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Bankruptcy is: a good thing. It corrects the price of the assets to match current market. It transfers assets to more efficient owners. Bankruptcy is not: a

Bankruptcy is: a good thing. It corrects the price of the assets to match current market. It transfers assets to more efficient owners. Bankruptcy is not: a vaporization gun. The assets remain in the physically existent universe, as do the employees and even the entire industry, even if it is diminished.

c54 6y ago
Thanks for pointing this out, I think for most people bankruptcy is thought of as the event horizon of a black hole, where in reality it’s a debt restructuring that really only affects the CEO/board, who, you know, are supposed to take the blame for mismanagement.
foxyv 6y ago
It will be interesting how this changes up the regulatory environment. If all the established interests are diminished or gone, will we start seeing more innovation and investment into other forms of travel? The US is spending only about $150 billion dollars on science and technology funding. I wonder what could be done with interstate travel using another $25 billion that is being used to bail out airlines. High speed rail? Hyper loop? Gravity powered gliders? Then again, California has managed to spend nearly twice that on a not so high speed train that probably won't exist...
nunorbatista 6y ago
> Bankruptcy is: a good thing. This comment represents, unfortunately, what's wrong with capitalism and, at the same time, what makes it work. Bankruptcy is used by companies to get rid of debt and refocus their business, which is good. In the case of Boeing, an eventual bankruptcy comes as a consequence of a decade of buybacks to fill investor targets and lousy engineering in the case of the 737 Max. But hey, with infinite FED money, Boeing is not going down that easily.
- generalpass 6y ago
  > > Bankruptcy is: a good thing. > This comment represents, unfortunately, what's wrong with capitalism and, at the same time, what makes it work. Bankruptcy is used by companies to get rid of debt and refocus their business, which is good. In the case of Boeing, an eventual bankruptcy comes as a consequence of a decade of buybacks to fill investor targets and lousy engineering in the case of the 737 Max. But hey, with infinite FED money, Boeing is not going down that easily. The Federal Reserve system is anti-capitalistic because it removes choice and agency from the market, which are critical components of capitalism. Bankruptcy is also used by creditors to take possession of the assets of bad borrowers, which typically is not to the benefit of the borrowers. Financing issues rarely impact engineering decisions. If there is something outside of Boeing influencing this, the more likely culprit is regulatory capture effectively blocking innovators from entering the market.
  - nunorbatista 6y ago
    > The Federal Reserve system is anti-capitalistic because it removes choice and agency from the market, which are critical components of capitalism. I can completely agree with this if Boeing is nationalized. While it's not, if they receive FED money, they would just use it to keep operating, come back to profits in a few years and distribute dividends then. This is a capitalist behavior. I wouldn't generalize the fact that financial issues can't impact engineering decisions because I've seen that happening in the past. In the case of the 737 Max is evident: they adapted the 737 with a new engine that was too big and because there was no space to put it, they placed it in an odd position and compensated with Software that was operating silently. They did this to avoid developing a new plane, which would cost them time and money.
    - generalpass 6y ago
      > > The Federal Reserve system is anti-capitalistic because it removes choice and agency from the market, which are critical components of capitalism. > I can completely agree with this if Boeing is nationalized. While it's not, if they receive FED money, they would just use it to keep operating, come back to profits in a few years and distribute dividends then. This is a capitalist behavior. > I wouldn't generalize the fact that financial issues can't impact engineering decisions because I've seen that happening in the past. In the case of the 737 Max is evident: they adapted the 737 with a new engine that was too big and because there was no space to put it, they placed it in an odd position and compensated with Software that was operating silently. They did this to avoid developing a new plane, which would cost them time and money. Agreeing that the Federal Reserve system is anti-capitalistic but things under it are capitalistic is a nonsensical argument. You seem to be applying "capitalism" to anything you don't like. This is poor argumentation and makes for very poor discussion. Every engineering project has some sort of budgetary constraints, no matter the source of the funding. Even under ideal conditions, poor engineering decisions have been made. Attempting to just blame everything on a singular cause that you happen to not like does not result the important critical thinking required to uncover and correct actual causes of actual problems.

c54 6y ago

Thanks for pointing this out, I think for most people bankruptcy is thought of as the event horizon of a black hole, where in reality it’s a debt restructuring that really only affects the CEO/board, who, you know, are supposed to take the blame for mismanagement.

foxyv 6y ago

It will be interesting how this changes up the regulatory environment. If all the established interests are diminished or gone, will we start seeing more innovation and investment into other forms of travel? The US is spending only about $150 billion dollars on science and technology funding. I wonder what could be done with interstate travel using another $25 billion that is being used to bail out airlines. High speed rail? Hyper loop? Gravity powered gliders? Then again, California has managed to spend nearly twice that on a not so high speed train that probably won't exist...

nunorbatista 6y ago

> Bankruptcy is: a good thing. This comment represents, unfortunately, what's wrong with capitalism and, at the same time, what makes it work. Bankruptcy is used by companies to get rid of debt and refocus their business, which is good. In the case of Boeing, an eventual bankruptcy comes as a consequence of a decade of buybacks to fill investor targets and lousy engineering in the case of the 737 Max. But hey, with infinite FED money, Boeing is not going down that easily.

generalpass 6y ago
> > Bankruptcy is: a good thing. > This comment represents, unfortunately, what's wrong with capitalism and, at the same time, what makes it work. Bankruptcy is used by companies to get rid of debt and refocus their business, which is good. In the case of Boeing, an eventual bankruptcy comes as a consequence of a decade of buybacks to fill investor targets and lousy engineering in the case of the 737 Max. But hey, with infinite FED money, Boeing is not going down that easily. The Federal Reserve system is anti-capitalistic because it removes choice and agency from the market, which are critical components of capitalism. Bankruptcy is also used by creditors to take possession of the assets of bad borrowers, which typically is not to the benefit of the borrowers. Financing issues rarely impact engineering decisions. If there is something outside of Boeing influencing this, the more likely culprit is regulatory capture effectively blocking innovators from entering the market.
- nunorbatista 6y ago
  > The Federal Reserve system is anti-capitalistic because it removes choice and agency from the market, which are critical components of capitalism. I can completely agree with this if Boeing is nationalized. While it's not, if they receive FED money, they would just use it to keep operating, come back to profits in a few years and distribute dividends then. This is a capitalist behavior. I wouldn't generalize the fact that financial issues can't impact engineering decisions because I've seen that happening in the past. In the case of the 737 Max is evident: they adapted the 737 with a new engine that was too big and because there was no space to put it, they placed it in an odd position and compensated with Software that was operating silently. They did this to avoid developing a new plane, which would cost them time and money.
  - generalpass 6y ago
    > > The Federal Reserve system is anti-capitalistic because it removes choice and agency from the market, which are critical components of capitalism. > I can completely agree with this if Boeing is nationalized. While it's not, if they receive FED money, they would just use it to keep operating, come back to profits in a few years and distribute dividends then. This is a capitalist behavior. > I wouldn't generalize the fact that financial issues can't impact engineering decisions because I've seen that happening in the past. In the case of the 737 Max is evident: they adapted the 737 with a new engine that was too big and because there was no space to put it, they placed it in an odd position and compensated with Software that was operating silently. They did this to avoid developing a new plane, which would cost them time and money. Agreeing that the Federal Reserve system is anti-capitalistic but things under it are capitalistic is a nonsensical argument. You seem to be applying "capitalism" to anything you don't like. This is poor argumentation and makes for very poor discussion. Every engineering project has some sort of budgetary constraints, no matter the source of the funding. Even under ideal conditions, poor engineering decisions have been made. Attempting to just blame everything on a singular cause that you happen to not like does not result the important critical thinking required to uncover and correct actual causes of actual problems.