Privatize the losses. These are the largest companies the world has ever seen, sitting on piles of assets like dragons. They have hyped AI endlessly to the point that everyone else is sick of it. If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy.
AMEN AMEN AMEN! This doesn't mean ai goes bust, this actually would force innovation even more. AI isn't going anywhere anytime soon. We have the CEO of OpenAI claiming that models running on consumer hardware is a waste of resources and encouraging that it should stay in big data centers that are extremely wasteful when it comes to resources. Most consumers couldn't afford to waste away their resources to run consumer models. I love technology. I have a deep-seated level of resentment of the difference in treatment these big corporations get vs the people.
> If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy
Agree.
What we need is a revocation of the Exchange Stabilisation Fund [1] as well as hard limits on the Defense Production Act’s Title III [2] and whatever the fuck in the CHIPS Act let the President unilaterally invest taxpayer funds in Intel.
This announcement of a non-binding resolution does none of that. It’s pure puffery.
And in case anyone thinks this is hateful or harsh, remember: bankruptcy doesn’t mean we space laser these companies. Shareholders get wiped. Creditors take over. Services probably keep getting rendered, GPUs probably keep running.
How exactly are House Democrats supposed to revoke the Exchange Stabilization Fund or change the Defense Production Act when they don't have a majority in the House? All they can do is signal what they intend to do if they regain the majority.
> How exactly are House Democrats supposed to revoke the Exchange Stabilization Fund or change the Defense Production Act when they don't have a majority in the House?
Introduce an actual bill. Draft and debate something specific so that when they are in power they don’t have to start from scratch.
Use procedure to try and bring it up for a vote. At least try to legislate.
We should have let the auto industry fail in 2008 too. The factories and IP still would be there for more innovative entrepreneurs to buy and make use of. Instead we have 3 legacy companies that can't even deliver an EV to compete with Tesla after 15 years of pretending to try.
If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem. If you owe the bank $100 billion, that's country's problem.
If it’s the country’s problem, then nationalize them. Not loans, not bail outs. Confiscate and figure out how to wind them down in a way that benefits the taxpayers.
Didn't even have to wind them down to benefit in some cases. I can't remember if it was the automaker or some of the 08 bank bailouts where the stock the government took as part of the bailout turned a profit after a few years.
You have a point here. It doesn't make sense that a company should get to keep the upside while having downside protection from the government. The problem is that the government makes the biggest bloated legacy nightmare of a corporation look like a 10 person startup. Between the two options I would rather have a pile of my tax money set on fire once every decade decade or so.
If the gov't made bad decisions letting us get to some situation, it doesn't make sense to reward the government and give it even more authority.
That's got perverse consequences. Just like with the corporate leadership, you're encouraging bureaucrats to make bad decisions because (a) they don't have to answer for their bad decisions, and in fact (b) they'll get to expand their authority should their decisions go bad.
The corporate leadership that got us to the problem should suffer, but so should any bureaucrats who had a part it allowing it to happen.
Yes, but it appears that the banks are not over levered like they were during the housing crisis. They will take a hit, but presumably will not need bailing out.
This was true last year, but it would be risky to assume it remains true from one week to the next.
The rate of growth in this sector is "1. move so fast legislators can't keep up; 2. keep going until you hit a limit, then find a way to hack around that limit; 3. GOTO 2".
Can you privatize the losses if the banks are investing, providing debt to and repackaging that debt into broader instruments?
I worry that one of the reasons that Anthropic has 500 billion in commitments and everyone is running to the credit markets is to make it so that if they fail everyone suffers.
If they can't privatize the loses, they should definitely not be allowed to privatize the gains. AI should be a public utility and be required to open source their models.
All the more reason to make them fail. FDIC should pay insurance and otherwise fail the banks. Capitalism cannot work if there isn't feedback that not watching for things like this will hurt you.
Are you talking about SVB? Because FDIC paid out much more than just insurance, it made sure everyone was whole. I think that set a very dangerous precedent.
No, it is not. The way the SVB et al. collapse was handled was highly unusual. FDIC guaranteed deposits in excess of the insurance cap, bailing out (wealthy tech and VC) depositors to the tune of 30%ish of the fund set aside for such purposes. The Treasury stood up a new facility to prevent contagion to other banks.
You cannot do this if the big Wall Street firms collapse.
> You cannot do this if the big Wall Street firms collapse.
I'm not sure what you mean by this. Wall Street firms as such don't have deposits; Wachovia, Washington Mutual, and a number of smaller but still large banks were handled in similar ways to avoid any loss of even uninsured deposits.
Perhaps you're under the impression that the FDIC paid out of its fund for those deposits? That's not what happened. First Citizens agreed to assume the deposits, although it's fair to say that the FDIC made them do it and they had promised to find some way to fill the gap.
I actually liked the approach that happened with several large companies in 2008 - the stockholders get wiped out, the senior management is gone, but the depositors get protected.
Where did depositors almost get wiped out in 2008?
At NetBank? Only if they were over the FDIC limit. Stockholders got destroyed, though.
At Bear Stearns? No, depositors got protected in a convoluted deal. The shareholders got very close to nothing.
At Lehman Brothers? They did "break the buck" on money market funds for a bit, but weren't depositors made whole? And weren't stock owners wiped out in the bankruptcy?
Washington Mutual? Depositors were covered by the FDIC.
Where were depositors "almost wiped out"? Where specifically? Where were stockholders bailed out?
> Where did depositors almost get wiped out in 2008?
“The [Deposit Insurance Fund] fell to the lowest point in its history, a negative $20.9 billion on an accounting basis, by year-end 2009.
…
To address this issue, the FDIC adopted a novel approach that required the banking industry to prepay its quarterly risk-based assessments for the fourth quarter of 2009 and for the next three years” [1].
Where did “significant amounts of cash” this was funded out of, which “banks were holding at the time,” come from? From the Fed and the bail-outs.
Without the bail-outs, banks wouldn’t have been able to fund the DIF and the FDIC would have faced the threat of insolvency.
Privatizing the losses doesn't mean the rest of us are going to escape without a scratch. It just means that we let fail the things that are going to fail.
What makes this so politically unpalatable is that having constantly bailed out the last few cycles, everyone is now operating on the assumption that they will be bailed out, so many entities who in a more perfect world would know better have done a lot of stupid things, like pensions that have a lot of bonds that will go bad if the AI bubble collapses.
Frankly we're looking at massive problems and upheaval at this point no matter what we do. But the advantage of not socializing the losses is that the signals of what needs to be changed go directly into the economy. Socializing the losses means that the signals get muted, confused, and mangled and people in the future end up doing the wrong things as a result.
Unfortunately, at this point I think the choice is between people clearly and forthrightly losing massive portions of their retirement as visible losses, or people deceptively losing massive portions of their retirement as the bailout creates massive inflation and their retirement is inflated until it has a fairly similar amount of losses. Unfortunately, it is a feature for the rulers that the bailouts obscure the losses and dampen the correct apportionment of blame, even as it destroys the underlying economy. Giving people clear, correct targets for their rage, the same process of correct pain apportionment the economy needs to become healthy again, would point people at the "wrong" clear, correct targets, and the clear, correct targets are the ones deciding whether or not a bailout occurs. Not just the literal lawmakers nominally making the call, but the entire system that makes the decision.
We do definitively know, with climate change level certainty (read: there is still the odd ball expert that dissents), that it absolutely needed to happen.
What is much less known, because it kinda kills the talking point, is that the "too big to fail" bailouts were fully repaid with interest, to the tune of an ~$17B profit.
The losses from the program were from the auto industry ($12B) and the struggling homeowners fund ($31B). Which is a bit ironic, because those two are probably the ones that would have the most public support.
I think the precedent folks were pointing to was the great depression--no strong signal of assurance to temper public concern means things like bank runs and sudden collapses of institutions that would have otherwise made it because of group fear. Not sure how accurate that comparison is though.
Anthropic is not going to fail. Claude does amazing things and all the companies built on top of it are more likely to fail because at the end of the day, we can remake their value proposition by using Claude and a few command line tools…
If Anthropic has made promises that its wallet cannot keep (as it looks like), it will fail. Let me remind you that Anthropic isn't profitable yet, and there's no clear path that it will be.
Okay fair enough. I don’t track the finances just what the tools are doing. And on that all these AI-Ifying documents and stuff doesn’t really have a moat, but Anthropic has a great product.
Either way the people should never bail out corporations.
great products only take them so far, the question is are they great enough so people would be willing to pay the prices they'd need to ask if they would want to at least match their spending with their income
Chapter 7, please! I would like them to *liquidate* Smaug's GPU hoard; and I would like them to do that all at once, in a swift and efficient fire sale.
A lot of those are datacenter GPU racks which will be difficult to operate for most people, even for smaller companies that don't have watercooling setups.
Likely with no place to run it. I considered an old (circa 2017) retired DGX-1 which has 8x V100 32GB GPUs as an alternative to an M5 Ultra Mac Studio. The problem is the power draw. The modern GPUs AI companies are sitting on draw vastly more power.
Nobody who has ever run a business or knows about how a business runs would think that any business "sits on piles of assets like dragons." Very little cash sits idle, usually for anticipated operational expenditures with a reserve for unanticipated expenditures; the rest is invested, loaned, spent on building the business, or returned to investors. If OpenAI is holding $25 billion in cash, it's because they anticipate spending that much in the near future, not because they're sleeping atop it in a mountain cave.
In this particular case and with these particular companies... yes, they were sitting in a hoard of cash like dragons. They literally didn't know what to do with it, so they gambled on The Next Big Thing™....
Either way, it's more efficient to give whatever money to bail out individuals/consumers than to bail out rent seeking organizations
I was so terribly sad to learn that gold is much more dense than a duck, and thus Scrooge would have certainly floated on top of his pool of coins. My childhood was ruined.
Now that I think about it, it would seem this may also apply to witches.
The IPOs are for "socializing" the losses, in the sense that the losses are dumped on retail investors, who are the general populace. Especially if you consider big pension funds
A lot of comments read this is as fluff. And in some ways it is.
However, looking at the other side, I think what this might do is add some barrier or consideration when a bailout is considered.
The last time we did large scale bailouts (TARP[0], in 2008), It was rushed through and ratified in around two weeks following the sudden collapse of Lehman.
Any measures we can take to ensure that we don't fall into a situation where there is only one choice is sensible.
It’s worth noting, though, that TARP succeeded in saving the US economy, which was much less affected by the crisis, and turned a profit for the US government.
> Any measures we can take to ensure that we don't fall into a situation where there is only one choice is sensible.
Amen. Prepare for a disaster tomorrow by planning for it today. The specific implementation might be mediocre, but we should be pushing for more, especially vis-a-vis pushing for anyone in the company who knowingly was involved in fraud to go to prison.
Treasury's summary is missing important pieces of the story. TARP failed its first vote in Congress, with opponents rightly pointing out that it was being rushed through and alternatives ought to be considered. But five days later, no concrete alternative had arisen, and it was clear to at least 60 reps who flipped their vote that something had to be done or the financial system was going to collapse.
It was part of the bubble. Amazon's stock lost over 90% of it's value. The company survived, but many other companies did not. A bubble does not mean a company fails just that valuations are too high and that there will be a massive correction over a short period of time. Some companies fail, others survive.
You mean the dot com bubble, which was in fact a major bubble that caused a lot of huge financial issues in the country? You'd think someone on a tech forum would have heard of it, but I suppose some of us would rather make asinine clapback comments than think about what we're saying.
There's an existing concept of and precedent for, "Too big to fail."
The wikipedia article gets the idea across [0].
This creates an implied "insurance" program, tilting the risk profile toward being aggressive. Taking a moon shot isn't so scary when you think the government will probably step in if it blows up bad enough.
This fluffy, political statement is a message: don't count on it.
Perhaps it will give investors/executives a few thoughts on preparing to deal with a potential blowup themselves?
It’s a resolution, so pure fluff. That said, a prohibition on bailing out this sector in particular might make it possible to claw back anything this regime illegally gives.
There are almost certainly bank execs who are looking at Anthropic's IPO and thinking "if it crashes, we'll get bailed out". Saying "no you won't" now, before the IPO, when it has a chance to affect peoples' behavior, is a worthwhile thing to do.
How? Since when do banks care about IPO crashes? A lot of IPOs crashed after listing; I can’t remember a single time when a bailout was needed after an IPO.
For some reason* the rhetoric is focused on bank bailouts in 2008, but the more direct analogy is the auto bailouts in 2008, which weren't strictly necessary but did protect an industry many Americans felt attached to. I think it's reasonable to worry that the same thing could happen to AI companies.
The investment to date has been ridiculous and undisciplined. It’s very hard to understand the valuations of these companies. If this wasn’t an election year I think there would be more oversight and critical review. But we have a very unserious party in charge right now.
It’s good that it’s being discussed. We’re tired of the wealth class privatizing the profits and leaving us to cover the costs.
Then the bill will never become relevant and it’ll just be a waste of time and you can laugh at it in hindsight. And I’m sure none of these companies will lobby against it, since it’s just tilting at windmills and won’t mean anything.
I have no idea who would they even bailout. Investors? Why? What for? What would that change?
Bailing out banks made some sense so that they couldn't operate. Without the bailout there would be no more banks and a hundred million of people left on the ice.
If you want to keep AI operating you can just (temporarily?) ban investors from tearing down the AI companies they invested in for parts. You could say they are important for national security or something. I'm sure they are already earning enough to keep the lights on. Just not enout to give investors payback for insate capital expediture to set up.
Such ban wolud the governement zero, especially if you write the law well enough, so that it can't be succesfully challenged in court.
I agree with much of your sentiment, but if the lack of bailout (which let me reiterate, I agree with) leads to a recession, it will kill the D chances in 2028. They will apply this calculus to their political behavior, and (as is typical for the Ds) will do nothing.
The Democrats I suspect are planning on doing the exact opposite unfortunately. They were very wimpy on the bubbly ai stuff under Biden, why would they change when they don't get punished from their own constituents for going against their promises. Same party apparatus as a whole that existed under Kamala. We need a Trump style clean out of the Democratic party because the brand is as bad as the Republican brand at this point. I can't with surity say that the Democrats are going to do anything to reign in big tech, all I can hope for is that they will be slightly better than trump or if not that, no worse.
For the people in the comments stating that this is just fluff for voters, that may be true. But consider that this memo has another target audience: Investors, Banks, and VCs.
I know that many people in those spaces are investing in AI precisely because they believe that should their AI investments fail, the industry will be bailed out by the federal government. Getting AI to be seen favorably by the administration and putting AI within civic government systems and inside defense contracts is a pretty big push towards that outcome.
This doesn’t actually require anything like a law, it’s basically a verbal promise. Or am I misreading?
If AI companies were to go bankrupt, it’s possible they’d be nationalized. I don’t see any other feasible option besides that or a bailout (or one but it’s effectively the other, e.g. “nationalized” but the employees including leaders are the same, or bailed out but already subservient to the military). I think the best case is for the compute to be made effectively public: giving every citizen free access, since we’re paying taxes that prevent their bankruptcy.
You are reading this exactly correct. It's the most government-coded kind of resolution: it sounds impressive, but means nothing. It is kinda nice to get that narrative out there though, we shouldn't bail out companies, we should let them fail and re-organize into companies that can work. "Bankrupt" doesn't necessarily have to mean you disappear and go away, it can mean you shuffle people and equipment around and get a new name and logo that makes more sense.
That's the logic that led to "Let's just let Lehman fail" and precipitated the 2008 crash. At scale, markets are not zero sum and failures sink all boats.
There are no good answers here. But pointing fingers and assigning blame is for sure one of the worst ways to do the analysis.
I don't doubt that there are possible bailouts with potential net positive outcomes, just that legislatures are capable of distinguishing them with an overall net positive outcome. Or that the benefits would outweigh the moral hazard of becoming reliant on them.
Eh, no. The reality is that we are still paying for unresolved issues from 2008 crash. If anything, each time we kick the can, the worse the next iteration will be.
> reality is that we are still paying for unresolved issues from 2008 crash
Because it was a mess. Compare it with the bank failures in 2023. Shareholders wiped out, multiple collapses, yet many people have forgotten it even happened.
> At scale, markets are not zero sum and failures sink all boats.
At scale, this boats sink somewhere, not disappeared into the void. And yeas, markets are not zero sum, amount of goods may increase and may decrease, and we should let agents that decrease them fail.
Lehman failed because of the 2008 crisis; its failure did not cause or precipitate it. Even Wikipedia lays it out in the opening summary (emphasis mine):
> “A liquidity crisis spread to global institutions by mid-2007 and climaxed with the bankruptcy of Lehman Brothers in September 2008…”
Letting Lehamn fail was the right call, because it allowed the Fed to bulldoze TARP through and save the wider economy as a result. If anything, I would say the subsequent bailouts were too generous in letting the companies retain controls and returns; the government should’ve kept a permanent, partially-nationalized control of those shares and added them to a sovereign wealth fund instead of selling them back on the market. “You fucked up so bad the entire system almost failed, so clearly you cannot be trusted to self-govern” should’ve been the unambiguous messaging from the Fed.
How many people in this thread think that when the Dems win midterms the AI boom has a hard switch to a bust? I really feel like they will rapidly expedite the process instead of having air come out. I definitely didn't think the market would run up right to the date though.
I wonder how we'll look back at the last 30 years at this point:
- We have a total lack of oversight, transparency on private companies and their finances
- We have VCs that very much have the capability to pump up value in a way that is detached from reality.
- The language of startups discourages saying "We are trying to..", you just say "We are". This is a launch pad for a more general culture that lacks integrity.
- The founder has become more and more of an idolized archetype. Character flaws are accepted as part of "what it takes". We accept dishonest behavior as hacks and part of the hustle.
I think this is a risk that applies to the whole VC backed tech startup economy.
But this is really socialism. It was not a bailout of banks, it was socialism for wealthy. Did the people lose their houses? Yes! What about the people who made obscene profits from lending money to people when they should not? Did they lose their money? No. We - the taxpayers, the ex home owners - gave them money.
What about socialism for the egg industry? When the centralized chicken stocks got a disease, we people who were paying usurious prices for food, also provided payments to ensure the wealthy owners did not suffer.
Socialism for the wealthy === good, socialism for the poor === evil. Hmmm. Oh no that can't be so lets call socialism for the rich "a bailout".
Since we force people on food stamps to work now, maybe with this "bailout" we should force those people to work minimum wage jobs?
Any pulse on how likely this is to pass or what hurdles it faces? Neews like these give me hope but often they are written before anything materializes.
Not going to happen. Friendly reminder that when it came to money, politicians know exactly where the bread is buttered. When it came to Silicon Valley Bank bailout, Summers himself personally intervened[1]. Naturally, that is perfectly fine, but if one was to suggest the same for .. say.. students loan, immediately people will descend crying horrified cries of 'but but fiscal responsibility'.
Gosh I really gotta get a real job again. The RLHF gig work has been great while I’ve been in school - flexibility, good pay - but I’ve known the whole time that it won’t last. Gig workers will be the last consideration when it all falls apart
Fully support it. We’ve had a moral hazard in the USA for half a century with constant bailouts for speculation and gambling by businesses.
We must let them fail, no matter how many jobs it costs, no matter what the harm looks like in the short term, to send a clear and unambiguous signal to others that the government won’t backstop your shitty bets.
absolutely ZERO Ai companies need bailouts. this is complete theater.
if you are reading this, please do some research on how much money inference prints? its not wildly spoken about because people don’t yap about printing money.
“Oh but it’ll all come crashing down” - say you don’t work at a lab or know anyone at a lab.
My greater annoyance is HN becoming annoying political in the past few years. Sure, everything is political now but the moderation siloed these posts better. Maybe the user base is too old now. Fresh blood went to Discord or X.
Please do some research on the other costs involved in AI. Not a single AI company is making any profit and realistically are not close. Training models costs billions of dollars. There is no moat for these companies. If an open model comes out tomorrow that is better than Claude what happens to Claude's 1.5 trillion dollar valuation? What happens if revenue does not grow as fast as anticipated when Anthropic alone has 750 billion dollars in obligations? How do they pay their bills? What happens then.
The only company making money are hardware manufacturers who are throwing logs on to keep the fire burning through direct capital investments in their customers. Without Nvidia some of these neoclouds would already have failed.
I think the “it’ll come crashing down” argument comes from cheaper inference, not more expensive. The frontier labs have to pay for these massive training runs. If inference gets cheap enough that you can run it yourself, why run it on their side? Open weights are (much) less than a year behind.
Projecting that none of these AI companies will demand bailouts after the bubble crash is wildly speculative in the other direction. This has nothing to do with politics.
a) How courageous for them declaring wanting to ban something that isn't being proposed
b) if an AI bubble burst were to happen, the fallout would be severe, ie. hard to abstain for policy makers from giving the public ease of mind
c) All this proposal wants is to drive a wrench between the GOP and its new (?) populist voters, that don't want any favors given to any Big Tech oligarchs, regardless of it being AI or not.
d) this may work or not – neither party is going to abstain from bailing them out, anyways.
I seem to recall OpenAI's CFO inadvertently proposing a bailout about a year ago. I'm fairly confident that the industry has been considering the possibility of one since before that statement.
Not sure why you're downvoted because you're right. If there wasn't a major election next week this would not even be happening. It's meaningless theatre to get the public cheering or jeering on their way to the polls.
In the 2008/2009 crisis the bailouts were approved by a red admin (Bush) and then the check signed, delivered hat in hand, by a blue admin (Obama). If they want a bailout they will get a bailout no matter which party is in charge.
Privatize the losses. These are the largest companies the world has ever seen, sitting on piles of assets like dragons. They have hyped AI endlessly to the point that everyone else is sick of it. If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy.
Signed, the Silent Majority
AMEN AMEN AMEN! This doesn't mean ai goes bust, this actually would force innovation even more. AI isn't going anywhere anytime soon. We have the CEO of OpenAI claiming that models running on consumer hardware is a waste of resources and encouraging that it should stay in big data centers that are extremely wasteful when it comes to resources. Most consumers couldn't afford to waste away their resources to run consumer models. I love technology. I have a deep-seated level of resentment of the difference in treatment these big corporations get vs the people.
> If they haven't saved any money, and can't bail themselves out, they deserve bankruptcy
Agree.
What we need is a revocation of the Exchange Stabilisation Fund [1] as well as hard limits on the Defense Production Act’s Title III [2] and whatever the fuck in the CHIPS Act let the President unilaterally invest taxpayer funds in Intel.
This announcement of a non-binding resolution does none of that. It’s pure puffery.
And in case anyone thinks this is hateful or harsh, remember: bankruptcy doesn’t mean we space laser these companies. Shareholders get wiped. Creditors take over. Services probably keep getting rendered, GPUs probably keep running.
[1] https://en.wikipedia.org/wiki/Exchange_Stabilization_Fund
[2] https://www.govinfo.gov/content/pkg/COMPS-8323/pdf/COMPS-832...
"It's pure puffery"
How exactly are House Democrats supposed to revoke the Exchange Stabilization Fund or change the Defense Production Act when they don't have a majority in the House? All they can do is signal what they intend to do if they regain the majority.
> How exactly are House Democrats supposed to revoke the Exchange Stabilization Fund or change the Defense Production Act when they don't have a majority in the House?
Introduce an actual bill. Draft and debate something specific so that when they are in power they don’t have to start from scratch.
Use procedure to try and bring it up for a vote. At least try to legislate.
We should have let the auto industry fail in 2008 too. The factories and IP still would be there for more innovative entrepreneurs to buy and make use of. Instead we have 3 legacy companies that can't even deliver an EV to compete with Tesla after 15 years of pretending to try.
Need to update the aphorism:
If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem. If you owe the bank $100 billion, that's country's problem.
If it’s the country’s problem, then nationalize them. Not loans, not bail outs. Confiscate and figure out how to wind them down in a way that benefits the taxpayers.
Didn't even have to wind them down to benefit in some cases. I can't remember if it was the automaker or some of the 08 bank bailouts where the stock the government took as part of the bailout turned a profit after a few years.
You’re likely thinking about TARP:
https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
TARP delivered a $15.3B surplus on $426.4B invested for a roughly 3.5% return.
https://projects.propublica.org/bailout/
https://www.reuters.com/article/business/us-government-says-...
GM lost taxpayers $11B, Chrysler lost $1.2B.
So, theft. Got it!
That will make a lot of businesses focus on success here and not somewhere else.
You have a point here. It doesn't make sense that a company should get to keep the upside while having downside protection from the government. The problem is that the government makes the biggest bloated legacy nightmare of a corporation look like a 10 person startup. Between the two options I would rather have a pile of my tax money set on fire once every decade decade or so.
If the gov't made bad decisions letting us get to some situation, it doesn't make sense to reward the government and give it even more authority.
That's got perverse consequences. Just like with the corporate leadership, you're encouraging bureaucrats to make bad decisions because (a) they don't have to answer for their bad decisions, and in fact (b) they'll get to expand their authority should their decisions go bad.
The corporate leadership that got us to the problem should suffer, but so should any bureaucrats who had a part it allowing it to happen.
Fortunately, they do not owe the banks as much as they owe each other and private capital.
I've got news for you on how the economy works.
Well don't leave us hanging, what's the news?
They borrow the banks money to owe to each other?
Yes, but it appears that the banks are not over levered like they were during the housing crisis. They will take a hit, but presumably will not need bailing out.
This was true last year, but it would be risky to assume it remains true from one week to the next.
The rate of growth in this sector is "1. move so fast legislators can't keep up; 2. keep going until you hit a limit, then find a way to hack around that limit; 3. GOTO 2".
Pyramid scheme?
You’re not wrong.
Sucks that most of the country didn’t vote for the $100 billion, but will be left holding the bag. Are we witnessing the fall of an empire?
That's an evergreen template.
Trump admin, to their credit, seem to have somehow figured this out.
They bailed out Intel and the stock recovered.
Might do the same.
Bad new for you, their stock fell -29% today, the largest collapse since the 70s. It's nearly back to last years' level.
It did the temporary job. INTC is doing the work. Things take time.
Can you privatize the losses if the banks are investing, providing debt to and repackaging that debt into broader instruments?
I worry that one of the reasons that Anthropic has 500 billion in commitments and everyone is running to the credit markets is to make it so that if they fail everyone suffers.
Of course. Governments shouldn't be bailing out corporations ever.
> Governments shouldn't be bailing out corporations ever
Ever is a stretch. Government shouldn’t be bailing out shareholders and senior managers.
If they can't privatize the loses, they should definitely not be allowed to privatize the gains. AI should be a public utility and be required to open source their models.
All the more reason to make them fail. FDIC should pay insurance and otherwise fail the banks. Capitalism cannot work if there isn't feedback that not watching for things like this will hurt you.
> FDIC should pay insurance and otherwise fail the banks
That’s what happened in 2023.
Are you talking about SVB? Because FDIC paid out much more than just insurance, it made sure everyone was whole. I think that set a very dangerous precedent.
> FDIC paid out much more than just insurance, it made sure everyone was whole
FDIC didn’t pay anything out. The new capital requirements and conservatorship processes worked.
> that set a very dangerous precedent
I don’t like how it happened. But codifying universal deposit insurance in U.S. banks isn’t a bad idea. Maybe one caps it for foreign deposits.
No, it is not. The way the SVB et al. collapse was handled was highly unusual. FDIC guaranteed deposits in excess of the insurance cap, bailing out (wealthy tech and VC) depositors to the tune of 30%ish of the fund set aside for such purposes. The Treasury stood up a new facility to prevent contagion to other banks.
You cannot do this if the big Wall Street firms collapse.
> You cannot do this if the big Wall Street firms collapse.
I'm not sure what you mean by this. Wall Street firms as such don't have deposits; Wachovia, Washington Mutual, and a number of smaller but still large banks were handled in similar ways to avoid any loss of even uninsured deposits.
Perhaps you're under the impression that the FDIC paid out of its fund for those deposits? That's not what happened. First Citizens agreed to assume the deposits, although it's fair to say that the FDIC made them do it and they had promised to find some way to fill the gap.
I actually liked the approach that happened with several large companies in 2008 - the stockholders get wiped out, the senior management is gone, but the depositors get protected.
> the stockholders get wiped out, the senior management is gone, but the depositors get protected
Who are you thinking of?
That’s what happened in 2023. In 2008, depositors almost got wiped out and a lot of senior managers and stockholders got bailouts.
Where did depositors almost get wiped out in 2008?
At NetBank? Only if they were over the FDIC limit. Stockholders got destroyed, though.
At Bear Stearns? No, depositors got protected in a convoluted deal. The shareholders got very close to nothing.
At Lehman Brothers? They did "break the buck" on money market funds for a bit, but weren't depositors made whole? And weren't stock owners wiped out in the bankruptcy?
Washington Mutual? Depositors were covered by the FDIC.
Where were depositors "almost wiped out"? Where specifically? Where were stockholders bailed out?
> Where did depositors almost get wiped out in 2008?
“The [Deposit Insurance Fund] fell to the lowest point in its history, a negative $20.9 billion on an accounting basis, by year-end 2009.
…
To address this issue, the FDIC adopted a novel approach that required the banking industry to prepay its quarterly risk-based assessments for the fourth quarter of 2009 and for the next three years” [1].
Where did “significant amounts of cash” this was funded out of, which “banks were holding at the time,” come from? From the Fed and the bail-outs.
Without the bail-outs, banks wouldn’t have been able to fund the DIF and the FDIC would have faced the threat of insolvency.
> Where were stockholders bailed out?
Every institution that participated in TARP [2].
[1] https://www.fdic.gov/bank/historical/crisis/overview.pdf
[2] https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
Privatizing the losses doesn't mean the rest of us are going to escape without a scratch. It just means that we let fail the things that are going to fail.
What makes this so politically unpalatable is that having constantly bailed out the last few cycles, everyone is now operating on the assumption that they will be bailed out, so many entities who in a more perfect world would know better have done a lot of stupid things, like pensions that have a lot of bonds that will go bad if the AI bubble collapses.
Frankly we're looking at massive problems and upheaval at this point no matter what we do. But the advantage of not socializing the losses is that the signals of what needs to be changed go directly into the economy. Socializing the losses means that the signals get muted, confused, and mangled and people in the future end up doing the wrong things as a result.
Unfortunately, at this point I think the choice is between people clearly and forthrightly losing massive portions of their retirement as visible losses, or people deceptively losing massive portions of their retirement as the bailout creates massive inflation and their retirement is inflated until it has a fairly similar amount of losses. Unfortunately, it is a feature for the rulers that the bailouts obscure the losses and dampen the correct apportionment of blame, even as it destroys the underlying economy. Giving people clear, correct targets for their rage, the same process of correct pain apportionment the economy needs to become healthy again, would point people at the "wrong" clear, correct targets, and the clear, correct targets are the ones deciding whether or not a bailout occurs. Not just the literal lawmakers nominally making the call, but the entire system that makes the decision.
So plan on bailouts.
I remember the prevailing opinion in 2008 was that not bailing out would have caused much worse problems. We'll never know I guess
We do definitively know, with climate change level certainty (read: there is still the odd ball expert that dissents), that it absolutely needed to happen.
What is much less known, because it kinda kills the talking point, is that the "too big to fail" bailouts were fully repaid with interest, to the tune of an ~$17B profit.
The losses from the program were from the auto industry ($12B) and the struggling homeowners fund ($31B). Which is a bit ironic, because those two are probably the ones that would have the most public support.
I think the precedent folks were pointing to was the great depression--no strong signal of assurance to temper public concern means things like bank runs and sudden collapses of institutions that would have otherwise made it because of group fear. Not sure how accurate that comparison is though.
We're due for a recession to wipe out all this irrationality that has been cooking for the last 20 years. I say let it fail.
Anthropic is not going to fail. Claude does amazing things and all the companies built on top of it are more likely to fail because at the end of the day, we can remake their value proposition by using Claude and a few command line tools…
If Anthropic has made promises that its wallet cannot keep (as it looks like), it will fail. Let me remind you that Anthropic isn't profitable yet, and there's no clear path that it will be.
Okay fair enough. I don’t track the finances just what the tools are doing. And on that all these AI-Ifying documents and stuff doesn’t really have a moat, but Anthropic has a great product.
Either way the people should never bail out corporations.
> but Anthropic has a great product.
Give me $100 billion and I will make the greatest pencil sharpener that has ever existed, and possibly that will ever exist.
great products only take them so far, the question is are they great enough so people would be willing to pay the prices they'd need to ask if they would want to at least match their spending with their income
>but Anthropic has a great product
Let me guess, subscription user?
> "they deserve bankruptcy"
Chapter 7, please! I would like them to *liquidate* Smaug's GPU hoard; and I would like them to do that all at once, in a swift and efficient fire sale.
A lot of those are datacenter GPU racks which will be difficult to operate for most people, even for smaller companies that don't have watercooling setups.
Sounds like a fun challenge with bragging rights if someone gets it working! Don't threaten me with a good time ;)
can you imagine? gamers flush with all that fancy hardware?
Likely with no place to run it. I considered an old (circa 2017) retired DGX-1 which has 8x V100 32GB GPUs as an alternative to an M5 Ultra Mac Studio. The problem is the power draw. The modern GPUs AI companies are sitting on draw vastly more power.
Sure, but they have a lot of money to buy me votes and new cars and stuff.
- your elected representatives
The crazy thing is that government funded a lot of this hyper growth for these AI companies. Very similar to Boeing / McDonnel Douglas.
Nobody who has ever run a business or knows about how a business runs would think that any business "sits on piles of assets like dragons." Very little cash sits idle, usually for anticipated operational expenditures with a reserve for unanticipated expenditures; the rest is invested, loaned, spent on building the business, or returned to investors. If OpenAI is holding $25 billion in cash, it's because they anticipate spending that much in the near future, not because they're sleeping atop it in a mountain cave.
He didn't say cash, he said assets.
Also funny enough - AAPL is siting on 62B$ cash according to google search.
AAPL has a history of sitting on massive quantities of cash tbh
In this case, companies actually do have large inventories of GPUs they bought before they had datacenters to install them in.
Assets, not just cash. Though sometimes, they literally have stuff they can't use:
> Microsoft CEO says the company doesn't have enough electricity to install all the AI GPUs in its inventory
https://finance.yahoo.com/news/microsoft-ceo-says-company-do...
In this particular case and with these particular companies... yes, they were sitting in a hoard of cash like dragons. They literally didn't know what to do with it, so they gambled on The Next Big Thing™....
Either way, it's more efficient to give whatever money to bail out individuals/consumers than to bail out rent seeking organizations
Next you will be telling me the rich don’t have a vault of gold coins you can swim in like Scrooge McDuck!
I was so terribly sad to learn that gold is much more dense than a duck, and thus Scrooge would have certainly floated on top of his pool of coins. My childhood was ruined.
Now that I think about it, it would seem this may also apply to witches.
Right. Corporations own people, not cash.
We can and should be the very very loud majority.
> Privatize the losses
Isn't that what the IPOs are for?
The IPOs are for "socializing" the losses, in the sense that the losses are dumped on retail investors, who are the general populace. Especially if you consider big pension funds
A lot of comments read this is as fluff. And in some ways it is.
However, looking at the other side, I think what this might do is add some barrier or consideration when a bailout is considered.
The last time we did large scale bailouts (TARP[0], in 2008), It was rushed through and ratified in around two weeks following the sudden collapse of Lehman.
Any measures we can take to ensure that we don't fall into a situation where there is only one choice is sensible.
[0] https://home.treasury.gov/data/troubled-assets-relief-progra...
> what this might do is add some barrier or consideration when a bailout is considered
It’s a resolution. Pure puffery. A serious effort would have involved floating a bill.
It’s worth noting, though, that TARP succeeded in saving the US economy, which was much less affected by the crisis, and turned a profit for the US government.
>and turned a profit for the US government
Accounting for inflation and opportunity costs?
> Any measures we can take to ensure that we don't fall into a situation where there is only one choice is sensible.
Amen. Prepare for a disaster tomorrow by planning for it today. The specific implementation might be mediocre, but we should be pushing for more, especially vis-a-vis pushing for anyone in the company who knowingly was involved in fraud to go to prison.
Treasury's summary is missing important pieces of the story. TARP failed its first vote in Congress, with opponents rightly pointing out that it was being rushed through and alternatives ought to be considered. But five days later, no concrete alternative had arisen, and it was clear to at least 60 reps who flipped their vote that something had to be done or the financial system was going to collapse.
Is there any indication that such a bailout was even planned or is this just populist tilting at windmills?
It is preemptive. Everyone can see the bubble and these companies are barrelling forwarding anyway. It is reckless and irresponsible.
I've seen lots of bubbles. I remember thinking Amazon was a bubble in the .com days...
Companies themselves can’t be economic bubbles. Amazon survived the economic bubble it was in, but many others didn’t.
It was part of the bubble. Amazon's stock lost over 90% of it's value. The company survived, but many other companies did not. A bubble does not mean a company fails just that valuations are too high and that there will be a massive correction over a short period of time. Some companies fail, others survive.
You mean the dot com bubble, which was in fact a major bubble that caused a lot of huge financial issues in the country? You'd think someone on a tech forum would have heard of it, but I suppose some of us would rather make asinine clapback comments than think about what we're saying.
I mean Amazon. There were lots of companies part of the .com bubble that did fail. Amazon did not though.
It's not just populist tilting at windmills.
There's an existing concept of and precedent for, "Too big to fail." The wikipedia article gets the idea across [0].
This creates an implied "insurance" program, tilting the risk profile toward being aggressive. Taking a moon shot isn't so scary when you think the government will probably step in if it blows up bad enough.
This fluffy, political statement is a message: don't count on it.
Perhaps it will give investors/executives a few thoughts on preparing to deal with a potential blowup themselves?
[0] https://en.wikipedia.org/wiki/Too_big_to_fail
It’s a resolution, so pure fluff. That said, a prohibition on bailing out this sector in particular might make it possible to claw back anything this regime illegally gives.
It's just convention at this point in the 21st century. No indication of a plan is needed when it's the only outcome to be expected.
The latter.
There are almost certainly bank execs who are looking at Anthropic's IPO and thinking "if it crashes, we'll get bailed out". Saying "no you won't" now, before the IPO, when it has a chance to affect peoples' behavior, is a worthwhile thing to do.
How? Since when do banks care about IPO crashes? A lot of IPOs crashed after listing; I can’t remember a single time when a bailout was needed after an IPO.
For some reason* the rhetoric is focused on bank bailouts in 2008, but the more direct analogy is the auto bailouts in 2008, which weren't strictly necessary but did protect an industry many Americans felt attached to. I think it's reasonable to worry that the same thing could happen to AI companies.
* yes, I know what the reason is
The investment to date has been ridiculous and undisciplined. It’s very hard to understand the valuations of these companies. If this wasn’t an election year I think there would be more oversight and critical review. But we have a very unserious party in charge right now.
It’s good that it’s being discussed. We’re tired of the wealth class privatizing the profits and leaving us to cover the costs.
Nope. The balance sheet of big tech companies are healthy enough not to need to bailout anyways. AI startups can of course fail.
Then the bill will never become relevant and it’ll just be a waste of time and you can laugh at it in hindsight. And I’m sure none of these companies will lobby against it, since it’s just tilting at windmills and won’t mean anything.
Oh I’m laughing at it now, no need to wait for hindsight
I have no idea who would they even bailout. Investors? Why? What for? What would that change?
Bailing out banks made some sense so that they couldn't operate. Without the bailout there would be no more banks and a hundred million of people left on the ice.
If you want to keep AI operating you can just (temporarily?) ban investors from tearing down the AI companies they invested in for parts. You could say they are important for national security or something. I'm sure they are already earning enough to keep the lights on. Just not enout to give investors payback for insate capital expediture to set up.
Such ban wolud the governement zero, especially if you write the law well enough, so that it can't be succesfully challenged in court.
> Without the bailout there would be no more banks
> and a hundred million of people left on the ice
That is not true. There would be a lot of banks and people would have lost only part of their money.
David Sacks has been a bit sidelined by the regime, but he was the one lobbying for the bailout of Silicon Valley Bank (under the Democrats!).
So there will be a huge pressure. Trump Jr. and the Kushners are invested in all sorts of bubbly assets, too.
The Democrats should do this however, and if they win the midterms keep their promises for once and block everything. Then 2028 is easy.
I agree with much of your sentiment, but if the lack of bailout (which let me reiterate, I agree with) leads to a recession, it will kill the D chances in 2028. They will apply this calculus to their political behavior, and (as is typical for the Ds) will do nothing.
Promises in the wind.
The Democrats I suspect are planning on doing the exact opposite unfortunately. They were very wimpy on the bubbly ai stuff under Biden, why would they change when they don't get punished from their own constituents for going against their promises. Same party apparatus as a whole that existed under Kamala. We need a Trump style clean out of the Democratic party because the brand is as bad as the Republican brand at this point. I can't with surity say that the Democrats are going to do anything to reign in big tech, all I can hope for is that they will be slightly better than trump or if not that, no worse.
For the people in the comments stating that this is just fluff for voters, that may be true. But consider that this memo has another target audience: Investors, Banks, and VCs.
I know that many people in those spaces are investing in AI precisely because they believe that should their AI investments fail, the industry will be bailed out by the federal government. Getting AI to be seen favorably by the administration and putting AI within civic government systems and inside defense contracts is a pretty big push towards that outcome.
This doesn’t actually require anything like a law, it’s basically a verbal promise. Or am I misreading?
If AI companies were to go bankrupt, it’s possible they’d be nationalized. I don’t see any other feasible option besides that or a bailout (or one but it’s effectively the other, e.g. “nationalized” but the employees including leaders are the same, or bailed out but already subservient to the military). I think the best case is for the compute to be made effectively public: giving every citizen free access, since we’re paying taxes that prevent their bankruptcy.
You are reading this exactly correct. It's the most government-coded kind of resolution: it sounds impressive, but means nothing. It is kinda nice to get that narrative out there though, we shouldn't bail out companies, we should let them fail and re-organize into companies that can work. "Bankrupt" doesn't necessarily have to mean you disappear and go away, it can mean you shuffle people and equipment around and get a new name and logo that makes more sense.
Intuitively you would think that a law is not required to prevent this but you’d be wrong.
Check out this excellent article for more background: https://www.theatlantic.com/ideas/2026/10/bubble-bailout-tru...
Better to just oppose all bailouts for all sectors, always.
That's the logic that led to "Let's just let Lehman fail" and precipitated the 2008 crash. At scale, markets are not zero sum and failures sink all boats.
There are no good answers here. But pointing fingers and assigning blame is for sure one of the worst ways to do the analysis.
I don't doubt that there are possible bailouts with potential net positive outcomes, just that legislatures are capable of distinguishing them with an overall net positive outcome. Or that the benefits would outweigh the moral hazard of becoming reliant on them.
Eh, no. The reality is that we are still paying for unresolved issues from 2008 crash. If anything, each time we kick the can, the worse the next iteration will be.
> reality is that we are still paying for unresolved issues from 2008 crash
Because it was a mess. Compare it with the bank failures in 2023. Shareholders wiped out, multiple collapses, yet many people have forgotten it even happened.
> At scale, markets are not zero sum and failures sink all boats.
At scale, this boats sink somewhere, not disappeared into the void. And yeas, markets are not zero sum, amount of goods may increase and may decrease, and we should let agents that decrease them fail.
Lehman failed because of the 2008 crisis; its failure did not cause or precipitate it. Even Wikipedia lays it out in the opening summary (emphasis mine):
> “A liquidity crisis spread to global institutions by mid-2007 and climaxed with the bankruptcy of Lehman Brothers in September 2008…”
Letting Lehamn fail was the right call, because it allowed the Fed to bulldoze TARP through and save the wider economy as a result. If anything, I would say the subsequent bailouts were too generous in letting the companies retain controls and returns; the government should’ve kept a permanent, partially-nationalized control of those shares and added them to a sovereign wealth fund instead of selling them back on the market. “You fucked up so bad the entire system almost failed, so clearly you cannot be trusted to self-govern” should’ve been the unambiguous messaging from the Fed.
Thank you. One would think that we are discussing ancient history, but the rewriting is just fascinating.
How many people in this thread think that when the Dems win midterms the AI boom has a hard switch to a bust? I really feel like they will rapidly expedite the process instead of having air come out. I definitely didn't think the market would run up right to the date though.
Yet more meaningless political theatre.
This generates ZERO passed bills, but lots of pre-election rage bait donations.
End-stage Alexis de Tocqueville material.
I wonder how we'll look back at the last 30 years at this point:
- We have a total lack of oversight, transparency on private companies and their finances
- We have VCs that very much have the capability to pump up value in a way that is detached from reality.
- The language of startups discourages saying "We are trying to..", you just say "We are". This is a launch pad for a more general culture that lacks integrity.
- The founder has become more and more of an idolized archetype. Character flaws are accepted as part of "what it takes". We accept dishonest behavior as hacks and part of the hustle.
I think this is a risk that applies to the whole VC backed tech startup economy.
Why does this even need legislation? Isn't this the default for all companies?
The terminology is the issue - "A bailout".
But this is really socialism. It was not a bailout of banks, it was socialism for wealthy. Did the people lose their houses? Yes! What about the people who made obscene profits from lending money to people when they should not? Did they lose their money? No. We - the taxpayers, the ex home owners - gave them money.
What about socialism for the egg industry? When the centralized chicken stocks got a disease, we people who were paying usurious prices for food, also provided payments to ensure the wealthy owners did not suffer.
Socialism for the wealthy === good, socialism for the poor === evil. Hmmm. Oh no that can't be so lets call socialism for the rich "a bailout".
Since we force people on food stamps to work now, maybe with this "bailout" we should force those people to work minimum wage jobs?
Isn't the purpose of a bailout to stop a larger economic collapse rather than save a company?
My contention is it doesn't stop a larger economic collapse - it just kicks it down the road and makes it grow even larger.
Any pulse on how likely this is to pass or what hurdles it faces? Neews like these give me hope but often they are written before anything materializes.
The US media using the abbreviation Reps to mean representatives and Republicans at the same time is very confusing.
Not going to happen. Friendly reminder that when it came to money, politicians know exactly where the bread is buttered. When it came to Silicon Valley Bank bailout, Summers himself personally intervened[1]. Naturally, that is perfectly fine, but if one was to suggest the same for .. say.. students loan, immediately people will descend crying horrified cries of 'but but fiscal responsibility'.
[1]https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...
Gosh I really gotta get a real job again. The RLHF gig work has been great while I’ve been in school - flexibility, good pay - but I’ve known the whole time that it won’t last. Gig workers will be the last consideration when it all falls apart
Guess the big AI companies are not paying enough donation to them.
Fully support it. We’ve had a moral hazard in the USA for half a century with constant bailouts for speculation and gambling by businesses.
We must let them fail, no matter how many jobs it costs, no matter what the harm looks like in the short term, to send a clear and unambiguous signal to others that the government won’t backstop your shitty bets.
Soo does this mean RAM is gonna get cheaper or more expensive?
isnt Anthropic already too-big-to-fail?
> the billionaire AI boys who created the problem
Niki Parmar: am I a joke to you?
I work on AI and I oppose a bailout for an ai bubble or whatever else.
If you're lucky enough to be in this field and you're not managing your finances, that's not the governments problem to fix
absolutely ZERO Ai companies need bailouts. this is complete theater.
if you are reading this, please do some research on how much money inference prints? its not wildly spoken about because people don’t yap about printing money.
“Oh but it’ll all come crashing down” - say you don’t work at a lab or know anyone at a lab.
My greater annoyance is HN becoming annoying political in the past few years. Sure, everything is political now but the moderation siloed these posts better. Maybe the user base is too old now. Fresh blood went to Discord or X.
Please do some research on the other costs involved in AI. Not a single AI company is making any profit and realistically are not close. Training models costs billions of dollars. There is no moat for these companies. If an open model comes out tomorrow that is better than Claude what happens to Claude's 1.5 trillion dollar valuation? What happens if revenue does not grow as fast as anticipated when Anthropic alone has 750 billion dollars in obligations? How do they pay their bills? What happens then.
The only company making money are hardware manufacturers who are throwing logs on to keep the fire burning through direct capital investments in their customers. Without Nvidia some of these neoclouds would already have failed.
I think the “it’ll come crashing down” argument comes from cheaper inference, not more expensive. The frontier labs have to pay for these massive training runs. If inference gets cheap enough that you can run it yourself, why run it on their side? Open weights are (much) less than a year behind.
Projecting that none of these AI companies will demand bailouts after the bubble crash is wildly speculative in the other direction. This has nothing to do with politics.
a) How courageous for them declaring wanting to ban something that isn't being proposed
b) if an AI bubble burst were to happen, the fallout would be severe, ie. hard to abstain for policy makers from giving the public ease of mind
c) All this proposal wants is to drive a wrench between the GOP and its new (?) populist voters, that don't want any favors given to any Big Tech oligarchs, regardless of it being AI or not.
d) this may work or not – neither party is going to abstain from bailing them out, anyways.
I seem to recall OpenAI's CFO inadvertently proposing a bailout about a year ago. I'm fairly confident that the industry has been considering the possibility of one since before that statement.
Not sure why you're downvoted because you're right. If there wasn't a major election next week this would not even be happening. It's meaningless theatre to get the public cheering or jeering on their way to the polls.
In the 2008/2009 crisis the bailouts were approved by a red admin (Bush) and then the check signed, delivered hat in hand, by a blue admin (Obama). If they want a bailout they will get a bailout no matter which party is in charge.