Let’s Talk About Bailouts, Before We Need Them This Time

Steven L. Rattner, who acted as the “car czar” in the Obama administration and oversaw the bailouts of Detroit’s automakers, said he believed there was still money available in the private markets to help. “I don’t think we are at that ‘break-the-glass’ moment.”

“Remember part of why the government bailouts existed was because private markets had failed. There was no private market,” Mr. Rattner said in an interview. “Today, we’re not yet in that position.”

He added, “If the airlines run out of cash, there is certainly debtor-in-possession financing,” suggesting that even if an airline filed for bankruptcy protection, there would be enough investors waiting on the sidelines to provide money to keep it going while it reorganized.

Still, it would not be surprising if the airlines — or other industries — went to Washington, hat in hand. After all, just Tuesday, Delta and American said they would slash flights because of lack of demand, and Southwest’s chief executive, Gary Kelly, said he would take a 10 percent pay cut.

When Mr. Trump was asked during a meeting between airline chief executives and Vice President Mike Pence how he would respond to a bailout request from the airline industry, he replied: “Don’t ask that question, please, because they haven’t asked that. So I don’t want you to give them any ideas.”

After the Sept. 11, 2001, terrorist attacks, the U.S. government provided $15 billion to the airline industry, partly to offset losses as well as to help pay for additional safety requirements the nation adopted. In that case, the taxpayers did not seek anything in return.

Mr. Rattner said he thought it would be a mistake to use bailouts as “policy tools.” He said in the same way they thought about the auto bailouts, “we shouldn’t try to achieve every objective that might be imagined.” In other words, the government did not use that bailout to mandate new emissions standards, for example, or new safety standards. He said the goal was always simply to “get these companies back on their feet in a commercial way.”