Sunday, September 21, 2014
Why Ordinary People Bear Economic Risks and Corporations Don't
consequences of bad bets and big losses by cashing out at the first sign
of trouble. The laws protect them through limited liability and bankruptcy.
was designed so people could start over. But these days, the only ones
starting over are big corporations, wealthy moguls, and Wall Street. Corporations
are even using bankruptcy to break contracts with their employees. When
American Airlines went into bankruptcy three years ago, it voided its
labor agreements and froze its employee pension plan. After
it emerged from bankruptcy last year and merged with U.S. Airways,
America's creditors were fully repaid, its shareholders came out richer
than they went in, and its CEO got a severance package valued at $19.9 million.
Posted by politzo at 9:00 PM