Don’t fritter away your money on avocado toast. Stop buying frivolous flat whites. Live with 15 housemates. Subsist on beans and tap water so you can set aside money for retirement. Make sure you have three months of your salary saved in case of emergency.
We have all seen variations of this financial advice, which is normally written by a “sensible grownup” and directed at feckless millennials. Young people are entitled, we are told endlessly. They need to learn good financial habits instead of demanding freebies. They need to fend for themselves.
Well, look who is demanding freebies now. Look who thinks they are entitled to be bailed out with taxpayer money. Look who thinks free markets are not such a good idea when it means their company might fail. Look who thinks we should overlook their irresponsible financial habits. It is not impoverished millennials.
Sir Richard Branson, who is worth an estimated £4.7bn, is begging the UK government to give his Virgin Atlantic airline a £500m loan – and he is offering his private Caribbean island as collateral. Very generous of you, sir, but here is another idea: sell your damn island and bail out your company yourself.
While we are at it, if you want British income taxpayers to help you out, why not become one yourself? While Branson loves slapping union jack branding on his planes, the patriotism that he practises involves living in the tax-free British Virgin Islands and suing the NHS. (Branson, by the way, would prefer that we refer to Virgin Care’s legal battle as a “dispute” and would like you to know that the entire thing was the fault of NHS commissioners.)
I can understand why Branson thinks his aviation baby deserves a state bailout; many of the other airlines are getting one. “Airlines around the world need government support and many have already received it,” he said in a blogpost on Monday. He is right. In the US, the airline industry is getting $25bn (£20.2bn) from the government in grants and loans.
Why are all these enormous airlines, which charge us sky-high prices for every tiny add-on, so illiquid? Did they not read the advice about saving up an emergency fund as the rest of us did? Apparently not. As Bloomberg reported last month, the biggest US airlines spent 96% of their spare cash in the past decade on buying back their own shares. Share buybacks have become common in almost every industry in recent years. What is the point of this strategy? Well, it tends to inflate stock prices and make shareholders richer. Since a lot of big companies tie executive pay to earnings per share, boosting stock prices makes CEOs richer.
That said, the Virgin Group is a private company, so we cannot blame share buybacks for Virgin Atlantic’s monetary woes. Perhaps Branson just wasted all his spare cash on avocado toast and Caribbean islands.
It is not just the airline industry that is getting injections of cash, of course. Lots of bloated institutions are raking in taxpayer funds – even if they don’t need it. Harvard, for example, is getting nearly $9m in aid from the US government, despite having a $40.9bn endowment fund. Meanwhile, Americans who earn under $75,000 are getting a one-off stimulus cheque of up to $1,200, plus $500 for each child. The treasury secretary, Steven Mnuchin, a former investment banker worth about $400m, told a reporter that he thought the government’s relief package – including expanded unemployment coverage, bailouts and business loans – would be sufficient to last 10 weeks. Common folk do not need much to live on, you see.
In Britain, the government is being more generous to individuals. But make no mistake, we are on track to see a repeat of the massive wealth transfer that happened in 2008 after banks were bailed out and ordinary people had their savings wiped out. “Pull yourself up by your bootstraps,” billionaires are fond of telling us. All while making us pay for their boots.
Arwa Mahdawi is a Guardian columnist
