How else should companies respond to the misallocation of capital? If we reduced the ability to layoff it would have perverse incentives for hiring. Isn't a vibrant market where you might be at risk of losing a job, but can easily find a new one much better? Especially if back-stopped with generous severances and/or unemployment insurance? I think we actually want companies to be more aggressive investing, and that comes at a risk of underperforming and needing to let people go. Though more can certainly be done to enable intra-firm mobility.
How else should companies respond to the misallocation of capital? If we reduced the ability to layoff it would have perverse incentives for hiring. Isn't a vibrant market where you might be at risk of losing a job, but can easily find a new one much better? Especially if back-stopped with generous severances and/or unemployment insurance? I think we actually want companies to be more aggressive investing, and that comes at a risk of underperforming and needing to let people go. Though more can certainly be done to enable intra-firm mobility.