Should Sears/Kmart be allowed to go bankrupt?

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It depends on what you mean by allowed to go bankrupt. If you mean that rather than go bankrupt the government bails them out then no. A company unable to pay its debts is mismanaged, like the government itself. Society is better off with less mismanagement. So the government should not bail out a business. Such an act makes both institutions of mismanagement more powerful.

If by bankrupt you mean allowed to shed some of its debt but remain a company then that is unwise as well. Again, the business has been mismanaged and has severe institutional issues. Bankruptcy like this rewards the executives of the business who caused it to fail in the first place. It allows the diseased corporation to continue to mismanage assets but under artificial conditions that are special exemptions for that poorly run business. Here I have in mind airlines, which are perpetually going bankrupt. The bankruptcy law allows them to shed a few of their mismanaged features but the company as a whole remains fundamentally poorly structured and run.

True bankruptcy releases assets from the control of mismanagers. It allows the assets to be purchased by someone else who will then put them to their best use. For the economy as a whole it is the best remedy.
 
Vim71 said:
No, Minimum wage is too high. When you raise the minimum wage, you raise the cost of living. It solves nothing.
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A better solution is ending free trade, thus reintroducing tariffs.

An American worker cannot compete on a wage-price basis with a worker in China or Mexico.
“Free trade” averages the working-class standard of living between the participants. Awesome deal for the working-class in poorer countries. A totally raw deal for the working class in wealthier countries.

This is the fundamental reason we’ve seen the explosion of check-drawing, “Wal-Mart” culture in the US in the last 20 years. We sent the decent jobs that uneducated people can do to Mexico.

This has also had the unfortunate effect of slowing salary-growth for kids getting their college degrees. A BS in business is only worth about a quarter more than it was pre-NAFTA. Cost of living has nearly doubled in the same amount of time…

But who cares if my neighbor had his job shipped south? My socks are cheaper now. 😃
 
mikekle said:
Oh yes, it may put a lot of people out of work, but on the other hand, its not right to suppress technological progress just for the sake of keeping jobs or certain industries afloat…if we started doing that, we would plateau pretty quick in regards to technology. Just imagine if they had this mindset 100 yrs ago!
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People before profits; yes, just imagine. Maybe Nikola Tesla would have had his way and we’d find ourself in a whole lot less of a mess without 100+ years of scientific “progress” having occurred using dirty power rather than clean power. Anyhow there’s no point in selling the jeans if no one can afford to buy them.
 
Vonsalza said:
A better solution is ending free trade, thus reintroducing tariffs.

An American worker cannot compete on a wage-price basis with a worker in China or Mexico.
“Free trade” averages the working-class standard of living between the participants. Awesome deal for the working-class in poorer countries. A totally raw deal for the working class in wealthier countries.

This is the fundamental reason we’ve seen the explosion of check-drawing, “Wal-Mart” culture in the US in the last 20 years. We sent the decent jobs that uneducated people can do to Mexico.

This has also had the unfortunate effect of slowing salary-growth for kids getting their college degrees. A BS in business is only worth about a quarter more than it was pre-NAFTA. Cost of living has nearly doubled in the same amount of time…

But who cares if my neighbor had his job shipped south? My socks are cheaper now. 😃
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It also says alot about what the idea of a ‘successful business’ is and is not. Example, if a widget company claims they cannot be successful and profitable unless it pays employees the lowest pay legally allowable and has their product made by basically slave labor in some foreign factory…is that really a successful business? Not imo.
 
jeannetherese said:
I don’t have a problem with government supporting strategic industries; however, I’d much prefer nationalization of a bank over a bailout. That way, the bank becomes the property of the taxpayer and provided a different type of competition with private sector institutions.

While I like buying appliances at Sears, I’m not sure that Sears is worthy of nationalization.
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Nationization? :eek:
Where is that in the enumerated powers?
An absolutely horrendous idea
 
Hi Jon,
My point, regarding nationalization, is that if taxpayers are going to foot the bill to bail out a failing corporation, they’ve bought into the corporation and should receive ownership in accordance with their purchase.
 
jeannetherese said:
Hi Jon,
My point, regarding nationalization, is that if taxpayers are going to foot the bill to bail out a failing corporation, they’ve bought into the corporation and should receive ownership in accordance with their purchase.
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Thank you. I can understand that stance, and it lends support to the idea that government shouldn’t get involved in these kinds of issues. After all, if politicians want to bail out a business, they should do it with their own money. It is too easy to risk other people’s money
 
Business is Darwinian. If a business is not allowed to fail, it preloads the system. It is better to have a number of small earthquakes rather than pressure being allowed to build eventually causing a massively destructive one.
 
Maxirad said:
I’m particularly worried about blight affecting enclosed shopping malls myself. Check this, this, and this out.
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If Sears can’t meet its obligations, it has to go bankrupt. They don’t have the money to pay all the mall rent and other bills they have.

If they aren’t allowed to reorganize and go bankrupt, their landlords and others will force them into bankruptcy and liquidate their assets. Its bankruptcy regardless, whether its a reorganization or just a liquidation.

Retail outfits sometimes go belly up, its part of the cycle of life, birth and death, that businesses go through.
 
Kielbasi said:
Technology is constantly changing the way things are done. That’s history, do we really want to go back to the days of Ned Ludd?
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Thats kind of the underlying big question…is it best to suppress new technologies if their release and use would lead to many industries being obsolete and people being out of a job, or just let it happen?
 
mikekle said:
Thats kind of the underlying big question…is it best to suppress new technologies if their release and use would lead to many industries being obsolete and people being out of a job, or just let it happen?
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Absolutely, just let it happen.

Technological advances allow jobs to pop up elsewhere.

Advances in steel manufacturing allowed steel to be produced in sufficient quantities and quality to be suitable for thousands of steel sky scrapers and bridges to be built.

Not good for the masons that were put out of work, but that’s progress
 
JonNC said:
Do you remember Montgomery Wards? How about Gimbel’s? Levitz furniture? Property eventually gets repurposed. No need to bail them out.
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I grew up in a pretty underpopulated and rather primitive part of the Ozarks. There were tiny little stores everywhere that carried a very limited and specialized line of goods.

For anything else, there were the “Monkey Ward” and Sears catalogs, and people really used them. I guess they were the “Amazon” of the day. Why those retailers weren’t the first in computerized sales is beyond me.

Of course, the catalogs had a secondary purpose back then. Old issues served a useful purpose in the outhouses that were the prevalent restrooms of the time. 😉 You could read what was left of them while you, uh, did your business.

Can’t do that with computer purchasing.
 
Ridgerunner said:
For anything else, there were the “Monkey Ward” and Sears catalogs, and people really used them. I guess they were the “Amazon” of the day. Why those retailers weren’t the first in computerized sales is beyond me.
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A lot of time, established companies with a successful business model get set in their ways and think nothing will ever change Sears probably thought that business would go on as usual for eternity, they were the undisputed king of retail in the 1980’s. Montgomery Ward, on the other hand, was already in bankruptcy by the early 90’s.

Sear did remake itself with their store building beginning in the 1920’s and 1930’s, before that they were strictly catalog. Helped them do business in your urban centers and not just the backwaters of the Ozarks and other similar locations.

But they didn’t reinvent themselves again, and that was that.
 
I’ve moderately followed the Sears story since the advent of Edward Lampert, having read the book The Big Store a number of years back. Heck, I’m currently typing this on an old desk that was once at the main Sears Homan Ave. HQ!

My sense is that Lampert bought it as a real estate play, but no one has offered him what he feels it’s worth. . . and the resulting years have made the investment negative.

I’m on my city plan commission, and I’m TIRED of having businesses leave their messes for local governments to clean up (and pay for). Let Sears/KMart fail and pick up/sell their pieces for whatever they can get.

We need fewer business-leaches, not more.
 
mikekle said:
In 15-20 yrs time, we will be saying the same about walmart and other really popular places right now, its just the way retail works, stores come and go over the years, what is popular now will be obsolete within 20 yrs, on to the next best thing.

From a recent article I read in Popular Mechanics, one of the technologies they are working on right now that is said to be available in about 10 yrs is the ability to email or ‘text’ tangible objects…once that technology is available to the public, I cannot see any brick and mortar retail stores sticking around for long. If someone can go online, buy a pair of jeans and then receive them by email within minutes…physical stores could never compete!
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Is that article online? I’m curious to know the difference between the technology discussed in the article and Amazon dash buttons.
 
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