On the other hand, it frees up resources and market share for companies that have better policies and are looking beyond a 30 day time frame.

And it's not like the house would burn down. The assets wouldn't go poof, they'd be auctioned off. The employees will lose their jobs, but then again, a competitor will be hiring because they will have more business, unless there is no market for the offered product at all. And if there's no market at all, then why would we want to spend resources to run a company serving it? An expensive real-life Company Simulator 2000?

Exactly. We should be encouraging policies that flush out value-less companies. The financial markets can't be the winners of capitalism. The consumers have to be the winners of capitalism and the only way you do that is by finding ways to make money change hands more rapidly and making markets more perfectly competitive.

And how does the current system not cause huge job losses? The people who stand the most to lose when they lose their jobs still end up losing their jobs, either way.

The people who are remaining at the company after the layoffs are -- if the layoffs are done right -- the most valuable people, who would have the least trouble finding a new job if the restructuring fails.

The fact that we have both forms of bankruptcy, and that both are used, means that some companies survive and hence jobs survive as a result.