I think quacked's point was that sometimes it's not a very good signaling system. Neither is TCP/IP in some cases, and sometimes neither are cytokines (to use a biology example). These are all evolved systems, to some degree; maybe they're the best we can hope for, but we should still keep an eye out for "version 2.0".
It is insane to me that we all have to shrug and admit that "well, we can't fix X problem because the money's not there" over and over again, when we have all of the labor hours and intellectual capital to do whatever we want as a collective species organism. With the right coordination, we could make every city look like a Miyazaki lake town. Or Disneyland. Or an exact copy of ancient Rome. We could scan every person alive every year and see whether or not they've got cancer. We could clean every river and every lake. We could send everyone a Nintendo Switch. That whole "bullshit jobs" memo gets circulated on HN all the time; how much of us could do actually cool shit if we didn't have to worry about paying for other people to help maintain society for us? I don't know, but it sure is frustrating watching Hertz sell off their fleet because their board is more worried about its share price than it is about whether or not Hertz, a car rental company, can rent out cars. (And I'm not blaming them for it- they're deadlocked in the same standoff everyone else is.)
One of my research interests is trying to make a contribution to what you call version 2.0, through better measures of subjective wellbeing.
More like worried about bankruptcy and going out of business.
Another commentator downthread mentions the fragility vs efficiency tradeoff, and that's certainly something encouraged by financializing the economy. By making it possible to easily switch between stocks and flows (capital/income in this case pay in full / pay debt) and encouraging whatever makes firms look good in the short term, the financial system helps cause this kind of thing.
We get towers built higher but not necessarily safer.
Which is great, when things fit the model (the stocks or bonds involved pay retirees longer, make people wealthier, etc), but also allow people to build much higher castles of cards than they previously could have before something toppled them over.
Panics, crashes, defaulting on debt, etc. have been around as long (and probably longer) than we have historical records, but wow does the modern system take the cake for scale!
https://www.youtube.com/watch?v=xkQn56Dtslk
If you're a rental company, looking at ~$0 income for the next year, and the need to pay for, maintain, and garage their car fleets, then you're top priority is to shore up the balance sheet and keep your corp afloat. What the car buyer's market will be in 18mo is a more distant concern.
Selling your only operating assets just because they're not operating at the moment seems pretty short sighted.
Creditors may have forced their hand a degree, but to me it feels like a factory selling their machinery because demand is down this year.
If you're going to sell all your cars as a rental company, might as well liquidate your whole company and close up shop.
Over-indebted companies is a very Anglo (US/UK) and Japanese thing. There are plenty of companies in continental Europe (Germany, Italy, France) who operate with much less debt than their US counterparts. A good example is Aldi. They have no debt on their balance sheet anywhere, not even for inventory. By the standards of American business culture, that is 100% absurd.
I'm really not sure who's right. It's optimization vs survival.
Firstly, Aldi is a private company (actually two entirely separate private companies, ALDI Nord and ALDI Süd, who share the brand name). So AFAIK they do not publish annual financial reports like a public company would be required to do. So how do you know there's no debt on their balance sheet?
Companies House filings for ALDI Süd's UK subsidiary, ALDI Stores Limited, do show debts and interest expenses so it's certainly not correct to say they "have no debt on their balance sheet anywhere"[1]
Sure the pandemic messed them up, but that was really a once in a generation at most event. If thats what it took to sink your businessz I wouldn't call it very fragile.
I also think they and their creditors made poor decisions.
Selling your only operating assets in order to balance the books is a suicidal move no matter the industry. It's selling off your only way of making money. It's like a software engineer selling their workstation when times are tough.
I'm honestly curious to find out whether most of us will even still be driving cars powered by fossil fuels by the time the next pandemic hits - as tech goes, it's only been around for a few generations. People will find other transit solutions if cars themselves get phased out. Or maybe we'll still have 'cars' with something dramatically different going on under the hood that car owners of today would barely recognize.
Dying now and cashing out is better than burning money for a few years and cashing out for less then.
They paid down their debt on the cars, but they have lots of other financial obligations and operating costs that will be ongoing if they continue to operate, and they now have a hugely diminished capacity to make revenue.
They sold their fleets because other people (the buyers) wanted them more, in the short term. Now they want to buy because they want a fleet again. It's a time horizon problem, or perhaps an uncertainty problem - how were they supposed to know how long the pandemic would last? Or perhaps a premature optimization problem because the business was predicated on a pandemic not happening. But I don't see it as a money problem, any more than a tcp/ip problem.