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Comment by _heimdall | Hacker News Reader

Boeing isn't too big to fail, nothing is. That whole concept has always bothered me. We absolutely can let companies and banks that size fail. Sure there will be a lot of damage caused, but that's called taking responsibility for our mistakes and learning from them. You can't sweep problems under the rug forever.

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I do think the global mega banks are too big to fail in ways that other entities are not. You can force their assets to be wholly absorbed by other entities, like the Obama admin did with WaMu and Bear Stearns, but you can't liquidate them like a normal company.

Nor can you try to slowly unroll their assets piecemeal on any normal human time-scale, and big parts of the organization's 100's of billions of dollars of value prop are things you can't sell in the first place, like principal arbitrageur status.

I'm not defending the banks here, and in fact this is one of a few large reasons why the US has had such huge conflicts over establishing both a national bank, and national governance of the banks. It begs the question, if these entities hold such a huge portion of the nation's financial destiny in their hands, why are they not beholden to the public?

> You can force their assets to be wholly absorbed by other entities, like the Obama admin did with WaMu and Bear Stearns, but you can't liquidate them like a normal company.

Where I disagree here is that I don't see a forced absorption being needed if the assets are worth it. There may very well be red tape that needs to be cut or expedited in an extreme scenario, but if a bank's assets are still worth any value another bank will buy them for a price that benefits them. The government only needs to force the acquisition, including financial assistance or guarantees, if the bank assets have no net value.

> It begs the question, if these entities hold such a huge portion of the nation's financial destiny in their hands, why are they not beholden to the public?

This I totally agree with, though I land on the opposite direction. Should entities be allowed to be so large that they realistically need to be beholden to the public? I'd rather see bank protections removed, that would incentivize smaller banks that are inherently more beholden to their depositors.

In this instance, does Boeing need to fail though? There seems to be quite a bit of criminality happening, which is a law enforcement issue. The rest should have been caught by regulatory bodies.

If you get rid of the criminals and enforce regulations that ensure quality control and safety, I don't see why you need to completely eliminate the company and destroy all the supply chains they're a part of and jobs they provide.

I definitely don't have the answer of whether the company should fail, but that shouldn't be prevented either. They should be held to account for what was done, whether that lands only on the corporation or the individuals is left up to those with access to all the known facts. If the aftermath is enough to bankrupt the company though, so be it.

What I wouldn't want to see is a company destroyed as part of a witch hunt. Boeing doesn't have to be destroyed by any means, they could find a way through it depending on what the punishment is for their actions.

While I am a morbidly curious individual who would love to see one of these “too big to fail entities fail”, I don’t know that I share your confidence. And I don’t know that it’s taking responsibility either, if you let them fail, the pain is sharply distributed unevenly away from the people who caused the issue, then if you just prosecuted them.

Didn't we collectively allow Boeing to do this though, and allow banks to give us the mortgage crisis?

We individually don't regulate these companies but we do elect those who do and we choose to be customers for those companies. Shit rolls downhill, unfortunately when a company is allowed to dig such a massive hole those left standing have to deal with the aftermath of what happened on their watch.

Papering over the problem can seem to fix it for now but it completely misses the root cause. Banks walked away form 2008 largely unharmed in the long run, and more importantly the industry is just as capable today of causing a similarly huge problem as they were then.

And even if they do fail it's rarely the end as the bankruptcy process do totally allow for the critical/valuable aspects of an company to continue under new ownership, and the state could easily ensure that that process happens by buying up the parts they have an interest in doing the bankruptcy proceedings.

All the current model of Bailouts do is protect the shareholders from having their share value wiped out as a part of the process, and of cause keep up the appearance that the stock market can keep going to the moon(which a lot of retirement funds depend on).

Well I actually take issue with how bankruptcies are handled as well. If a company fails and has to liquidate, that should be the end of it.

The liquidation is the company being stripped of assets, who then gets sold of to highest bidder in order to pay the creditors, some of those assets might very well be fully operational business units that someone else(a competitor or the government) want to buy whole.

I known that the us chapter 11 is kind of a bad way to do bankruptcy as it don't really wipe out the whole but allows the previous executives way to much of a stake in the process where as other countries replaces the leadership with a bunch of court/creditor appointed outsiders on day one.

This is why there should be a hard limit on mergers and acquisitions for any business. All companies become tentacular godzillas after a decade or two and the state is forced to keep them running because its "too big to fail" for the economy.

Yes. And I think this is why the article ends with `Then prosecute its executives. There is nothing like the prospect of prison to focus the mind.`

repercussions on the general economy and for the people is what they are worried about

Short term repercussions.

Long term it's healthy to weed out your garden.

"Put another band-aid on the gushing amputated leg" has its own risks to the general economy and for the people.

“Kill their family and everyone in their neighborhood because they might do something irrational because of the pain”

No; just charge the guy running around the neighborhood with a chainsaw negligently injuring people with a crime.

"Too big to fail" is the bullshit phrase used to sell privatizing profits while socializing failure. What made private profits OK was that both risk and failure were also born by the same private entity. It's time we got back to how regulated capitalism is supposed to work. Let the company face its own consequences and fail, or perhaps heal.

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