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Right - and I think that's generally what you'd see people doing. I'm not even sure it's necessarily an intrinsically bad pattern - there can be short-term opp
by roughly 6y ago
Right - and I think that's generally what you'd see people doing.
I'm not even sure it's necessarily an intrinsically bad pattern - there can be short-term opportunities and circumstances that make a strategy worthwhile for a number of years but not further. I think the issue broadly is twofold. First is the collateral damage - companies forming and dissolving is fine for the investors but murder for the employees, who's livelihoods and health insurance become precarious. Second is that we've applied this to the entire economy in a way that makes us incredibly vulnerable to systemic shocks - see America's toilet paper supply between the months of March and July. Again, on an individual company-wide basis, it might still have been more profitable for Procter & Gamble to do whatever the hell it is they did to make 2-ply an impossible technology to reproduce domestically in 2020, but on an economy-wide basis, the fact that Everyone did it was a goddamn disaster.
- TheCoelacanth 6y ago> companies forming and dissolving is fine for the investors but murder for the employees, who's livelihoods and health insurance become precarious That's a problem with the social safety net, not a problem with companies failing. A lot of companies are going to fail even without someone actively trying to drive them out of business. Some industries just have collapses in demand and no longer do something that anyone wants. Some companies are just mismanaged. We need to provide support for the employees who are victims of companies collapsing, not try to prevent any company from ever collapsing.