If it’s the country’s problem, then nationalize them. Not loans, not bail outs. Confiscate and figure out how to wind them down in a way that benefits the taxpayers.
If it’s the country’s problem, then nationalize them. Not loans, not bail outs. Confiscate and figure out how to wind them down in a way that benefits the taxpayers.
Didn't even have to wind them down to benefit in some cases. I can't remember if it was the automaker or some of the 08 bank bailouts where the stock the government took as part of the bailout turned a profit after a few years.
https://projects.propublica.org/bailout/
https://www.reuters.com/article/business/us-government-says-...
GM lost taxpayers $11B, Chrysler lost $1.2B.
You’re likely thinking about TARP:
https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
TARP delivered a $15.3B surplus on $426.4B invested for a roughly 3.5% return.
And perpetuated the system. Iceland meanwhile let their banks fail,sent bankers to jail, took the medicine and came out stronger.
Icelander here. The banks were only temporarily nationalized, the plan was always to privatize them as soon as possible. Only a handful of bankers went to jail, their sentences were extremely light, and every single one of them returned to investing as soon as they were able (or even kept investing via family members while in prison). Today they are still the richest people in Iceland and own the majority of all assets.
I think the only reason Iceland nationalized the failed banks in the first place was because they had no other option, the economy is too small, and they simply could not afford to bail them out, the money literally did not exist.
Also, today’s Iceland is extremely troubled by austerity. Schools and healthcare is extremely underfunded. Teachers- and nurses strike almost every 2 years. The city of Reykjavík just started their biggest round of mass-layoff ever.
Well the US nominally put in more safeguards against the same thing happening again. We've just dismantled them in record time and are moving on to those put in place after the 20s for some reason.
Iceland isn’t a global financial powerhouse and it has a low population. My county has twice as many people as Iceland, the city I live in has as many residents as Iceland has citizens.
Wild guess: I suppose in Iceland the banks weren’t buying the politicians.
They were. Or rather they were all friends/family/the same people. Iceland is one of the most corrupt countries in Northern Europe. What happened is due to how small the economy is, the country simply could not afford to bail out the banks. The money required to do so simply did not exist, so they had exactly one option.
Note also that since then, all the nationalized banks are back on the public market with the state only holding plurality or even minority shares. Investment/retirement funds and private investors together hold bigger share then the state. These shares were more often then not released on a steep discount allowing investors (many of whom responsible for the 2008 crash) essentially free money from the state.
Problem is that is bailout with taxpayer money that benefits recklessness by private companies. Nationalising or winding down is a loss for executives who ran the company to the ground. Bailout is not a loss for executives that ran company to the ground. Don't reward reckless executives with financial stability.
I am confused. In my country that is what a bailout means. How do you pay money to a company but not buy them? What is it that the state buys from the company, if not ownership, then? Or is it a gift? That would be insane.
> That would be insane.
The phrase is "that would be good for the economy".
It’s still the notion of trickle down economics at play.
But they did get a 3.5% return on their investment (but not comparable to the equivalent return in the market or even in bonds for the same duration).
That return was in turn used to justify the bailout, but the global macro effects weren’t accounted for: the banks’ fuckup caused misery all over the world for the best part of a decade.
It's a gift. No matter how you structure it - maybe subsidized loans, or anything like that - any bailout that doesn't transfer equity to the government is a gift
Are you perhaps confusing a bailout with a buyout?
Does the US have anything going for it right now besides ai and supporting industries? Something like nationalize or anything extreme would wreck the economy.we would all suffer
How so?
nationalization is likely on the horizon, but definitely not to wind them down (quite the opposite)
You have a point here. It doesn't make sense that a company should get to keep the upside while having downside protection from the government. The problem is that the government makes the biggest bloated legacy nightmare of a corporation look like a 10 person startup. Between the two options I would rather have a pile of my tax money set on fire once every decade decade or so.
Anything critical for the nation should be run by the nation. I'd rather have a voice and the ability to vote out the people running that corporation. You don't get to elect CEOs.
In my experience I would much rather deal with corporate management than government bureaucracy. The fact that I have a vote means nothing to them.
Our government has been working very hard over decades to minimize the impact of the voter. Through gerrymandering, voter suppression, collusion within political parties, etc. and the amount of open corruption going on today shows that our government doesn't think they need to be very concerned about the voters at this point.
I still believe in democracy as a system however. It does need to be protected and maintained though. Jefferson said that "the tree of liberty must be refreshed from time to time with the blood of patriots and tyrants" and right now the tree is starting to look parched, but I'm still hoping we can bring it back into health with just a little more care and attention.
And yet you would still support them nationalizing a company? If you say the government can be fixed, it needs to be fixed before they can get their hands on anything else and ruin it.
That would be socialism and socialism is bad.
Liquidation is not socialism
Why?
If the gov't made bad decisions letting us get to some situation, it doesn't make sense to reward the government and give it even more authority.
That's got perverse consequences. Just like with the corporate leadership, you're encouraging bureaucrats to make bad decisions because (a) they don't have to answer for their bad decisions, and in fact (b) they'll get to expand their authority should their decisions go bad.
The corporate leadership that got us to the problem should suffer, but so should any bureaucrats who had a part it allowing it to happen.
And downvoted into oblivion!
It's kinda like taxes. Who among us would say their tax dollars are and have been well spent? Then why on earth would any of us want to give these idiots more of our hard earned dollars.
I actually like parks and roads and fire departments and social services. I'd happily pay more in taxes for things that are worthwhile. If you don't want your tax money spent on bullshit maybe you should vote for democrats since they're promising not to use your tax money to bail out AI companies.
Everybody can find some government programs they like, and some they hate. I would rather my tax dollars were spent differently than they are. This is normal.
Agree. What about the part where the government spends 30%+ more than it takes in which has been its modus operandi for just the last 2 decades or so?
Yeah. They are going to have to do something about it eventually. The Republican party used to care, or at least claim to, but that seems to have fallen by the wayside. Clinton was the last president with anything even close to a balanced budget.
It really galls me to have to say that Clinton was the best president during my adult years, considering how much I dislike him.
Congress controls spending. People like to forget that because it annihilates their political arguments.
Clinton worked with a Republican Congress (House and Senate). Both compromised, negotiated, and achieved something difficult and substantial.
We don't elect adults anymore.
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> So, theft. Got it!
> That will make a lot of businesses focus on success here and not somewhere else.
You have a weird definition of theft. We're talking about nationalizing them instead of handing their shareholders a bunch of free money to bail them out. Not getting free money is theft now?
But, more broadly: there's more to the social contract than private property rights. And it's really hard to bring myself to care too much about the private property rights of entities who have shown themselves to not be very respectful of that contract.
Yes, it is theft.
If you dont want to provide a loan, fine. I dont see how you justify seizing the company.
Imagine asking the bank for a loan and they say "no, and we are also taking your car".
We're explicitly talking about a situation where BigTech and AI labs ask the government for money or (very hypothetically) allow coordinated defaults to spill out into the banking fabric
In those cases, the economy and society you want to externalises losses onto has every right to negotiate something in return. We are not in the business of just forgiving multi billion debts.
That is not the proposal. Negotiation is fine. Forced taking is not.
>Not loans, not bail outs. Confiscate and figure out how to wind them down in a way that benefits the taxpayers.
Some people find authoritarian despotism attractive as long as it targets their perceived enemies
> Some people find authoritarian despotism attractive as long as it targets their perceived enemies
It's not that simple. For instance: a prison sentence is "authoritarian despotism" from the perspective of a murderer subject to it (or his apologists).
I dont think it is that complex in this case.
Most on the left would consider it authoritarian despotism if Trump started "Confiscating" companies. Most on the right would consider it the same if Biden or whomever did the same.
In general, the US has strong opposition to the state unilaterally confiscating companies, and it is the kind of thing seen in Nazi Germany, revolutionary Cuba and Iran, or the Islamic state.
The last time the US government tried this was steel mills under Truman in 1952, and that was with compensation and struck down by the SCOTUS.
> Most on the left would consider it authoritarian despotism if Trump started "Confiscating" companies. Most on the right would consider it the same if Biden or whomever did the same.
Eh. I disagree. It really depends on the company, the why, and what's done with it afterwards.
If the other party nationalized the big frontier labs or AI data center operators, with the rationale that AI is just too disruptive to privatize the gains and/or the companies are acting recklessly, I wouldn't consider it "authoritarian despotism," and I don't think many others would either: those companies are unpopular across the political spectrum.
There's a certain amount of reflexive opposition to "the other side," in that some people will oppose anything it does, but that's just really dumb, so I wouldn't read too much into it on any particular issue.
Now, if the Democrats confiscated "The Trump Organization" on some flimsy rationale because they really hate Trump, that particular action would be seen as you describe.
> In general, the US has strong opposition to the state unilaterally confiscating companies
Thankfully, things can change.
> and it is the kind of thing seen in Nazi Germany, revolutionary Cuba and Iran, or the Islamic state.
That's a dumb argument. "Confiscating companies" is not the reason those regimes are considered bad. And the fact they did some particular thing is irrelevant. I'm sure they also penalize murder, and your not going to get me to question my opposition to murder by saying "the Nazis had anti-murder laws!"
> That's a dumb argument.
nobody said that was the reason they were bad. that's a dumb interpretation.
The point is that seizing companies simply because you have the army and popular support to do so indicates that the government has abandoned respect for law, rights, process, and reason.
It is precisely the authoritarian behavior that defines an authoritarian regime - Taking companies or people with flimsy pretext because they can get away with it. Citizens who cheer and hope for such things are cheering for populist law of the jungle.
If someone is genuinely concerned about safety or disruption, there are 101 legal and boring options the government can take. Those just dont stimulate the the same petty emotions.
The constitution requires paying fair market value whenever a company is nationalized. Theft would be unconstitutional.
Sounds like a reason not to advocate the government do such a thing.
The corporations getting a bunch of free money from my taxes is theft. If they can't keep themselves afloat then let them drown.
No handouts seems entirely reasonable.
I dont see how anyone extends that to the claim us government should forcibly be taking over companies.
The correct analogy is the bank securing the loan with the car, and then potentially repossessing that car.
Don't ask for a loan if you don't want a loan.
How do you get that analogy. The proposal was no loan and take instead
Except in this case they say "No loan for you. But give us your car and we'll give you the money to pay off your debts."
Is it "theft" when someone who pays off another's loans takes legal possession of the debtor's assets as compensation? Or only when the government does it?
You talking about taking a loan and not paying it off?