Comment by bonestamp2
2 years ago
Are they entirely to blame? No. Everyone who capitalizes on the deal shares some blame. The consumer and the economy do get hurt. Late stage capitalism is starting to destroy what was good about capitalism and we need regulations to keep things sane.
There is a finite amount of capital in the world (with a little more printed each year of course). But they're not printing 20% more every year, so companies can't keep expecting to grow by 20% every year forever. It's just not possible and once a company reaches certain thresholds, we need regulations that prevent them from destroying the good parts of capitalism for simply more money than they had last year.
I don't have the books of Red Lobster, but the economic rationale is that if the enterprise is continuing to persistently lose money, it is destroying capital not increasing it.
It's likely that the real estate that the Red Lobsters were built on was worth more than the entire enterprise. In such a case the implication is that the ongoing operation is negatively valued. Splitting the real estate off and valuing the restaurants at zero is a rational action -- and good for the economy.
Put a mom and pop restaurant on the spot. Or a nail salon. Or anything that can justify its costs.