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This is far too low. A fine large enough to destroy the company (as was effectively done to Purdue) would have been the only palatable outcome. And even more im
by crumbshot 6y ago
This is far too low. A fine large enough to destroy the company (as was effectively done to Purdue) would have been the only palatable outcome. And even more importantly, legal repercussions for all their employees who were personally responsible for this.
All this settlement achieves is 'a cost of doing business', as they say. It's not punishment or deterrence. McKinsey and other companies like them will do similar in the future, and simply pay it off, again.
- minikites 6y agoIf big companies started facing consequences for their actions our economy would fall apart.
- omosubi 6y agoWhy? Because people would actually be held accountable for their decisions? Shouldn't that be how it works to begin with? It would be painful in the short term but in the long term i think it would make people better off
- minikites 6y agoI agree that it shouldn't be this way, but I remember 2008 and the fact that zero people were punished. The US government will protect corporate profits at all costs.
- bcrosby95 6y agoI agree, but I'm not really sure what that has to do with this: > If big companies started facing consequences for their actions our economy would fall apart.
- minikites 6y agoThere are enough large companies who have committed misdeeds worthy of major consequences that if we actually punished all of them in a meaningful way, the economy would fall apart, because there would not be many companies left.
- ClumsyPilot 6y agoon the contrary, it would create opportunity for actually well-run businesses that benefits the customer to take their place
- Supermancho 6y ago> it would create opportunity for actually well-run businesses that benefits the customer to take their place This assumes that you have a functional society after say...Chase or Nestle or Pfizer or Boeing or Disney, etc becomes insolvent. You will lose more than a decade in churn as the monopolies (enough that they can dictate legislative agendas) leave huge gaps that are inevitably filled with instability. The "good actors" that would backfill is a utopian fantasy. Different names, different brands, but the same kinds of people would end up in the same positions of influence. That's how the (mostly) capitalistic system operates.
- ClumsyPilot 6y agoThey dont need to be good, they need to have real competition and realisation that is they break the law they will be slapped hard Also, we wont have functional society without Dysney and Nestle? What, society will collapse if we run out of chocolates and movies? People won't have diabetes?
- Supermancho 6y ago> we wont have functional society without Disney and Nestle? What, society will collapse if we run out of chocolates and movies? The breadth of these companies is almost immeasurable. Nestle owns an immense amount of resource rights (eg the largest siphon of natural water from the Los Angeles basin) and industry (#1 food producing company in the world). Disney is the leading intellectual property holder of the world. The ubiquity, innate cultural knowledge, and economic strength of corporate entities in the world are part of what keep society stable. The brands are stable, so families are able to be stable and confident about the future. This is why I picked out examples from multiple industries, all of which are known actors, who have been slapped on the hand for heinous acts over recent time.
- KoftaBob 6y agoI don't even know where to begin with this comment.
- minikites 6y agoName a big company or C-level executive that has faced any meaningful consequences for their misdeeds in the last 15 years. I can think of Bernie Madoff, but he was punished because he swindled rich people. If he swindled poor people he'd be on the cover of Fortune magazine.
- KoftaBob 6y agoI agree that big companies don't face meaningful consequences often enough for their misdeeds. My comment was referring to your statement that if we did hold them accountable, the economy would fall apart.
- jessaustin 6y agoWhy do we cling to the idea that the present form of our economy is somehow justified or sustainable?
- AshWolfy 6y agoits easier to imagine the end of the world than the end of capitalism
- UnFleshedOne 6y agoThe comment is descriptive, not prescriptive I think. It is also probably correct as descriptions go.
- bostonsre 6y agoIf big companies face no consequences, then our society will fall apart. They have ruined millions of lives and are responsible for a large portion of the 450k overdose deaths from 1999 to 2018. It amounts to literal gambling with people's lives and the individuals responsible face almost no risk. The worst thing that happens is that their company has to pay a big fine. Someone who steals a car will face a multi year federal sentence. Who had the biggest negative impact on society, the dude that stole a car or the people responsible for hundreds of thousands of deaths?
- minikites 6y ago>If big companies face no consequences, then our society will fall apart. It currently is and I don't see any sign of it stopping. The foundation was laid in the 80s, the roof fell in on January 6th, and the Democrats don't have enough of a spine to actually fix the problem because Republicans keep calling them mean names.
- nitrogen 6y agoThe fault in our society is not that one party is bad and the other party it's good, it's that both parties think that about each other and believe a whole bunch of distortions based on the extremes of either party. Rs think Ds are destroying our society just as much as Ds think Rs are doing the same. Both sides are vilifying Is for not taking enough of a stand on The Issues That Will End The World TM. The only way out is to fix that mutual misunderstanding, and to stop destroying the neutral space where that misunderstanding can be mended. I'd love it if whenever politics comes up on HN, we started brainstorming ways to do that, instead of amplifying the us vs. them rhetoric that is too prevalent elsewhere.
- eggsmediumrare 6y agoI agree with the sentiment, but it's also not helpful to lay blame equally. It's pretty obvious that the Republican party and their peripherals (fox news, et al) have caused way more damage than the Democrats. (Not to say that the problems in our society can be distributed fully between those two groups).
- omginternets 6y agoAt least be upfront about what this is: preferring the justice system to fall apart.
- gnulinux 6y agoSo let's allow all big companies to do whatever the fuck they want, because otherwise "our economy would fall apart"? This is the darkest comment I read on HN.
- JoeAltmaier 6y agoThis is a common exaggeration used in a variety of ways. A Basic Income will destroy the economy (because the US economy depends utterly on a slave-labor class?) Or electric cars will destroy the economy because whatever. Its thrown around here a lot.
- crumbshot 6y agoI read it as a lament that our economies are so vulnerable to the actions of a relatively small number of large corporations. Including the idea of certain entities purportedly being 'too big to fail'. Not sure if that was the intended connotation though.
- deleted 6y ago[deleted]
- ergocoder 6y agoI don't think we should fine the company. It should be the execs who signed off serving time in prison instead.
- minikites 6y agoI think we should do both.
- AshWolfy 6y agoor maybe it means an alternative way of organizing society is needed
- JoeAltmaier 6y agoYes, as soon as you put a price on malfeasance, it becomes a spreadsheet decision for a corporation.
- tkinom 6y ago$573M for 450,000 overdose deaths. $1k+ per death.
- nerbert 6y agoDo you think this amount is high or low?
- totalZero 6y agoCan't speak for tkinom, but if you were friends with a thousand or two of those dollars, then you feel a punch in the gut. It's not so much "low" as it is "sad."
- spoonjim 6y agoIt’s too low. The 20 people most responsible for willfully creating this epidemic should get lethal injection, the next 200 should get life in prison without parole. Then some measure of justice will be served, fines or no fines.
- humaniania 6y agoJustice was not done in the case of Purdue. The Sackler family absconded with billions. They still need to be held to account.
- leafmeal 6y agoHere's a fascinating article about the Sackler family and how deluded they are about the whole thing https://www.newyorker.com/news/our-columnists/the-sackler-family-and-mine https://www.newyorker.com/news/our-columnists/the-sackler-fa...
- londons_explore 6y agoIt does seem a rather gaping hole in our legal/finance system that it's possible for a company to do a risky thing where the upside will occur soon, yet the downside will be delayed many years. Then the shareholders of the company can take out all the profits of the upside, walk away with all the cash and declare the company bankrupt when the downside happens. I think the only proper fix would be to disallow companies from going bankrupt - ie. if a company has unpaid debts, the shareholders must pay them, and the share price can become negative. That forces everyone to build such risks into their models from the start, and company directors will be discouraged from taking such risky bets. Other similar financial instruments exist - like stock shorts, futures contracts, lloyds names, etc.
- deleted 6y ago[deleted]
- m00x 6y agoThis doesn't make any sense. If the investors got money on the upside, they must've taken their investments out before the bankruptcy. Then if the remaining investors pay the debts, they've also lost all the money they invested. Where do you draw the line for investors responsible? Anyone who's still in? Whoever was ever in?
- londons_explore 6y ago
- leafmeal 6y agoFrom the New York Times article, "The amount McKinsey is paying is substantially more than it earned from opioid-related work with Purdue or Johnson & Johnson, Endo International and Mallinckrodt Pharmaceuticals, its other opioid-maker clients, a person involved in the settlement negotiations said" To me, "a cost of doing business" implies that they're making more money than it costs them. Here at least, that doesn't seem to be the case. So while this may not have been sufficient for retribution, I think it's easy to make the case that this will be a pretty good deterrent. Consulting companies will start to realize that they can be liable for the advice the give. https://www.nytimes.com/2021/02/03/business/mckinsey-opioids-settlement.html https://www.nytimes.com/2021/02/03/business/mckinsey-opioids...
- droopyEyelids 6y agoThe money they make is the total of all the money they make from shady immoral shit. The opioid project wasn't the only shady project contributing to their top line.
- totalZero 6y agoThe EV is the payoff times the probability. If there were only a 10% chance of paying (for example) treble damages without admitting guilt, then a company would take that bet repeatedly and the wins would more than pay for the losses.
- klmadfejno 6y agoPosted this a few times but it keeps getting brought up. A project like this would be ~$1M. The fine is ~$600M. Total McK revenue is ~$10,000M. It's wayyyy more than the cost of doing business. This project represents less than 0.001% of a year's revenue. Company is losing 5-6%.
- lapphi 6y ago> Most of the money will go to government programs fighting opioid addiction and providing treatment, North Carolina Attorney General Josh Stein said Thursday. The company helped “turbocharge” opioid sales for 15 years while consulting for Purdue and its billionaire owners, the Sackler family, Stein said. 15 years of work must have cost more than $1M https://www.aljazeera.com/economy/2021/2/4/mckinseytopay-573m-to-settle-claims-it-fueled-us-opioid-crisis https://www.aljazeera.com/economy/2021/2/4/mckinseytopay-573...
- refurb 6y agoWait. You want to destroy a $10B+ annual revenue business that does consulting across almost every industry because of this one project? Edit: to the reply comparing this to murder, not it's not. And even if you do compare it, the court look at an individuals standing and contribution to the community all the time in sentencing.
- jdironman 6y agoWhy ruin this mans life with one murder? He's active in all sorts of communities and contributes so much.
- refurb 6y agoThis would be like throwing a murder’s family in jail too.
- spoonjim 6y agoMcKinsey is one of the most sociopathic corporate entities in the world and this has been proven time and time again.
- vmception 6y agoThe government spends so much energy preventing monopolies that they don't want to be responsible for creating them. I'm serious, this guides decisions with Attorney Generals.
- deleted 6y ago[deleted]
- wombatmobile 6y agoHow much was McKinsey paid by Purdue? I haven't been able to find the quantum anywhere.