News release I'd like to read:
President Obama announced that he is studying the proposition of not bailing out large businesses to save them. It's not that a business would have to stay small it's just that mega-companies would not be able to get bailed out.
In the future companies should have to inform their employees when their loans are more than what they could immediately repay if the economy turned. Employees would then make the decision to invest, upgrade equipment, expand, save, increase salaries, pay execs large bonuses, or pay off loans. If an organization's board members knew with certainty that no one would come to bail them out they would make different choices.
Included in this proposition is the recommendation that stock holders agree to keep their proceeds in an escrow fund for a period of years just in case the business has a setback and needs the funds to stay solvent.
Companies should play by the same rules as everyone else—never borrow more than the value of ones assets. As consumers we shouldn't borrow more than our assets so that if we fail we can sell what's necessary so as to ensure that we honor our agreement with the lender. It's neither ethical nor responsible to support a CEO in financially ruining his/her company and make the rest of us pay for their failure.
