To the Editor:

The curtailment of travel, dining and entertainment in an effort to combat the spread of the coronavirus will immediately represent a demand shock to virtually all companies and businesses, large and small. We are seeing desperate calls for a government bailout of affected industries and public companies.

These public companies may well need some form of assistance, as will privately owned companies and vulnerable citizens. I would ask, however, that the government take into consideration the fact that many of these public companies have exacerbated their own predicament since the financial crisis of 2008.

The vast majority have spent the last decade of unprecedented economic expansion buying back their outstanding shares — as Royal Caribbean Cruises and Delta and American Airlines have done — in an effort to increase their per-share earnings and their share prices. At the same time, companies have dangerously increased the leverage of their balance sheets. This “financial engineering” has left companies wholly unprepared for a sharp recession.

While I hope that the citizens of our country who are most in need and the small businesses that have no access to capital markets are in the front of the line for assistance, when it does come time to lend a hand to these public companies, any loan or bailout should also provide a reward to the citizens of our country who are lending them money. I would suggest stock warrants attached to any loan — just as a private investor would require when bailing out a troubled company.