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Old 03-20-2020, 08:10 AM
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Bailout of Cruise Lines?


Obviously, cruise lines are being crushed by the pandemic. Someone on the interwebs noted that many companies base in tax-friendly countries in order to avoid paying U.S. taxes. Would the U.S. consider giving taxpayer money to such companies? In principle that sounds like a bad idea but maybe there are so many jobs in the U.S. dependent on those companies is makes pragmatic sense? Especially since bailouts would have to be paid back.
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Old 03-20-2020, 08:13 AM
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It maybe made sense to bail out car companies and banks, because those are huge industries that directly and indirectly affect every aspect of our lives to a major degree.

But if all of the cruise lines were to go out of business, it'd make very little difference to any other aspect of modern life.

And that's even before getting into the cruise lines' efforts to distance themselves from Uncle Sam.
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Old 03-20-2020, 08:16 AM
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Originally Posted by MikeF View Post
Obviously, cruise lines are being crushed by the pandemic. Someone on the interwebs noted that many companies base in tax-friendly countries in order to avoid paying U.S. taxes. Would the U.S. consider giving taxpayer money to such companies? In principle that sounds like a bad idea but maybe there are so many jobs in the U.S. dependent on those companies is makes pragmatic sense? Especially since bailouts would have to be paid back.


I saw a post on Facebook that made a good point: Now that we're at essentially a 0% interest rate, they could borrow against their ships as collateral, and probably have enough cash to weather the storm. Why bail out a non-essential industry that is sitting on a whole lot of large capital investments? See Also: Airlines, although they are more needed than cruise lines.
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Old 03-20-2020, 08:20 AM
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Cruise lines dump all of their human waste, plastic and garbage into the oceans. Ships have thousands of people on board, ALL that waste is going into the ocean.

No, cruise companies should most definitely NOT be bailed out.

Good riddance.
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Old 03-20-2020, 08:48 AM
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I think someone has mixed up "based in the US" and "sailing under a flag of convenience" . I didn't look up every cruise line, but Norwegian, Royal Caribbean, Carnival and Holland America are all based in the US and presumably pay US axes. But all of their ships (except one of NCLs) are registered outside the US.
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Old 03-20-2020, 09:27 AM
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I cannot begin to imagine why we would want to bail out an industry that employs few Americans and pays little in American taxes. This is certainly a very optional industry.
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Old 03-20-2020, 09:32 AM
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Cruise lines dump all of their human waste, plastic and garbage into the oceans.
And this isn't true. The cruise lines don't have a great history but they are improving and the major cruise lines have much higher standards that they usually keep up. They've certainly been caught polluting and should be held accountable, but they don't dump untreated waste into the ocean unless someone has messed up.
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Old 03-20-2020, 09:50 AM
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Originally Posted by Chronos View Post
It maybe made sense to bail out car companies and banks, because those are huge industries that directly and indirectly affect every aspect of our lives to a major degree.

But if all of the cruise lines were to go out of business, it'd make very little difference to any other aspect of modern life.

And that's even before getting into the cruise lines' efforts to distance themselves from Uncle Sam.
Similarly, I could see an argument for the importance of airlines but cruises and cruise ships do not seem to be a critical part of the economy or something that needs to be supported for national interest reasons.
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Old 03-20-2020, 09:51 AM
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The giant cruise ship business needs to die. It just spreads disease and pollution and ruins environments.

One might make a case for much smaller cruise ships.
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Old 03-20-2020, 10:01 AM
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One might make a case for much smaller cruise ships.
The economics of which require pricing that will appeal if not exclusively to the 1%, then perhaps to the wealthiest 3 to 5%.

It's roughly analogous to the idea of restricting jet travel to planes that carry no more than 20 passengers.


(But I'll agree that cruise line bailouts are borderline abhorrent.)
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Old 03-20-2020, 10:08 AM
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The giant cruise ship business needs to die. It just spreads disease and pollution and ruins environments.
The industry is also a prime example of the kind of conspicuous overconsumption that gives creedence to the image of the “Ugly American”.

No bailouts for cruise lines, fraudulent tech startups, or charter school corporations, please.

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Old 03-20-2020, 10:25 AM
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No bail out to cruise ships should be allowed for all of the reasons you guys have already stated.

I do have a question though.

I see that some of the ships are offering to act as hospitals. Is this a good idea or not? I know that they seem to be really bad about spreading disease, but I'm not sure why so I'm not sure what would have to be done to make this a good idea. Can someone educate me on that?
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Old 03-20-2020, 10:42 AM
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Originally Posted by not what you'd expect View Post
I see that some of the ships are offering to act as hospitals. Is this a good idea or not? I know that they seem to be really bad about spreading disease, but I'm not sure why so I'm not sure what would have to be done to make this a good idea. Can someone educate me on that?
There are a couple of reasons they spread disease- one is that you have a couple of thousand people on each ship and another is that they are constantly mixing with each other. And while people might stay at home if they feel a little under the weather, they don't typically confine themselves to their room on a ship unless they are flat out sick, in part because there is little to do in the room - it's not like you can watch Netflix on the room's TV - so people who feel mostly OK but have a cough, a slight fever, a mild case of the runs are still going to restaurants, to shows, to the casino. Those issues won't present a problem if the ship is used as a hospital or infirmary and people are confined to their rooms.
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Old 03-20-2020, 11:18 AM
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That's a good idea if it can be implemented properly. When Trump announced Mercy and Comfort were being deployed I looked up their stats. They have 1,000 beds apiece which is better than nothing but they're a drop in the bucket if it really gets bad.
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Old 03-20-2020, 11:53 AM
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I can't see how a cruise ship can efficiently function as a hospital - they are small cramped rooms with no space for hospital beds and equipment. Cruise lines are just offering this as a cheap PR move. If things get this bad it would be better to be in a tent in real hospital's parking lots (access to Medical staff). If tents won't do then a nearby gymnasium, a hotel - due to the impending lock-down there will be many spaces available with more space and access.

A hospital ship has medical staff, equipment and it is designed to treat people - not scam all their money on decadence..
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Old 03-20-2020, 12:06 PM
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The cruise ships would be useful for housing homeless people who are not sick.
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Old 03-20-2020, 12:10 PM
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Cruise ships would have to be gutted and completely refitted to operate as a ‘hospital ship’, and there is really no point to this. The US Navy (and other large navies) operate hospital ships because they can be mobile and move to the location of an incident to provide direct services without having to construct a temporary hospital facility and move all of the necessary equipment and supplies on-site.

This notion of using large cruise ships as ‘hospital ships’ is really nothing more than a throwback to the era before public health when contaminated ships were quarantined off shore until the crew and passengers either died or survived.

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Old 03-20-2020, 12:14 PM
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As a general rule, IMHO:

Large manufacturers are first in line for any bailout money. It's easy to replace a car dealership, it's difficult to replace Ford.

Large fleets shouldn't be bailed out. It's easy to replace Delta, it's impossible to replace Boeing.

Last edited by JohnT; 03-20-2020 at 12:14 PM.
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Old 03-20-2020, 12:40 PM
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Cruise lines dump all of their human waste, plastic and garbage into the oceans. Ships have thousands of people on board, ALL that waste is going into the ocean.
None of this is true.

https://www.express.co.uk/travel/cru...ish-management
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Old 03-20-2020, 10:47 PM
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I think someone has mixed up "based in the US" and "sailing under a flag of convenience" . I didn't look up every cruise line, but Norwegian, Royal Caribbean, Carnival and Holland America are all based in the US and presumably pay US axes. But all of their ships (except one of NCLs) are registered outside the US.
Do a search on "is shipping flag of convenience used to evade taxes".

Flag of convenience is used to get around regulations and taxes in the US.

You don't fly the Stars and Stripes, you don't get the benefits.

No way us taxpayers should be bailing out cruise ships. Non-essential, the ships themselves employee majority of crew from emerging markets, and they are giant floating petri dishes.

We need to keep the economy going, protect infrastructure, and support the most vulnerable among us. We don't need to bailout cruise ships.
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Old 03-21-2020, 02:03 AM
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Surplus fleets have existed before. During 49er Gold Rush days, flotillas of sailing ships crowded into Yerba Buena (San Francisco) and were abandoned near shore. Many empty hulls were converted into hotels. Take a hint there. As cruise lines go belly-up because they're non-essential, anchor their excess ships at port cities to serve as ad-hoc homeless shelters. Disney's fleet could house quite a few.
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Old 03-21-2020, 02:42 AM
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The verymost end. Goodby
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Old 03-21-2020, 02:53 AM
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Well, tax issues are not the only reason cruise lines base in certain countries. One issue is standards related to crewing the vessels (crew qualiifications, pay, etc.).

Having the ships acting as hospitals would not be bad provided the ships are outfitted as hospitals, to include isolation rooms for those who need it. A hospital ship should not be just a repeat of the Diamond Princess disaster.
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Old 03-24-2020, 08:28 AM
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There is an opinion piece on Slate about this. What it may boil down to is "So, if there are few good reasons to bail out the cruise business, and some very good reasons not to, why does Trump think they’re a “prime” candidate for help? Well, he happens to be friends with Micky Arison, chairman of Carnival, which also sponsored The Apprentice. And this president always puts his friends first." He must be conflicted, however. The thought of using U.S. tax dollars to help out all those non-American employees! Nah, that's just collateral damage.

https://slate.com/business/2020/03/c...ut-no-way.html
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Old 03-24-2020, 09:17 AM
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My suggestions on corporate bailouts, including cruise lines.

1. No bailouts of foreign flagged cruise ship companies. Let Panama, the Cayman Islands, etc., bail them out. These companies avoid US taxes and labor laws.

2. No bail out of any public company that reported profits for the years 2017 - 2019 and paid no federal taxes. Any bail out limited to the amount of FIT paid in the same period.

3. No bail out for any private company that paid no income taxes 2017 - 2019. Any bail out limited to the amount of FIT paid in the same period.

4. No bail out of any company that bought significant amounts of its own stock since the 2017 tax law.

5. No bail out of any Trump or Kushner property.
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Old 03-24-2020, 04:31 PM
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Originally Posted by Xema View Post
The economics of which require pricing that will appeal if not exclusively to the 1%, then perhaps to the wealthiest 3 to 5%.

It's roughly analogous to the idea of restricting jet travel to planes that carry no more than 20 passengers.


(But I'll agree that cruise line bailouts are borderline abhorrent.)
Not really true. Windstar is a 'premium' cruise company. Their ships have anywhere from 250 to 400 people on them, rather than the thousands on the large cruise ships. They even run two sailing cruise ships that use much less energy. We took a 7-day Caribbean cruise on the Windsurf, a 288-passenger sailing cruise ship, and we paid $1699 each for it, which included all meals and beer/wine. You don't have to be a one-percenter to pay $3400 per couple for an all-inclusive cruise. The big cattle-car ships are around $1000/ea anyway for the same cruise, with much less included.

I expect the cruise industry to slowly move to smaller ships. If you had to evacuate a ship like the Windsurf, it would be manageable by any reasonable port. The problem with the huge ships is that if an outbreak occurs there are almost no facilities in cruise ship ports capable of handling that many sick or isolated people at once, so no one lets them disembark and the entire ship becomes a disaster zone.

I wouldn't bail out the cruise lines either, but that does not come without cost. There are a lot of small tourist-driven countries that absolutely rely on cruise ships for their local economy. Kill the cruise ship industry, and you'll impoverish a lot of people. Even large countries will be hurt - The cruise industry creates about 7,000 jobs in Canada. Port cities like Los Angeles, Seattle, Vancouver, New York and Miami would be severely impacted, as would the ship builders and support companies.

Still, no bailouts. Let them restructure in a way more compatible with the new reality. And also, I'm not sure bailouts would work. Anyone here hankering to go on a cruise again? I'm certainly not - at least not until Covid-19 is years in the rear-view mirror. I'll bet a lot of people feel the same way.

Last edited by Sam Stone; 03-24-2020 at 04:33 PM.
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Old 03-24-2020, 04:48 PM
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The beauty of giving money to people, not corporations, if that they'll direct the money to businesses that earn the business. If that's not cruise ships, that sucks for people whose jobs depended on that, but it'll be great for people in other industries. Maybe people will ski more, or go to movies, or see comedy shows, or take road trips in RVs or something. All those things create jobs.
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Old 03-24-2020, 04:49 PM
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My suggestions on corporate bailouts, including cruise lines.

1. No bailouts of foreign flagged cruise ship companies. Let Panama, the Cayman Islands, etc., bail them out. These companies avoid US taxes and labor laws.
While I sympathize, and mostly agree, many of the flagged countries would be utterly unable to bail out the cruise industry.

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2. No bail out of any public company that reported profits for the years 2017 - 2019 and paid no federal taxes. Any bail out limited to the amount of FIT paid in the same period.
So let's say a company falls on hard times and loses half of its value and has capital losses much greater than their taxes in a year, and so they carry forward their losses. They do all the right things - restructuring debt, selling assets, etc. They begin to turn it around and, have modest profits in 2017 and 2018. They use their previous losses to offset their taxable profit, so for a couple of years they pay no tax. Should that company not get a bailout?

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3. No bail out for any private company that paid no income taxes 2017 - 2019. Any bail out limited to the amount of FIT paid in the same period.
So we give a taxable benefit to solar companies to encourage them to build solar panels. A company rakes the offer, and starts a solar factory. It takes a huge capital investment, so the first two years are big losses. Then the company starts making some profit, but after applying the tax benefit they were offered, their tax obligation is zero. Then Covid-19 hits, and the company has to shut down and goes bankrupt.

No bailout for them either? They just took the deal we wanted them to take. Why should they be punished for it?

Quote:
4. No bail out of any company that bought significant amounts of its own stock since the 2017 tax law.
Even companies that bought their own stock only to watch it drop in half due to Covid-19? And what exactly is wrong with stock buybacks?

I would certainly stop them from buying back stock from this point on, as it would be easy to buy a lot of stock at depressed prices if you know you are getting a bailout and the price is going to go up, But I see no reason to punish companies that bought back stock years ago. Why? What are you trying to avoid?

Quote:
5. No bail out of any Trump or Kushner property.
I would add no bailouts for any company in which a politician of either party who voted for bailouts has a large financial interest.

Last edited by Sam Stone; 03-24-2020 at 04:50 PM.
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Old 03-25-2020, 09:44 AM
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Cruise lines dump all of their human waste, plastic and garbage into the oceans. Ships have thousands of people on board, ALL that waste is going into the ocean.

No, cruise companies should most definitely NOT be bailed out.

Good riddance.
Absolutely agree. The amount of fossil fuels burned, as well.

Bloody good riddance, the sooner the better.
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