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The difference is that shareholders lose something (the value of their shares) when they drain a company of its assets. This might still be short-sighted, but there is at least a balancing force.

In public services, where making a loss is o.k. this is just included in the loss, and there is essentially nothing that encourages the 'parasite' to not drain the system.




Well, even that no longer seems to be assured. Plenty of ways to strip a company and make a profit in the short term, destroying the company in the long term.


E.g. Toys R Us. It was bought then saddled with debt by the new investors, and is now dead.


> The difference is that shareholders lose something (the value of their shares) when they drain a company of its assets.

Not if they sell before the shit hits the fan.




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