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> 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 t

> 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.
dragonwriter 2y ago
> We don't need them to approve the bailout because the government can seize it via eminent domain Bailouts usually are negotiated (partial) seizures that avoid the litigation associated with contested uses of eminent domain; the corporate entity (and thereby its employees and other creditors) is bailed out, the existing equity owners lose out.
- jvanderbot 2y ago
  If this had a citation or tldr link, I'd say it should be required reading before posting in this thread.

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.

dragonwriter 2y ago

> We don't need them to approve the bailout because the government can seize it via eminent domain Bailouts usually are negotiated (partial) seizures that avoid the litigation associated with contested uses of eminent domain; the corporate entity (and thereby its employees and other creditors) is bailed out, the existing equity owners lose out.

jvanderbot 2y ago
If this had a citation or tldr link, I'd say it should be required reading before posting in this thread.