As will this comment thread. We saw the same rhetoric on Holmes and Bankman-Fried. Once they were charged it was obvious they’d get off. Once convicted that they’d get a light sentence. Once sentenced that they’d have their sentences shortened, et cetera.
It’s a lazy learned helplessness that’s always potentially right because it feeds into a type of cynicism that has always been part of human nature in every culture since the beginning of history.
>We saw the same rhetoric on Holmes and Bankman-Fried. Once they were charged [...] It’s a lazy learned helplessness that’s always potentially right because it feeds into a type of cynicism
The gp's key argument for Boeing is based on the "Too Big To Fail" idea. I.e. Boeing's deep relationship with the government.
So far in this subthread, nobody has actually engaged with that specific part of his argument. Mentioning Theranos Holmes and FTX SBF who are _not_ deeply intertwined with the government like Boeing isn't really a counter to that.
The cynicism comes from previous "too big to fail" situations such as 2008 Financial Crisis and nobody from Goldman Sachs, etc going to prison for fraud. Fines and financial settlements as punishments -- yes. But jail time for those bank executives -- no.
It points to a subtle part of gp's comment I think replies are overlooking which is "corporation" vs "employees":
- Boeing Inc the corporate entity may be criminally charged and found guilty. The corporation then pays a punitive fine or settlement. (The proverbial "financial slap on the wrist.")
vs
- actual Boeing employees are found guilty and sent to jail. Gp's "this will go nowhere" frustration is based on this scenario which history has shown to be very unlikely to happen.
> Boeing is based on the "Too Big To Fail" idea. I.e. Boeing's deep relationship with government
These are two separate concepts and you’re right, nobody has directly addressed them. Let me try.
Too big to fail “is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and therefore should be supported by government when they face potential failure” [1]. A key part to it is financial institutions can’t meaningfully go bankrupt—they don’t materially have tangible assets, they just fail. (It’s why bad banks go into receivership.)
Boeing is not a bank. It’s not built almost solely on confidence. It, like the auto manufacturers, can go bankrupt without threatening its production. (GM and Chrysler went bankrupt [2]. Bankruptcy doesn’t mean we raze the factories.)
Put succinctly, Boeing is NOT too big to fail.
It does, however, have a deep and diverse relationship with government. Boeing has, by design, employees in every Congressional district. It’s strategically important to the U.S. and its allies and possesses an industrial-strength wheel greaser.
That broad base of employees protects the plants. But as we’ve already seen, financial failure and even prosecution of senior leadership doesn’t blow up the plants. The strategic importance, meanwhile, is a two-edged sword. Boeing has power because it’s useful. Not only is that usefulness preserved through reörganisation, but if someone can claim it’s increased through it, the usefulness becomes a source of weakness. (Nobody cares if Chik-fil-a is mismanaged. They do when Boeing creates a national embarrassment at the ISS.)
The only part that remains is the wheel greasing [3]. In this, Boeing is far from unique. It’s also unprotective against financial failure. Because, again, the wheels stay on if Boeing is reörganised. That may not be true if it continues on its current path.
Especially as we’re lining up for a potential war in the South China Sea, Boeing’s military-industrial ties may be what forces those who’d prefer to look the other way to stare down the problem. We can’t win that war, if we have to fight it, with Boeing a shitshow. And we’re more likely to have to fight it every time Beijing sees it’s a shitshow.
So yes, Boeing does have a deep relationship with government. But that doesn’t protect it from criminal prosecution or financial failure, and in some cases, may encourage the people pining for its reörganisation.
Dissecting the origin of "too big to fail" and the wikipedia cite isn't relevant to gp's argument because many journalists/observers in media already use "too big to fail" to characterize companies like Boeing:
>Your counterargument is there are memes that say Boeing is TBTF, Q.E.D.?
I wasn't making any counterargument.
I can 100% agree with you that TBTF was originally associated with the banking industry but simultaneously show that this isn't the meaning that others are using for Boeing. This seems like an obvious fact from a neutral viewpoint of seeing how language usage evolves (e.g. see the google examples) so not sure why stating it is controversial.
> this isn't the meaning that others are using for Boeing
But that’s why it’s wrong. TBTF only works because financial institutions are built on confidence. You can’t reboot them through bankruptcy.
Boeing can be put into bankruptcy to facilitate reörganisation without causing ripple effects. (Like GM and Chrysler were.) TBTF as a general-purpose meme fundamentally doesn’t work.
As someone who is starting to work on a defense product, I can tell you that defense products are also built on confidence a lot more than you think. You have to make a lot of claims that your users can't test, so they rely on things like being able to audit your code and testing processes and/or your reputation. You also have to be able to make promises that your products and support (or something compatible) are going to be around for 10+ years.
Boeing has already lost some of this trust with the issues in the consumer aviation sector, but the space and defense side of Boeing is still going strong. A bankruptcy could risk Boeing's space and defense lines.
One big fault here is with Boeing's board. Boards are supposed to control the short-term greed of executives and protect stock value. Boeing's board should do a prophylactic firing of the C-suite (replace the CEO with someone who will fire the rest), putting the engineers back in charge, but I doubt they will do that.
Yes, all commerce involves confidence. The difference with banks is both sides of their balance sheet are not only entirely confidence based, they’re leveraged to the hilt on it.
Boeing can lose and re-gain confidence. (Albeit, at great risk.) A bank can’t; if it ever loses it, even momentarily, it fails. That is a dynamic that has increased as our world grew more interconnected, a dynamic we failed to fully appreciate until ‘08.
> bankruptcy could risk Boeing's space and defense lines
How? Worst case, guarantee BDS’s obligations as part of the bankruptcy.
Put another way: does restructuring threaten their defence line more than the status quo? I don’t know the answer, but I think it’s a valid question. (I’m familiar with their space lone and am halfway to writing it off.)
> big fault here is with Boeing's board
Totally agree. They seem clueless, more afraid of the bark than the bite.
> Yes, all commerce involves confidence. The difference with banks is both sides of their balance sheet are not only entirely confidence based, they’re leveraged to the hilt on it.
I'll give you that defense is not in the same league as banking if you'll give me that defense is not in the same league as SaaS (even enterprise/F500 SaaS). By the way, defense companies do get a lot of leverage based on their federal contracting lines. It's 2024, a bank can get you leverage on a ham sandwich, and companies are usually pretty big users of it (they are encouraged to be).
> Put another way: does restructuring threaten their defence line more than the status quo? I don’t know the answer, but I think it’s a valid question. (I’m familiar with their space lone and am halfway to writing it off.)
Yes. Defense contracts in general cannot be awarded to firms in bankruptcy or that have been in bankruptcy in the last 5-10 years. That is because financial solvency threatens acquisition timelines, and in a bankruptcy, anything can happen.
That's a rule, not a law, and I am not sure about how exceptions are made. And existing contracts will be fine, but new contracts will just not be awarded.
>Boeing has already lost some of this trust with the issues in the consumer aviation sector, but the space and defense side of Boeing is still going strong.
Going so strong that:
* The USAF really hates Boeing for pulling some Serious Legal Assfuckery(tm) to drop Airbus for the tanker program, only to then fail to provide tankers that can pump gas.
* They've failed to secure all but one fighter program sale, and that was only because Lockheed Martin (F-35) succeeded so hard they couldn't succeed any harder.
* They were laughed out of the bomber program, especially after the tanker failures.
* They keep crashing V-21 Ospreys, their most recent episode resulting in nationwide groundings in the US and Japan that were only recently cleared.
* The Starliner is increasingly looking unfit for human occupation.
The only reason Boeing is relevant in space and defense anymore is sheer inertia.
I think the comment well addresses why this situation is different than the situation with banks - Boeing’s manufacturing and employees would not be harmed by a prosecution of its management.
Indeed, criminally charging upper management hardly counts as the business “failing” at all.
> Especially as we’re lining up for a potential war in the South China Sea, Boeing’s military-industrial ties may actually be what forces those who’d prefer to look the other way to stare down the problem. We can’t win that war, if we have to fight it, with Boeing a shitshow. And we’re more likely to have to fight it every time Beijing sees it’s a shitshow.
So this is a very interesting question, but it's not clear to me whether it can be resolved until the shooting actually starts. WW2 was a huge driver for fixing broken things (USN torpedoes didn't work reliably at the start, for example, in ways that only appeared under live conditions!). The Iraq war was on the other hand a huge opportunity for grift. Pallets of dollar bills vanished. Someone made a lot of money from non-functional mine detectors.
What's the difference? Well, the Iraq and Afghan wars were completely irrelevant and invisible to the Homeland, just a money and lives sink shown on TV, while WW2 kicked off with a bit of Actual America (Hawaii) being bombed.
The China war will probably have no real effects on the US until the GPUs stop arriving, at which point most of NVIDIA's $3tn market cap vanishes and Americans feel it in their retirement accounts. Then, and only then, will people take it seriously enough to overcome corruption.
> continuity of supply is why forcing them into real non-operating bankruptcy is inconceivable. Nothing more onerous than Chapter 11
Correct. But that’s still bankruptcy. It wipes out the shareholders and lets the creditors, which presumably includes the government, reörganise the company as it sees fit.
(I’d start with cleaving BDS from the rest of Boeing.)
> it's not clear to me whether it can be resolved until the shooting actually starts
Do you have a source on the torpedo story? Hadn’t heard that one before, and it sounds fun.
I recently read about how “the US went into [WWII] with fewer carriers than the Japanese, it was the US that was almost out of carriers in the Pacific in late 1942, and the US that had suffered the larger percentage of carrier losses—not the Japanese” [1]. We still won, as the author puts it, not with “the fleet that [we] started the war with,” but “the fleet that [we] ended it with.” How? Because “by December 8, 1941, the United States had already undergone 3 cycles of investment in only 8 years, with the last being one of the largest peace-time defense investments in US history.”
Put another way, it’s not clear we can wait until the shooting starts. What’s germane to this discussion is less whether that is true, but whether those in government with power over Boeing believe it is.
> China war will probably have no real effects on the US until the GPUs stop arriving
I’m not sure. Unless we try to fight it à la Ukraine, and it’s unclear that’s even an option, I expect the opening moves will involve the deaths of American soldiers. That brings it closer to “a bit of Actual America (Hawaii) being bombed.” (I assume a strike on a CVN would incur similar emotions, though that’s just a guess.)
> I recently read about how “the US went into [WWII] with fewer carriers than the Japanese, it was the US that was almost out of carriers in the Pacific in late 1942, and the US that had suffered the larger percentage of carrier losses—not the Japanese”
I don't dispute your overall point, but I don't think this is right.
I couldn't read your source without a signup, so I went looking around. According to https://www.statista.com/statistics/1353080/wwii-japan-us-ai... the Japanese lost 14 carriers in the war, and ended with 18 in service, so they lost 14 out of 32. The US lost 5 and ended with 34 in service, so it lost 5 out of 39. That's really hard to turn into "the US suffered the larger percentage of carrier losses".
As I said, I don't disagree with your overall point.
As to the torpedo story: IIRC, there were two problems. The torpedoes themselves had an issue. I don't recall exactly, but it may have been that they didn't run at the depth they were supposed to. The second problem was the detonators. They didn't trigger if they hit square on, but only if they hit at an angle. So the better the shot on a ship, the less likely the torpedo was to actually explode. They didn't get consistently working torpedoes until September 1943.
Honestly worth the sign-up, but here you go in the meantime [1]. (Never mind, Substack got smarter.)
The greater loss ratio claim is limited to aircraft carriers in 1942. America lost as carriers as Japan that year and wound up the year in worse shape, numerically, despite Midway. What got us through wasn’t a decisive naval battle in June of ‘42 but the production infrastructure laid down in the decade prior. We built our way out of the hole, because in attritional war, stocks are less important than flows.
Classic example of "anything inadqeuately tested turns out not to work": the torpedoes were "too expensive" to test in realistic scenarios. So they weren't. That meant a cascade of problems - wrong depth, early magnetic detonation, failed impact detonation - all of which showed up in live fire as "miss", which could be blamed on individual commanders until the problem became too big to ignore.
There's a very high chance that something which is a critical fancy weapons system that has not been used in anger will turn out not to work in actual combat.
Not sure if the last paragraph was sarcasm. One third of global shipping passes through the South China Sea. If war breaks out and it becomes unsafe to ship along those trade lanes, it will be absolutely cataclysmic for the global economy, and while the US will be more insulated from the worst shocks than many other countries, Americans will absolutely feel it hit their wallets on day one.
My comment isn't coming out of thin air. I'm trying my best to look at the big picture. What I see is that the military industrial complex is bigger than anyone (including myself), can comprehend. They are an immovable force. If they go down, so does our country. It's that simple. This isn't eBay or some couple billion dollar fraud, we are talking about. It's much much bigger. This is trillions bigger.
You're referring to compartmentalized departments. No one person or internal unit can truly understand the inner workings of this machine. This is by design.
Bankruptcy? There's indirectly trillions of dollars on the line if Boeing goes bankrupt. This is why I'm telling you, nothing significant will happen. Don't be an contrarian, just think about it. "Too Big to Fail", it's a real thing bud.
Bankruptcy means the shareholders and potentially some lenders are wiped out; it doesn't mean the company ceases to exist.
In a Boeing bankruptcy, roughly $100b of its paper money market cap may be "wiped out" (but for the company to go bankrupt that paper money would have to be worthless anyways), but the factories would keep producing. No "trillions" are on the line, even in that extreme case.
The company and its assets don't just evaporate when some executives go to prison.
> want to be pro-war, pro-profit, pro-death & destruction
Wat. I said Boeing is comprehensible and able to be held accountable. I also think they should, and will, be criminally charged, and that those charges carry material risk of bankruptcy. You, on the other hand, cast Boeing as a mythical beast unable to be comprehended much less checked.
We’re not discussing war and peace. But between those arguments, I’m not sure how you pull off this pivot.
isn’t doing nothing actually MORE harmful for this military industrial complex? who cares if boeing is part of the industrial complex if it’s manufacturing junk? garbage in garbage out…
It's not manufacturing junk. It's manufacturing weapons of mass destruction at a massive scale. A few of their planes malfunction, ok. The bombs they produce are a different story. They work, and they fuck up thousands of lives in a short amount of time.
@JumpCrissCross I can't reply to your sub comment, but yes, Boeing manufactures weapons systems. It's their bread and butter. You thought they only built airplanes and partially functional spacecrafts?
That doesn't include their innumerable contractors and suppliers, spread out across the country. In many cases these are the major employers in that region and their collapse would trigger the collapse of that whole local economy. The economic harm of the big MIC companies going kaput would be immense.
> their collapse would trigger the collapse of that whole local economy
Yes, but why would they collapse? General Motors also had a web of suppliers when it went bankrupt. Preserving the value of a struggling company while it reörganises is why we invented modern bankruptcy.
Not for nothing, but Bankman's exposure was 110 years. He got 25 and that is after a massive public outcry, due to glove treatment resulting in him[2] and his parents[3], apparently, trying to derail investigation. Normally, as I understand it, the system would clamp down on anyone trying to subvert it. So the guy did get a light sentence given the circumstances.
Holmes I had less exposure to so I don't want to rely on just search engine since I am not sure what I am looking for.
<< It’s a lazy learned helplessness that’s always potentially right
I would argue that it shows simple pattern recognition. Some of us are just tired and therefore cynical. Join my podcast to go over trending ww3 news.
I want white collar criminals to see justice, but sentencing in the USA is crazy extreme. 25 years plus a lifetime ban on securities trading is just fine.
Has it occurred to you that the sense of throw-your-hands-in-the-air, nothing-will-ever-change hopelessness you're evincing here is exactly what they want?
Could you please stop feeding flamewars by continually responding to things like this? I appreciate your more substantive contributions but you're doing too much of this.
Obviously you can't post like this here. Since you've done it repeatedly, I've banned the account.
If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future. They're here: https://news.ycombinator.com/newsguidelines.html.
Think about it this way, yeah, Boeing is powerful and part of the MIC.
But if you're top dog, would you want your flunkies making bad guns (just an example) when your country is concerned about a potential war with a peer?
No, there was a downturn in both the defense and the aviation industry that hit Boeing like a double whammy. It laid off tens of thousands before the acquisition and tens of thousands afterwards, for a total of over 100k laid off in the 1990s (Boeing has 170k employees today). They used this opportunity to disproportionately target older and more expensive employees which led to many of their best engineers getting canned.
Everyone likes to point to the McDonnell Douglas acquisition as Boeing’s downfall but the truth is that Boeing executives had already gutted the company.
In fairness, everyone probably likes to point to that because it was one of the primary conclusions reached by investigative journalist Peter Robison in the book "Flying Blind."
eBay got away with it because some of the people involved were CIA officers working to collect data from eBay's customers. https://youtu.be/GnQMuS87gLw
Judaism is a religion. The people (at least the ones I interacted with) couldn't be more different both genetically and culturally. You are making it sound as there is some kind of conspiracy that the "Jewish people" are executing. Whereas in reality, it just happens that some Jewish people got a shit ton of power.
OP is simply stating a fact. US MIC and Israel have been in a deep embrace. Nothing was said by OP by "driving the ills of the world". Yours is a tactic to prevent even simple statements of facts if it is against your 'perceived' "collective interest" of a minority.
I am interested in learning more on why IDF has deep ties to Boeing. Such a small country, how is it that it has captured so many behemoths. Should we just ignore this rather strange structural phenomena in geopolitics and national interest (speaking as an American here ..)?
In fact the entire world is curious to know exactly who is the premier "ally" in this strange US-Israel alliance. Who is the boss, an inquiring American wants to learn.
I think it’s fascinating how political criticism of power and corrupt relationships between states has been tagged as “antisemitic”.
I would think that the label would be reserved for statements against the Semitic peoples, based on their heritage and culture? Not the overtly corrupt and often internationally illegal actions of their government?
It’s a very dangerous idea to put a nuclear capable nation above criticism.
Right? I have always thought it's unfair that you cannot criticize a country and the actions of its government because people will label you Nazi or antisemitic.
I couldn't give a damn about the religion or the culture. But Israel government apparatus scares the shit out of me
Unfair in ways including those which result in the death of thousands of women and children and displacement of hundreds of thousands of people.
Gaza becoming a humanitarian tragedy on the scale it has is largely enabled by Israel being largely above criticism.
I don’t know what the best solution is to the Israel/Palestine conflict, but I doubt it includes dropping 2000 lb bombs on civilian infrastructure. I support the eradication of HAMAS because I believe they are not only inimical to Isreal but also to the Palestinian people they claim to “protect “.
It’s perfectly clear by now that Hamas is more than willing to sacrifice every Palestinian life to meet their political goals, which are not well aligned with the Palestinian people. However, Indiscriminate measures do nothing to abate the conflict, only to fuel it. Bombing civilians is the best recruiting tool that Hamas has. To bereaved Palestinian families, the war sells itself.
I shudder to think that indeed, the Israeli government knows this. It follows then that this recruitment effect is probably not an undesirable side effect, but rather an intentional goal.
I think this shares some commonality with the trickle-treatment of Ukrainian military support from the USA. We are best served by a slow, agonizing, expensive if not catastrophic defeat of Russian military capability. A quick win would not be a win for America, or for NATO. Unfortunately, this means that Ukrainian soil will be fortified with blood for decades.
I think for Isreal, the situation may be similar. Under the current playbook, “Winning” in Gaza means killing every person that can be induced to fight. This is distinct from breaking public support for HAMAS. It is a genocidal extermination of every person with a will to fight, through what amounts to a systematic process of provocation.
That said, while I don’t agree with the methodology, I do understand the reasoning and agree that the goals can be seen as worthwhile if not necessarily worth the cost of achievement.
>asserts nothing will happen while citing a case where execs went to jail as proof. It seems logically inconsistent.
The gp wasn't being logically inconsistent if you see the rhetorical structure of his comment: anticipate and pre-emptively state the counterpoint and then counter that counterpoint.
- predict other side's possible counterpoint : "But Ebay execs went to jail"
- counter that counterpoint : "Yes but Ebay is smaller company that's not deeply interconnected with the government"
- gp's conclusion: Ebay situation is different enough that it is not proof that Boeing execs will go to jail
Readers' can have 2 different interpretations:
- I disagree with gp that Ebay and Boeing are different situations --> therefore gp is logically inconsistent
- I agree with gp that Ebay and Boeing are different --> gp is logically coherent
>OP is the one who brought that up in the first place, but they are using it to show it won’t happen. Which makes no sense.
Because the OP's reasoning is Boeing's "deep ties to the government" -- is what keeps it from happening.
I don't agree with OP. I'm just explaining what he wrote.
The readers' different reactions to OP's comment basically depends on how whether one buy's into the idea that the government's dependency on Boeing (military, space launches, etc) gives it an unstated immunity. The judgement of "logic" to his argument hinges on that.
Yeah it’s not proof the Boing execs will go to jail, no one said it was. OP is the one who brought that up in the first place, but they are using it to show it won’t happen. Which makes no sense.
I dunno, if it were me making this argument, I’d cite a case where a company was criminally charged and nothing happened. That would be a much stronger argument than using rhetoric.
This is actually pretty dope. I didn't know something like this existed. Sounds like a tactic a natural psychopath or manipulator would use. I'm neither. Maybe I used a bad example out of ignorance. Let me try again.
Boeing will not face any consequences just like no one at Ford Motor Company has ever faced any consequences for dumping toxic waste in New Jersey in the 1960's. This has been a continuous issue for decades, and no one to date has been held to account.
Boeing will not face any consequences, just like no one in the Sackler family did any time for actively promoting opioids as a harmless pain killer. Please google the article, "NY Times 2023 - An Appeals Court Gave the Sacklers Legal Immunity. "
I can keep going. I'm not crazy or trying to trick anyone. There's messed up things companies do, and no one is held accountable. If I was a someone's handyman and hurt a client or a clients neighbor I would be held to the full extent of the law. There are families, companies, and institutions out there doing terrible things, with no consequences. Why? Because they hold all the power. That is a fact.
