Fed should pay every American more, let hedge funds and billionaires ‘get wiped out,' says Social Capital CEO

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Palihapitiya's argument, basically, is: Let those businesses fail, but without layoffs, and let the rich stakeholders absorb the pain.

When a business typically fails, Palihapitiya said, "it does not fire their employees," instead going though a bankruptcy process that often preserves pensions, and employees end up owning more of the company in the end.

"The people who get wiped out are the speculators" who own debt, and the equity holders. "These are the people that purport to be the most sophisticated investors in the world. They deserve to get wiped out," Palihapitiya said. "But he employees don't get wiped out. The pensions typically don't get wiped out."''