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Maybe they don’t have a future. I’m a proponent of the corporate death penalty under certain circumstances for companies found guilty of killing people. I empat

by crmd 4y ago

Maybe they don’t have a future. I’m a proponent of the corporate death penalty under certain circumstances for companies found guilty of killing people. I empathize with their shareholders, but corporations have free will and their death will act as a deterrent to other corporations therefore saving many more lives.

JumpCrisscross 4y ago
> proponent of the corporate death penalty As an insignificantly-minor J&J shareholder, I would be fine with a corporate death penalty. The company would be disbanded, assets and liabilities together, instead of fines and judgements putting it into actual bankruptcy. Pretty much every formulation of "corporate death penalty" is fines, but less severe, or fines, with extra steps.
- infamouscow 4y ago
  If such a law existed, I think it would also have to have a provision about the shares being destroyed -- not being worth 0. Shareholders ought to have some skin in the game to incentivize behavior that does not lead down the road of corporate death. If you allow the value to go to zero, shareholders will just turn a blind eye and write the investment off as a loss on their taxes.
  - pifm_guy 4y ago
    I think no company should be allowed limited liability/bankruptcy protection. If a company can't pay its debts, the shareholders should be required to pay.
    - JumpCrisscross 4y ago
      > the shareholders should be required to pay We had this. For millennia. It simply makes equity impossible. Instead, you have proprietors who get loans--all investment is debt.
      - chordalkeyboard 4y ago
        > It simply makes equity impossible. Instead, you have proprietors who get loans--all investment is debt. this is not true. investors are merely incentivized to be more careful about who they trust with their money.
        JumpCrisscross 4y ago
        > incentivized to be more careful about who they trust with their money Sure. And they'd be more careful by structuring investments as debt. If you're taking joint liability, you're a proprietor. Limited liability is equity's defining characteristic. Equity with liability is proprietorship. A world without limited liability is one without equity.
        chordalkeyboard 4y ago
        it seems as though you are making a semantic claim around the word 'equity' which is fine but you also seem to be simultaneously claiming that people would either make/take loans or operate the business themselves. I almost didn't reply because I don't want to argue but you ought to be informed that this implication I have attributed to you based on your replies is not true [1]. if I've misunderstood the thrust of your replies then I apologize. [1] https://en.wikipedia.org/wiki/Unlimited_company https://en.wikipedia.org/wiki/Unlimited_company
        JumpCrisscross 4y ago
        Unlimited companies prove my point. They’re rare. And they’re overwhelmingly levered. The actual counter-example you seek is partnerships. The difference between stock and partnership is limited liability.
        chordalkeyboard 4y ago
        > Unlimited companies prove my point. They’re rare. And they’re overwhelmingly levered. if you say so, but your point is hard to grasp because here are examples of people owning capital without a liability shield. And plenty of liability limited companies are also levered. > The actual counter-example you seek is partnerships. https://www.investopedia.com/articles/investing/090214/limited-liability-partnership-llp-basics.asp https://www.investopedia.com/articles/investing/090214/limit... > The difference between stock and partnership is limited liability. https://en.wikipedia.org/wiki/Joint-stock_company https://en.wikipedia.org/wiki/Joint-stock_company
  - NickM 4y ago
    If you allow the value to go to zero, shareholders will just turn a blind eye and write the investment off as a loss on their taxes. Writing off a loss on your taxes does not cancel out that loss, it only lessens it a bit. Shareholders still lose lots of money if the company they hold shares in goes bankrupt. Perhaps you already understood that, but your comment makes it sound like you think tax writeoffs mean that shares can go to zero and the shareholders won't ultimately lose anything. This is very much not the case.
    - chii 4y ago
      what happens to the assets of the company? The factory they own surely isn't going to be demolished for no reason.
      - NickM 4y ago
        They get sold off to (partially) pay back the company's creditors.
  - JumpCrisscross 4y ago
    > the shares being destroyed -- not being worth 0 These are economically equivalent.
- Panzer04 4y ago
  And what about all the goods J&J produces? Research? This is a ludicrous proposal for a profitable and productive company. It's obviously bad for society as a whole.
  - JumpCrisscross 4y ago
    > what about all the goods J&J produces? Research? Bankruptcy doesn’t mean liquidation.
    - Panzer04 4y ago
      You said the company should be disbanded - perhaps I took that to mean something different to what you meant.
      - JumpCrisscross 4y ago
        > the company should be disbanded Sorry, I meant that if one applies many popular theories of how a "corporate death penalty" should work, the company would be liquidated. With the fines approach, shareholders get wiped, creditors impaired, but the company's operations can keep going under new ownership.
  - BoiledCabbage 4y ago
    > This is a ludicrous proposal for a profitable and productive company. It's obviously bad for society as a whole. I agree, and also feel that wealthy and productive people in society should not be subject to laws like murder. They are, after all, wealthy and productive to society. It would be bad to hold them responsible. There are reasons why laws must be made and held above opinions of how useful someone or something is deemed to be. Otherwise you create obscene moral hazard and enable societally dangerous behavior.
  - anonuser123456 4y ago
    You can liquidate shareholder equity without destroying the company. Public markets can recapitalize it after bankruptcy.
refurb 4y ago
I’d prefer a solution where 141,000 people didn’t lose their jobs.
- CogitoCogito 4y ago
  Why is the number of employees material? If a company of 5 employees engaged in behavior resulting in lawsuits causing it to go bankrupt, should that company not go bankrupt to save those 5 jobs?
  - refurb 4y ago
    Are you asking why 141,000 people losing their job is worse than 5 losing their job?
    - CogitoCogito 4y ago
      No I'm not, but allow me to clarify for you anyway. I'll ask you a few questions: 1. If a company of 5 employees engaged in behavior resulting in lawsuits causing it to go bankrupt, should that company not go bankrupt to save those 5 jobs? 2. If a company of 500 employees engaged in behavior resulting in lawsuits causing it to go bankrupt, should that company not go bankrupt to save those 500 jobs? 3. If a company of 141,000 employees engaged in behavior resulting in lawsuits causing it to go bankrupt, should that company not go bankrupt to save those 141,000 jobs? Really at what point does the size of the company become large enough that you personally feel we should regard it differently because of the number of people working at that company? Besides 141,000 is maybe 0.1% of the US working population so I assume that many more lose their jobs each month just as normal churn. Is there something worse about people who lose their jobs at the same company than if they are spread out at different companies?
chordalkeyboard 4y ago
> corporations have free will disagree. corporations have no will at all. a corporation is a liability-limiting legal structure, it is merely a social convention that is designed to shield ownership from the liability associated with the actions of their employees.

by crmd 4y ago

JumpCrisscross 4y ago

> proponent of the corporate death penalty As an insignificantly-minor J&J shareholder, I would be fine with a corporate death penalty. The company would be disbanded, assets and liabilities together, instead of fines and judgements putting it into actual bankruptcy. Pretty much every formulation of "corporate death penalty" is fines, but less severe, or fines, with extra steps.

infamouscow 4y ago
If such a law existed, I think it would also have to have a provision about the shares being destroyed -- not being worth 0. Shareholders ought to have some skin in the game to incentivize behavior that does not lead down the road of corporate death. If you allow the value to go to zero, shareholders will just turn a blind eye and write the investment off as a loss on their taxes.
- pifm_guy 4y ago
  I think no company should be allowed limited liability/bankruptcy protection. If a company can't pay its debts, the shareholders should be required to pay.
  - JumpCrisscross 4y ago
    > the shareholders should be required to pay We had this. For millennia. It simply makes equity impossible. Instead, you have proprietors who get loans--all investment is debt.
    - chordalkeyboard 4y ago
      > It simply makes equity impossible. Instead, you have proprietors who get loans--all investment is debt. this is not true. investors are merely incentivized to be more careful about who they trust with their money.
      - JumpCrisscross 4y ago
        > incentivized to be more careful about who they trust with their money Sure. And they'd be more careful by structuring investments as debt. If you're taking joint liability, you're a proprietor. Limited liability is equity's defining characteristic. Equity with liability is proprietorship. A world without limited liability is one without equity.
        chordalkeyboard 4y ago
        it seems as though you are making a semantic claim around the word 'equity' which is fine but you also seem to be simultaneously claiming that people would either make/take loans or operate the business themselves. I almost didn't reply because I don't want to argue but you ought to be informed that this implication I have attributed to you based on your replies is not true [1]. if I've misunderstood the thrust of your replies then I apologize. [1] https://en.wikipedia.org/wiki/Unlimited_company https://en.wikipedia.org/wiki/Unlimited_company
        JumpCrisscross 4y ago
        Unlimited companies prove my point. They’re rare. And they’re overwhelmingly levered. The actual counter-example you seek is partnerships. The difference between stock and partnership is limited liability.
        chordalkeyboard 4y ago
        > Unlimited companies prove my point. They’re rare. And they’re overwhelmingly levered. if you say so, but your point is hard to grasp because here are examples of people owning capital without a liability shield. And plenty of liability limited companies are also levered. > The actual counter-example you seek is partnerships. https://www.investopedia.com/articles/investing/090214/limited-liability-partnership-llp-basics.asp https://www.investopedia.com/articles/investing/090214/limit... > The difference between stock and partnership is limited liability. https://en.wikipedia.org/wiki/Joint-stock_company https://en.wikipedia.org/wiki/Joint-stock_company
- NickM 4y ago
  If you allow the value to go to zero, shareholders will just turn a blind eye and write the investment off as a loss on their taxes. Writing off a loss on your taxes does not cancel out that loss, it only lessens it a bit. Shareholders still lose lots of money if the company they hold shares in goes bankrupt. Perhaps you already understood that, but your comment makes it sound like you think tax writeoffs mean that shares can go to zero and the shareholders won't ultimately lose anything. This is very much not the case.
  - chii 4y ago
    what happens to the assets of the company? The factory they own surely isn't going to be demolished for no reason.
    - NickM 4y ago
      They get sold off to (partially) pay back the company's creditors.
- JumpCrisscross 4y ago
  > the shares being destroyed -- not being worth 0 These are economically equivalent.
Panzer04 4y ago
And what about all the goods J&J produces? Research? This is a ludicrous proposal for a profitable and productive company. It's obviously bad for society as a whole.
- JumpCrisscross 4y ago
  > what about all the goods J&J produces? Research? Bankruptcy doesn’t mean liquidation.
  - Panzer04 4y ago
    You said the company should be disbanded - perhaps I took that to mean something different to what you meant.
    - JumpCrisscross 4y ago
      > the company should be disbanded Sorry, I meant that if one applies many popular theories of how a "corporate death penalty" should work, the company would be liquidated. With the fines approach, shareholders get wiped, creditors impaired, but the company's operations can keep going under new ownership.
- BoiledCabbage 4y ago
  > This is a ludicrous proposal for a profitable and productive company. It's obviously bad for society as a whole. I agree, and also feel that wealthy and productive people in society should not be subject to laws like murder. They are, after all, wealthy and productive to society. It would be bad to hold them responsible. There are reasons why laws must be made and held above opinions of how useful someone or something is deemed to be. Otherwise you create obscene moral hazard and enable societally dangerous behavior.
- anonuser123456 4y ago
  You can liquidate shareholder equity without destroying the company. Public markets can recapitalize it after bankruptcy.

refurb 4y ago

I’d prefer a solution where 141,000 people didn’t lose their jobs.

CogitoCogito 4y ago
Why is the number of employees material? If a company of 5 employees engaged in behavior resulting in lawsuits causing it to go bankrupt, should that company not go bankrupt to save those 5 jobs?
- refurb 4y ago
  Are you asking why 141,000 people losing their job is worse than 5 losing their job?
  - CogitoCogito 4y ago
    No I'm not, but allow me to clarify for you anyway. I'll ask you a few questions: 1. If a company of 5 employees engaged in behavior resulting in lawsuits causing it to go bankrupt, should that company not go bankrupt to save those 5 jobs? 2. If a company of 500 employees engaged in behavior resulting in lawsuits causing it to go bankrupt, should that company not go bankrupt to save those 500 jobs? 3. If a company of 141,000 employees engaged in behavior resulting in lawsuits causing it to go bankrupt, should that company not go bankrupt to save those 141,000 jobs? Really at what point does the size of the company become large enough that you personally feel we should regard it differently because of the number of people working at that company? Besides 141,000 is maybe 0.1% of the US working population so I assume that many more lose their jobs each month just as normal churn. Is there something worse about people who lose their jobs at the same company than if they are spread out at different companies?

chordalkeyboard 4y ago

> corporations have free will disagree. corporations have no will at all. a corporation is a liability-limiting legal structure, it is merely a social convention that is designed to shield ownership from the liability associated with the actions of their employees.