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The title could be changed to "Corporate greed over decades led to a National Emergency" - and it would be more accurate. But NO MORE BAILOUTS. Next time the U

The title could be changed to "Corporate greed over decades led to a National Emergency" - and it would be more accurate. But NO MORE BAILOUTS. Next time the US government needs to save something, they should take over the assets as an eminent domain, wipe out equity holders, and put a 10 year ban on all executives/board of directors who authorized share buybacks.

class3shock 2y ago
I don't know if that could work but I think it points out the fundamental issue; Companies that change to prioritizing shareholder value over focusing on their purpose (planes, chips, etc.) are destined to end up in this situation. I just wish things could be different. Boeing was in a place of being one part of a duopoly with Airbus, in a era of increasing commercial air travel. At the same time as slowly renewing focus on military aero that has been recovering after large cuts at the end of the cold war. In an era where space went from a tiny field to having a bunch of commercial applications and interest. All places they could have been leaders! But it's just eroded. I know much of this is just the past repeating itself but I just wish it were different. It's hard not to think being an engineer back in the day working on the 747 was a better gig then it'll be working on whatever Boeing does next.
gruez 2y ago
>But NO MORE BAILOUTS. Next time the US government needs to save something, they should take over the assets as an eminent domain, wipe out equity holders, and put a 10 year ban on all executives/board of directors who authorized share buybacks. 1. Isn't that what usually happens with government bailouts? AFAIK the us government got stakes in automakers they bailed out in the GFC. 2. I'm not sure whether punishing the board/executives sets up the right incentive here. They're the ones that will be approving/approaching the government for the bailout. Punishing them for accepting it is a good way to run the company into the ground (no punishment) rather than accepting the bailout (punishment).
- nine_zeros 2y ago
  > 1. Isn't that what usually happens with government bailouts? AFAIK the us government got stakes in automakers they bailed out in the GFC. In part, yes. But that was a real generational crisis. Today, there is no real financial crisis. Boeing and Intel are failing because of their own choices over the last few decades. In non-financial-crises, execs ask for subsidies and general funding. US Govt should say fuck off to that. > 2. I'm not sure whether punishing the board/executives sets up the right incentive here. They're the ones that will be approving/approaching the government for the bailout. Punishing them for accepting it is a good way to run the company into the ground (no punishment) rather than accepting the bailout (punishment). We don't need the right incentive. We want them to not make any more money. We don't need them to approve the bailout because the government can seize it via eminent domain.
  - gruez 2y ago
    > We don't need them to approve the bailout because the government can seize it via eminent domain. "Your company isn't doing too well but it hasn't gone bankrupt yet but we're going to seize it anyways because national security™" seems unlikely to constitutional, especially when you want to wipe out existing equity holders. That's closer to expropriation than eminent domain.
    - nine_zeros 2y ago
      No. The government should seize it when the company is seeking a bailout or when the shareholders are unable to raise funds.
      - gruez 2y ago
        >The government should seize it when the company is seeking a bailout Why would the company seek it when both the shareholders stand to lose everything, and the executives stand to lose everything and then some? It's in their interest to crash it into the ground hoping for a hail mary that would save the company. What this typically manifests as is one day the company announces it ran out of money and is ceasing operations effectively immediately. This is very disruptive to both employees as well as customers/vendors. Letting the executives get off scot free might not seem fair, but it's far better than the alternative.

class3shock 2y ago

I don't know if that could work but I think it points out the fundamental issue; Companies that change to prioritizing shareholder value over focusing on their purpose (planes, chips, etc.) are destined to end up in this situation. I just wish things could be different. Boeing was in a place of being one part of a duopoly with Airbus, in a era of increasing commercial air travel. At the same time as slowly renewing focus on military aero that has been recovering after large cuts at the end of the cold war. In an era where space went from a tiny field to having a bunch of commercial applications and interest. All places they could have been leaders! But it's just eroded. I know much of this is just the past repeating itself but I just wish it were different. It's hard not to think being an engineer back in the day working on the 747 was a better gig then it'll be working on whatever Boeing does next.

gruez 2y ago

>But NO MORE BAILOUTS. Next time the US government needs to save something, they should take over the assets as an eminent domain, wipe out equity holders, and put a 10 year ban on all executives/board of directors who authorized share buybacks. 1. Isn't that what usually happens with government bailouts? AFAIK the us government got stakes in automakers they bailed out in the GFC. 2. I'm not sure whether punishing the board/executives sets up the right incentive here. They're the ones that will be approving/approaching the government for the bailout. Punishing them for accepting it is a good way to run the company into the ground (no punishment) rather than accepting the bailout (punishment).

nine_zeros 2y ago
> 1. Isn't that what usually happens with government bailouts? AFAIK the us government got stakes in automakers they bailed out in the GFC. In part, yes. But that was a real generational crisis. Today, there is no real financial crisis. Boeing and Intel are failing because of their own choices over the last few decades. In non-financial-crises, execs ask for subsidies and general funding. US Govt should say fuck off to that. > 2. I'm not sure whether punishing the board/executives sets up the right incentive here. They're the ones that will be approving/approaching the government for the bailout. Punishing them for accepting it is a good way to run the company into the ground (no punishment) rather than accepting the bailout (punishment). We don't need the right incentive. We want them to not make any more money. We don't need them to approve the bailout because the government can seize it via eminent domain.
- gruez 2y ago
  > We don't need them to approve the bailout because the government can seize it via eminent domain. "Your company isn't doing too well but it hasn't gone bankrupt yet but we're going to seize it anyways because national security™" seems unlikely to constitutional, especially when you want to wipe out existing equity holders. That's closer to expropriation than eminent domain.
  - nine_zeros 2y ago
    No. The government should seize it when the company is seeking a bailout or when the shareholders are unable to raise funds.
    - gruez 2y ago
      >The government should seize it when the company is seeking a bailout Why would the company seek it when both the shareholders stand to lose everything, and the executives stand to lose everything and then some? It's in their interest to crash it into the ground hoping for a hail mary that would save the company. What this typically manifests as is one day the company announces it ran out of money and is ceasing operations effectively immediately. This is very disruptive to both employees as well as customers/vendors. Letting the executives get off scot free might not seem fair, but it's far better than the alternative.