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Comment by derefr | Hacker News Reader

If the company is big enough, I’d suggest splitting the company (as if as the result of an anti-trust proceeding), taking the fragment of the resulting company that the govermnent depends on for services and nationalizing just that part; and then throwing the rest of the company—the part that the government now explicitly doesn’t depend on—to the wolves, by allowing the case against it to proceed.

Basically, rather than protecting the whole just because some part of it’s necessary for you, just pluck that part out and keep it for yourself.

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Since doing anything prior to being proven guilty in any way seems against the principles of justice we espouse in the west, perhaps waiting until proven guilty would be best.

But then, don't nationalize some of it, just nationalize all of it, but under specialized program for 2-5 years that replaces the board and some/all of the corporate officers with government bureaucrats to run the company short term and replace all the management deemed problematic while giving the replacements a few years to come up to speed in running the company, eventually turning the board back over to shareholders. Sort of a variation on some of the stuff I think was done during the financial crisis.

This policy would greatly incentivize companies to behave.

The danger is that it would also greatly incentivise governments to misbehave though, right?

Perhaps we should look at the people rather than the companies or governments. Narrowing down the blame would prevent future executives (and rogue engineers /s) from being too comfortable under the cloak of "the company" when taking such initiatives.

Volkswagen didn't cheat on emissions tests, specific people knowingly lied and cheated to get to achieve their goals. And while the company should be allowed to pay back all damages in a fashion that does't cripple it entirely, those people responsible for the decisions should not be given this privilege. I'm sure there are equitable options in this regard. Of course none of them would ever apply to those people since surely they put all that money to "good use".

> The danger is that it would also greatly incentivise governments to misbehave though

Government having the power to choose how to apply the law will lead to misbehave and corruption as well.

The moral hazard though is that it would incentivize mismanaged companies to cash out on the taxpayer dime, leaving governments with poorly-performing assets.

A felony for mismanaging the company into nationalization?

I am with you until you got to the nationalizing part. I don't know if that would be long term best for the country.

You can always re-privatise it later. Doing it this way — especially if you make it clear to the shareholders that such misbehaviour has consequences for their bottom lines and the money they get from forced nationalisation isn’t supposed to be the pre-offence share price — makes it a deterrent for anyone who would otherwise say “we’re too big to fail” or “we want out portfolio to take unnecessary risks, because there is no downside for us”.

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