4 ms·

Fines need to start being paid in company stock, its the only thing companies are beholden to. Everything else is just a price to wreck havoc. The more the com

Fines need to start being paid in company stock, its the only thing companies are beholden to. Everything else is just a price to wreck havoc. The more the company purposefully puts people in danger, the more nationally owned they are. Especially when it comes to infrastructure like this. "Sorry, you've been nationalized due to your continued efforts in proving you cannot be trusted". Fines large enough to matter would arguably hurt infrastructure and safety. Start taking shares.

ROTMetro 4y ago
This is a great idea. And I like the idea of fines being X% shares outstanding, not X dollars as that proportionally penalizes shareholders for not being good corporate owners. It's a win in so many ways.
- gretch 4y ago
  This probably doesn’t do the thing you want it to do 1) if there is a demand to have something, it usually raises price of that thing. You could interpret this as a forced buyback, which may raise prices of shares (and thus reward bad behavior) 2) what does the govt do with the stock after it has the stock? It doesn’t have a system for processing it, as it does with USD Also, why shouldn’t you penalize shareholders? In the future they’ll think twice about investing in companies that cut corners to juice short term gains
  - shanebellone 4y ago
    "Also, why shouldn’t you penalize shareholders? In the future they’ll think twice about investing in companies that cut corners to juice short term gains" +1 Losses speak louder than words.
riffic 4y ago
the federal government can step in and nationalize the railroad at any point as it has done in the past (woodrow wilson era iirc)
- MSFT_Edging 4y ago
  Oh I'm aware, this is more a general idea for "too big to fail" companies in general. Our infrastructure is rotten and often privatized. No one has the funds and ability to hold companies like this accountable except for the federal government. Look at Steven Donzinger. He reported on toxic spills by Chevron in Nicaragua that poisoned indigenous water supplies. Chevron hired a private prosecutor and found a judge in their favor to force him into house arrest(for over a year) for not supplying a document. Large corporations have the cards stacked in their favor.
  - mrguyorama 4y ago
    It's almost like we shouldn't allow companies to grow so large, and that a company being larger than most countries doesn't provide any benefit to the consumer.
- ccooffee 4y ago
  "Can" is doing a lot of heavy lifting here. I do not find it a credible threat, and doubt any of these companies do either. Perhaps one could argue that the 2008-2009 TARP handling of some banks or automobile manufacturers was a "light nationalization", as the US took control of _some_ stock of the affected companies. (This stock was later sold off for a profit.) But other than that, and _maybe_ the creation of the TSA in 2001, there isn't a nationalization in my living memory. The nationalization of railroads under Wilson lasted from December 1917 to March 1920. During this time, operation (including expansion and maintenance) of all railroads was organized by the federal government. When the nationalization was repealed in 1920, the US paid rail companies for lost profits.
jefftk 4y ago
This doesn't really make sense. If the company owes more in fines than it's worth, existing shareholders get nothing and the company belongs to its creditors. If it owes large amounts to the government, those claims convert into ownership too.
- MSFT_Edging 4y ago
  Rather than converting the liquid operating budget into paid fines, it converts the shares retained by the company. A company this big doesn't need to sell shares to get operating capital. This should apply to any company that does stock buybacks to inflate stock price, rather than reinvesting into their company, employees, etc.
  - jefftk 4y ago
    Depending on the details, this is the same as charging a fine in money or it's worse. Say the company is worth $1B and has 10M shares that are trading at $100 each. Now there's an accident that will lead to a $100M fine. This get priced in, the value of the company is now $900M, and the stock goes to $90/share. Whether they send $100M to the government in cash or by issuing 11M shares, either way the stock price stays at $90 and investors are equally affected. On the other hand, if the amount of the fine is higher than the value of the company you'd much rather be a creditor than a shareholder, since in bankruptcy the stock goes to zero.
mulmen 4y ago
That creates an incentive structure for regulators to fine valuable companies and to do no harm to their long term value. It’s the opposite incentive structure you want in regulators.

ROTMetro 4y ago

This is a great idea. And I like the idea of fines being X% shares outstanding, not X dollars as that proportionally penalizes shareholders for not being good corporate owners. It's a win in so many ways.

gretch 4y ago
This probably doesn’t do the thing you want it to do 1) if there is a demand to have something, it usually raises price of that thing. You could interpret this as a forced buyback, which may raise prices of shares (and thus reward bad behavior) 2) what does the govt do with the stock after it has the stock? It doesn’t have a system for processing it, as it does with USD Also, why shouldn’t you penalize shareholders? In the future they’ll think twice about investing in companies that cut corners to juice short term gains
- shanebellone 4y ago
  "Also, why shouldn’t you penalize shareholders? In the future they’ll think twice about investing in companies that cut corners to juice short term gains" +1 Losses speak louder than words.

riffic 4y ago

the federal government can step in and nationalize the railroad at any point as it has done in the past (woodrow wilson era iirc)

MSFT_Edging 4y ago
Oh I'm aware, this is more a general idea for "too big to fail" companies in general. Our infrastructure is rotten and often privatized. No one has the funds and ability to hold companies like this accountable except for the federal government. Look at Steven Donzinger. He reported on toxic spills by Chevron in Nicaragua that poisoned indigenous water supplies. Chevron hired a private prosecutor and found a judge in their favor to force him into house arrest(for over a year) for not supplying a document. Large corporations have the cards stacked in their favor.
- mrguyorama 4y ago
  It's almost like we shouldn't allow companies to grow so large, and that a company being larger than most countries doesn't provide any benefit to the consumer.
ccooffee 4y ago
"Can" is doing a lot of heavy lifting here. I do not find it a credible threat, and doubt any of these companies do either. Perhaps one could argue that the 2008-2009 TARP handling of some banks or automobile manufacturers was a "light nationalization", as the US took control of _some_ stock of the affected companies. (This stock was later sold off for a profit.) But other than that, and _maybe_ the creation of the TSA in 2001, there isn't a nationalization in my living memory. The nationalization of railroads under Wilson lasted from December 1917 to March 1920. During this time, operation (including expansion and maintenance) of all railroads was organized by the federal government. When the nationalization was repealed in 1920, the US paid rail companies for lost profits.

jefftk 4y ago

This doesn't really make sense. If the company owes more in fines than it's worth, existing shareholders get nothing and the company belongs to its creditors. If it owes large amounts to the government, those claims convert into ownership too.

MSFT_Edging 4y ago
Rather than converting the liquid operating budget into paid fines, it converts the shares retained by the company. A company this big doesn't need to sell shares to get operating capital. This should apply to any company that does stock buybacks to inflate stock price, rather than reinvesting into their company, employees, etc.
- jefftk 4y ago
  Depending on the details, this is the same as charging a fine in money or it's worse. Say the company is worth $1B and has 10M shares that are trading at $100 each. Now there's an accident that will lead to a $100M fine. This get priced in, the value of the company is now $900M, and the stock goes to $90/share. Whether they send $100M to the government in cash or by issuing 11M shares, either way the stock price stays at $90 and investors are equally affected. On the other hand, if the amount of the fine is higher than the value of the company you'd much rather be a creditor than a shareholder, since in bankruptcy the stock goes to zero.

mulmen 4y ago

That creates an incentive structure for regulators to fine valuable companies and to do no harm to their long term value. It’s the opposite incentive structure you want in regulators.