[CPLX]

This is the closest thing to an answer.

The economy has essentially been ruined by looting. People finding ways to strip out assets from companies.

Variations on this include private equity racking up debt and bankrupting companies. Executives doing stock buybacks to boost their options while hollowing out the company's resources. Hedge fund management fees. It's everywhere.

[sitkack]

Everyone incentivized by percentage of money changing hands ends up looting whatever asset they have access to, esp if the resource they are burning isn't on the books somewhere.

PMs loot products by throwing in needless features to game some metric, or cutting features that users want but are "too expensive".

Engineers loot by burning resilience and multi-dimensional reliability to eek out 5% more straight line speed.

Sales folks loot by offering huge discounts to get huge deals signed, etc.

They look like heros, then they move on, leaving the place worse than they found it.

[lifeisstillgood]

That's a good insight - the whole article is deep food for though thansk

[bboygravity]

It's way worse than that: there's also deliberate cellar boxing (bankrupting) of companies on a large scale.

Hedge funds working with consultant buddies (BCG) to take over the board/leadership of a victim company.

The consultants then deliberately destroy the company from the inside while their hedge-fund buddies (naked) short it into literal bankruptcy.

It's a very easy game, it's tax-free (because the short position is technically never closed? or something) and it only very very rarely fails and backfires (GME).

[TheOtherHobbes]

https://edition.cnn.com/2018/10/16/investing/retail-sears-pr...

Hard to imagine the delightful people involved leaving money on the table by missing an opportunity to profit from shorting.

[RandomLensman]

Do you have an example (incl. evidence) of such coordinated and deliberate action between consultants and hedge funds?

[anomaly_]

He doesn’t because it’s conspiracy bullshit. There are some valuable points in this thread but the OP above is not one of them.

[lumost]

Is the looting behavior just a response to US industrial policy? US policy has made US manufacturing tenuous for decades. Meanwhile US policy has also provided the means and mechanisms to ship manufacturing abroad.

Given the above, isn’t the optimal strategy to maximize profit extraction in order to invest in new industries?

[TheOtherHobbes]

It's a response to a planetary economy incentivised to reward resource extraction, rent seeking, and individual greed over collective intelligence and creative strategy.

The US corporate right evangelised this culture as "freedom", and now it's being eaten from the inside out by it.

[jdk354]

Its likely that if many things were made in the US, they would be too expensive for most people to afford, a smartphone might cost $5000. The US could re-industrialize but it takes a lot of robotics due to high labor costs in the US.

[lumost]

My understanding is that robotics were being heavily developed in the US in the 80s/90s to improve costs. Then outsourcing took the wind out of the sails for robotics.

Maybe the tech was to far out, or maybe we would have had vastly more advanced industrial robots.

[jdk354]

Private equity really makes life miserable for regular investors and the general economy. I think stronger provisions against buyouts of public companies preventing a single investor from buying more than say 10% of a company and preventing public companies from therefore being gobbled up by private companies would go a long way to solving these problems. Its also vitally important that rules for fiduciary responsibility to a companies shareholders have teeth and also the INDEX act to prevent companies from being subverted .

[wisty]

I think China deciding to dig itself out of poverty is a big factor with both good and bad effects (and absolutely staggeringly big effects).

[SyzygistSix]

Can you imagine the magnitude of the humanitarian and environmental crisis China would be if they had not industrialized and joined the global market? A country that size full of uneducated farmers and first generation coal power plants would be a nightmare for everyone, not just China.

[rorroe53]

Well, the planet would be better off without Chinese middle class and elite flying around and buying stuff. Countries that are full of poor "uneducated farmers" tend to have much lower carbon footprint than richer ones, even with the higher birth rates. Despite its admirable investments in reneweable tech, China still keeps building new coal plants as well.

[jeffreyq]

Would your comment read any differently if you replaced "Chinese" with "United States", or "France", or any other Western civilized nation?

I'm curious to understand why China is to be blamed, exclusively? Correct me if I am misunderstanding your premise.

[OfSanguineFire]

Carbon isn’t the only pressing environmental damage though. For example, Madagascar is an island full of poor “uneducated farmers”, and it is precisely their farming that has been deforesting the island through slash-and-burn agriculture, a practice that has accelerated over the centuries due to the high birthrates.

[katbyte]

started by jack welch at GE, the first corporate raider - https://www.iheart.com/podcast/105-behind-the-bastards-29236...

[walthamstow]

Was Welch a raider? I thought he worked his way up internally.

My understanding, possibly biased by my Britishness, is that Jim Goldsmith was one of the earliest raiders who took over companies and asset-stripped them.

[chii]

> People finding ways to strip out assets from companies.

If those people don't own the company, what is the owner doing by allowing this to happen?

If those people _are_ the owners, then there shouldn't be a problem, since it's their own company, and they ought to be allowed to do anything they wish. Including short term reward for long term loss (if it is worth it in their eyes).

So i dont think it's "looting" (implying it's being stolen without knowledge of the owner).

[dwallin]

Just because a behavior may end up profitable for its owners doesn’t mean we should be just accepting it as a society.

Also viewing a company as just a collection of assets owned by capital can be somewhat limiting. Companies are generally made up of human employees, and many schools of thought treat employees as one of several stakeholders in a company and assign various rights to them and various responsibilities to the company for them.

Looking at it this way, the “owner” of a company can easily be described as looting the company if they are destroying a lot of value in the company for marginal benefit for themselves.

[chii]

> we should be just accepting it as a society.

This problem is solved using the court system, and then legislation system. Things which _should_ be unacceptable needs to be made illegal. And over time, this has indeed been the case. Things like environmental regulations etc are the examples.

> various responsibilities to the company for them

i think the employees are reading too much into this responsibility, because the only responsibility the company has for the employees are the legals ones: such as OSHA, timely payment of wages, safety from harassment etc.

Longevity of the job, social responsibilities (such as improving the community etc), are all secondary to the financial success for the shareholders.

[adwn]

> Longevity of the job, social responsibilities (such as improving the community etc), are all secondary to the financial success for the shareholders.

I think you're describing the way things are, while dwalling is talking about how things ought to be. There's no law of nature saying that companies can't or shouldn't behave socially responsibly.

Edit: I'm not advocating for socialism, not at all. There's a wide spectrum between pure laissez-faire capitalism and nationalization of all private property.

[katbyte]

companies behaving badly is bad for society as a whole, so allowing the "owners" ie shareholders to make a quick short term buck at the cost of employees or a local factory that supports the town because "it doesn't make ENOUGH" money chips away at society and drags down the country all so a couple people can make a quick buck destroying 1000s or 10,000s of lives and/or entire towns.

putting financial success for the shareholders above all is the reason for so many things wrong right now,

[ChatGTP]

Just because a behavior may end up profitable for its owners doesn’t mean we should be just accepting it as a society

I 100% agree with you, but isn’t this how capitalism works?

I do notice similar sentiments to use more frequently on HN lately. Feels like people are actually aware there are problems now but unsure what’s to be done?

[polygamous_bat]

Random thought, but perhaps trying to enshrine "customer or consumer rights" and "employee rights" as seriously as "shareholder rights" would be a good step.

[TheOtherHobbes]

What we have now is quite literally economic apartheid. Poor people are not allowed into the same spaces, not given the same legal and ethical privileges, denied adequate education and healthcare, increasingly barred from owning property (because "markets")... among many other challenges.

The model is that you can buy your way out of this slavery if you're talented (ruthless) and well-connected enough.

Otherwise you die, and no one - at least no one who matters - cares.

[Rooki]

> but unsure what’s to be done?

Can feel Lenin spinning in his tomb from here.

[b800h]

Ah yes, Communism! So successful at delivering productive happy societies that they needed walls around their countries to keep people in. Great idea.

[Rooki]

Sorry, was a 1/2 hearted attempt at a joke about his pamphlet titled "What is to be done?", similar to the wording used in parents comment. No need to alert the inquisition here just yet.

[CapstanRoller]

Capitalism! So successful at delivering productive happy societies that they need to stage coups worldwide to keep people from attempting to try alternatives and fund death squads to secure profits. Great idea.

https://en.wikipedia.org/wiki/United_States_involvement_in_r...

https://en.wikipedia.org/wiki/Banana_Massacre

https://en.wikipedia.org/wiki/Contras

[b800h]

Stronger national cultural and industrial policies.

[bryanrasmussen]

I think you have a sort of 1920s view of companies that there are 'owners' instead of investors who don't exercise nearly as much control as the people who are brought in and do the looting.

anyway in this case the term "looting" is meant to do things that will be of benefit to the people to the company that will in the short term maybe benefit the company but in the long term destroy it. The short term benefit often aligns with what benefits the looter, but this alignment is not hard and fast.

[Terr_]

Trying to introspect the "That's Wrong" feeling... I think it happens when people feel that employees/founders have some kind of vested interest in the company's persistence that is being violated... But that thingamajig is something our legal and financial systems do not adequately capture and model, or else it could be but people aren't aware/proactive about it.

[peyton]

I think fiduciary duties get way more nuanced. You can’t always do anything you wish to a company, even if you own it outright.

[chii]

> fiduciary duties

only agents acting on behalf of the owners have fiduciary duty. Of course, if you are a majority owner, but there exists minority owners, you cannot screw the minority owners to profit yourself - i guess this is a form of fiduciary duty.

But if you own it outright 100%, then you don't have such a fiduciary duty to yourself.

[peyton]

You’re missing the concept of foreseeable injury.

[chii]

It is not an injury to an employee to sell the company's operations overseas and close shop in the US. Forseeable injury is applicable to negligence suits, and it is not negligent to change the business model resulting in the employee being out of work.

A company has no legal responsibility to maintain the livelihood of their employees at the cost of the business' profit margins.

[blq10]

Livelihood of employees is also a false start, unionization and the accompanying high wages are also a significant factor in the disparity between Western industry and China.

[jdk354]

The big issue on that comes down to minority vs majority rights. If the majority puts in a board that destroys the value of the company because the majority also owns another company that wants to buy it at a bargain price, it destroys the investment of the minority. Some people suspect that could be happening with Disney.

[sitkack]

You know this is debunked trope don't you?

[peyton]

Explain?

[mrcode007]

https://www.nolo.com/legal-encyclopedia/fiduciary-responsibi....