Comment by vlovich123
7 hours ago
You're basically advocating for unscrambling the omelet to be easier. Should be obvious why it's harder to unmix than it is to mix.
7 hours ago
You're basically advocating for unscrambling the omelet to be easier. Should be obvious why it's harder to unmix than it is to mix.
Splitting a large company is already done to shed and transfer liabilities. Divisional Merger Tactic / Texas Two Step. [0] [1] Keep the yoke and drop the albumen with time and patience.
[0] https://batesonlaw.com/divisional-merger-tactic-how-liabilit...
[1] https://www.creditandcollectionnews.com/u-s-supreme-court-de...
You can bet that if the board of directors could show that unscrambling the omelet would result in greater shareholder value produced, it would suddenly be really easy to do...
Happened with Dow-Dupont! A three-way split, even (from a two-way merger). Took roughly two years and was the shareholders' plan from the start. By most accounts it went very smoothly.
[1] https://www.investors.dupont.com/news-and-media/press-releas...
[2] http://www.dow-dupont.com/
Progressive corporate taxation could make it happen for reasons other than dodging the ghosts of chemical sins past!
On a technical level it would still be a nightmare. But yes it would actually get done.
My first tech job was at HP, in 2015, started there just in time work and live through that split. That was a smoother one from what I hear but it was not a fun job to have at the time
I’m advocating for controlling the damage. The way I said it is cutesy, not literal.
I intended it to point out that it’s too easy to merge companies together but it’s effectively impossible to stop someone from becoming anticompetitive without a real consequence.
If we can’t make it easier to rip them apart then we shouldn’t be so slap-happy about approving them in the first place.
Why skip this part ?
> legislation needs to either make it just as hard to merge two companies as it is to unmerge them
Nothing was skipped - the point is that this is directly analagous to unscrambling an omelet. Separating mixed things is significantly more difficult than mixing them.
"The laws says X" doesn't change whether X is possible or not.
It’s quite literally not analogous as breaking up companies has happened a bunch but no one has ever unscrambled an omelet
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Do you really think it's impossible to pass legislation that makes something that's currently easy hard without making the reverse any harder as well?
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Yes, this is obviously the ask: why doesn't government unmix the omelet. Your very body unscrambles the omelet and makes you. It's what intelligent things do when they are moving agency into the proper places.
what is the purpose of regulation except to resist entropy in such strategic places?
Progressive corporate taxation would give the market an incentive to do spinoffs and undo the merger wave.
Or we could just roll antitrust policy back to what it was before Ronald Reagan and Robert Bork installed the Consumer Welfare Standard, the idea that companies must be allowed to merge if they can scribble a tall tale with crayons on butcher paper about how the merger will benefit consumers, for sure, pinky promise. This is obviously mega-rigged, it comes from the Robber Baron era, it was defeated before (look up Louis Brandeis) and it can be defeated again (look up Lina Khan). They didn't even change the talking points (dontcha know, the Standard Oil monopoly reduced the price of Kerosene by 70%?!) -- time is a flat circle when it comes to anti-trust policy. Let's spin it back to the part of the circle where we win.
Progressive corporate taxation would lead to every company splitting its revenue and expenses across 50 shell companies, without actually splitting operations.
That’s one half. The other, more interesting half, recognizes that unscrambling the egg is difficult, so we must take more precautions before scrambling it in the first place.
I’ve been saying that an easy solution is just don’t allow companies with even modestly large overall sizes to merge or acquire other companies. At all. For any reason.
I think that despite this reform being a blunt instrument it would work surprisingly well.
It would allow companies that should have declined to decline and it would give massive incumbents a major incentive to innovate in-house.
No, they're advocating for more scrutiny of whether the omelet is going to be very bad for everyone who isn't part of the omelet (yes, this metaphor is weird, but I didn't introduce it)
I don't think it's particularly unusual for a company to spin off another company?
Undoing mistakes is usually difficult and costly, but still worth doing on the road to not making the mistake again. Grandfathering in the subversion of the economy and our democracy is worth fighting.
large corporations spin off divisions into separate companies all the time
Eh, thats a bit of a False analogy. spinning off a division of a company is easier than fully integrating another.
PE companies do it all the time.
PE companies do it with very little regard for if any of the pieces are viable and survive after the fact, so their model isn't one I'd suggest following.
From a public policy perspective it doesn't matter if some pieces are unviable and fail to survive. Across the entire economy, this creative destruction allows for quickly reallocating resources to more productive uses. Most of the companies that take PE investments do so because they're badly managed and unable to obtain capital from other sources; they would likely fail anyway. At least the PE investment gives them a chance to survive and brings in more financially disciplined management.
Maybe if a large company is anticompetitive and the parts would not survive on their own, we should be letting those pieces fail
its not unheard of for large public companies to do spinoff. a few examples that seem to have worked out fairly well
Phillip Morris / Altria / Kraft / Mondelez
HP / HPE / Agilent / Keysight