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Comment by sideshowb | Hacker News Reader

Money is not really the root cause though, any more than tcp/ip is meaningful interpersonal communication. It's just a signal.

They sold their fleets because other people (the buyers) wanted them more, in the short term. Now they want to buy because they want a fleet again. It's a time horizon problem, or perhaps an uncertainty problem - how were they supposed to know how long the pandemic would last? Or perhaps a premature optimization problem because the business was predicated on a pandemic not happening. But I don't see it as a money problem, any more than a tcp/ip problem.

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> It's just a signal.

I think quacked's point was that sometimes it's not a very good signaling system. Neither is TCP/IP in some cases, and sometimes neither are cytokines (to use a biology example). These are all evolved systems, to some degree; maybe they're the best we can hope for, but we should still keep an eye out for "version 2.0".

It's not even that I think it's realistic to expect version 2.0, although I would really like that. It's more that it's impossible to get many people to even admit that the current system is flawed in a way that is technically controllable.

It is insane to me that we all have to shrug and admit that "well, we can't fix X problem because the money's not there" over and over again, when we have all of the labor hours and intellectual capital to do whatever we want as a collective species organism. With the right coordination, we could make every city look like a Miyazaki lake town. Or Disneyland. Or an exact copy of ancient Rome. We could scan every person alive every year and see whether or not they've got cancer. We could clean every river and every lake. We could send everyone a Nintendo Switch. That whole "bullshit jobs" memo gets circulated on HN all the time; how much of us could do actually cool shit if we didn't have to worry about paying for other people to help maintain society for us? I don't know, but it sure is frustrating watching Hertz sell off their fleet because their board is more worried about its share price than it is about whether or not Hertz, a car rental company, can rent out cars. (And I'm not blaming them for it- they're deadlocked in the same standoff everyone else is.)

> it sure is frustrating watching Hertz sell off their fleet because their board is more worried about its share price than it is about whether or not Hertz

More like worried about bankruptcy and going out of business.

(Gp here) I for one certainly admit flaws in the system! ...maybe we're splitting hairs over whether that system is called money or something bigger.

One of my research interests is trying to make a contribution to what you call version 2.0, through better measures of subjective wellbeing.

I don't know, if you look at "money" as the wider financial system, then maybe it is a root cause.

Another commentator downthread mentions the fragility vs efficiency tradeoff, and that's certainly something encouraged by financializing the economy. By making it possible to easily switch between stocks and flows (capital/income in this case pay in full / pay debt) and encouraging whatever makes firms look good in the short term, the financial system helps cause this kind of thing.

We get towers built higher but not necessarily safer.

Sure, I agree having a financial system predicated on growth causes a whole lotta problems. I guess I define "money" more narrowly as we could use it as a component in a very different system.

The financial system is very efficient, and allows tuning and scaling to an extent never before possible. That allows folks to squeeze pennies or build leveraged business models that previously would have not been possible.

Which is great, when things fit the model (the stocks or bonds involved pay retirees longer, make people wealthier, etc), but also allow people to build much higher castles of cards than they previously could have before something toppled them over.

Panics, crashes, defaulting on debt, etc. have been around as long (and probably longer) than we have historical records, but wow does the modern system take the cake for scale!

It's a whole system of problems but it's not a hugely complicated system, at least not compared to all the bandaids that are necessary if you do not address the problems at their root.

https://youtu.be/ZFRVfXeIaek

https://www.youtube.com/watch?v=xkQn56Dtslk

https://www.youtube.com/watch?v=j5l_Oeg6kMo

https://youtu.be/mhr4JGbozTA

Isn't is more of an existential issue?

If you're a rental company, looking at ~$0 income for the next year, and the need to pay for, maintain, and garage their car fleets, then you're top priority is to shore up the balance sheet and keep your corp afloat. What the car buyer's market will be in 18mo is a more distant concern.

To a point though.

Selling your only operating assets just because they're not operating at the moment seems pretty short sighted.

Creditors may have forced their hand a degree, but to me it feels like a factory selling their machinery because demand is down this year.

If you're going to sell all your cars as a rental company, might as well liquidate your whole company and close up shop.

The whole issue is the general prudence of taking on debt. It's a question of efficiency. Too little and you miss out on opportunities to produce and grow, too much and you're super-fragile.

Over-indebted companies is a very Anglo (US/UK) and Japanese thing. There are plenty of companies in continental Europe (Germany, Italy, France) who operate with much less debt than their US counterparts. A good example is Aldi. They have no debt on their balance sheet anywhere, not even for inventory. By the standards of American business culture, that is 100% absurd.

I'm really not sure who's right. It's optimization vs survival.

There's also a question of just how fragile they truly were.

Sure the pandemic messed them up, but that was really a once in a generation at most event. If thats what it took to sink your businessz I wouldn't call it very fragile.

I also think they and their creditors made poor decisions.

Selling your only operating assets in order to balance the books is a suicidal move no matter the industry. It's selling off your only way of making money. It's like a software engineer selling their workstation when times are tough.

dying later is always better than dying early. And may be there's some miracle that could help that you wouldn't get if you died early.

Not always the case.

Dying now and cashing out is better than burning money for a few years and cashing out for less then.

They paid down their debt on the cars, but they have lots of other financial obligations and operating costs that will be ongoing if they continue to operate, and they now have a hugely diminished capacity to make revenue.

The problem with climate change is that 'once in a generation' events are now happening more like once a decade - I would not expect this to be the last global pandemic causing major whiplash in demand and supply in our lifetimes.

I'm honestly curious to find out whether most of us will even still be driving cars powered by fossil fuels by the time the next pandemic hits - as tech goes, it's only been around for a few generations. People will find other transit solutions if cars themselves get phased out. Or maybe we'll still have 'cars' with something dramatically different going on under the hood that car owners of today would barely recognize.

> "A good example is Aldi. They have no debt on their balance sheet anywhere, not even for inventory. By the standards of American business culture, that is 100% absurd."

Firstly, Aldi is a private company (actually two entirely separate private companies, ALDI Nord and ALDI Süd, who share the brand name). So AFAIK they do not publish annual financial reports like a public company would be required to do. So how do you know there's no debt on their balance sheet?

Companies House filings for ALDI Süd's UK subsidiary, ALDI Stores Limited, do show debts and interest expenses so it's certainly not correct to say they "have no debt on their balance sheet anywhere"[1]

[1] https://craft.co/aldi-uk/metrics

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