6 ms·

If anybody just gets a speeding ticket and includes that in the price of their product, how can the system self correct?

by jmakov 3y ago

cfiggers 3y ago
I dunno man, $12 BILLION is a pretty serious speeding ticket
- skrebbel 3y ago
  I think the argument is that people doing crime go to jail, so when a company does crime, maybe the same should happen.
- konfusinomicon 3y ago
  not when you have 3M billions
- idiotsecant 3y ago
  3M sells about 1.3 billion USD of the stuff yearly at about 16% margin, so figure about 200 million USD in profit per year. 12 billion represents about 60 current profit-years of production.They invented the stuff in the 30s but have been churning it out in quantity since the 50s. 12 billion isn't a speeding ticket but it also isn't even all the profit they made on it. In addition to that, is their obligation to pay their profits or to make whole a world soaked in forever chemicals? Because the latter would be way more than 12 billion.
  - tome 3y ago
    I'm not entirely sure what you're saying. Are you saying that 60 years of profit on a product that's been churned out in quantity for 70 years is a small fine?
    - justinclift 3y ago
      > 12 billion isn't a speeding ticket but it also isn't even all the profit they made on it. They literally said "it isn't even all the profit they made". That seems pretty clear.
      - tome 3y ago
        It's not clear to me!
        asadotzler 3y ago
        [flagged]
        justinclift 3y ago
        > That this simple idea seems a stretch for you might be a signal to you that your reality is distorted in this area and could use a re-examining. That seems pretty unwarranted. :(
        justinclift 3y ago
        They're being fined less than the profit they made. Surely they should be getting fined more than how much they profited? Preferably (at a minimum) several times the amount, so they (and others) aren't keen to do it again.
  - ClumsyPilot 3y ago
    Indeed, the real justice would be to make them pay for cleanup efforts for the next 200 years
    - ben_w 3y ago
      How are you planning on enforcing that given: 1) bankruptcy is a thing, and 2) that period exceeds the lifespan of not only those responsible, but also any kids they might have conceived in extreme old age, and people can just… choose not work for (or invest in) a company that's been stuck with a long-term obligation. I can see how it would be possible to make criminal liability stick on all members of a chain of command, corporate or otherwise, responsible for some decision. I can't see how setting a multi-lifetime punishment could possibly work.
      - ClumsyPilot 3y ago
        > 1) bankruptcy is a thing Students loans, famously, can’t be discharged in bankruptcy, and follow you your entire life. Should we have one set of law for the capital class and another for mere peasants?
        mattmaroon 3y ago
        When you sign up for student loans, you are aware (or at least should be) that they can't be discharged in bankruptcy. They aren't dischargable in bankruptcy because if they were, far fewer would be made, and far fewer non-rich people would go to college, and we don't want that. Nothing would perpetuate class divisions more than restricting education to those with money. Nobody would ever get a student loan for an anthropology degree again. I don't necessarily agree with this system, as an 18 yr old probably does not have the life experience to make such large financial decisions, and I think perhaps far fewer people should go to college for things of no economic value, but the system has logic to it. It's meant to benefit the "peasants". Rich people don't need student loans and can pay for their kids' degrees. Fines aren't the same. A company only has so much money. Many of the owners of the company are pensions funds, etc., that are held by the middle class. You can't reasonably squeeze money from everyone who had an ETF that contained 3M. You need to allow corporations to file bankruptcy to have a healthy economy, in fact, America's bankruptcy laws are (according to some economists) one of the reasons we have such a strong economy.
- jajko 3y ago
  Do you see the company struggling to stay afloat, breaking up, selling parts to competition just to survive? For poisoning half of planet and killing god knows how many, yes thats a (bit bigger) speeding ticket, nothing more.
xyst 3y ago
Executives serving actual jail time. Prohibited from joining the boards of public/private companies. Personal liability.
- konschubert 3y ago
  But this would have to be limited to cases where you can prove personal intent or personal gross negligence by the executive. Otherwise you’re effectively making companies illegal.
  - ndsipa_pomu 3y ago
    > Otherwise you’re effectively making companies illegal. It's more like making illegal behaviour by companies to be illegal. There's a disconnect where behaviour that would result in jail time for people, doesn't result in jail time if performed by companies and that seems wrong to me. If an individual poisons a water supply, they're not going to be getting just a fine.
    - konschubert 3y ago
      I don’t think a lot of ppl would want to take a job where they are liable for the actions of others.
      - littlestymaar 3y ago
        Don't underestimate the appeal of a 7 digit salary and the position of power you get with it. There a orders of magnitude more candidates for CEOs positions than there are jobs, so it's not like we would run out of people to do the job if we increased the responsibilities.
      - ndsipa_pomu 3y ago
        Isn't that exactly what is required of CEOs and executives? If a company doesn't have liability for upper management, then where's their incentive to not instruct employees to behave illegally?
sp332 3y ago
If they could have raised prices, they would have already done it.
- mattmaroon 3y ago
  Right, they aren't the only manufacturer. There are a dozen major ones. People always miss this about competitive markets. They are already charging the highest price they believe they can.
lettergram 3y ago
The fine was the 1/3 of yearly revenue, in 2023 their revenue was $32.68B, net income was -$7B (that’s a negative seven billion). Im not sure of the payment timeline or if they have insurance, but it seems likely this will wipe out a few years of profitability and may force the sale of business units. That said, I do think personal culpability is probably a better incentive and more ethically reasonable depending on the circumstances. Though that’d have to be criminal neglect, using laws we probably already have. In other words, this is a civil penalty, not the same as a criminal case with higher burdens of proof and motives need to be established.
- rahimnathwani 3y ago
  this will wipe out a few years of profitability They've already recognized most of the loss, so most of the impact on profits is in the past. From the Q2 2023 10-Q: During the first six months of 2023, as a result of ongoing review and recent developments in ongoing environmental matters and litigation (including the proposed PWS Settlement), the Company increased its accrual for PFAS-related other environmental liabilities by $10.3 billion and made related payments of $38 million. As of June 30, 2023, the Company had recorded liabilities of $10.9 billion for “other environmental liabilities.” These amounts are reflected in the consolidated balance sheet within other current liabilities ($0.3 billion) and other liabilities ($10.6 billion). The accruals represent the Company’s estimate of the probable loss in connection with the environmental matters and PFAS-related matters and litigation described above. The Company is not able to estimate a possible loss or range of possible loss in excess of the established accruals at this time.
backwardation_b 3y ago
The system self corrects by companies moving to a different supplier. If 3M has to increase prices (they will) to offset the settlement costs, then other suppliers will be comparatively cheaper. 3M share price and profit will decrease which incentivizes the board and or shareholders to encourage safer (read: legal) business practices.
- ClumsyPilot 3y ago
  You are selling a fantasy, a spherical cow. As the OP said, The original people responsible made bank and retired. The original shareholders cashed out. this does not encourage anything.
- rolandog 3y ago
  The people affected by these "corrections" are the workers that would be laid off due to decreasing revenue,... In order to maintain the expected profits that result in dividend payments to shareholders. So, one could make the case that the workers get punished by the board of directors' bad decisions.
- thayne 3y ago
  That clearly doesn't work. The fines are often less than the profits made. And the individuals and shareholders have already made a fortune by the time the payments come due, and can just move on to the next company and do the same thing there.
- checkyoursudo 3y ago
  How does your model account for the probability that cheaper competitors are simply bad actors who have not yet been caught? In fact, without something like criminal penalties, why would the board encourage safer/legal business practices? Seems like they might equally say, well that was a good run now find us another dastardly product that can bring our prices back down to our competitors.
- int_19h 3y ago
  And those "other suppliers" will be 3M - same owners, same board, same executives - under a different name.
wouldbecouldbe 3y ago
For these cases of gross misconduct affecting health of people, criminal charges should actually be made against individuals who made the decisions.
- elaus 3y ago
  Are you talking about the _responsibility_ that is the justification for paychecks in the millions? It seems to end somewhere before jail sentences for most execs...
alexashka 3y ago
What makes you think the system isn't working as intended? What would 'correct' even look like? Occasional human sacrifice to appease the masses as is being called for on here?

If anybody just gets a speeding ticket and includes that in the price of their product, how can the system self correct?

by jmakov 3y ago

If anybody just gets a speeding ticket and includes that in the price of their product, how can the system self correct?

cfiggers 3y ago

I dunno man, $12 BILLION is a pretty serious speeding ticket

skrebbel 3y ago
I think the argument is that people doing crime go to jail, so when a company does crime, maybe the same should happen.
konfusinomicon 3y ago
not when you have 3M billions
idiotsecant 3y ago
3M sells about 1.3 billion USD of the stuff yearly at about 16% margin, so figure about 200 million USD in profit per year. 12 billion represents about 60 current profit-years of production.They invented the stuff in the 30s but have been churning it out in quantity since the 50s. 12 billion isn't a speeding ticket but it also isn't even all the profit they made on it. In addition to that, is their obligation to pay their profits or to make whole a world soaked in forever chemicals? Because the latter would be way more than 12 billion.
- tome 3y ago
  I'm not entirely sure what you're saying. Are you saying that 60 years of profit on a product that's been churned out in quantity for 70 years is a small fine?
  - justinclift 3y ago
    > 12 billion isn't a speeding ticket but it also isn't even all the profit they made on it. They literally said "it isn't even all the profit they made". That seems pretty clear.
    - tome 3y ago
      It's not clear to me!
      - asadotzler 3y ago
        [flagged]
        justinclift 3y ago
        > That this simple idea seems a stretch for you might be a signal to you that your reality is distorted in this area and could use a re-examining. That seems pretty unwarranted. :(
      - justinclift 3y ago
        They're being fined less than the profit they made. Surely they should be getting fined more than how much they profited? Preferably (at a minimum) several times the amount, so they (and others) aren't keen to do it again.
- ClumsyPilot 3y ago
  Indeed, the real justice would be to make them pay for cleanup efforts for the next 200 years
  - ben_w 3y ago
    How are you planning on enforcing that given: 1) bankruptcy is a thing, and 2) that period exceeds the lifespan of not only those responsible, but also any kids they might have conceived in extreme old age, and people can just… choose not work for (or invest in) a company that's been stuck with a long-term obligation. I can see how it would be possible to make criminal liability stick on all members of a chain of command, corporate or otherwise, responsible for some decision. I can't see how setting a multi-lifetime punishment could possibly work.
    - ClumsyPilot 3y ago
      > 1) bankruptcy is a thing Students loans, famously, can’t be discharged in bankruptcy, and follow you your entire life. Should we have one set of law for the capital class and another for mere peasants?
      - mattmaroon 3y ago
        When you sign up for student loans, you are aware (or at least should be) that they can't be discharged in bankruptcy. They aren't dischargable in bankruptcy because if they were, far fewer would be made, and far fewer non-rich people would go to college, and we don't want that. Nothing would perpetuate class divisions more than restricting education to those with money. Nobody would ever get a student loan for an anthropology degree again. I don't necessarily agree with this system, as an 18 yr old probably does not have the life experience to make such large financial decisions, and I think perhaps far fewer people should go to college for things of no economic value, but the system has logic to it. It's meant to benefit the "peasants". Rich people don't need student loans and can pay for their kids' degrees. Fines aren't the same. A company only has so much money. Many of the owners of the company are pensions funds, etc., that are held by the middle class. You can't reasonably squeeze money from everyone who had an ETF that contained 3M. You need to allow corporations to file bankruptcy to have a healthy economy, in fact, America's bankruptcy laws are (according to some economists) one of the reasons we have such a strong economy.
jajko 3y ago
Do you see the company struggling to stay afloat, breaking up, selling parts to competition just to survive? For poisoning half of planet and killing god knows how many, yes thats a (bit bigger) speeding ticket, nothing more.

xyst 3y ago

Executives serving actual jail time. Prohibited from joining the boards of public/private companies. Personal liability.

konschubert 3y ago
But this would have to be limited to cases where you can prove personal intent or personal gross negligence by the executive. Otherwise you’re effectively making companies illegal.
- ndsipa_pomu 3y ago
  > Otherwise you’re effectively making companies illegal. It's more like making illegal behaviour by companies to be illegal. There's a disconnect where behaviour that would result in jail time for people, doesn't result in jail time if performed by companies and that seems wrong to me. If an individual poisons a water supply, they're not going to be getting just a fine.
  - konschubert 3y ago
    I don’t think a lot of ppl would want to take a job where they are liable for the actions of others.
    - littlestymaar 3y ago
      Don't underestimate the appeal of a 7 digit salary and the position of power you get with it. There a orders of magnitude more candidates for CEOs positions than there are jobs, so it's not like we would run out of people to do the job if we increased the responsibilities.
    - ndsipa_pomu 3y ago
      Isn't that exactly what is required of CEOs and executives? If a company doesn't have liability for upper management, then where's their incentive to not instruct employees to behave illegally?

sp332 3y ago

If they could have raised prices, they would have already done it.

mattmaroon 3y ago
Right, they aren't the only manufacturer. There are a dozen major ones. People always miss this about competitive markets. They are already charging the highest price they believe they can.

lettergram 3y ago

The fine was the 1/3 of yearly revenue, in 2023 their revenue was $32.68B, net income was -$7B (that’s a negative seven billion). Im not sure of the payment timeline or if they have insurance, but it seems likely this will wipe out a few years of profitability and may force the sale of business units. That said, I do think personal culpability is probably a better incentive and more ethically reasonable depending on the circumstances. Though that’d have to be criminal neglect, using laws we probably already have. In other words, this is a civil penalty, not the same as a criminal case with higher burdens of proof and motives need to be established.

rahimnathwani 3y ago
this will wipe out a few years of profitability They've already recognized most of the loss, so most of the impact on profits is in the past. From the Q2 2023 10-Q: During the first six months of 2023, as a result of ongoing review and recent developments in ongoing environmental matters and litigation (including the proposed PWS Settlement), the Company increased its accrual for PFAS-related other environmental liabilities by $10.3 billion and made related payments of $38 million. As of June 30, 2023, the Company had recorded liabilities of $10.9 billion for “other environmental liabilities.” These amounts are reflected in the consolidated balance sheet within other current liabilities ($0.3 billion) and other liabilities ($10.6 billion). The accruals represent the Company’s estimate of the probable loss in connection with the environmental matters and PFAS-related matters and litigation described above. The Company is not able to estimate a possible loss or range of possible loss in excess of the established accruals at this time.

backwardation_b 3y ago

The system self corrects by companies moving to a different supplier. If 3M has to increase prices (they will) to offset the settlement costs, then other suppliers will be comparatively cheaper. 3M share price and profit will decrease which incentivizes the board and or shareholders to encourage safer (read: legal) business practices.

ClumsyPilot 3y ago
You are selling a fantasy, a spherical cow. As the OP said, The original people responsible made bank and retired. The original shareholders cashed out. this does not encourage anything.
rolandog 3y ago
The people affected by these "corrections" are the workers that would be laid off due to decreasing revenue,... In order to maintain the expected profits that result in dividend payments to shareholders. So, one could make the case that the workers get punished by the board of directors' bad decisions.
thayne 3y ago
That clearly doesn't work. The fines are often less than the profits made. And the individuals and shareholders have already made a fortune by the time the payments come due, and can just move on to the next company and do the same thing there.
checkyoursudo 3y ago
How does your model account for the probability that cheaper competitors are simply bad actors who have not yet been caught? In fact, without something like criminal penalties, why would the board encourage safer/legal business practices? Seems like they might equally say, well that was a good run now find us another dastardly product that can bring our prices back down to our competitors.
int_19h 3y ago
And those "other suppliers" will be 3M - same owners, same board, same executives - under a different name.

wouldbecouldbe 3y ago

For these cases of gross misconduct affecting health of people, criminal charges should actually be made against individuals who made the decisions.

elaus 3y ago
Are you talking about the _responsibility_ that is the justification for paychecks in the millions? It seems to end somewhere before jail sentences for most execs...

alexashka 3y ago

What makes you think the system isn't working as intended? What would 'correct' even look like? Occasional human sacrifice to appease the masses as is being called for on here?