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The real question is why/when restructuring through bankruptcy became seen as something society should avoid rather then embrace? There is a huge argument to b
by Stranger43 7y ago
The real question is why/when restructuring through bankruptcy became seen as something society should avoid rather then embrace?
There is a huge argument to be said for the government acting like an buyer of last resort for critical assets/activities belonging to organization under bankruptcy, rather then acting as an lender of last resort for companies trying to stay out of bankruptcy court.
Lets keep in mind that bankruptcy under almost all western legal systems allow for the continuation of viable economic activity and resale of valuable assets, i.e. in a lot of cases most salaried employees keeps their jobs even after the parent company goes bankrupt.
From an market theory and moral perspective we need an functional system of restructuring through bankruptcy for any free market based system to starve off the (according to Marx inevitable) decline back towards aristocratic mercantilism.
- downerending 7y agoThe general answer is that governments (i.e., bureaucrats) are not thought to be very good at stepping in and running corporations. In addition, presumably all of those bureaucrats already have things to do and don't need the headache.
- Stranger43 7y agoIs that empirical based knowledge or theological doctrine? The idea that an service cannot be efficiently provided by government is an idea that tend to be thrown around a lot in US politics despite evidence from Europe that on public utilities government/state/city owned/controlled utilities is cheaper/better then private companies when allowed to compete directly side by with private enterprise.
- downerending 7y agoIt's one thing to have the government provide a service as part of a carefully planned operation. It's another thing entirely to put a bunch of government workers suddenly in charge of a large corporation. Hey Joe and Jane in GSA, GM just went bankrupt. Could you please drop your other responsibilities and run it from now on?
- Stranger43 7y agoSo what your saying is that the common corporate practice of lifting CEO's across sectors into companies they have no experience with directly is an recipe for disaster? The government have exactly the same options to hire experienced people as any company in existence, so if the government cant replace bad manage neither can the private sector. Once you have a bailout you have by definition incompetent owners and an/or management team that cant do their job properly, bankruptcy forces that to become clear by forcing the incumbent owners to face losses, bailout on the other hand keeps the rot in place.