U.S. Should Not Bail out Billionaires and Hedge Funds, Says Social Capital CEO

Michael LaVere
  • Social Capital CEO Chamath Palihapitiya criticized the US government for bailing out billionaires and corporations.
  • "Who cares? Let them get wiped out," Palihapitiya told CNBC.

Social Capital chief executive officer (CEO) Chamath Palihapitiya criticized the U.S. government for taking action to bail out billionaires and hedge funds. 

Palihapitiya, an early senior executive at Facebook, told CNBC the U.S. government has been overly concerned with the welfare of America’s richest corporations during the coronavirus pandemic. 

Palihapitiya argued with the show’s host over the government’s response to propping up corporations, including airlines. The Social Capital CEO advocated allowing the businesses to fail and said Wall Street had created misconceptions in order to benefit from government bailouts. 

Palihapitiya claimed pensioners and employees end up owning more of the company following bankruptcy, while speculators are ultimately the ones to pay the cost.  

This is a lie that has been purported by Wall Street. When a company fails it does not fire its employees. It goes through a packaged bankruptcy...These are the people who purport to be the most sophisticated investors in the world. They deserve to get wiped out. But the employees don’t get wiped out.

The CNBC host asked Palihapitiya why anyone deserved to be “wiped out” given the unexpected and unprecedented impact of the coronavirus pandemic. 

Palihapitiya responded, 

Let’s be clear. Who are we talking about? We’re talking about a hedge fund that serves a bunch of billionaire family offices. Who cares? Let them get wiped out.

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