Alexandria Ocasio-Cortez

[Dahobbs 17,534]

9 minutes ago, EuroHorn said:

Well she is a proponent of taxing corporations at 90%. Who owns a corporation if it’s taxed at 90%?

As far as I know she hasn't proposed eliminating the graduated income tax scheme. 

[Incredulity 11,671]

37 minutes ago, Dahobbs said:

It isn't about not liking them, it is about ensuring that all externalities are accounted for when evaluating their benefit. We impose liability as one tool to bring those externalities within the economic system. Doing so on just the pipeline operator is one way to do that, but if our experience teaches us that it is insufficient for some reason (e.g., lack of operator resources to cover the liability), then extending liability to another entity in the transaction may improve the situation. We do the same thing for instance under consumer protection statutes where all businesses in the chain (manafucturer, distributer, and retailer) can all have liability for a faulty product. It ensures that some entity is available to the consumer. The businesses in the chain then have a separate set of rules that determines liability amongst each other. 

Manufacturers indemnify distributors, distributors indemnify retailers routinely in the normal course of business.

[Incredulity 11,671]

14 minutes ago, elfenix said:

"fresh"

February strawberries suck.

Oh and that's the free flow of goods, which != free flow of capital.

What fundamentally facilitates the free flow of goods?

 Barack Obama’s pen and phone?  

[Dahobbs 17,534]

5 minutes ago, Incredulity said:

Manufacturers indemnify distributors, distributors indemnify retailers routinely in the normal course of business.

Sometimes yes, sometimes no. Really irrelevant to my point. What do you think the purpose of indemnity is? It only matters if legal liability is an actual possibility. The point here is set the rules of who is liable. From there parties can agree to indemnify if they want. 

It is pretty clear that you have very little understanding of law or economics. 

Edited March 15, 2019 by Dahobbs

[Brisketexan 105,139]

Well she is a proponent of taxing corporations at 90%. Who owns a corporation if it’s taxed at 90%?

Sounds to me like you’re relying on circumstantial evidence there.

[Anastasis 23,469]

13 minutes ago, FondrenRoad said:

Actually, global shipment of out of season produce is a heavy contributor to global warming.  We should all be eating as local and as seasonal as possible.  We also shouldn't be drinking water that is bottled on an island on the other side of the planet when we have perfectly good tap water here.

Can I get a government subsidy for my JBG CSA?

[elfenix 34,240]

14 minutes ago, Incredulity said:

Got it.  I live in a mud hut.  You fly in a private jet.

Please sir, I want some more.

republican mantra: i can shit in your yard and you can't tell me to be responsible for it.

 

6 minutes ago, Incredulity said:

What fundamentally facilitates the free flow of goods?

 Barack Obama’s pen and phone?  

selling out american workers to the patrician classes

[FondrenRoad 4,378]

3 minutes ago, Anastasis said:

Can I get a government subsidy for my JBG CSA?

No, but your local farmers should while they sell you produce at the same price.  This is America.  We have to make sure to never offer a subsidy that could be used to benefit poor people directly.

[Incredulity 11,671]

Just now, Dahobbs said:

Sometimes yes, sometimes no. Really irrelevant to my point. What do you think the purpose of indemnity is? It only matters if legal liability is an actual possibility. The point here is set the rules of who is liable. It is pretty clear that you have very little understanding of law or economics. 

You don’t have a point. You have some fanciful perception/dream of a reality where liability is allocated by political will.  That would be catastrophically bad.

  Corporations fundamentally exist to limit liability.  That is the reason for their invention, to facilitate risk taking and limit risk.

[jimmyjazz 45,953]

3 hours ago, EMAWesome said:

Because so many people, especially young people, in this country are morons and gullible morons at that.

I wonder how many of them know what kinds of evidence are admissible in court?

[jimmyjazz 45,953]

2 hours ago, Incredulity said:

She doesn’t “know” it.  She was fed it, on a bet no one else did.

Thats the problem.

Ah, the newsletter must have come out late this afternoon.  The new talking point I'm seeing all over social meida:  AOC is just a front for a competent staff.

Jesus Christ you people are fucking lunatics.  She could literally dissect you in any debate about anything.  (I mean that in the millennial sense of "literally", which is to say I don't think she could dissect you in a debate over what it feels like to be a drooling sycophant, because you've got that down pat.)

[Anastasis 23,469]

5 minutes ago, FondrenRoad said:

No, but your local farmers should while they sell you produce at the same price.  This is America.  We have to make sure to never offer a subsidy that could be used to benefit poor people directly.

It's fucking hilarious that you think that locally sourced organic produce for all is just one well crafted government intervention away. 

 

This is what government sponsored nutrition for poor people looks like.

[Dahobbs 17,534]

19 minutes ago, Incredulity said:

You don’t have a point. You have some fanciful perception/dream of a reality where liability is allocated by political will.  That would be catastrophically bad.

  Corporations fundamentally exist to limit liability.  That is the reason for their invention, to facilitate risk taking and limit risk.

Oh dear god. Can you keep a thought for longer than 5 seconds? Liability is established by government fiat. That is it. So, in that sense, it literally only exists due to the political will of the public.

The discussion here is about how we as a society set the rules of liability. Yes, one of the rules we created allowed for a limitation of liability for shareholders of corporation. That doesn't make corporations a necessity or basis for our economic system. And it doesn't make ill-advised a discussion about how liability is determined when certain harms occur.

You are just spouting terms and words of which you have zero understanding. 

Edited March 15, 2019 by Dahobbs

[wildcat09 29,354]

I’ve never seen someone with as big a boner for status quo bias as incredulity.

[FondrenRoad 4,378]

1 minute ago, Anastasis said:

It's fucking hilarious that you think that locally sourced organic produce for all is just one well crafted government intervention away. 

 

This is what government sponsored nutrition for poor people looks like.

I didn't say a thing about government intervention nor did I say anything about organic.  You're the one that brought up a subsidy.  I only pointed out that shipping produce all over the world is a big contributor to global warming.  I'd like people to actually give a shit on their own.  But I do understand that we need government coercement to point people in a healthy or societally beneficial direction.  It need not always be subsidy.  We could also tax the fuck out of your Milk Duds instead, and have that tax subsidize health insurance premiums.

And really, you should take better care of yourself.  None of that shit in your cart is even comparatively cheap. You can eat more healthy and cheaper than that, you can live longer, and you can save the rest of us from covering your triple bypass and foot amputation when you end up in the ER with no insurance.  Everyone can win.

[Incredulity 11,671]

7 minutes ago, Dahobbs said:

Oh dear god. Can you keep a thought for longer than 5 seconds? Liability is established by government fiat. That is it. So, in that sense, it literally only exists due to the political will of the public.

The discussion here is about how we as a society set the rules of liability. Yes, one of the rules we created allowed for a limitation of liability for shareholders of corporation. That doesn't make corporations a necessity or basis for our economic system. And it doesn't make a discussion about how liability is determined for certain harms that occur meaningless.

You are just spouting terms and words of which you have zero understanding. 

How much liability does the hospital that delivered Tim Sloan have for global warming because WF loaned money to Dakota Access Pipeline?

I will take the answer in nearest billion.

[Incredulity 11,671]

12 minutes ago, Dahobbs said:

That doesn't make corporations a necessity or basis for our economic system. 

How about this, Go operate as a sole proprietor for a couple of decades and report back on the results.  

Maybe inquire with an attorney if that is a good idea or if you should......wait for it..........incorporate.  

I will give you a hint what 100 out of 100 are going to recommend.  But, you’re probably right corporations aren’t a necessity.  What’s the worst that could happen?

 

 

[cactusflinthead 27,598]

3 hours ago, TwiceHorn said:

Can we stop arguing about "socialism" and "capitalism", for fucks sake.  Until someone starts advocating government ownership of the means of production, we're talking about policies that lie somewhere on a spectrum between unfettered, free-market capitalism, which doesn't exist and hasn't existed in the US, ever, and pure socialism, which doesn't exist anywhere anyone wants to live.

Calling one or the other "socialism" or "capitalism" is meaningless drivel designed to polarize and trying to argue it pro or con as one or the other is even worse.

AOC promotes socialistic policies, not socialism, as far as I can tell.  Bernie same.  Maybe y'all are privy to some agenda I'm not.  The GOP, to the extent it promotes anything other than soundbites, promotes capitalistic policies that are just a masque for selling out to big business interests that give them money (a lot of Dems are guilty of this too, of course).

/end rant

 

Rant more. 

[FondrenRoad 4,378]

8 minutes ago, Incredulity said:

How about this, Go operate as a sole proprietor for a couple of decades and report back on the results.  

Maybe inquire with an attorney if that is a good idea or if you should......wait for it..........incorporate.  

I will give you a hint what 100 out of 100 are going to recommend.  But, you’re probably right corporations aren’t a necessity.  What’s the worst that could happen?

 

 

You are actually proving his point. You are forming a corporation so you can separate yourself from societal harms your corporation may cause. Perhaps if you had all your skin in the game, you'd better balance community service with maximizing profit. For sure, you'd proactively fix that loose step before someone gets hurt. And maybe you'd even think about disposing of your industrial waste properly instead of tossing it in the river out back. 

[Incredulity 11,671]

31 minutes ago, wildcat09 said:

I’ve never seen someone with as big a boner for status quo bias as incredulity.

JFC. Corporate limited liability is a fundamental pillar of Economic Liberalism.  Which is absolutely the foundation of all western economies.

 

[Incredulity 11,671]

11 minutes ago, FondrenRoad said:

You are actually proving his point. You are forming a corporation so you can separate yourself from societal harms your corporation may cause. Perhaps if you had all your skin in the game, you'd better balance community service with maximizing profit. For sure, you'd proactively fix that loose step before someone gets hurt. And maybe you'd even think about disposing of your industrial waste properly instead of tossing it in the river out back. 

Jesus.

Really? 

A corporation is liable for loose steps on its property and dumping toxic waste.

Should the company that sold the toxic waste dumping corporation paper towels be liable for the dumping as well?  How about the CFO’s wifes cousin? I hear he donates to the NRA.....gasp.

Edited March 15, 2019 by Incredulity

[FondrenRoad 4,378]

7 minutes ago, Incredulity said:

Jesus.

Really? 

A corporation is liable for loose steps on its property and dumping toxic waste.

 

Exactly, but the corporation can declare bankruptcy, and the owner can still keep that nice house on the hill and start a new corporation that dumps shit in the river leaving the taxpayers to clean up his old mess.

Credit to India for piercing the corporate veil and going after the Union Carbide CEO after Bhopal. The pussy didnt go over there and face the music though. The US wouldn't have even charged him if it had happened here. 

Edited March 15, 2019 by FondrenRoad

[cactusflinthead 27,598]

Well, while y'all were getting all distracted by goddamn nonsense Wilbur Ross and Meadows are figuring out things ain't what they used to be. 

And this 

Yeah, y'all keep arguing about who's an evangelical and what happened in 1980. 

Zero fucks. AOC has no time for you. But, the chair says she can have all she wants. 

Hillary Clinton can recede now. There is a new bitch in town. 

 

[jimmyjazz 45,953]

One thing I really struggle with is which Republican legislator I hate more:  Meadows, Graham, McConnell, Nunes, etc.  I mean, they're all despicable in their own unique way.  It's like a buffet, one dish laced with salmonella, one with botulism, one with bleach and so on, all yummy yet antithetical to my human condition.

Fuck Republicans.

[HenryJames 66,052]

So is EMAWesome swam or nah?

[Dahobbs 17,534]

8 hours ago, Incredulity said:

JFC. Corporate limited liability is a fundamental pillar of Economic Liberalism.  Which is absolutely the foundation of all western economies.

Corporations are a legal fiction we invented to facilitate economic development. But market based economics existed before corporations were created. The corporate form is not a fucking requirement for a market to develop. Do you actually think that market economics (the interaction of supply and demand to determine the value of a good) did not exist before the East India Company was created in the 1600s? Adam fucking Smith wasn't a fan of them. Maybe you've heard of him.

Anyway, I was trying to have an actual discussion with Twicehorn. Maybe you can spend this time getting an actual education rather than continually proving what an ignoramus you are. 

Edited March 15, 2019 by Dahobbs

[High Plains Drifter 11,049]

13 hours ago, Incredulity said:

Assuming AOC is correct on the technical issue, what this really shines a light on is the conflagration of laws that no one has any chance of following.

That clip is a total clown cirus of Toothy McLib quoting a staute no one,including Cummings, have any idea if applies.  Based on her previous, “don’t matter, moral perspective in right place” ambiguity on facts I certainly wouldn’t give her the benefit of the doubt.

 

Not "no one". At least one person in that room knows if the law applies. Hint: It ain't one of the old white men.

[Hank Scorpio 17,729]

29 minutes ago, Dahobbs said:

Corporations are a legal fiction we invented to facilitate economic development. But market based economics existed before corporations were created. The corporate form is not a fucking requirement for a market to develop. Do you actually think that market economics (the interaction of supply and demand to determine the value of a good) did not exist before the East India Company was created in the 1600s? Adam fucking Smith wasn't a fan of them. Maybe you've heard of him.

Anyway, I was trying to have an actual discussion with Twicehorn. Maybe you can spend this time getting an actual education rather than continually proving what an ignoramus you are. 

[wildcat09 29,354]

9 hours ago, Incredulity said:

How about this, Go operate as a sole proprietor for a couple of decades and report back on the results.  

Maybe inquire with an attorney if that is a good idea or if you should......wait for it..........incorporate.  

I will give you a hint what 100 out of 100 are going to recommend.  But, you’re probably right corporations aren’t a necessity.  What’s the worst that could happen?

 

 

Yes, there indeed are economic benefits to limiting liability. Truly you are among the world's most brilliant people for recognizing such. But the truly radical idea that some people are proposing is: what if, in addition to said benefits, there are also drawbacks? 

[Incredulity 11,671]

1 minute ago, wildcat09 said:

Yes, there indeed are economic benefits to limiting liability. Truly you are among the world's most brilliant people for recognizing such. But the truly radical idea that some people are proposing is: what if, in addition to said benefits, there are also drawbacks? 

Dealing with the negatives is what regulation and laws are for.  That's the way to deal with it, not with the blowing of political winds.

 

[Dahobbs 17,534]

19 minutes ago, Incredulity said:

Dealing with the negatives is what regulation and laws are for.  That's the way to deal with it, not with the blowing of political winds.

 

You understand we are discussing the possibility of congress passing a law that would extend liability to lenders of certain major projects (e.g., pipelines). I honestly don't have any inkling what you mean by "political winds." 

For a more concrete example of how this could work (based on how the law works in other instances), the line of liability could looks like this:

Lender --> operator --> public. 

The public could pursue either the lender or the operator for damage caused by the pipeline. Both would be liable to the public. But the Lender would have a claim against the operator for any liability it occurred. Thus, if the public sued the lender but not the operator, the lender would just add the operator to the suit. The only time the lender would actually have to pay anything would be in the instances where the operator wasn't available (e.g., shuttered company) or where the operator had insufficient assets to cover the liability.  This would incentivize lenders to ensure that operators had sufficient resources or insurance coverage before lending to them (they already do that to an extent, this would just increase the amount necessary) and that operators had sufficient standards and procedures to prevent incidents. Ideally, this arrangement would add another check to make sure projects are developed appropriately and safely, provide a backstop for the public in instances of insufficient operator resources, but not overly burden the flow of capital. 

I'm not saying this is the best idea in the world, but it certainly isn't absurd to discuss it and it isn't out of line with our jurisprudence in other areas of the law. AOC flubbed raising the issue in her questioning (that sort of questioning is difficult for even a seasoned litigator), but it is still a worthwhile issue to discuss. 

Edited March 15, 2019 by Dahobbs

[TwiceHorn 31,471]

11 hours ago, Dahobbs said:

It isn't about not liking them, it is about ensuring that all externalities are accounted for when evaluating their benefit. We impose liability as one tool to bring those externalities within the economic system. Doing so on just the pipeline operator is one way to do that, but if our experience teaches us that it is insufficient for some reason (e.g., lack of operator resources to cover the liability), then extending liability to another entity in the transaction may improve the situation. We do the same thing for instance under consumer protection statutes where all businesses in the chain (manafucturer, distributer, and retailer) can all have liability for a faulty product. It ensures that some entity is available to the consumer. The businesses in the chain then have a separate set of rules that determines liability amongst each other. 

You know what I meant by "like."  Sure it's not without precedent, but it's what you do after efforts to directly regulate fail.

But more to the point, AOC, in her "argument" with the Wells Fargo guy, wasn't outright advocating anything specific, but her questioning either showed an ignorance of legal causation and liability, or, more unlikely, a nascent position for placing liability on lenders.for undesirable practices of borrowers.  Probably most of all, though, she just wanted to associate more or less neutral businesses (banks, in their lending capacities) with more objectively "evil" businesses (pipeline companies and private prisons).

If she had wanted to be more pointed in her questioning, and less grandstanding, she could have asked if WF knew that pipeline borrowers committed environmental torts, or private prison borrowers "caged children," and if not why not and why doesn't that affect their lending practices.

 

Also, and possibly most importantly, the US Congress has about zero business legislating in the area of lender liability.  That sort of thing has always been committed to the states and should remain so.  Just because the feds can impose a solution doesn;t mean they should.  We have almost entirely lost sight of that reality. And it's mostly because of federal legislators grandstanding and pandering to some constituency rather than any desire to effectuate solid legislation for the good of the country.

Edited March 15, 2019 by TwiceHorn

[Dahobbs 17,534]

1 minute ago, TwiceHorn said:

You know what I meant by "like."  Sure it's not without precedent, but it's what you do after efforts to directly regulate fail.

But more to the point, AOC, in her "argument" with the Wells Fargo guy, wasn't outright advocating anything specific, but her questioning either showed an ignorance of legal causation and liability, or, more unlikely, a nascent position for placing liability on lenders.for undesirable practices of borrowers.  Probably most of all, though, she just wanted to associate more or less neutral businesses (banks, in their lending capacities) with more objectively "evil" businesses (pipeline companies and private prisons).

If she had wanted to be more pointed in her questioning, and less grandstanding, she could have asked if WF knew that pipeline borrowers committed environmental torts, or private prison borrowers "caged children," and if not why not and why doesn't that affect their lending practices.

Yeah, I agree. I've already said AOC's questioning was poor and appeared to come from ignorance. But the idea that lenders should have some liability isn't completely absurd. I'm trying to get away from what AOC actually did, and address the more interesting question of whether the spirit of what she was suggesting is tenable. I think, as I outlined in my post above, it is. 

[Incredulity 11,671]

I absolutely understand all of that.

As Sloan said lenders aren't the business operators.  Making lenders quasi-operators is a bad idea.  

For one it would put more economic power in the hands of lenders.  Is anyone in favor of large banks and quite specifically WF having greater control and responsibility for economic activity?

Pass a law that pipeline operators have to carry an environmental bond or some other financial surety.(frankly, they may well have to today)  That is the correct way to deal with it.

[Macanudo 12,978]

16 minutes ago, Dahobbs said:

Yeah, I agree. I've already said AOC's questioning was poor and appeared to come from ignorance. But the idea that lenders should have some liability isn't completely absurd. I'm trying to get away from what AOC actually did, and address the more interesting question of whether the spirit of what she was suggesting is tenable. I think, as I outlined in my post above, it is. 

So if a bank lends to a developer building office high rises and said high rises turn up with a design flaw that collapses and kills people, the bank has some liability?

[Message Board User 12,395]

C'mon y'all, she's a child and still learning.

 

[Dahobbs 17,534]

20 minutes ago, Macanudo said:

So if a bank lends to a developer building office high rises and said high rises turn up with a design flaw that collapses and kills people, the bank has some liability?

Not currently, no. But it is a system that could work. If it were to be implemented it would have to be limited to project-specific lending as opposed to general lending. Remember, as I've framed it the goal is to improve accountability in the system and provide a backstop for the public in case of harm. Imparting liability on a creditor who extended a general line of credit wouldn't accomplish these purposes because that creditor wouldn't have been involved in the specific project at all, and thus have no ability to offer meaningful oversight. Project specific-lending presents a different situation because there the creditor is fairly intimately involved in the project and would be in a position to offer substantial oversight to the development of the project. 

From a grander legislative view, you'd also have to consider how wide you'd want the scope of such laws to be. Generally, my belief is that any such laws should be fairly narrowly targeted at the types of projects that could implicate or damage the public as a whole rather than merely damaging specific individuals. 

Again, let me be clear, I'm not advocating for these type of laws. But in general I do believe that liability and direct regulation can work hand-in-hand to solve the problems of economic externalities. Liability schemes allow the public to fill in the cracks that are missed by direct regulation, usually either due to regulatory overload or intentional neglect.  

Edited March 15, 2019 by Dahobbs

[Hugo Stiglitz 23,367]

 

[GSU&UT 1,798]

29 minutes ago, Message Board User said:

C'mon y'all, she's a child and still learning.

 

What am I missing here Captain Galaxy Brain? This is how a lot of us speak if that's what you're criticizing, and if it is then hoo boy.

[Gil Bang 25,958]

Watching her questions again, it just reinforces what I've always thought:

Don't turn your back on a PR because they're probably carrying a switchblade. 

[Dbeasy 15,051]

Ignore Adam and the other guy. This interview is not a good look for her.

[UpperWestside 6,163]

I am proud of how ambitious she is and that she wants to do things to help out the segment of our population that needs it. 

She does say some things that are wrong and uninformed. What I chalk that up to is she is 29 years old. She has a whole lot to learn about the world around her. With age and experience you learn from things you said or did that were wrong or incorrect.

To be that age though and trying to fundamentally reshape how out country works is a pretty daunting task, but she's trying. I think she will eventually find that she needs to meet folks halfway if she wants to get at least some of her agenda passed. 

[Dahobbs 17,534]

1 hour ago, longhornmatt said:

You would be asking traditional lenders to take on more potential liability than even the shareholders of the borrower, without the upside of an equity interest in the borrower or the project.  In fact, the bank would have more liability than a private equity group or public offering investor funding the project with equity investments that actually get to reap the rewards of the profits in perpetuity.

How would this not disrupt the flow of capital?  Why would anyone ever make a loan instead of an equity infusion to fund a project like that under this proposed scheme?   Maybe for a 30% interest rate?  Then that means the operators are going to have a lot less access to capital.  

And unless you want to leave a giant loophole for projects funded by equity offerings to be exempt from this regulatory structure, it also means you’re going to have to pierce the corporate veil for major projects (not because of fraud or something nefarious, but ultimately just because you don’t like the industry politically) - although these are exactly the type of projects that need the corporate shield or else they simply won’t happen.  How many sole proprietors or general partnerships get in the multi billion dollar infrastructure construction business?  What happens when Ma and Pa investor who have some pipeline stock in their 401k get a bill for their share of liability next time there’s a spill?

Well, the limitation on liability is that the only real exposure is if the operator/developer has insufficient coverage. The lender is essentially indemnified by them under this liability scheme. The lender could further reduce its risk by ensuring that the lendee has sufficient resources and/or insurance coverage before lending for major projects. 

As to projects funded by equity offerings, I hadn't contemplated extending this liability scheme to that sort of system and I dont really see a need to. Such enterprises typically still leverage the equity raised with money from a lender. I really dont see the need to treat one type of equity (a standard corporate shareholder) different from another type (equity offerings for specific project). 

I fully admit that I haven't fully fleshed out a comprehensive scheme. I am merely pointing out that it is possible, compatible with our law, and could potentially be beneficial. I personally doubt that such a change would be worth it, not really because I think it would cause long term damage, but because the same goals can probably be addressed without the short term impact of a significant change in the law. It is still worth discussion even if ultimately rejected. 

[Hugo Stiglitz 23,367]

Edited March 16, 2019 by Hugo Stiglitz

[Incredulity 11,671]

55 minutes ago, Dahobbs said:

Well, the limitation on liability is that the only real exposure is if the operator/developer has insufficient coverage. The lender is essentially indemnified by them under this liability scheme. The lender could further reduce its risk by ensuring that the lendee has sufficient resources and/or insurance coverage before lending for major projects. 

As to projects funded by equity offerings, I hadn't contemplated extending this liability scheme to that sort of system and I dont really see a need to. Such enterprises typically still leverage the equity raised with money from a lender. I really dont see the need to treat one type of equity (a standard corporate shareholder) different from another type (equity offerings for specific project). 

I fully admit that I haven't fully fleshed out a comprehensive scheme. I am merely pointing out that it is possible, compatible with our law, and could potentially be beneficial. I personally doubt that such a change would be worth it, not really because I think it would cause long term damage, but because the same goals can probably be addressed without the short term impact of a significant change in the law. It is still worth discussion even if ultimately rejected. 

No, it’s not worth discussing. It is a catarophically stupid concept. Read LHM’s post again at least a half dozen times.   

 

[Dahobbs 17,534]

1 hour ago, Incredulity said:

No, it’s not worth discussing. It is a catarophically stupid concept. Read LHM’s post again at least a half dozen times.   

 

I did. Read mine. You are categorically a moron, so excuse me if I don't take things you say seriously. 

[TwiceHorn 31,471]

4 hours ago, longhornmatt said:

You would be asking traditional lenders to take on more potential liability than even the shareholders of the borrower, without the upside of an equity interest in the borrower or the project.  In fact, the bank would have more liability than a private equity group or public offering investor funding the project with equity investments that actually get to reap the rewards of the profits in perpetuity.

How would this not disrupt the flow of capital?  Why would anyone ever make a loan instead of an equity infusion to fund a project like that under this proposed scheme?   Maybe for a 30% interest rate?  Then that means the operators are going to have a lot less access to capital.  

And unless you want to leave a giant loophole for projects funded by equity offerings to be exempt from this regulatory structure, it also means you’re going to have to pierce the corporate veil for major projects (not because of fraud or something nefarious, but ultimately just because you don’t like the industry politically) - although these are exactly the type of projects that need the corporate shield or else they simply won’t happen.  How many sole proprietors or general partnerships get in the multi billion dollar infrastructure construction business?  What happens when Ma and Pa investor who have some pipeline stock in their 401k get a bill for their share of liability next time there’s a spill?

That's a pretty good disquisition on why it's a shitty idea.  In keeping with the Coase theorem, we have had pretty steady commercial rules/laws here in the US for the better part of a century.

I think it's very dangerous to upset those rules in pursuit of some other agenda, unrelated to commercial practices. 

The term commercial is used here to be distinguished from consumer, investment, insurance and other related financial activities.  Just workaday business-to-business relations.  Those commercial rules by and large aren't hurting anyone.

 

Edited March 16, 2019 by TwiceHorn

[Incredulity 11,671]

Further I guarantee you HQ at WF was a shitstorm rating clients to potentially get rid of based on this crap.

Also, some small pump manufacturing company that services the oil industry is getting raked over the coals by some mid-tier bank because the banks Chief Risk Officer is a sheep.

[Incredulity 11,671]

42 minutes ago, Dahobbs said:

I did. Read mine. You are categorically a moron, so excuse me if I don't take things you say seriously. 

I am not the one imagining some fictional world where a business can completely insure every risk associated with operating a business.  

 

[wildcat09 29,354]

29 minutes ago, Incredulity said:

I am not the one imagining some fictional world where a business can completely insure every risk associated with operating a business.  

 

God forbid we expect someone to be responsible for harm they cause to others. Thank god that’s not something we’ve ever been dumb enough to try!