFC

Investable cash 16% + 18 months of survival $


  • Hero Member
  • *****
  • Posts: 3172
Re: Let Rentiers Fail
« Reply #7 on: April 28, 2020, 12:48:36 PM »
shit happens!  wipe the shit off your own shoe.


  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3665
Re: Let Rentiers Fail
« Reply #8 on: April 28, 2020, 12:50:51 PM »
I'm a big fan of no bailouts for anyone - for everything and every time.


  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2016
    • scorpion capital
Re: Let Rentiers Fail
« Reply #9 on: April 28, 2020, 01:02:25 PM »
How else will we generate the much sought after and legendary hyperinflation if we don't bail everyone out?