Simplefit supports the truth and the american people

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Re: Simplefit supports the truth and the american people

Post by Admin » Thu Oct 20, 2011 1:18 am

Probably as we look back in the future, we will realize that we should have let these companies with poorly designed products fail.

1) capitalism
Let's look at two cases. Company A is known for making poorly designed widgets and or offering poor service. They typically fail due to the fact that competitors (that either exist or will form in order to provide competition) will offer better products and services. IMHO, capitalism. People who own those crappy products typically have to live with them (or buy something else). People who have equity/debt stakes in the company are punished for taking the risk of investing in that company.

2) our current system
Company B (certain banking institutions, some car companies and so on) is offering poorly designed product(s) that have either failed the way they were supposed to work or are just non-competitive. In this case, we bail out the company and their bondholders (and perhaps the equity holders). Risk is diluted away from the risk takers to the general public.

Of course, this is what happens when you let the fox guard a hen house that is "too big to fail".

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