[quote=harvey][quote=CA renter]I’m also greatly opposed to limited liability if there is no commensurate limit to the upside. [/quote]
You never cease to have strong opinions about things that you simply do not understand.[/quote]
This is particularly hilarious considering the fact that you constantly opine about things that you know little/nothing about, and you don’t even qualify it with an “IMO,” you make declarative statements as if your opinions were facts. You have yet to prove me wrong about something; no, your opinions and name-calling don’t count as proof of anything. It’s particularly humorous when the subject is something you *clearly* know nothing at all about. This is proven by the fact that you cannot find anything to back up most of your statements (you hate it when I “copy and post” data and links that back up what I’m saying, too! In your wacky world, opinions are more important than facts.), and your statements are so incredibly false and ridiculous that it appears you’re more troll than actual poster who wants to engage in genuine debate.
[quote=harvey]If companies were not limited liability, then shareholders (including CalPERS) would be on the hook for the debts of every company they invest in. If someone purchases a stock, they could lose more than what they paid for it. Please explain how that would be a good thing.
Anybody who lends money to a limited liability company knows the rules and risks. If they don’t like the risks, they don’t lend. It’s that simple. The system works, it has worked for centuries.
And why would you want to limit the upside of an investment? What would happen when a company reaches this artificial upside limit? It just stops?
Sorry folks, we’d like to make the iPhone you want but Apple can’t do any more hiring because it’s not fair that Apple is successful…
This Marxist planned economy fantasy of yours is just nonsense.[/quote]
There is no reason for risks to be divorced from rewards. None. The fact that you suggest that they should be is indicative of your ignorance. What would happen if we didn’t have limited liability? People would be more careful about where they invest their money, and speculation would be reduced dramatically — which is a good thing. It should be incumbent upon the shareholders (and executives and other responsible employees) to do their due diligence and make wise — and responsible — choices; why should creditors be the only ones responsible for knowing what they’re getting into?
It would also dramatically reduce the careless risks taken by those who put profit above all else — risks that, under our current system, are born by those who often have no say in the decisions that cause so many of these economic and environmental and legal problems (like cars that catch on fire, or accelerate for no reason; or when mortgages and their derivatives blow up the economic system; or when pollutants are pumped into potable water sources…). If people knew they could be held personally responsible for these things, I can assure you that they would make far better decisions. More than anything, this should pertain to the major decision makers (who are often the largest individual shareholders) more than it does to the average individual stock investor, IMO. The decision makers should have the greatest liability.
And your reading comprehension problem rears its ugly head, yet again. I’ve never said that limited liability shouldn’t exist at all, just that the rewards and risks should be balanced. If the risks are limited, then the rewards should be limited as well. And I’m referring to the broader concept of limited liability, too, not just where debt and creditors are concerned. Liability for tort actions — and who is responsible for insurance and legal defense costs of an individual officer/executive/shareholder — also fall under this umbrella. Limit the liability, limit the rewards.
[quote=harvey][quote]And costs can be dramatically reduced if we eliminate the corruption that exists between private entities and the govt.[/quote]
Excellent! You are in favor of eliminating collective bargaining for public-sector unions.[/quote]
Absolutely! I want labor’s money out of politics, too; though fraud, waste, and abuse are more likely to happen between private contractors (among a host of other private interests) and public entities because the private stakeholders are less scrutinized and better protected than public employees. We can eliminate labor’s money just as soon as capital’s money is out (and every other special interest group’s money, too) — ALL OF IT. Until then, labor absolutely needs to have a seat at the table.
