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He's spot on that equity risk should actually have downside. But the idea that a whole bunch of massive corporations can fail and no jobs would be lost seems li
by mrosett 6y ago
He's spot on that equity risk should actually have downside. But the idea that a whole bunch of massive corporations can fail and no jobs would be lost seems like a real stretch to me. In fact, it's strange to think that a company wouldn't have fewer employees coming out of bankruptcy if one of the causes was being overextended.
- lordnacho 6y agoFair enough, but at any given company it's not the case that all the employees must lose their jobs. I worded that badly. Even so, the collapse is a signal that should not be ignored that the economy ought to be organised differently, basically some people should be doing other things than previously thought.
- chickenpotpie 6y agoCounterpoint, companies will learn not to overextend and we won't have to worry about job loss or bailouts the next time this happens
- mewpmewp2 6y agoCounterpoint. We will have less innovation and tech advancement if companies will have to spend more to prepare for disasters like this virus. If new businesses have to do that then we will have a lot tougher barrier entry meaning old fish will prevail.
- chickenpotpie 6y agoBut don't they already have to spend more to prepare in the form of taxes?
- mewpmewp2 6y agoThen it is like insurance which makes more sense than requiring companies to hold certain amount of money in reserves.
- 93po 6y agoI have happy with less innovation if it means people don't go homeless and starve every time the economy tanks
- dllthomas 6y agoCompanies can't "learn not to overextend" for things this rare. If they spend a bunch of resources making sure they can weather sufficiently infrequent storms, they'll be out competed in the shorter term by companies that refuse to. If we need companies to prepare for this kind of thing, we need to somehow test their readiness more frequently.
- jonlucc 6y agoMore frequently than every 10 years?
- dllthomas 6y agoI don't recall multiple month suspension of broad categories of business in the last 20 years. But yes, probably even more frequently than every 10 years - it's too easy to cut corners, so someone will, and the businesses behaving "correctly" need to compete against that. That's if we want companies to be prepared for this.
- deleted 6y ago[deleted]
- Ericson2314 6y agoCompanies should just plan on failing, and everyone moves on to the next thing. Not everything has to last for ever.
- dllthomas 6y agoYeah, my point was just that "make them hurt so they learn" doesn't really make sense here. There may be plenty of reasons to allow companies to fail, in particular instances or in general.
- joosters 6y agoThey've had generations to learn that, why do you think they will suddenly get clever now?
- totalZero 6y agoYou should be more concerned about the workers than you are about the jobs. Give 60k to every family in America, and let the corporations that mis-managed their assets bite the dust. When there's demand for the services those corporations provided, someone will step up, buy the equipment and other assets, and do it better next time. I see no wisdom in resisting the nature of our economy, its booms and busts pruning away the bad growth so that better ones have room to develop.