Volkswagen's U.S. diesel emissions settlement to cost $15B
reuters.com
reuters.com
[1] NY Times: How Volkswagen Got Away With Diesel Deception http://nyti.ms/1ZjAV1w
[2] Vox: VW's appalling clean diesel scandal, explained http://bit.ly/1MhJVuA
[3] FHWA: Annual Vehicle Distance Traveled and Related Data http://www.fhwa.dot.gov/policyinformation/statistics/2013/vm...
[4] EIA: How much CO2 is produced by burning gasoline? http://www.eia.gov/tools/faqs/faq.cfm?id=307&t=11
[5] EPA: Does the fuel used in fuel economy testing contain ethanol? http://www3.epa.gov/otaq/about/faq.htm#ethanol
[6] DOE: Fuel Economy of 2015 Volkswagen Jetta http://www.fueleconomy.gov/feg/bymodel/2015_Volkswagen_Jetta...
The response is punitive because VW acted deliberately but otherwise far out of proportion to the harm. The article mentions that buybacks cannot be resold unless EPA approves a fix. I hope they do, because their embodied energy will dwarf by a significant margin everything else being considered here and scrapping them would be a disaster.
Fortunately internal combustion engines are nearly obsolete for light automobiles and this will all be moot in a decade.
VW light vehicle sales: 50M worldwide since 2009 [1]
Affected cars: 500,000 US, 11M worldwide [2]
VLKAY price: 70% pre-scandal level [1]
For the United States...
Annual average miles traveled per car: 11,000 [3]
NOx emissions allowed: 0.06 g/mi [1]
Actual TDI emissions: 1.6 g/mi [1]
11,000 mi * 500,000 * 1.5g/mi = 8,200 tonne NOx per year
CO2 from gasoline combustion: 8.9 kg/gal [4][5]
CO2 from diesel combustion: 10.2 kg/gal [4]
Jetta fuel efficiency: 27 mpg [6]
Jetta TDI fuel efficiency: 36 mpg [6]
Jetta carbon efficiency: 330 g/mi
Jetta TDI carbon efficiency: 280 g/mi
11,000 mi * 500,000 * -50 g/mi = -275,000 tonne CO2 per yearWouldn't it make more sense to use these large amounts of money to combat the actual damage that was done? (e.g. environmental cleanup initiatives?)
Its not like these cars caused direct damage to the environment that can be cleaned up, they're still relatively low in emissions compared to a lot of other cars on the road.
The extra $5,000/car could have been put towards planting trees, cleaning up an ex-industrial site, shingling San Francisco's city hall with solid gold...
(That must be reason #192845 why "capitalist healthcare" doesn't work: often, you only need it because other peoples actions require you to, and they're not paying for it.)
It's not just VW owners who were lied to. It's everyone who had to breathe the air around them.
What really kills you though, is in establishing mens rea, because it's absolutely impossible. Since consumers could not have known that emissions were falsified, they could not have had the intent to harm you for profit. Again here you slightly benefit from the lower burden of intent on civil cases, as negligence or recklessness can count, but that's out the window on the facts, as the owner was specifically choosing a lower emissions vehicle in the first place, presumably so that they would be killing their brethren less, or less quickly.
The people who own the cars breathed in the pollution too. Almost certainly more than people who did not own one.
They'll buy back my diesel so that I can get another one that pollutes less, thus getting my cheater car off the road, thus addressing the environmental damage going forward.
They're not just paying me money as a "we're sorry" factor.
2.7 billion so far doesn't look all that bad to me, followed up with another 500 million or so to the states.
The real question you should be asking, will the states prove they put it towards the environment or merely general fund it or worse pass it off to cronies who suddenly have environmental solutions companies and investments.
Well looks like VW will also fix the other more monstrous source of pollution, school buses.
- $26,000 for the car, before TTL - First year, the car will depreciate 20%, so its September 2015 value would be $20,800. - VW will give me $5,100 (maybe more) plus that Sept 2015 value = $25,900 - I don't have to make a decision until December 2018
Result: I get a car for 4.5 years for which I've paid $100
* Simplified math, doesn't factor time-value or the 0.9% interest rate.
Bear in mind, the vehicles VW sold were _superior_ from the point of view of the customer & driver.
Unless of course the whole affair dented your faith in them responding properly to safety issues or the like.
I'm honestly torn between taking the total amount of money or the $5,100 and letting them fix the car. I just hope it doesn't kill the fuel economy too much.
...and what downsides are there to holding on to the car if they have a fix?
20% depreciation seems low, is there a source for that number? KBB value for my vehicle, private party sale, "very good" condition is $16k. Even "excellent" condition (3% of cars) only adds $500.
Granted I bought this because I was commuting long distance last year and it has 39k miles on it, but I put about 5 miles a day on it now so that will even out over time.
I think your math is pretty similar. A virtually free car for 1 year less ownership time.
So the rumor is I can drive my affected Golf TDI for ~2 more years, and then get compensated @9/2015 value plus up to $5k on top of that? Honestly, that's a terrible deal for VW.
Edit: thinking more, maybe this is better for VW than an alternative where they have to make good right away. They don't have to scramble to get 500k cars repaired or off the road as quickly, and they can spread whatever makes up the rest of their hit over a longer period as well.
To me, this does signal that we're a lot more upset about the dishonesty than we are about the emissions themselves.
They didn't "get lucky". They were lied to by the company and sold a car under false pretenses.
Edit: I had the fuel economy bit wrong, my mistake. I've removed that portion. Thanks @mikestew, @gnoway, and @GavinMcG for the correction.
I agree that it's a little weird to say that they got lucky, but a pretty big hint that they actually did is that I wish I were a part of the settlement. It's not like anybody was actually harmed. These owners are getting a great deal.
I think that sticking VW's head on a pike as a warning to others that may follow would qualify as "useful". The fact that owners are compensated for not getting what they thought they were buying can be viewed as a bonus.
I guess you could make that same argument about all law enforcement.
There are plenty more cars on the road from even older times, with far worse emissions.
But I think the concerns are less about getting these specific cars off the road immediately, and more so ensuring that other manufacturers are scared away from trying to pull this shit again.
> The settlement includes $2.7 billion in funds to offset excess diesel emissions and $2 billion for green energy and zero emission vehicle efforts, the source said. The diesel offset fund could rise if VW has not fixed or bought back 85 percent of the vehicles by mid-2019, the first source said.
But they are still facing stiff penalties under the Clean Air Act which could more than double the damage. There are also 80,000 larger engine vehicles they still need to deal with (which I am quite curious about since I have one!).
As an individual, you make one wrong statement to the FBI, and you are hauled off to jail. The company lied over 500,000 times to the government, and gets off by paying a paltry fine. No wonder companies continue to do this: there is no consequence to the employees who do this shit.
It's seems that a criminal investigation may be ongoing.
Biggest fines against US companies. http://www.marketwatch.com/story/5-of-the-biggest-corporate-...
So yeah this would be in the top 3 or 4 of the biggest ever fines paid by US companies.
The tobacco industry is paying over $200 billion (although that's split between a number of companies). [https://en.wikipedia.org/wiki/Tobacco_Master_Settlement_Agre...]
Toyota and Honda have paid the largest safety-related fines in history: http://www.latimes.com/business/la-fi-hy-toyota-billion-doll...
http://www.edmunds.com/car-news/honda-will-pay-largest-auto-...
Compare Toyota's fine for it's failure to report safety defects to GM's in the GM ignition scandal. I think reasonable minds can conclude that they are both serious, but it is possible to make an argument GM's was more serious, and they paid a lesser fine. Also compare timelines, and the fact that US regulators were pressured by public discourse in the GM case. It's not crazy to come to the conclusion regulators show bias towards US automakers.
It's actually no conspiracy at all that the US government has bias and favors US auto makers in public policy. Afterall, it was not long ago we gave GM a huge welfare check / bail out package. Ford to a lesser extent.
Here's the arguments I can make in 5 minutes of Google searching. My point is just that there's room for debate here (in other words, I'm not saying I am right and you are wrong, what I am saying is that reasonable people can agree there is reasonable debate on this issue).
Argument 1: Toyota paid 1.2 billion dollars for failure to disclose safety defects linked to 5 deaths. Floor mats in Toyota cars may be linked to up to 34 more deaths. GM had to pay only 900 million for safety defects leading to at minimum 124 deaths, but the real death toll may be much, much higher than that, because as many as 90% of claims are not included in that figure as they are part of an ongoing civil dispute.
Sources: 1. https://en.wikipedia.org/wiki/General_Motors_ignition_switch... 2. http://www.foxbusiness.com/features/2014/03/19/toyota-in-us-...)
Argument 2 (an argument similar to yours that oversimplifies): Complete loss of control of your car (not even airbags functioning) is less serious than having floor mats in your car?
Argument 3: Toyota paid 1.2 billion dollars for "having floor mats in their cars" and an extremely rare accelerator sticking issue that was linked to only 5 deaths. GM got off easy on an issue that caused complete loss of control of the car as ignition cut off, and not even the airbags would be deployed in this scenario. GM also internally was aware and discussed this defect for about a decade and did not disclose it.
Argument 4: Most of the deaths in Toyota's case were linked to floor mats, but how much blame can we reasonable put on floor mats for causing accidents? Is it more or less than putting items on your key chain? Maybe it's not reasonable to assume items on your keychain a safety risk, but manipulating and kicking the floor mats out of their socket holders obviously could interfere with the accelerator pedal.
Edit: I think no matter how you spin it, GM paid probably an order of magnitude less $$/human life than Toyota in these two cases.
And it's not "complete loss of control", not to mention airbags are not part of "control of a car". It's "less control" and unlike in Toyota's case, the car doesn't actively do something.
I mean, sure, it's debatable and GM were despicable for not fixing it when they knew about it, but every time I hear about "IgnitionGate", it feels like most people are making out of it a bigger problem than it was.
The topic of my post is about unequal punishment b/w GM/Toyota. If your comment isn't about that then I don't see what the point is in changing the topic and going into a microscopic debate about which safety fault was worse?
If you want to go into these tangential arguments about safety defects, car control, etc. ...my arguments were for illustrative purposes in the first place, but second... you know when the ignition is cut off in modern cars, that would usually mean you can not steer the car, right? That is pretty dangerous.
The German government is actually investigating the ex-VW Germany CEO, although I don't know if that means potential jail time.
Further, there have been serious consequences at VW. Top management has effectively changed in both Germany and the US. The future product roadmap has changed radically in both the US and Europe. Also, this direct monetary outlay is not exactly a slap on the wrist, even for one of the world's largest automakers.
Installing the defeat devices in hundreds of thousands of vehicles was not an accident that happened one day. It was a calculated corporate decision involving many people, over a long period of time. The result, according to many sources, was dozens to hundreds of deaths in the United States, Europe and elsewhere.
Edit: a word
Also, 59 seems like a statistically insignificant number when compared to the overall population. Or maybe I'm interpreting it incorrectly?
What if you were one of those people? Or someone you loved?
There is no way you can pin the death of anybody on VW diesel emissions. It's a statistics game that that's it. You might as well blame Tesla for the extra deaths caused by the increase coal plant emissions created by owners charging their cars. Or make up any other example of any activity that increases some polutant. The only difference is that VW violated an arbitrary number in a government regulation.
There are millions of vehicles on the road today with worse emissions than the violating VW diesels. They are all killing people (statistically) and the government and therefore you and I are complicit in this murder by allowing it to continue. I am sure everone on this thread will endorse punitive tax increases to punish us all for our negligence, and to buy out the owners of these polluting cars so that they can all buy clean-and-green new ones (conveniently ignoring the rather massive environmental impact and attendant premature deaths caused by junking and replacing perfectly serviceable vehicles).
Consider the fact that in some states, heavy duty diesel trucks (8,500 lbs or more) and trucks older than 1997 are completely exempt from all emissions testing.
I bet a single one of those trucks produces more emissions than the "actual vs claimed" emissions delta of dozens of VWs combined.
That's a bullshit attitude. How about cancer from smoking? Is that also a statistics game? The effect of NOx on human health was studied the same way that smoking was.
2. There is a confidence interval around 59 in the study which doesn't include 0, so it is statistically significant according to the analysis they did. Not sure what sort of analysis would say that 59 deaths is statistically insignificant unless it was a difference between two groups, but that's not the case here.
3. There's a problem here with news articles boiling down an estimate with a wide confidence interval to a single number. There needs to be a way for the public to start understanding statistical conclusions and confidence intervals.
...I should have said “worse off than if VW had not cheated and all other variables remained the same”.
I don't question that more emissions results in more deaths. I question their ability to reliably calculate the number of deaths caused when dealing with numbers that small (~0.0003%) and leaving out some very important variables (which they do reference but don't incorporate). Of course, the publication was meant to compare the claimed vs actual emissions, but I'm talking in the more general case of overall emissions.
The publication claims that:
>> [Finally, we note that there may have been environmental benefits of the defeat device that we have not computed. For example, the reduced use of diesel exhaust fluid in selective catalytic reduction may potentially have also reduced ammonia slip, and therefore associated PM2.5 exposure and health impacts. In particular, Dedoussi and Barrett (2014) find that total PM2.5 exposure attributable to road transportation is caused approximately equally by NOx and NH3 emissions.]
I can think of a few more inadvertent environmental/health benefits of the defeat device:
For example, suppose that VW hadn't cheated and instead spent more time and money on R&D to come up with a legitimate solution. They would then have to pass this cost on to the consumers in the form of a more expensive car.
Would all of the people who purchased diesel VW's still have purchased them if they were more money?
If not, would they have purchased a car that produces worse emissions instead?
The VW Jetta has a 5 star crash rating. Would all of the people who purchased other cars purchased cars with the same crash rating, or perhaps a car with a worse crash rating?
There are a bunch of things that you could list that could all have an impact that rivals the 59 cited in the publication.
We're talking about 59 out of 17,500,000 (number of annual deaths integrated over 2008-2015). It wouldn't take much to actually find out that the VW emissions scandal actually resulted in more lives saved.
EDIT: That said, the publication isn't really trying to measure the amount of deaths caused by the scandal itself, but rather the increased emissions portion of it. Perhaps my original comment was out of line now that I think about it.
Would you agree with something like "the emissions they caused by cheating killed people, and our current best estimate of that is 59 (+- the confidence interval in the paper)".
It's true that the decision to cheat may have had the benefit of getting safer cars to more people, but that is even harder to measure than deaths caused by emissions. To me, the decision to cheat wouldn't be justifiable and I would still be outraged because they knowingly did harm to the environment and society with the hopes that there would be a nearly un-measurable side benefit: increasing the average safety of cars relative to a world that doesn't exist. To me, it seems despicably irresponsible to gamble the well being of many human lives against something so hard to measure.
On the other hand, consuming more fuel, making car ownership more expensive etc also carries real costs. People can't get work done, spend more of that lifetime tAking less efficient means of transportation, doing less enjoyable things like waiting on a greyhound bus, etc.
The sensationalist 'caused x deaths' headlights are very hard to reason With and usually one sided. That being said, car emissions are still a problem and there is a reason for these(and other public health) rules -- the response should perhaps be a little bit less emotional though. ( there are plenty of scandals that are probably more worthy of this emotional response, e.g. Illegal dumping or contamination, unhealthy foods, antibiotic overuse, etc.)
Because if they are, then I think we may have to disagree on what constitutes a "serious consequence", as per the original posters point.
And if we don't know that, then we're not really in a position to know if there have been sufficiently serious consequences for those involved.
Hell, I'll pay the 15 billion dollar fine if I can do it with Volkswagen money and you don't touch my assets, the money I took out of the company as salary while doing the crime, or jail me.
Serious consequences laid on a corporation don't do anything, because there's no conscious being there to react to, perceive, or experience those negative consequences. They especially don't do anything if you're managing other people's money and the executive class receives relatively little personal punishment.
My point is that this could happen with any company and is part of the risk of investing, but to imply that the shareholders should have just "demanded companies to uphold legal and moral obligations" is assigning more stupidity on the shareholders than deserved.
It usually goes without saying that shareholders expect the companies they're investing in to obey the law and not lie to them.
Like I said, this is part of the risk of investing. There's always a chance the company you are investing in is cooking their books, lying, etc..., but the risk exists with any company and there's not much you can really do to mitigate it.
Yeah, they flew out with the golden parachutes and bonuses and new people replaced them. Some punishment.
http://www.nytimes.com/2016/06/21/business/international/vol...
> German prosecutors said on Monday that the former Volkswagen chief, Martin Winterkorn, is suspected of market manipulation for having waited too long to disclose that the company faced an inquiry. They are looking into another member of the management board as well for potential violations of securities laws.
It worked for the banks and car manufacturers...
Power, in this sense, can range from monarchy[0] to democracy[1][2] to political respect[3][4].
[0] https://en.wikipedia.org/wiki/English_Reformation
[1] https://en.m.wikipedia.org/wiki/Twenty-first_Amendment_to_th...
[2]https://en.wikipedia.org/wiki/Legal_history_of_cannabis_in_t...
If the guilty rich enough, get money else, jail time
If there are public anger, then give minimal/luxurious jail time
continue to next public issue
Hillary Clinton approves.
Why not lower instead? Abolish the fairly newly invented crime of lying to police while not under oath instead?
Then again, when we're all imprisoned for life, we will undeniably have achieved some kind of equality...
Sure it would slow down business significantly. But it would stop this irreversible harm to our planet, the place of which we require to stay alive..
VWs actions left around 60 estimated dead. Around 120,000 days of people not being able to function normally. At a direct cost to the economy of around $450 million. And a cost to our quality of life that most would consider even higher.
All of which is bad. But no matter how you do the math, most of this fine is punitive dissuasion for others who might be tempted to also cheat.
(Note that most of the fine moves money from the left hand to the right without destroying it, so we are theoretically collectively left better off as a result. Plus we prevent about as much more damage as we had already.)
In this case, it was very hard to detect, it was fully intentional on the part of the company, and they fought for years to keep it hidden.
This sort of deception is maybe 1 in 20 or 1 in 50 to be caught? So it isn't like a parking ticket - it's hard to catch and was hard to prove.
Furthermore, this is a "deal with the mess you made" solution - or a "natural consequences" consequence if you are a parent. There are certainly much more efficient ways of spending the money to improve public health, but those are abstract, hard to explain to the public, and hard to explain to the car owners. So they are less efficient from the government, public and company's perspective. Make America hyper-rational and the owners would continue driving these cars and we'd spend the money on truck emissions or something.
Was it? The researches who detected it didn't seem like they were doing anything that special. My impression is that nobody had bothered to check before.
There is a trading strategy that assumes markets over estimate liability of lawsuits. While I am probably cherry picking data, it is notable that the stock closed at exactly $106 per share today. So much for that trading strategy in this case. The market pretty much nailed it.
Nature would benefit if gasoline prices were 10 US per liter and people would stop to drive around senselessly. (I know the geographic circumstances make this impossible, but nevertheless...).
Also VW got off with a slap on the wrist here.
The US did nothing wrong here. People don't drive around needlessly, they drive because they live in places that often have no viable alternative. Why on earth should they be punished?
Your comments are bizarre and naive. Is you point just anti-Americanism?
I'm critical b/c I think 'defrauding consumers' in this case doesn't deserve a 15 billion 'slap on the wrist' (which will hinder innovation and affect jobs here - VW could have spent this money on the development of electric cars).
When hearing such numbers, yes maybe I am 'America-critical'. But it's not only in this case. E.g. recently I cannot understand how someone can sucessfully sue for $10,000 upon being forced to upgrade to Windows 10? Or, more fundamentally, how 'a country' can e.g. put Chelsea Manning behind bars for 35 (!) years? (She is an American hero for me).
2- VW faced wtih dilemma. Stop selling diesels altogether, or go rogue and yolo your way through emission tests.
3- Get caught and fined.
Well played, GM, Ford, and Chrysler. GM, Ford, and Chrysler were behind in Diesel tech, so this as a great defensive move to thwart Japanase and European automotive competition.
Moral of the story is: You need good lobbyists if you wanna be successful here.
Thank god the big oil lobby massages congress to enact legislation that naturally bound pollution released through fracking/digging/drilling does not count.
Do you know that Volkswagen has a plant in Chatanooga, TN that employs many American and that Ford Motor Company has a plant in Cologne, Germany that employs many Germans right? It's not the 1970s any more. Nobody is trying shut anyone out of the American market.
I understand the punitive nature of the penalty and its amount, but the amount seems somewhat egregious given the fact that all VW did was violate regulations of a government body. Uber is constantly praised for skirting or directly violating state or local government laws and regulations, yet is seen in an overall positive light for the supposed benefit they are providing society. This is the government's heavy hand making an example of VW and it's violation of regulation.
That VW's behavior caused some environmental impact is not a guess. The guess is only to the extent of the damage.
> it would have been cheaper for VW if they would have been killing the consumers of their cars.
That is ridiculous. The death toll would be many times 9/11.
USG would've seized by force every asset inside its borders and a lot (or all) outside of its borders. Not only of VW but of any contractor that might've may had something to do with it. For starters.
> Uber is constantly praised for skirting or directly violating state or local government laws
And also constantly criticized, and sometimes shut down.
But more to the point, violating different government regulations (by extension, different laws) has different outcomes. Why is that surprising/concerning, again? Federal environmental regulations SHOULD be treated more seriously than local taxi rules.
> This is the government's heavy hand making an example of VW and it's violation of regulation.
On only his can we agree. The message is clear: fines for willfully ignoring environmental regulation are not a cost of business.
Why the focus on VW, then, rather on the auto industry?
This is one of those cases where the corporate death penalty is the only just outcome I can think of.
$15 billion looks like a large sum; and maybe it's even enough to deter car companies from doing something similar in the future. Maybe. VW is worth $73 billion, and they generated a lot of money on the strength of their diesel campaigns. Amortized over the many years that they were shipping out these cars, it begins to look like a cost of doing business, rather than a massively punitive expense.
We just need strict liability for corporate officers.
Maybe in 2 pieces, maybe into lots more pieces.
Every business decision comes with a cost/benefit analysis. Hurting your employees goes into the "cost" side, and if you do the bad thing anyway, obviously the "benefits" outweighed the "cost" of potentially hurting your employees.
But you don't have to defend yourself from this company. You aren't in danger. As a result punishing the workers would be nothing but a crime.
http://www.cnbc.com/2015/10/29/vw-excess-emissions-linked-to...
Allowing some New World Judge the power to destroy all international subsidiaries of a global corporation with 610,067 employees at the stroke of a pen might not improve the situation.
WikiPedia places the economic cost at $39+ billion, by one measure.
"A peer-reviewed study published in Environmental Pollution estimated that the fraudulent emissions are associated with 45 thousand disability-adjusted life years (DALYs) and a value of life lost of at least 39 billion US dollars."
https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal#D...
Anyway, CO2 is not comparable to NOx in terms of danger to human health; CO2 is a real problem, of course, but as I understand it, this was an environmental and human health trade-off that is not at all well-balanced. It produced out-sized harm in exchange for small reductions on the CO2 side. Even if the amount of NOx produced only increased by the same amount that CO2 decreased (which is not the case, if I understand it correctly), it would still be a bad trade. I'm no expert, but the experts I've read on the subject haven't been saying, "oh, it's really no big deal because CO2 went down."
Numbers and studies have been posted by another user in this thread, it’s definitely a huge difference.
That’s kinda why VW did it, it saves fuel and is cleaner.
Since we have neither a corporate death penalty nor adequate criminal statutes for malfeasance, how is the "corporate death penalty" superior than laws that make it more straightforward to hold managers and directors accountable criminally? People who are willing to commit crimes to enrich themselves using companies are unlikely to be especially motivated by the well-being of the company, its employees, or shareholders.
Do you think shareholders of a company like VW, which includes pretty much everyone with a retirement plan, shoulder _all_ the responsibility? Because that's pretty much what a "corporate death penalty" means.
No. That's why I said "a degree of culpability".
The question isn't whether companies (and thus their shareholders) should be penalized for wrongdoing. It's whether shareholders should be zeroed out by a "corporate death penalty". I think it's an interesting question, why we don't have one of those.
You can't just blame automobile makers for the existence of automobiles.
Consumers also lose out, because of decreased market competition.
If the business is otherwise competitive but the owners sued out of existence, it's nonsensical for new owners to dismantle it.
It's nice to imagine that maybe it would breed "super companies" that are tougher, smarter, and more efficient because they thought they had to be to compete. But, there aren't any order-of-magnitude wins to be had in automobile technology. There are no lone geniuses who figure out how to eke out 10% more efficiency with this one weird (but patentable) trick. It takes research over a long period time to make even modest gains, and a cheater in the market bleeds the honest companies of resources.
And, to go further: Because Volkswagen made these claims about diesel tech, other honest companies may have been wasting resources trying to match the dishonest VW claims...when there are actual better techs they could have been pursuing. This may have led to even less gains over the time VW were faking data.
I think, all around, it is lose-lose.
Whereas if the corporation were liquidated, the assets would be bought up by different corporations and run by different management.
Banks, most of all, are just bags of assets that can be run by other managers who run the same types of assets (otherwise these assets would be illiquid and not need active management) at other banks.
The same goes for airlines: If an airline is a brand + planes (probably leased) and routes, why EVER bail out an airline? Especially a legacy airline when it's assets could be bought by an economically viable new airline?
We don't have corporate death penalties because to a first approximation there are no laws that enable us to do that. To put companies to death, we'd need to pass enabling laws. But those aren't the only new sanctions we can enable in new laws.
It seems to me that we can break down those impacted by sanctions against corporations as follows:
* Officers and directors of the company
* Employees of the company
* Shareholders in the company
* Customers of the company
When we think about how to structure sanctions against a company, we should think about where (a) deterrence will have the most effect and (b) where retribution is most warranted.
How does a "corporate death penalty" apply those effects? It seems to me:
* Officers and directors of the company have a demonstrated track record of harming their employers for personal short-term gain; see, for instance, every stock buyback scandal. Moreover, officers and directors tend to be wealthy and thus more likely to have a professionally or at least competently managed portfolio: they're diversified out of a lot of impact.
* Employees of the company have extremely limited ability to alter strategic decisions made by management, and so aren't useful for deterrence. They also tend not to profit from strategic high-level malfeasance, and so aren't deserving of much retribution. Meanwhile: mergers, spinoffs, and acquisitions are almost invariable dreadful for employees, huge numbers of whom are made redundant, pension obligations scrapped, benefits reduced, and so on.
* Shareholders have virtually no insight into the operation of their holdings. Moreover, vast numbers of shareholders don't even know they hold companies, because they do so through pension plans and mutual funds.
* Customers who, for instance, bought VW cars during this scandal did so in an effort to minimize their impact on the environment; the scandal is that VW lied to them. Not only are they demonstrably incapable of being deterred from future scandals, but it's hard to argue that they've in any way earned warranty confusion, loss of service stations and personnel, and slashed resale values.
Compare that to a new law making this kind of malfeasance a strict-liability felony for officers of the company. Doesn't that make much more sense than a death penalty?
So I'm acknowledging that you could pass laws that make an effective death penalty (through fines or through literally forcing liquidation) a reality, but then asking: why would you want to do that? Aren't there better laws we could pass instead?
Also, what you are ignoring is that the US can't just come along and close a transnational or foreign company. Also, what about subsidaries? Does condé nast get closed if reddit violates the law? Does GM get closed if Opel cheats?
Detailed analysis of the cheat:
A human could be put to death even if they have a family to support, so the workers argument is settled. The only issue is the matter of scale, but the death penalty is pretty rare to begin with, and I would expect a corporate death penalty have even stricter requirements.
They don't have to close a transnational, they can just force them to stop doing business in the country. They can close their US operations and ban their imports. We already have import bans on companies, countries, and products.
For subsidiaries, it would depends on how far up the chain the crime went. If Opel committed the crime but GM didn't know, Opel dies. If GM knew, GM dies. You could likely even spin off the "innocent" subsidiaries. If a husband commits a crime and the wife was not involved, the wife doesn't go to jail. If they both did it but their children were not involved, the children don't go to jail, they go to live with another set of parents.
You're not wrong, but this is also the same argument your parent post was making, namely that it will have a large scale negative effect on many regions.
This is actually an interesting thought. What if they did have to fear punishment? Perhaps in the form of having a percentage of the settlement/regulatory fees passed to them via their brokerage accounts. A mechanism like this would mean that potentially shady/unethical corporate behavior would be reflected much more strongly in the stock price, since holding onto those stocks would carry risks beyond just the stock price temporarily going down during lawsuits.
It would also put immense pressure on corporations to not do shady shit.
Perhaps increase fees/taxes on "toxic" shares in companies that have broken significant laws with intent or maybe force these companies to settle by issuing diluting stock that goes to agencies responsible for cleaning up the mess. Or even tax revenue instead of profit on these toxic shares which would create a huge incentive, especially for executives and large stock holders.
The point is to tweak and realign incentives, it doesn't have to be passing on extreme financial liability to shareholders. Most investors can't take a huge hit on their portfolio like a company with tens or hundreds of billions of dollars of revenue can.
You can argue it should be worse, but we don't need some special new mechanism. The fine can be anywhere from $1 to the the market capitalization+1 and the effects would then range from a slap on the wrist to bankruptcy and the loss of all equity in the company for shareholders.
What about people who may have invested in a fund that bought shares? Should the fund managers fear punishment? Should the people that bought into the fund be punished?
This is where the "punishment for those who benefit" gets complicated. It's hard to work out the people that should NOT be punished.
Where do you draw the line between it being the corporation's fault and the individual?
(I suspect these questions are part of the reason it is the way it is currently)
Fires, jail and fines for the involved execs, but don't hurt the customers and shareholders and the rest of the employees.
Shutting down a company doesn't mean you destroy all of its assets. Factories or entire divisions could continue to run under new ownership. Just treat it as a Chapter 7 bankruptcy where the company owes the government more than the total of its assets.
> The shareholders would still be richer and don't have to fear punishment
Shareholders would lose out to the maximum extent allowed without piercing the corporate veil since their ownership stake in VW would become worthless.
> Also, what you are ignoring is that the US can't just come along and close a transnational or foreign company.
No, but they could close down the US subsidiary (Volkswagen Group of America) and take all assets that are in the US.
> Also, what about subsidaries? Does condé nast get closed if reddit violates the law? Does GM get closed if Opel cheats?
Easy, just sell them for whatever you can get for them.
http://www.huffingtonpost.com/2013/06/04/eric-holder-1999-me...
So, my question is: Would we be better off with Enron still existing, including the same executive team (VW executive team is still largely unchanged)? Would we be better off with a more aggressive response to the banking crisis a few years ago?
I believe ending criminal companies probably makes room for better companies, and in the long run makes our economy and our society healthier. I may be wrong; there are certainly negative impacts. But, I feel like the cost of looking the other way, or a slap on the wrist, is too high.
There are thousands -- millions? -- of innocent people who would definitely have been better off had Enron survived. You could be right about the long term, but you're playing pretty fast and loose with other people's money.
I'd say Enron was playing fast and loose with other people's money; likewise VW was, too. Why blame me for the malfeasance of the executives at these companies, just because I think they shouldn't be allowed to do it again? The rolling blackouts Enron caused likely led to deaths (hospitals need power to keep machines and people running, refrigerators need power to prevent food-borne illnesses, etc.). It should be a really big deal when a company makes an intentional decision to harm people.
It should be a really big deal when a person makes an intentional decision to harm people and that person should be punished.
So where are the criminal prosecutions? My argument is that very large corporations wield so much power, and have disbursed responsibility so widely, that no one faces any significant consequences for making these decisions. I think maybe what I haven't really made clear is that I think we (we, as in, governments, nations, communities) don't seem to be equipped with legal tools needed to prosecute people within corporations, because responsibility for actions becomes this wisp of an idea that sort of floats around inside a company but never really sticks to anyone. And, when it does stick to someone, it sticks to low-level workers; trickle-down economics for blame.
My suggestion was barely thought out; an expression of frustration that companies like BP, and Shell, and VW will keep ticking after committing horrible crimes. And, more importantly perhaps, the C-levels at those companies still have jobs in those companies, in most cases. Blame trickled down, profits trickled up. The incentives remain for companies to skirt the law and put communities at risk.
Maybe there's some other way to hold executives accountable. I don't think this settlement has done that.
There's no point in burning down the village because the mayor's corrupt. The town still has value!
This would hurt those with claims against the company but no hand in the decisions as much (if not more) than the responsible actors.
A real corporate parallel of the death penalty -- or at least, an ultimate corporate penalty for serious violations -- should take a different form. A couple ideas:
(1) personal, joint-and-several, liability of corporate officers with responsibility over (whether or not directly involved) and those employees actively directing the offense,
(2) allowing piercing the corporate veil to make equity holders liable in the event the corporation itself and legally responsible officers and employees as described in (1) cannot meet the liability for the offense.
You're probably right that there are better ways that cause less harm. I just don't know how to get there. Corporations at this level wield so much power, it's hard to figure out how governments or courts can effectively regulate them.
Regardless, I don't think this settlement is enough, because the people involved (generally, though I think a couple of low-level engineers were fired) will continue going to work each day, drawing their massive salaries. I'm willing to concede I don't have all the answers on what justice really looks like, but I'm confident it's not this. This just isn't enough for years of cold, calculated, destruction of human life for profit.
Maybe put a 30% tariffs on all of their imports for 30 years or something. What of splitting it up?
As anyone who's ever been near a major automaker's test engineering lab knows, ~all [0] of VW's competition is doing something similar, to varying degrees of sophistication. I remain perplexed by the pitchforks, outrage, and witch-hunt mentality displayed towards VW alone.
[0] http://www.independent.co.uk/news/business/news/mitsubishi-s... and many more
I think I need you to be more specific, is what I'm trying to say.
Venezuela nationalized many corporations, which meant they were simply confiscated. That is pretty much giving them the death penalty.
What do you intend by "corporate death penalty" if not being siezed?
In one case the government ends up owning and running the company, in the other, the assets are sold off to the highest bidder with the creditors (and in the case of a criminal company like VW, restitution for their victims, which in this case would be VW owners and public health systems, among others) receiving the proceeds.
How is that functionally the same?
And, regardless of that: The single most important element of my suggestion is that VW committed a crime (well, a number of crimes, spread over many years) and caused harm to human lives and health. Unless the Venezualan companies you're talking about were criminal companies causing harm to humans, it is unrelated to this conversation. No one (certainly not me) has suggested a bunch of random major companies should be owned by the government.
In both cases the company is confiscated from the owners.
> it is unrelated to this conversation
It shows what happens when companies are confiscated from the owners. Note you suggested more than just VW, the entire industry.
I see you're not alone in thinking my joking "line them all up against the wall" comment was intended to be taken seriously. Someone said, "everybody's doing it", and I meant to imply, "well, everyone who is doing it should be investigated and punished". I did not mean "everyone who ever sold a car should be put out of business".
I can't blame you for making that assumption, since others have made it, too. So, apologies for not being clear. I have no desire to see every car manufacturer closed down. Only the ones that have committed crimes on a level similar to Volkswagen (or worse, if there are any who've done worse things). In fact, I would like for the honest ones, the ones that are sincerely working on cleaner technology and accurately representing it in the market, to be able to compete in a market free from cheaters like Volkswagen.
If some automakers are cheating, and some are playing fair, the ones playing fair are effectively fighting with one hand tied behind their backs. They're virtually guaranteed to lose market share to the cheaters over time. That's the kind of screwed up market that no honest person wants to compete in.
More importantly, think about the difference between a serial killer and a single person being executed. Venezuela is the former, while SwellJoe advocates the latter. Your comparison makes about as much sense as "we can't jail anyone, because if we jailed everyone there would be no workers left".
To suggest otherwise is disingenuous.
If you think it is defensible perhaps you could explain why it's just that an assembly line worker should lose his livelihood because a few folks implemented this scheme? The worker had no actual or theoretical knowledge of the "crime". Further, the worker had no way of even spotting that a "crime" was taking place.
Group punishment just adds victims.
Would you suggest that Enron should have continued to exist because employees losing their jobs is a bad thing? Do you think we, as a society, would be better or worse off if bad companies, like Enron (and Volkswagen), are allowed to continue to exist? There is a certain necessary destruction in the free market. There's all sorts of things that the market corrects for (by killing off weak companies); why shouldn't society also impose some corrections based on some basic ethical factors?
Further, society does impose corrections on small companies; if my small company killed 59 people by hiding facts about my products, I'd pretty much certainly go to jail (as it should be). It is only very large corporations, and their executives, that are effectively immune to these kinds of corrections; even this, heralded as a huge penalty, is unlikely to impede VW significantly going forward.
What's so bad about opening up a place in the market for new auto makers, who don't cheat the system for profit? We are talking about criminal activity here over a period of years, not mere "irregularities".
How about you stop buying VW cars if you disagree with what the company did (let the market do its work)?
We do not have a perfectly "free market" (and that's OK), though markets are nice things, and in some cases I am in agreement with wanting more free markets. But, do you sincerely believe the right answer to a company killing people is a boycott?
It gives one hell of an incentive not to stand by while shit goes down. Though whistleblower protections would be quite helpful as well.
Not punishing the behavior penalizes honest competitors and defrauded customers and vendors / suppliers.
YMMV. (Especially if you have a Volkswagen.)
Certainly there should always be a constant review of regulation in light of events like this, but to confiscate and destroy an entire company for this type of cheat would be chilling for future investment and company formation. That directly leads to a lower level of living for everyone, far worse than the relatively minor increase in emissions in this case.
There seems to be an attitude around that corporations are some evil thing, and that is not healthy at all.
One post like yours, I shrug my shoulders and/or roll my eyes and move on. A continuous barrage of populist drivel like it, anywhere 'the average voter' gets a chance to express their 'opinion' on anything really - I worry what goes through the minds of all those people I see out there walking through the city when I look out my window, and how stable they really are; and if that collective instability might culminate into a real societal upheaval given the right circumstances.
I'm not, at all, anti-corporation. I'm anti-criminal behavior. How is wanting the rule of law to apply equally a "populist" notion?
"Equality" is, admittedly, pretty tricky when talking about a fictional construct. But, when a company kills people we can't put the company in prison to protect people from it and to dissuade other companies from doing similar things. So, I think there should be other tools that can strip away the corporate veil that executives are hiding behind and stop the criminal company from being in a position to cause further harm.
Here's my "free market" question for you: Do you want to be in an industry where you're competing with companies that cheat on health and safety standards? They have lower compliance costs because they're cheating. What do you do? How do you deal with that? Do you want to have to cheat, break the law, and lie to customers, in order to compete effectively with them?
It happens to share a second-level domain name with a startup accelerator. That's the extent of it.
Going off a direct analogy with a human, it appears it would require destroying the equivalent of the brain, so perhaps a forced wiping of the IT infrastructure, inventory ledgers, blueprints? Probably also a seizure of all patents.
At the end of the day it's just money, except it's probably simpler to just take it in cash. (Or however the $15B is expected to be disbursed).
I had been following this thread with a certain amount of blasé, but the thought of seizing a patent portfolio and releasing it into the public domain makes me raise an eyebrow or three.
My thinking is merely that at some point, we as a society should probably consider refusing to allow a corporation that has shown an ongoing wilful disregard of human life to continue to exist.
There is lots more comments on this below, it's just an interesting problem.
That would get the CxO in other companies attention, in a double-quick-time fashion.
I do agree that fines that seem astronomical to us (USD15Bn is huge in any personal context), to a corporation can be just The Cost of Doing Business. Depending on how long they've been doing this, they may have made twice that amount.
Isn't this the whole reason for the invention of limited companies in the first place? It's considered a progress in human society to have developed limited liability laws. Besides, the good thing about not killing juristic persons is also true for not killing natural persons - it's considered an improvement by and large if a society gets rid of the medieval practice of executing prisoners.
I'm sorry, but I find the comparison ludicrous, despite the name.
Civilized like in 'western civilization'? E.g. USA? https://en.wikipedia.org/wiki/Capital_punishment_in_the_Unit...
They destroyed the livelihoods of thousands, if not millions of innocent people, and thoroughly polluted huge swaths of the Gulf of Mexico coastline (and a bit of the Atlantic coast, as well). They caused the biggest single environmental disaster in United States history, and it was due to negligence.
If this wasn't an accident, but rather a deliberate attack "in the name of Islam", we would have gone back into Iraq. It would have been 9/11 all over again, but with far more actual damage caused. But since they're a company, they get a slap on the wrist and keep on going. (I'm exaggerating, I know they paid a lot, but they're still more than alive and kicking. I just wish their stock tanked more after the Brexit vote.)
If you want to make an example of a company with a clear-cut case, you can't really do better than this. They committed mass destruction of the Southern coastline. Seriously, if this was intentional it would be a war crime.
https://en.m.wikipedia.org/wiki/Environmental_Modification_C...
Nonono, don't compare anything to terrorism please: We have a far to belligerous action on terrorism, while we don't do much against other causes of death. Smoking still causes an order or magnitude more deaths of innocents than terrorism (non-smokers) and the people still defend it's ok to smoke on the sidewalk (and defend it's ok to kill Muslims without trial as long as it's a military action). Responses to terrorism are disproportionate.
Utter scumbags - they should never have been let off the hook the way they were after that disaster. I fully expected the company to be on its knees at the very least but nope - they're trading happily ever after.
All of them? All 80,000 employees are scumbags are they?
I happen to know a few, and at the very least they don't denigrate people they don't know on the internet.
However, BP as a legal entity and a subset of its employees fucked up, causing untold damage to the world we live in. There are people who work for BP who I would hold accountable, and those people do not deserve to have my hard earned cash spent on their company.
https://en.wikipedia.org/wiki/Environmental_issues_in_the_Ni...
The total volume of oil spilt was on the same order of magnitude - about half that at Deep Water Horizon. But the environmental and health problems are perhaps worse. It's close to shore and there's hardly any cleanup work, compensation or health protection.
According to Google finance, its 56 billion, and probably less after this news. The US branch is probably worth 10% of that, or 5.6 billion. That way, the 15 billion are basically a three-fold death penalty.
We're not talking smog monsters here, we're talking one chemical in particular (NPC), from one kind of engine by one car maker. I don't want to sound like I'm downplaying this, but given the kind of comments I see about this, I want to think the visceral reaction is based in rationality.
Is it?
https://www.theguardian.com/environment/2015/oct/29/vw-emiss...
http://www.nytimes.com/2015/09/29/upshot/how-many-deaths-did...
I guess it's possible to look at these numbers, and compare them to the number of deaths caused by autos in general (even the ones that follow all the rules), and consider it a small thing; something that doesn't justify a massively disruptive response.
But, from my perspective, VW made a conscious decision, and an ongoing choice over many years, to violate the law, and caused illegal levels of dangerous emissions in exchange for greater profits.
So...I don't think I'm responding irrationally when I am extremely critical of a company that would make those decisions over a span of many years, knowingly trading human life and human health for greater profits.
I'm critical of internal combustion auto companies, in general, but I'm not calling for them to be destroyed, and I don't go out of my way to talk trash about them. I'm pretty specific in my ire toward VW (though others have suggested several car manufacturers are pulling similar tricks and emitting illegal and dangerous levels in real world environments), and if that's the case, I'd consider those to be criminal companies, as well. I hope such companies will also be investigated, and also face consequences. But, "everybody's doing it" shouldn't be a defense when the stakes are this high.
Same if they e.g. issued a ban on VW selling cars in the EU for say 5 years.
Have the US transfer this amount (should be north of a trillion) to the victims or their representatives and serve justice!
The problem is that the regular factory workers are the ones that would end up paying the bigger price in a corporate death penalty situation, and that companies trading abroad would be able to escape the penalty (in this case, for instance, the US could simply forbid VW to do business on their soil).
Many people replying seem to think you are advocating the execution of every man and woman who work for the company. I suspect that's not what you mean.
But how do you execute the entity economically?
To me, the right way to do it would be for the US government to take ownership of all the stock, and for the stock to be resold under a new corporate name. A criminal trial should then take place, with the C-suite officers and board of directors under scrutiny regarding their roles in the decisions, with clemency/immunity given to engineers and laborers for their full and complete testimony.
The only way the behavior changes is if you sanction it with meaningful consequences.
My words were probably poorly chosen; and it was a casual comment, intended to be taken casually, not as a call for a bloody revolution. I thought my disclaimer of being opposed to the actual death penalty for humans was sufficient to alleviate any fear that I actually ever want anyone killed, but the angry response seems to indicate otherwise.
GM to Pay Record $35 Million Fine Over Ignition Switch Recalls (May 2014)
http://time.com/102906/gm-fine-ignition-recalls/
"The federal government struck a $35 million settlement with General Motors after the company failed to act for 10 years on an ignition switch defect that led to the death of at least 13 people and recall of approximately 2.6 million vehicles"
GM will pay $900 million over ignition switch scandal (September 2015)
http://bigstory.ap.org/article/e1207eccc10c4f2a8ef550da95e12...
"General Motors agreed to pay $900 million to fend off criminal prosecution over the deadly ignition-switch scandal, striking a deal that brought criticism down on the Justice Department for not bringing charges against individual employees."
"Also Thursday, GM announced it will spend $575 million to settle the majority of the civil lawsuits filed over the scandal."
"The twin agreements bring to more than $5.3 billion the amount GM has spent on a problem authorities say could have been handled for less than a dollar per car."
https://en.wikipedia.org/wiki/Deepwater_Horizon_litigation https://en.wikipedia.org/wiki/Deepwater_Horizon#Aftermath
The low emission 2.0 TDI models (Such as Audi's TDIe) were very much marketed as very eco friendly, and it meant a lot of corporate buyers with CO2 caps bought it in stiff competition with other cars. If the engines had met the NOx emissions, the consumption (and thus CO2) would have been higher, and the cars couldn't have been boughy, or wouldn't have been bought because of being less attractive with lower power or higher consumption. If this isn't marketing it as "clean diesel" I don't know what is.
They are the ones who lied about their diesel engine standards for air quality. Under the guise of making tough standards they basically outlawed diesels in California.
Since CA is such a big car market this prevented most manufacturers from selling any diesel cars anywhere in the USA.
I am glad to see there will be some money going to the owners of the affected diesels. A lot of these people bought the cars because they were marketed as more environmentally friendly. Then, they were left with an embarrassing car with near-zero resale value once the revelations came out.
I feel like the US has a bizarrely inconsistent attitude towards air pollution. The standards for NOx emissions for diesel construction equipment and ships are almost non-existent. If VW's actions are reprehensible, surely the lawmakers who created such a bizarrely fragmented regulatory regime are also to blame. http://www.greenhoustontx.gov/reports/closingdieseldivide.pd...
Yet, how can everybody forget about all other car manufacturers - especially US? They pretty much all lie about their gas emissions as proven by different experts and agencies [1] [2] [3].
Why? Because we have improved our gas emission limits to a level that most car manufacturers couldn't reach over the short run. Take the example of European car makers. The European Commission started to really regulate car emissions in 2010. At that time, car makers were faced with dropping sales (double crisis 2008 and 2010), stable/slightly increasing costs (wage inflation and poor labour market flexibility - German is an exception in Europe) and stable/slightly decreasing prices (due to competition and few new vehicles). In this context, how can you expect car makers to invest in "traditional cars" to reduce gas emissions and in electric and autonomous vehicles to fight against the competition of tech car companies like Tesla or Google. That is just not possible.
So who is responsible? Of course VW and other car makers are all responsible for that mess and the disastrous consequences on environment. But WE are also responsible: we want safer, cleaner, cheaper and stronger vehicles from traditional car makers but but you can't have everything all at once. Tesla can do it because that they start from a "blank page", with no turnaround costs. For VW, GM, Toyota, that's another story. Maybe we should just keep that in mind before charged them with a "corporate death penalty"...
[1]http://www.independent.co.uk/news/business/news/volkswagen-w... [2]https://www.theguardian.com/business/2016/apr/21/all-top-sel... [3]http://www.cbsnews.com/news/do-all-automakers-cheat-on-their...
Tesla just makes cars that can't apply to gas emissions regulations, they are far from cleaner.
We'll see.
There was a GM settlement like this (the pickup gas tank problem) and customers with existing pickups got a coupon good for $1000 off the price of a new pickup. So GM gets to sell you a new pickup and probably keeps any rebates or low financing.
Also the recent Ticket Master settlement for $420M. There's a daily allotment of coupons worth $5 off the ticket price on select concerts (read: not the popular ones) that are buried in a series of hard to follow links. They still have the same service charges like before, they're just more transparent about it.
The only worry here is that attorney generals might end up with more resources to harass small people now.
There must be something in the water these days that spurs these insults on sane discourse, I have a vague feeling of recognition when going over current events in politics across the world the last few weeks...
:(
So what? That doesn't make his comments about "lining executives up against the wall", below, any less ridiculous.
The comment below is stupid (hopefully meant in a proverbial way) but since this is in another subthread my comment had no bearing on it.
Tss, rose-colored glasses and all, and the world is a different place from what it was 10 years ago; still at least back then the main 'problems' were the excessive focus on nootropics and quantitative finance; not that it was overrun with populist high-school angsty political drivel.
Anyway, I'm just using your comment to respond to several others at once that all make roughly the same point. It's rather meta to the OP though, so maybe it would better be detached from here (seeing that my response now seems to be the top voted reply out of many, which is rather ironic in the light of the following).
But on to my point: not all points or opinions should be 'reasoned' with, or deserve an intellectually honest debate, or even a reply. To paraphrase the old quip, 'don't wrestle a pig in the mud. You'll get dirty and the pig likes it'. Many other commenters try to engage the GP in a fact-based 'debate', but that is impossible with sophistic extremists who use terminology like 'corporate death penalty'. It's meant to incite an emotional reaction only. There is no point in refuting Stormfront posters either, or Truthers, or pick the fringe of any group that you ideologically disagree with.
Now I know that the general rule for posting here is 'don't post negative things' and 'stick to substance and not the person' etc.; and my off handed reply is essentially contrary to all those things; and I fully realize that with this reply I'm polluting even more. My point is: there seems to be some sort of naive believe that 'all opinions are equally valid', 'all viewpoints deserve equal consideration' and 'the only way to respond to fringe/populist rhetoric is with meticulous fact-based refutation'. That's simply not true. Call me a 'reactionist' or a 'fascist censor' - but I liked the days when 'letters to the editor' from lunatics were thrown in the bin and only those with substance and without inciting language were published (I mean that metaphorically, I was born in 1979, I'm from a generation where 'letters to the editor' were already an anachronism). I'm not talking about shunning content because of its content; but rather shunning content that employs mala fides sophisms like purposefully using incendiary phrasing.
So in summary: no I won't be seduced into a useless 'debate'. And on top of that, I would much prefer much more heavy-handed moderation where many more posts were simply and summarily deleted (and yes that includes some of my own, that were written too hastily) in order to increase the intellectual content per 1000 words in the comments; failing that, we (as in, all posters) need to ignore and/or shun extremism instead of giving it a podium by replying with well-intentioned fact-based answers and thus attracting even more attention to it.
> So in summary: no I won't be seduced into a useless 'debate'.
Then downvote or flag and move on. Your comment is as much a part of the problem as the original was. If you make a comment make it a substantial one.
We're beyond the point of 'just' downvoting and 'moving on'. Sometimes some needs to take a stand against moronification. I'm not volunteering to be that person and maybe my original reply wasn't even in that category, but not speaking up (and let's face it, downvoting doesn't count) lets this sort of thing fester on. At the risk of beaten an old cliche'd horse - "first they came for xyz [...] and then there was nobody to speak up left" etc. etc. I don't mind the occasional post calling out utter rhetorical garbage; if only to affirm that there are people left who don't mind debate as long as it's done in honesty and in an informed way, rather than 'I have a [deity-given|natural] right to shout whatever springs into my head at everybody else'. If someone were to gauge opinion from online discourse, they'd have no alternative but to conclude that there is nobody left who can hold an opinion that is more complicated than 'THIS ME LIKE' or 'THIS ME HATE, MUST SMASH'.
"If you make a comment make it a substantial one."
That's rather ironic coming from someone who with two dismissive one-sentence posts ignores a whole complex point being made - a point that, while it may not be 'novel', is certainly contrary to the majority's concept of 'democracy' and 'fairness'.
As for your entry paragraph: such veiled accusations are also not worthy of HN.
As a matter of fact, regardless of "corporate death penalty" making sense or not, the debate thread immediately below your (non-)argument has many informative points.
In other words, if you told me that anthropomorphizing an organization like this were absurd on its face, I would accuse you of rank ignorance of the law, the rationale behind the law, and the whole idea of behavioral incentivization.
The reason why we're all discussing this AT ALL is because the fines are often losing their ability to disincentivize the bad behavior - if a company can make 19 billion in a year using only 1 billion, and then be fined for 15 billion, then they can pay the fine can and pocket the 3 billion difference, and report a hefty profit to shareholders.
Trying to influence collective behavior through incentives and disincentives is not 'absurd on its face,' dionidium, and I challenge your grasp of the overall context for asserting that it is.
There is no way to effectively punish saavy, loyal individuals when individuals from within their respective organizations can shelter them from the consequences and/or incentivize them to break the law despite the consequences.
If the whole matter is implicit, it doesn't even necessarily require the organization to 'rescue' their fall guy afterwards, people are just another resource in an organization, if the benefit to the organization of breaking the law is greater than the benefit the organization derives from the person who would ultimately be the fall guy, then even the potential of a 'rescue' is enough, if the incentives are otherwise strong enough!
Only if BOTH the individual AND the organization must pay a price for misbehavior is it possible to truly disincent illegal but profitable behavior. Under your scenario, an organization can simply shuffle through its minions until it finds one willing to break the law and offer the profits for a given incentive package- indeed, organizations under your model are incentivized to seek out and hire criminals who lack analytical depth, and then implicitly make the desired course clear, and then allow the criminal to take the fall for them, while the organization and its investors pocket the profits.
You have every right to complain about situations you don't like, but because your comment so clearly exemplifies the very situation about which you are complaining, I would be foolish to give your complaint much credence.