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That would cause a massive economic disruption that could potentially lead to actually bad economic effects. Right now things aren't all sunny and happy for ev

by munk-a 6y ago

That would cause a massive economic disruption that could potentially lead to actually bad economic effects. Right now things aren't all sunny and happy for everyone but they can get a lot worse if infrastructural components of the economy start getting eroded - either by being chopped up for vulture capitalists or by having their lending chain & backers divided up similarly. If Fedex & UPS were to be forced to sell off package delivery in NYC to cover losses while USPS continues to be hamstrung by the administration then things will get bad - and there are a lot of other operators that are a lot less visible but just as essential. Let slip retailers and banks are less stable - let slip banks and companies that are operating through the pandemic on shoe-strings and a whole bunch of backed credits lose the ability to keep the lights on.

linuxftw 6y ago
> If Fedex & UPS were to be forced to sell off package delivery in NYC Then the market will adjust. If you can't get packages delivered in NYC, you will have to get your goods through some other means. Maybe all of NYC is a bubble. Maybe that many people shouldn't live on a handful of tiny islands, importing their food from the mid west and their goods from China. Maybe everyone's in the wrong place.
- PaulDavisThe1st 6y ago
  Maybe. But if that's true, is the correct solution to crash-and-burn from the current scenario to some version of a "better" one?
  - linuxftw 6y ago
    The correct thing to do is let the market decide. If it's profitable to do something, people will do it.
    - PaulDavisThe1st 6y ago
      This seems profoundly naive to me. "If it's profitable do something" is beyond simplistic. Profitable compared to what? Profitable for whom? Profitable based on what assumptions? Profitable by what metric? Dollars accrued to capital? Dollars accrued to GDP? Quality of life index? Happiness index? Life expectancy numbers? Infant mortality? Profitable with what externalities forced to be part of cost-factoring? What is "the market"? What is a "decision" in this context? What is the cost benefit analysis of allowing "the market" to "decide" versus more policy-driven unfolding of the outcome? ... and so on and so on .... i.e. the usual litany of problems with free-market boosterism
      - lmm 6y ago
        To refuse to decide is even more simplistic. The free market offers a clear way to decide where resources are invested. If you're going to override that and prop up failing companies, what grounds are you going to use to decide, and why do you believe your process will be better? Letting the market decide at least ensures that completely useless companies go to the wall, and companies that people are willing to spend a lot on get to continue (and, notably, it does this in a nondiscriminatory way - anyone's money is as good as anyone else's). Can your process - which is, what, Trump picks and chooses which companies don't go bankrupt? - guarantee that much?
        PaulDavisThe1st 6y ago
        I don't propose propping up failing companies. I agree with others who have suggested that ensuring that individuals (i.e. employees/workers) are adequately protected so that the immediate aftermath of corporate failure doesn't fall on them. Remember: the usual reason why employees are not entitled to the same share of profits as investors is that "employees are not taking a risk". If we're going to start arguing that deciding to take a job at a company is just as much of a risk as investing capital, then the relationship with profit will need to change too. But the implications go beyond the people who work for corporations that fail, into communities (possibly far and wide). I don't think there are policies that can mitigage this without damaging the entrepeneurial climate, which I'd rather not do. At the same time, the incredible ease with which one can start new businesses in the US, and the trivial availability of credit, almost guarantees that we have huge numbers of businesses that play valuable roles in their communities but have absolutely no resilience to negative economic shifts. I don't know how we fix that.
    - munk-a 6y ago
      The instances where it's been profitable to maintain a standing army are quite few and far between - and allowing the market to control fire extinguishing has led to some really perverse incentives. There are things that we benefit from as a society that aren't realistic to accurately price for ethical reasons so I think this is quite too simplistic a statement.
  - lmm 6y ago
    Creative destruction is how capitalism is supposed to work. Bankruptcy is a vital part of the system - and far from "crash-and-burn" it's a well-regulated process with a lot of safeguards in place. If you stop allowing companies to go bankrupt then you end up with a crony capitalism that's not much different from oligarchy.

by munk-a 6y ago

linuxftw 6y ago

> If Fedex & UPS were to be forced to sell off package delivery in NYC Then the market will adjust. If you can't get packages delivered in NYC, you will have to get your goods through some other means. Maybe all of NYC is a bubble. Maybe that many people shouldn't live on a handful of tiny islands, importing their food from the mid west and their goods from China. Maybe everyone's in the wrong place.

PaulDavisThe1st 6y ago
Maybe. But if that's true, is the correct solution to crash-and-burn from the current scenario to some version of a "better" one?
- linuxftw 6y ago
  The correct thing to do is let the market decide. If it's profitable to do something, people will do it.
  - PaulDavisThe1st 6y ago
    This seems profoundly naive to me. "If it's profitable do something" is beyond simplistic. Profitable compared to what? Profitable for whom? Profitable based on what assumptions? Profitable by what metric? Dollars accrued to capital? Dollars accrued to GDP? Quality of life index? Happiness index? Life expectancy numbers? Infant mortality? Profitable with what externalities forced to be part of cost-factoring? What is "the market"? What is a "decision" in this context? What is the cost benefit analysis of allowing "the market" to "decide" versus more policy-driven unfolding of the outcome? ... and so on and so on .... i.e. the usual litany of problems with free-market boosterism
    - lmm 6y ago
      To refuse to decide is even more simplistic. The free market offers a clear way to decide where resources are invested. If you're going to override that and prop up failing companies, what grounds are you going to use to decide, and why do you believe your process will be better? Letting the market decide at least ensures that completely useless companies go to the wall, and companies that people are willing to spend a lot on get to continue (and, notably, it does this in a nondiscriminatory way - anyone's money is as good as anyone else's). Can your process - which is, what, Trump picks and chooses which companies don't go bankrupt? - guarantee that much?
      - PaulDavisThe1st 6y ago
        I don't propose propping up failing companies. I agree with others who have suggested that ensuring that individuals (i.e. employees/workers) are adequately protected so that the immediate aftermath of corporate failure doesn't fall on them. Remember: the usual reason why employees are not entitled to the same share of profits as investors is that "employees are not taking a risk". If we're going to start arguing that deciding to take a job at a company is just as much of a risk as investing capital, then the relationship with profit will need to change too. But the implications go beyond the people who work for corporations that fail, into communities (possibly far and wide). I don't think there are policies that can mitigage this without damaging the entrepeneurial climate, which I'd rather not do. At the same time, the incredible ease with which one can start new businesses in the US, and the trivial availability of credit, almost guarantees that we have huge numbers of businesses that play valuable roles in their communities but have absolutely no resilience to negative economic shifts. I don't know how we fix that.
  - munk-a 6y ago
    The instances where it's been profitable to maintain a standing army are quite few and far between - and allowing the market to control fire extinguishing has led to some really perverse incentives. There are things that we benefit from as a society that aren't realistic to accurately price for ethical reasons so I think this is quite too simplistic a statement.
- lmm 6y ago
  Creative destruction is how capitalism is supposed to work. Bankruptcy is a vital part of the system - and far from "crash-and-burn" it's a well-regulated process with a lot of safeguards in place. If you stop allowing companies to go bankrupt then you end up with a crony capitalism that's not much different from oligarchy.