6 ms·

Money is not really the root cause though, any more than tcp/ip is meaningful interpersonal communication. It's just a signal. They sold their fleets because o

Money is not really the root cause though, any more than tcp/ip is meaningful interpersonal communication. It's just a signal. They sold their fleets because other people (the buyers) wanted them more, in the short term. Now they want to buy because they want a fleet again. It's a time horizon problem, or perhaps an uncertainty problem - how were they supposed to know how long the pandemic would last? Or perhaps a premature optimization problem because the business was predicated on a pandemic not happening. But I don't see it as a money problem, any more than a tcp/ip problem.

lordnacho 5y ago
I don't know, if you look at "money" as the wider financial system, then maybe it is a root cause. Another commentator downthread mentions the fragility vs efficiency tradeoff, and that's certainly something encouraged by financializing the economy. By making it possible to easily switch between stocks and flows (capital/income in this case pay in full / pay debt) and encouraging whatever makes firms look good in the short term, the financial system helps cause this kind of thing. We get towers built higher but not necessarily safer.
- sideshowb 5y ago
  Sure, I agree having a financial system predicated on growth causes a whole lotta problems. I guess I define "money" more narrowly as we could use it as a component in a very different system.
- lazide 5y ago
  The financial system is very efficient, and allows tuning and scaling to an extent never before possible. That allows folks to squeeze pennies or build leveraged business models that previously would have not been possible. Which is great, when things fit the model (the stocks or bonds involved pay retirees longer, make people wealthier, etc), but also allow people to build much higher castles of cards than they previously could have before something toppled them over. Panics, crashes, defaulting on debt, etc. have been around as long (and probably longer) than we have historical records, but wow does the modern system take the cake for scale!
  - deleted 5y ago
    [deleted]
- imtringued 5y ago
  It's a whole system of problems but it's not a hugely complicated system, at least not compared to all the bandaids that are necessary if you do not address the problems at their root. https://youtu.be/ZFRVfXeIaek https://youtu.be/ZFRVfXeIaek https://www.youtube.com/watch?v=xkQn56Dtslk https://www.youtube.com/watch?v=xkQn56Dtslk https://www.youtube.com/watch?v=j5l_Oeg6kMo https://www.youtube.com/watch?v=j5l_Oeg6kMo https://youtu.be/mhr4JGbozTA https://youtu.be/mhr4JGbozTA
gary_0 5y ago
> It's just a signal. I think quacked's point was that sometimes it's not a very good signaling system. Neither is TCP/IP in some cases, and sometimes neither are cytokines (to use a biology example). These are all evolved systems, to some degree; maybe they're the best we can hope for, but we should still keep an eye out for "version 2.0".
- quacked 5y ago
  It's not even that I think it's realistic to expect version 2.0, although I would really like that. It's more that it's impossible to get many people to even admit that the current system is flawed in a way that is technically controllable. It is insane to me that we all have to shrug and admit that "well, we can't fix X problem because the money's not there" over and over again, when we have all of the labor hours and intellectual capital to do whatever we want as a collective species organism. With the right coordination, we could make every city look like a Miyazaki lake town. Or Disneyland. Or an exact copy of ancient Rome. We could scan every person alive every year and see whether or not they've got cancer. We could clean every river and every lake. We could send everyone a Nintendo Switch. That whole "bullshit jobs" memo gets circulated on HN all the time; how much of us could do actually cool shit if we didn't have to worry about paying for other people to help maintain society for us? I don't know, but it sure is frustrating watching Hertz sell off their fleet because their board is more worried about its share price than it is about whether or not Hertz, a car rental company, can rent out cars. (And I'm not blaming them for it- they're deadlocked in the same standoff everyone else is.)
  - WalterBright 5y ago
    > it sure is frustrating watching Hertz sell off their fleet because their board is more worried about its share price than it is about whether or not Hertz More like worried about bankruptcy and going out of business.
  - sideshowb 5y ago
    (Gp here) I for one certainly admit flaws in the system! ...maybe we're splitting hairs over whether that system is called money or something bigger. One of my research interests is trying to make a contribution to what you call version 2.0, through better measures of subjective wellbeing.
twistedpair 5y ago
Isn't is more of an existential issue? If you're a rental company, looking at ~$0 income for the next year, and the need to pay for, maintain, and garage their car fleets, then you're top priority is to shore up the balance sheet and keep your corp afloat. What the car buyer's market will be in 18mo is a more distant concern.
- admax88qqq 5y ago
  To a point though. Selling your only operating assets just because they're not operating at the moment seems pretty short sighted. Creditors may have forced their hand a degree, but to me it feels like a factory selling their machinery because demand is down this year. If you're going to sell all your cars as a rental company, might as well liquidate your whole company and close up shop.
  - eldavido 5y ago
    The whole issue is the general prudence of taking on debt. It's a question of efficiency. Too little and you miss out on opportunities to produce and grow, too much and you're super-fragile. Over-indebted companies is a very Anglo (US/UK) and Japanese thing. There are plenty of companies in continental Europe (Germany, Italy, France) who operate with much less debt than their US counterparts. A good example is Aldi. They have no debt on their balance sheet anywhere, not even for inventory. By the standards of American business culture, that is 100% absurd. I'm really not sure who's right. It's optimization vs survival.
    - admax88qqq 5y ago
      There's also a question of just how fragile they truly were. Sure the pandemic messed them up, but that was really a once in a generation at most event. If thats what it took to sink your businessz I wouldn't call it very fragile. I also think they and their creditors made poor decisions. Selling your only operating assets in order to balance the books is a suicidal move no matter the industry. It's selling off your only way of making money. It's like a software engineer selling their workstation when times are tough.

lordnacho 5y ago

I don't know, if you look at "money" as the wider financial system, then maybe it is a root cause. Another commentator downthread mentions the fragility vs efficiency tradeoff, and that's certainly something encouraged by financializing the economy. By making it possible to easily switch between stocks and flows (capital/income in this case pay in full / pay debt) and encouraging whatever makes firms look good in the short term, the financial system helps cause this kind of thing. We get towers built higher but not necessarily safer.

sideshowb 5y ago
Sure, I agree having a financial system predicated on growth causes a whole lotta problems. I guess I define "money" more narrowly as we could use it as a component in a very different system.
lazide 5y ago
The financial system is very efficient, and allows tuning and scaling to an extent never before possible. That allows folks to squeeze pennies or build leveraged business models that previously would have not been possible. Which is great, when things fit the model (the stocks or bonds involved pay retirees longer, make people wealthier, etc), but also allow people to build much higher castles of cards than they previously could have before something toppled them over. Panics, crashes, defaulting on debt, etc. have been around as long (and probably longer) than we have historical records, but wow does the modern system take the cake for scale!
- deleted 5y ago
  [deleted]
imtringued 5y ago
It's a whole system of problems but it's not a hugely complicated system, at least not compared to all the bandaids that are necessary if you do not address the problems at their root. https://youtu.be/ZFRVfXeIaek https://youtu.be/ZFRVfXeIaek https://www.youtube.com/watch?v=xkQn56Dtslk https://www.youtube.com/watch?v=xkQn56Dtslk https://www.youtube.com/watch?v=j5l_Oeg6kMo https://www.youtube.com/watch?v=j5l_Oeg6kMo https://youtu.be/mhr4JGbozTA https://youtu.be/mhr4JGbozTA

gary_0 5y ago

> It's just a signal. I think quacked's point was that sometimes it's not a very good signaling system. Neither is TCP/IP in some cases, and sometimes neither are cytokines (to use a biology example). These are all evolved systems, to some degree; maybe they're the best we can hope for, but we should still keep an eye out for "version 2.0".

quacked 5y ago
It's not even that I think it's realistic to expect version 2.0, although I would really like that. It's more that it's impossible to get many people to even admit that the current system is flawed in a way that is technically controllable. It is insane to me that we all have to shrug and admit that "well, we can't fix X problem because the money's not there" over and over again, when we have all of the labor hours and intellectual capital to do whatever we want as a collective species organism. With the right coordination, we could make every city look like a Miyazaki lake town. Or Disneyland. Or an exact copy of ancient Rome. We could scan every person alive every year and see whether or not they've got cancer. We could clean every river and every lake. We could send everyone a Nintendo Switch. That whole "bullshit jobs" memo gets circulated on HN all the time; how much of us could do actually cool shit if we didn't have to worry about paying for other people to help maintain society for us? I don't know, but it sure is frustrating watching Hertz sell off their fleet because their board is more worried about its share price than it is about whether or not Hertz, a car rental company, can rent out cars. (And I'm not blaming them for it- they're deadlocked in the same standoff everyone else is.)
- WalterBright 5y ago
  > it sure is frustrating watching Hertz sell off their fleet because their board is more worried about its share price than it is about whether or not Hertz More like worried about bankruptcy and going out of business.
- sideshowb 5y ago
  (Gp here) I for one certainly admit flaws in the system! ...maybe we're splitting hairs over whether that system is called money or something bigger. One of my research interests is trying to make a contribution to what you call version 2.0, through better measures of subjective wellbeing.

twistedpair 5y ago

Isn't is more of an existential issue? If you're a rental company, looking at ~$0 income for the next year, and the need to pay for, maintain, and garage their car fleets, then you're top priority is to shore up the balance sheet and keep your corp afloat. What the car buyer's market will be in 18mo is a more distant concern.

admax88qqq 5y ago
To a point though. Selling your only operating assets just because they're not operating at the moment seems pretty short sighted. Creditors may have forced their hand a degree, but to me it feels like a factory selling their machinery because demand is down this year. If you're going to sell all your cars as a rental company, might as well liquidate your whole company and close up shop.
- eldavido 5y ago
  The whole issue is the general prudence of taking on debt. It's a question of efficiency. Too little and you miss out on opportunities to produce and grow, too much and you're super-fragile. Over-indebted companies is a very Anglo (US/UK) and Japanese thing. There are plenty of companies in continental Europe (Germany, Italy, France) who operate with much less debt than their US counterparts. A good example is Aldi. They have no debt on their balance sheet anywhere, not even for inventory. By the standards of American business culture, that is 100% absurd. I'm really not sure who's right. It's optimization vs survival.
  - admax88qqq 5y ago
    There's also a question of just how fragile they truly were. Sure the pandemic messed them up, but that was really a once in a generation at most event. If thats what it took to sink your businessz I wouldn't call it very fragile. I also think they and their creditors made poor decisions. Selling your only operating assets in order to balance the books is a suicidal move no matter the industry. It's selling off your only way of making money. It's like a software engineer selling their workstation when times are tough.