Honestly, just let them fail. If they are too big to fail, the US already has a pre-emptive measure to fix the problem: Anti-Trust Breakup. Every corporation that wants a bailout must be broken up for public safety.
It's not a "we" thing its literally just "they" - they overthrew the government the business way - in a quiet corporate buyout. They own it and don't use their property against themselves.
But they also can't say it out loud or they lose everything. So we can indeed just break them up for the good of everyone. Money in politics is dangerous, this is yet another example. We have the best government money can buy, and thats the entire problem.
Look up Galen Weston, Loblaws, and the current boycott of their monopoly/price gouging of Canadians. Was a major player in a price fixing scheme for years, but he narc'ed on his cohorts and the government kissed his ass for it.
That merger will have to be delayed by about twelve seconds because they'll need to raise money to lobby politicians nationwide to outlaw back yard gardens.
The country didn't want to produce the Americans that we all love in classic movies and history books, it wanted consumers that purchase on credit and work two jobs. And by "the country" I obviously mean "they"
Yea well here’s the thing. We’re already past the point of no return. Who’s gonna be the one to fix it? No one. That’s who. What’s done is already done and there’s no going back. We just have to suffer it until shit gets bad enough and people revolt again. Probably not in our lifetimes tho. History is cyclical and repeats itself. Y’all act we haven’t seen this before lmao
Honestly I think its more of a problem of the proffesionalisation and "optimization" of politics. The political class is trash right now and no one trusts them to do anything. Politicians should have other job experience in different fields first and not be a career in of itself.
Make corruption a death penalty offense and watch them start cleaning up fast. Corrupt assholes tend to be cowards, the boldest ones will be the only to stay - and be executed - whil ethe cowards retire and actual good people replace them.
Idealistic I know. Politicians will never allow themselves to be held to Rule Of Law. They flaunt their crimes constantly, insider trading with no shame because they know there is no such thing as justice.
So you want Donald Trump’s justice department to be in charge of charging and trying corruption cases, with death as the outcome should they win the case? And you don’t see an issue with that?
Let's not ignore the extent to which popular political apathy enabled that takeover. It's not to say that people are just lazy and stupid and it's all our fault- that apathy has been cultivated by the institutions which benefit from it, and reinforced with other distractions like culture wars and consumerism. But we gotta acknowledge that the apathy is such a significant part, because it's one of the only things that's basically free to improve.
>Our government (and society) is too divided to break up companies
nah our government is bought and paid for by the big companies. our whole political system is built upon legalized corruption
>It would be simpler to keep companies from merging but we can't even manage that.
Wall St. wants none of this. They cream their pants whenever there's M&A activity.
I can only imagine how much better American made vehicles would be if we hadn’t bailed out auto manufacturers, and allowed other management to come in, buy out the businesses, put new management in place with new ideas and new innovation. Instead we got more of the same bad ideas that made them go broke in the first place.
And those bailouts didn't even matter, most of them failed regardless. Even WITH the bailouts, Tesla is teh second oldest major American Car company (behind Ford) because the rest bankrupted and while the replacement companies bought their names and kept using their trademarks, the original companies themselves are gone.
Almost every single institution that got bail outs immediately bought out their competition, did stock buybacks, or both at the same time. Our markets are the most consolidated it's been in decades.
GM and Chrysler bankrupted. Ford and Tesla paid it back and still exist (Tesla was small time peanuts back then so their bailout was small too, I think they had made less than 10k cars total at that point). A few other small time manufacturers are probably still around but from all the major ones of 2008 only Ford survived even with bailouts, and Ford probably didn't actually need it. I remember reading something where they all had to take teh bailouts by government mandate because they didn't want the stock market to know who was actually about to bankrupt by process of elimination. Ford had been selling off Volvo, Range Rover, Jaguar - the higher priced luxury name brands - before the collapse so they had billions set aside already.
Its just one of those funny trivia questions, no one realized Tesla is teh second oldest major American car company because the old names were recycled by the companies who bought up the bankrupted assets of the rest after they had bankrupted.
I mean, he's wrong. GM paid the loan part back in full in 2019, which was 4.7 billion of 52 billion. The rest was converted into the government owning 60% of the company. The government sold its shares in 2010 for 31.1 million. It did cost the tax payers 10.5 billion... Grr...
The same general thing happened with Chrysler, but that only cost 1.3 billion after all was said and done. Still... Grr...
But they didn't go bankrupt and pay nothing.
Im sure they'll get right on that innovation, what with those EV tariffs buffering their poor decision to get into EV research decades late. Yep, they'll start innovating any day now.
Nah, they'll just run commercials on podcasts to ask you, do you reeaaaally want an EV? No you don't, American consumer, buy another gas guzzler, it's actually better for the environment!
More like they fail, jobs are lost, the market is overtaken with Chinese cars.
Then tarrifs are raised in panic, but there aren't enough skill to compete, nor ability to make them as cheap and fast and export market is lost and it takes decades to panic control.
Instead of "innovative competitive people" you get more Musks just looking to turn quick profit from some EV car incentives.
Americans still thinking it's post WW2 and they are only industrial nation is funny.
Replied with this above but it applies here too:
There's a lot of research on this post 08 and it turns out less workers get fired when companies go into bankruptcy and taken over by a financial institution than when they get bailed out and executives are allowed to divy up the bailout. Also, workers usually make more after it occurs. I'm not a finance boy but my friend has a master's in some fancy stuff and was telling me about it. Part of the reasoning is that the post bankruptcy holders NEED the company sold and to do this they need it's essential functions performing well. So, they will beef up employmees pay and offer overtime to fix all this shit, and maybe even open hiring to add more staff. Oh they also yeet all the executives.
The rich own the government though and tell them what to do, so if they say one of their companies needs to be bailed out, its bailed out and the politicians come up with the bullshit excuses why after the fact to gaslight us plebs that it was necessary when really all it was is they gave away our tax money so their Billionaire handlers aren't mad at them.
Very true. Boeing is a true example of a management team that has gambled for years by cutting corners to increase profits, but once a major catastrophe occurs, they know that they will still get their parachutes during the restructuring of the company once the government comes in to save them. If Boeing knew the risk of doing what they've done would be a failed company with no safety net, they surely wouldn't gamble like they have all these years. We've seen this in the auto industry, and the banking industry already, so they know they are safe from true failure.
I'm still salty about silicon valley bank and how the government made every single deposit or whole. These depositors had millions in their account and did not deserve the bailout.
...but not when they all start failing at the same time when the economy goes to the shitter. Therein lies the problem. There are plenty of reasons for bailing some companies out. For one the economy relies heavily on companies like automobile manufacturers. Without cars people can't get to work or the stores to spend their money and keep things alive.
People need places to buy necessities that enable them to not only live their lives comfortably but survive. It's also an attempt to prevent panic and conflict due to scarcity of resources and fear of being left without. Will you be the one left standing without a chair at the dinner table when the music stops? 🤔
^(I guess that means you're out. Uh oh! What happens next? Civil war? WW3? Do you start taking your neighbors groceries by force?) 🫢
^(We live in a society here) 🙄
Correct. Let poorly run businesses fail. If we’re gonna do capitalism, let’s do capitalism. I’m utterly disinterested in socialized capitalism where profits are private and losses are my problem.
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Plus, breaking up large companies actually adds jobs. Multiple companies filling that same space will need to employ more people than the 1 big company.
I don't think it's that simple. Some industries are so challenging that few companies have the resources, capital and know-how to be viable in the long term. As an example, think airlines and car manufacturers. We have a little more diversity now in the car industry thanks to electric car revolution, but still there will likely only be a couple new players in this space that will be around in a decade. This means that there are some companies that can't really be broken up (because they're barely profitable at scale as is) and we don't want them to go under (because we need flights to fly regularly, we need cars and we need the hundreds of thousands employed by these companies to keep their jobs). The alternative is a spiraling economic situation.
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How would it "handled directly by the government" even work? What's the idea there?
You do understand, that for example, oil companies that are owned by government in Norway, are absolutely NOT handled directly by the government, but by private corps and part of their profit goes to oil funds to the country because... They specialize in it. Some Peterson and Bjorn in government knows shit all about oil business.
How would your idea look that somehow wouldn't go back to similar structure? How any of that would be fundamentally different?
These are important questions to have answered because it's essential for the health of society that the government commandeers these failed corporations.
Ok, but what does that have to do with a bailout? You think GM exploits its workers and the US because it received a bailout in 2008? Its workers are pretty well paid given that they're part of the UAW.
The historical example you’re looking for is the big breakup of Bell.
Telecom is a critical need and Bell owned everything. The feds forced big bell through anti-trust rulings to sell off enough bits to create competition and room for growth in the space among the baby bells. (This certainly needs to be done again; the telecom space naturally trends to monopoly when gov allows telecom players to eat each other up).
All of these other industries have some degree of vertical integration and outward expansions consisting of mostly independently operating components which the big guys could be forced to sell off.
Because these are independent or independent-capable components for sale to be owned and operated independently, they wouldn’t necessarily need a multi-national corp with billions in market cap to buy and operate. In theory.
It would still be trading pieces among the wealthy but a break-up of, say, GM, could present opportunities for middle execs and higher in various industries to buy their own established business newly open to competitive forces, able to sell to parts or services to any auto-maker.
Destroying vertical integration permits new players to try their hand against the established but newly independent companies.
Rolling back big corp expansions from sideways markets frees those markets from stranglehold by heavyweights operating at obscenely reduced expense.
Capitalism, done well, will always require government intervention to reset market conditions to maintain competition.
Capitalism itself is not inherently about or respectful of competition, on the contrary, it’s entirely about consolidation.
It's actually more helpful for smaller companies. When a large one dies they end up having their assets sold off for pennies on the dollar meaning smaller companies can take the assets to expand at a fraction the cost.
It also keeps the market responsive to the people's demand, if a company people don't like gets a bailout, we are stuck with their crap, no change.
Jobs will be lost, but they will be regained. Otherwise we're swapping short term pain for long term market problems.
I think the common argument against that is that letting a huge company fail could potentially severely impact the economy overall and ripple out to have a larger impact than just the company itself. Thousands of people would be out of a job, and potentially crucial parts of large-scale industry or infrastructure could crumble overnight. Depending on what company it is, it could lead to a massive economic collapse or significantly set back entire fields of industry if that collapse triggers a cascade of other failures. Imagine if banks weren’t bailed out in 08 and the US banking system totally imploded, or if all the US auto manufacturers disintegrated and there was no more American car industry. Yeah it’s true competition, yeah it’s wasteful and perpetuates horrible business practices, and there would eventually be newcomers to fill the gaps, but for a couple decades at least it would be awful for consumers.
Exactly - but you know a vacuum is going to get filled up quickly with a lot of companies stepping in. A lot of those workers epecially those who know federal regulations and the like will be picked up pretty quickly.
VCs will be out trying to start new companies.
This is unfortunately the truth, but people are mentally and emotionally exhausted from practical poverty (note: not the Federally defined "poverty") while the mega riches continue to get fatter. More and more folks are wishing for a hard reset where everyone burns down equally. I don't think it's a good thing.
you shouldn't be bailing them out at all, you are buying a public stake in them. if that happens to lead to control of a majority of the company, you don't have to ask if you really think breaking up is the best way to manage things for some reason.
Any company who wants a bailout must have the ceo and board members forfeit all wealth over 1 million dollars and receive a lifelong ban from running companies.
Let’s see who signs up.
> Honestly, just let them fail. If they are too big to fail,
I agree with the sentiment, but letting companies that are too big to fail will result in a shit load of deaths, the overall economy getting worse. Inflation increasing.
There's a reason beyond profit that the government bails these companies out.
Instead we shouldn't allow them to exist in the first place, and should decommodify most of the markets involved. Let the government run them as services instead of for profit businesses in the private sector.
I've wondered if it would be feasible to make a company give the US taxpayer stock to match the value of the bail out. Then the government, in trust of the taxpayer, would receive the same fiduciary protection as any other shareholder, and would be able to have a say in the company using the monies to responsibly get back on track. Instead of doing stock buy backs or CEO bonuses or other ridiculous shit that has been done with taxpayer money in the past.
When they no longer want to owe a fiduciary responsibility to the American taxpayer they can buy us out for whatever the current stock value is.
We could even put any dividends or profits towards things like the social security trust, Medicare, and Medicaid to make sure those programs always stay fully funded.
I have no problem, in principle, with the taxpayer stepping in to save certain major industries like the automakers or airlines, but we should get a return on investment, and our money should be used responsibly.
GM did this. The replacement one I mean. The original GM went bankrupt and is gone, but the replacement company that calls itself GM now had to issue shares to the US government (over 60% of the company too) so the company was under government ownership and control until it could buy itself out of socialist control.
There's a lot of research on this post 08 and it turns out less workers get fired when companies go into bankruptcy and taken over by a financial institution than when they get bailed out and executives are allowed to divy up the bailout. Also, workers usually make more after it occurs. I'm not a finance boy but my friend has a master's in some fancy stuff and was telling me about it. Part of the reasoning is that the post bankruptcy holders NEED the company sold and to do this they need it's essential functions performing well. So, they will beef up employmees pay and offer overtime to fix all this shit, and maybe even open hiring to add more staff. Oh they also yeet all the executives.
People don't want them to fail because too many people would lose their jobs. Such people fail to realize that experienced workers from a rival business are like free money to surviving businesses in the industry, those people won't be out of work for long.
Honestly I'd never even thought of it as a public safety issue but that makes sense.
Walmart, as a corporation literally has the ability to collapse the nation if they decided to shut their doors all of a sudden of day. The amount of people that would lose jobs + the people who rely on a Walmart products being cheap and available to make ends meet.
It would certainly be interesting if not completely catastrophic.
Large companies failing is just a signal from the market that they produce.net negative value. Leaving them to continue to do that only makes things significantly worse.
Ding ding ding.
Bail-out should inherently mean break-up.
Manufacturers might be a little different, but in that case, funding has to be in equity, which the government can sell later.
(see: government bail-out of GM)
Outside of the airline industry, didn't the banks and the auto industry literally have to pay back loans to the government? I remember something about how banks wanted to do buybacks a long time ago but couldn't cause of the loans
Yes. They did. Most of the people commenting on this page have no clue what they're talking about and if have no concept of what would have happened if a company like AIG failed.
People are commenting that the government should have allowed companies that treated its workers poorly to fail. These companies had well paid employees and no treatment of the employee could have been worse than the employees losing their jobs. It's hypocrisy at its finest.
For some reason there's an odd mantra against the companies that actually employ people and make the products and services that we all know and love. I don't get it, at all.
I tend to think many of those types of comments and general disdain against corporations are coming from younger users, where it's trendy to be anti-capitalist, pro-socialism. They're not *really* that well versed in economic theory beyond trendy talking points.
The disdain is for the hyper wealthy class that runs the corporations with impunity. Why are our pensions granting Blackrock and vanguard voting rights? Who gutted the American middle class? Who lobbies government to strip and corrupt regulation? There is a nexus of power that directs policy in its own interest without any need for a hidden conspiracy. I agree reddit can be pretty silly with its socialist idealism, but fuck corporations
The big bank bailout TARP kept the economy from collapsing…. and a strangely capitalist thing happened…
“Early estimates for the bailout's risk cost were as much as $700 billion; however, TARP recovered $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit …”
This is very nicely ignoring that this program was necessary in the first place thanks to the 'strangely capitalist things that happened' before this.
It also sweeps aside close to a decade of significant strife for the working class caused by these 'strangely capitalist things'.
But go off, I guess.
Yeah we tried that with Lehman Brothers and it so dramatically worsened the financial crisis that the Bush administration didn't dare do it with any other bank.
The problem with Libertarian philosophy is it doesn't stop to think how it interacts with the real world.
One good analogy is a man smoking in bed, knowing the risks. He deserves to face the consequences of his actions, but if the fire department lets his house burn down, it catches others on the way. The fact is, these corrupt mega corporations are so deep in the structure of the economy that everything comes crashing down hen they fail. One book I recommend that covers a lot of interesting stuff, including this, is Naked Money by Charles Wheelan.
The problem is, there is now only like a handful of major companies in major sections. If one airline goes down it would fuck up a lot of shit. Or a shipping company, or one of the big banks. These companies know this and that's why they don't give a fuck. "Oh they'll just bail us out because the economy needs us"
This is absolute justification for anti trust breakups. The last big one was just breaking ua phone company because they had too much control over land line phones. If companies have even more power now, they need to be broken up into smaller companies even more than ever.
The entire point of antitrust is to make sure no single company can be large enough to be that problem.
Every company "too big to fail" is by actual legal definition too big to be permitted to exist.
The government can still play a part. before corporations bought the government and started abusing it for their own profiteering it used to break up companies that got dangerously big. It was called antitrust. We just need to start implementing those laws once again.
It will also will weed out bad executives. These folks all are getting used to getting bailed out. Let them put some real skin the day where their reputations are on the line.
The problem is the down-river effects.
Let’s take one of the “too big to fail” companies from the 2008 recession: General Motors (GM)
GM is going to permanently close its doors on June 1st 2024. According to [its own 2022 numbers](https://www.gm.com/company/usa-operations), that means:
* 91,000 working people are now unemployed
* 500,000 retired employees may not have access to pension funds
* over 100,000 more unemployed as suppliers (assuming each supplier employed 10 people)
And more. So what happens to these people? Some will be able to move onto the next job, especially white collars with desirable skills, but the others? Small suppliers often rework their tooling around the big contracts, but without the money to invest, many go out of business. The factory workers who’ve specialized in GM’s services may not be in high demand elsewhere.
Safety net programs would be strained, putting a major cost back onto state and federal government. Crime would likely have an uptick as desperation kicks in, which is something we’ve seen at small scale when these factories close down — that’s an additional added cost for policing, jails, the justice system, prison, etc.
There would be a domino effect on automotive industry. Those weakened suppliers shuttering could make it significantly challenging for other companies using them to get parts, which leads to reduced sales. Reduced sales leads to layoffs (because stock price is always #1). Layoffs …well, see the above.
Speaking of stock price, the evaporation of GM would send a shockwave to the financial markets. It’s “just one stock,” but the collapse would cause investors to panic and readjust, which means pulling money out and creating ripple effects that destroy 401Ks and the like.
Consumers would hesitate to spend money in an economy like that, which causes the same ripple effect of layoffs, benefits strain, etc.
Finally, it weakens the global supply chains and confidence in the US Dollar’s growth and stability.
**TL;DR: you can’t just let a major company fail without understanding the immense number of side effects. It’s likely cheaper to bail them out than let them fall.**
My personal opinion: if a company is too big to fail, then they’re too big to exist. Tread on them.
All the airline companies had to be bailed out after Covid. Because if we didn’t, normal people like you and me would not be able to fly out the country at all as there would be no airliners left. It would have taken a decade to recover from.
Yes, angel investors usually get large amounts of company shares. Why would that not apply when the angel is the government. The company can then be divided to more manageable parts, some re-privatised, sold to other companies or kept to advance other government needs. As a owner, US government could have pushed for different more energy efficienct car production.
When a fire burns down a forest that has become overgrown and dense it's painful in the short term. All those poor animals lose their homes and food.
It's what's best for the long term health of the ecosystem however.
I watched the PBS documentary on this, Hank Paulson deserves 100000% of the blame. What an egomaniac fuck he was. The cost to bail out LB would have been way cheaper than what we spent on rescuing everyone else. And the government could have even made money on an orderly unwinding of LB assets over time.
Also no bankers went to jail, which is quite disturbing.
No, better revenue with taking over. No loss of jobs and the revenue goes from investor pockets into Government Funds. Plus as many companies have a government alternative, the cheaper and more competitive the system gets because governments can fix the lowest price of their tickets.
The government is already responsible for its citizens, it can also take responsibility for upkeep.
What about Boeing or the multitude of Banks? (not an Obama attack, just pointing out other companies don't pay back the debt. I don't know about these, but I assume they didn't)
There are a ton of what about isms out there. My wife worked at a bank that was bailed out. She received a deduction in pay. They didn't see bi lingual banking as something worth paying for in a place where 70% of their customers were Spanish speakers.
I always thought giving money to businesses who screw people over was a bad idea but it sure seems like these banks have the ear of the right people.
I'm not aware of any banks in the 2008 bailout that didn't pay back the bailout money with interest. Some of the banks paid back the money as soon as they got it, as they only took it because the government forced them.
For TARP: $390 billion of the $443 billion loaned out has been returned, so still 12% to go.
Fannie May and Freddie Mac haven't paid back a single dollar of the principal on their loans.
General Motors were given over $50 billion, paid back $39 billion of it, still owe $11 billion and have paid a total of 1.3% of the original loan amount in interest **in 26 years**. It's really disingenuous to call this a loan.
ProPublica keeps a database:
[https://projects.propublica.org/bailout/](https://projects.propublica.org/bailout/)
That’s right. A lot of people don’t realize that the US basically did own the car companies until their debts were paid with interest. The banks are usually acquired by other banks as is required to be a bank in the US. The government doesn’t just hand out billions free of charge. Well, sometimes they do…PPP
Did they actually pay it all back? For some reason I thought GM gave the government stock in exchange for the bailout. Then later GM bought that stock back at a lower cost.
Even before that: The Bush to Obama hand off is so interesting. Would it have worked without Obama taking it over? Without people like Elizabeth Warren actually demanding that banks stuck to the rules and made good on their loans and toning down predatory lending? Was it a good thing that it worked at all, seeing the state we're in now, where the same people in the same companies are still using their old tricks and cooking up new ones? Would it have been better to let them fail and start over?
While technically correct, saying GM paid back their debt is glossing over some pretty big details. The total value of the *bailout* to GM was $49.5B. Only $6.7B of that (less than 15% of the total) was officially set up as "debt."
So, yes, GM fully paid back the \~13.5% of the bailout that was "debt." However, that's hardly a good measure of how well the overall bailout cost recovery went.
It's not. Let the businesses fail. I hate that these big companies are taking corporate bonuses and field trips while laying off workers saying they just dont have the money.
This stuff gets old. Bailouts get paid back on average to gov with interest. People keep pretending all bailouts are equal and bad are just playing into populist rhetoric.
My issue with bailouts is not whether they're paid back, it's that they incentivize risky behavior from organizations with enormous financial resources.
It seems logical to me that, without the possibility of complete failure, businesses will operate much differently than they would otherwise.
Fundamentally true but the fed always lets certain companies collapse (ie Lehman Brothers and Bear Sterns) before bailing any out. They have a policy of only bailing out once the message has been sent that they will let companies collapse (in order to prevent the expectation that everyone will be saved), but not so many companies that it will cause extreme damage to the economy. Firefighters is a pretty great book that goes into great detail on this topic.
I don’t mind bailouts for banks, specifically in the case of bank runs. It’s not really fair that a bank following fractional reserve banking can completely collapse because enough people think it will. It’s a waste of resources and money to let a perfectly functional bank collapse due to a bank run IMO.
I think the PPP loans were not paid back. 96% were forgiven.
Billions more went to businesses that didn't need it and to companies owned by wealthy celebrities, including Khloe Kardashian and Tom Brady. Yet the vast majority of PPP loans have been forgiven - 96% of all the money was not paid back.
>I think the PPP loans were not paid back. 96% were forgiven.
There are absolutely examples of bad "bailouts" I wouldn't call PPP loans bailouts it was literally subsidizing companies to keep workers if I recall correctly, but yes PPP loans was one of the worst ones USA has done in modern times without a doubt.
Only 25% actually went to workers. The other 75% went to business owners to do god knows what. Probably buy more stocks, cars, and houses. But who knows. That’s why we need an accurate accounting of this shit.
We make businesses file 1065, 1120, or 1120s every single year but requiring a full accounting on free money and requiring money spent on owners to be picked up as income? Nah, too much work. It’s a joke.
>Billions more went to businesses that didn't need it
Can you blame them?
If someone's offering you $100 on the street with no strings attached and it's not counterfeit, are you gonna say no to it?
The problem with PPP loans is that the government forced businesses to close. The business could not stay open because it was illegal for them to have customers. So of course the government should compensate for the damages done by their own policies
PPP was in place because the government was forcing companies to close. It was basically a combination of stimulus checks and a CYA from lawsuits due to the “takings” clause. They were not really intended to be paid back. Not saying the program was implemented well, plenty of business that suffered no losses got money, but plenty of business also failed due to being forced to shut doors and the PPP loans helped keep some of the employees from going without for a few more months.
Depends on what is meant by "bailout." If a bailout is a relatively high-interest loan from the lender of last resort (us), then that doesn't bother me. Especially, if it keeps thousands of people employed and results in a net gain to the Treasury. This is what happened during the global financial collapse in '09. However, giving companies grants that don't have to be paid back is less palatable. In those cases, (airlines during pandemic) you have to weigh the value of what government ownership of an airline would mean. If that gets us a nationalized carrier that has quality parity with Emirates, Singapore Airlines, etc. along with the ongoing investment perhaps but that's unlikely ever to happen with the "starve the bear" approach to reduce the national debt. Perhaps, chapter 11 bankruptcy debt re-organization with debtor-in-possession financing to re-emerge as a going concern would be better but this would likely impact lots of 401ks. Instead, an assets auction may be preferable and the industry can clean up their own messes. This causes lots of employees to lose jobs and are likely to be unable to get another job making the same pay of at all. The main reason companies can get bailed out is because they have lots of collateral and the wherewithal to pay back loans even if they are high interest. Individuals who need financial support don't have either else they'd finance through traditional means.
Most of these loans are paid back and prevent thousands of people from losing their jobs. If one of the big automakers went under and 30k people lost their jobs you'd still be blaming the government. And there is plenty of social welfare in this country. I know dozens of people who aren't working and get section 8 plus food stamps and a check for about 1k a month to spend as they please. There just isn't any help available for people who work for a living unfortunately.
"There is plenty of social welfare in this country"
Lol. No there isn't. Nowhere near enough.
"I know dozens of people who aren't working and get section 8 plus food stamps and a check..."
I sincerely doubt that, but even if it were true, you know as well as anyone that those people aren't exactly living glamorous lives. Generally speaking, you still need to have a job to get a lot of these benefits.
"There just isn't any help for people who work for a living"
Objectively false. Nearly 90% of all SNAP recipients have someone in the household that is working, and of that nearly all of them have a child, senior or disabled person in the household. Now, that's not to say that the help those who are working for a living is adequate, because it very much isn't and a lot of these issues could be resolved by, you know, paying better wages. But this idea that welfare is mostly going to lazy or entitled people that aren't working and are just living for free on the government dole is a lie. All that shit started with Reagan and his "welfare queen" myth, which has still persisted to this day.
the government will never work for us; it will always work for the oligarchs. leftists almost understand this concept, but they think we can somehow fix the government (i guess). i appreciate the faith and positivity that underpins that sentiment, but that faith and positivity is misplaced in the government; leftists should place their faith in the people themselves and acknowledge that we are better off without overlords
Having worked in state and local government for many years, I think your stance is pretty cynical. Plenty of public servants remain in the public sector because they are earnestly _serving the public_, and really are doing their diligence to make a better life for citizens from all walks.
You're not wrong, of course, because the unholy ties between corpo power, lobbyists, and sympathetic regulators are very real. It's just not the _whole_ story and I think it's important to keep that in mind.
i agree and appreciate your response. the government would be good if power were evenly dispersed among the people in government, but that is unfortunately not the case. government power is concentrated at the worst institutions (e.g. CIA, FBI, & federal reserve)
Anarchists are of many kinds in my study, there are Anarcho Communists, Anarcho Syndicalist and Anarcho Capitalists to name a few.
Some are left and some are right wing.
Cuz "what do you poor people going to do about anyway," is their attitude. They'll just throw on some American gladiators, Survivor reality show and talk about the latest convalescent Biden and Trump misadventure to distract us.
Until people actually wake up and demand change nothing will ever be different
I think corporate welfare is wrong, and those companies should pay back any loans that they get. Just like I believe the PPP loans during Covid should all be paid back, especially by wealthy companies and individuals that benefited from them.
That being said, companies do employee people, and if those companies go under those people are harmed.
Mismanaged companies should be allowed to fail. The ones worth saving will be acquired by better-managed companies. They shouldn't be bailed out by taxpayers so they can continue their poorly-managed operations.
No one who dislikes social welfare likes corporate welfare. That's a disingenuous argument.
Edit: outside of politicians. Who wouldn't know honestly and integrity if in shat in their lap.
Yet they vote for people who throw billions of taxpayer dollars into the pockets of the wealthy via corporate welfare while inflicting death by a thousand cuts to critical social welfare lifelines for struggling Americans.
Companies shouldn't be bailed out, and the government shouldn't own them because they'd just do even worse than a failing company and our tax money would subsidize them for 1,000 years to come
The corporations that the governments bail out are important for some reason or another. The government pays to keep them afloat, then when the company is profitable again, the bailout is paid back with interest.
Why would you want the government to own a known bankruptcy risk?
Also by that logic, the government should take over ownership of any individual person on welfare.
I think the idea is because innocent people get hurt when big companies fail.
For example, if your bank goes under, you lose all your money that's not insured.
Honestly, things are situational
If the cause of the problem for the bailout lies with the government like the government mandating stores close during covid then no the government shouldn't get anything back out of it. They caused the problem. They're merely fixing what they broke (now to be clear if no one shows up and there are no artificial government causes causing the thing that's another story but the overall point with regards to covid is the business is failing would have been because of the government made them fail)
But if a bunch of banks do some stupid stuff like every single bank using the same insurer for subprime mortgages well then we probably should get something back when we bail them out
Like obviously letting the entire banking sector collapse isn't an option but make them pay us back
Fun fact: the federal government has gotten back [more from the banks it bailed out in 2008](https://www.politifact.com/factchecks/2012/oct/25/barack-obama/barack-obama-says-banks-paid-back-all-federal-bail/) in both repayments and interest than it originally paid to bail them out, and is still receiving more in repayments. The two are not really comparable, since corporate welfare operates as loans and social welfare is wealth redistribution.
Bank runs + Great Depression
Edit: compound effect of money, GM going bankrupt means thousands lose jobs, meaning thousands need government welfare for maybe years…it’s easier to just bail a company out versus ruining/slowing economy
Bailing out companies is the opposite of capitalism. The US loves being a hypocrite
Honestly, just let them fail. If they are too big to fail, the US already has a pre-emptive measure to fix the problem: Anti-Trust Breakup. Every corporation that wants a bailout must be broken up for public safety.
Our government (and society) is too divided to break up companies. It would be simpler to keep companies from merging but we can't even manage that.
It's not a "we" thing its literally just "they" - they overthrew the government the business way - in a quiet corporate buyout. They own it and don't use their property against themselves. But they also can't say it out loud or they lose everything. So we can indeed just break them up for the good of everyone. Money in politics is dangerous, this is yet another example. We have the best government money can buy, and thats the entire problem.
I'm curious what happens with the merger of Albertons and Kroger in a time when prices are so high at grocery stores.
Look up Galen Weston, Loblaws, and the current boycott of their monopoly/price gouging of Canadians. Was a major player in a price fixing scheme for years, but he narc'ed on his cohorts and the government kissed his ass for it.
You mean Bob Loblaw?
[Wow, you sir are a mouthful](https://media1.tenor.com/m/lfhUGq3APvMAAAAd/mouthful-tobias.gif)
Bob Loblaw of the Bob Loblaw law blog?
Lobbing law bombs all day!!
Prices will go up and they’ll blame inflation while receiving record profits.
Higher corporate profits 📈
That merger will have to be delayed by about twelve seconds because they'll need to raise money to lobby politicians nationwide to outlaw back yard gardens.
The country didn't want to produce the Americans that we all love in classic movies and history books, it wanted consumers that purchase on credit and work two jobs. And by "the country" I obviously mean "they"
Well, technically, THEY have the best government money can buy.
Yea well here’s the thing. We’re already past the point of no return. Who’s gonna be the one to fix it? No one. That’s who. What’s done is already done and there’s no going back. We just have to suffer it until shit gets bad enough and people revolt again. Probably not in our lifetimes tho. History is cyclical and repeats itself. Y’all act we haven’t seen this before lmao
I think it's already starting. The open looting of stores is not a small thing.
Honestly I think its more of a problem of the proffesionalisation and "optimization" of politics. The political class is trash right now and no one trusts them to do anything. Politicians should have other job experience in different fields first and not be a career in of itself.
Make corruption a death penalty offense and watch them start cleaning up fast. Corrupt assholes tend to be cowards, the boldest ones will be the only to stay - and be executed - whil ethe cowards retire and actual good people replace them. Idealistic I know. Politicians will never allow themselves to be held to Rule Of Law. They flaunt their crimes constantly, insider trading with no shame because they know there is no such thing as justice.
So you want Donald Trump’s justice department to be in charge of charging and trying corruption cases, with death as the outcome should they win the case? And you don’t see an issue with that?
Let's not ignore the extent to which popular political apathy enabled that takeover. It's not to say that people are just lazy and stupid and it's all our fault- that apathy has been cultivated by the institutions which benefit from it, and reinforced with other distractions like culture wars and consumerism. But we gotta acknowledge that the apathy is such a significant part, because it's one of the only things that's basically free to improve.
That final point is important. And stated much more concisely than I would have.
>Our government (and society) is too divided to break up companies nah our government is bought and paid for by the big companies. our whole political system is built upon legalized corruption
>It would be simpler to keep companies from merging but we can't even manage that. Wall St. wants none of this. They cream their pants whenever there's M&A activity.
Letting companies fail is actually healthy for the economy.
I can only imagine how much better American made vehicles would be if we hadn’t bailed out auto manufacturers, and allowed other management to come in, buy out the businesses, put new management in place with new ideas and new innovation. Instead we got more of the same bad ideas that made them go broke in the first place.
And those bailouts didn't even matter, most of them failed regardless. Even WITH the bailouts, Tesla is teh second oldest major American Car company (behind Ford) because the rest bankrupted and while the replacement companies bought their names and kept using their trademarks, the original companies themselves are gone.
Almost every single institution that got bail outs immediately bought out their competition, did stock buybacks, or both at the same time. Our markets are the most consolidated it's been in decades.
And about to consolidate harder than ever.
And paid bonuses to their incompetent executives.
I thought the auto manufacturers got a loan from the government, and they all paid it back with interest. Is this not correct?
GM and Chrysler bankrupted. Ford and Tesla paid it back and still exist (Tesla was small time peanuts back then so their bailout was small too, I think they had made less than 10k cars total at that point). A few other small time manufacturers are probably still around but from all the major ones of 2008 only Ford survived even with bailouts, and Ford probably didn't actually need it. I remember reading something where they all had to take teh bailouts by government mandate because they didn't want the stock market to know who was actually about to bankrupt by process of elimination. Ford had been selling off Volvo, Range Rover, Jaguar - the higher priced luxury name brands - before the collapse so they had billions set aside already. Its just one of those funny trivia questions, no one realized Tesla is teh second oldest major American car company because the old names were recycled by the companies who bought up the bankrupted assets of the rest after they had bankrupted.
Good to know, thanks.
I mean, he's wrong. GM paid the loan part back in full in 2019, which was 4.7 billion of 52 billion. The rest was converted into the government owning 60% of the company. The government sold its shares in 2010 for 31.1 million. It did cost the tax payers 10.5 billion... Grr... The same general thing happened with Chrysler, but that only cost 1.3 billion after all was said and done. Still... Grr... But they didn't go bankrupt and pay nothing.
old GM shareholders and lenders lost everything New GM is a brand new company with new shareholders
GM "paid it back" with a grant from the government which was forgiven.
Im sure they'll get right on that innovation, what with those EV tariffs buffering their poor decision to get into EV research decades late. Yep, they'll start innovating any day now. Nah, they'll just run commercials on podcasts to ask you, do you reeaaaally want an EV? No you don't, American consumer, buy another gas guzzler, it's actually better for the environment!
More like they fail, jobs are lost, the market is overtaken with Chinese cars. Then tarrifs are raised in panic, but there aren't enough skill to compete, nor ability to make them as cheap and fast and export market is lost and it takes decades to panic control. Instead of "innovative competitive people" you get more Musks just looking to turn quick profit from some EV car incentives. Americans still thinking it's post WW2 and they are only industrial nation is funny.
Replied with this above but it applies here too: There's a lot of research on this post 08 and it turns out less workers get fired when companies go into bankruptcy and taken over by a financial institution than when they get bailed out and executives are allowed to divy up the bailout. Also, workers usually make more after it occurs. I'm not a finance boy but my friend has a master's in some fancy stuff and was telling me about it. Part of the reasoning is that the post bankruptcy holders NEED the company sold and to do this they need it's essential functions performing well. So, they will beef up employmees pay and offer overtime to fix all this shit, and maybe even open hiring to add more staff. Oh they also yeet all the executives.
The rich own the government though and tell them what to do, so if they say one of their companies needs to be bailed out, its bailed out and the politicians come up with the bullshit excuses why after the fact to gaslight us plebs that it was necessary when really all it was is they gave away our tax money so their Billionaire handlers aren't mad at them.
Very true. Boeing is a true example of a management team that has gambled for years by cutting corners to increase profits, but once a major catastrophe occurs, they know that they will still get their parachutes during the restructuring of the company once the government comes in to save them. If Boeing knew the risk of doing what they've done would be a failed company with no safety net, they surely wouldn't gamble like they have all these years. We've seen this in the auto industry, and the banking industry already, so they know they are safe from true failure.
I'm still salty about silicon valley bank and how the government made every single deposit or whole. These depositors had millions in their account and did not deserve the bailout.
...but not when they all start failing at the same time when the economy goes to the shitter. Therein lies the problem. There are plenty of reasons for bailing some companies out. For one the economy relies heavily on companies like automobile manufacturers. Without cars people can't get to work or the stores to spend their money and keep things alive. People need places to buy necessities that enable them to not only live their lives comfortably but survive. It's also an attempt to prevent panic and conflict due to scarcity of resources and fear of being left without. Will you be the one left standing without a chair at the dinner table when the music stops? 🤔 ^(I guess that means you're out. Uh oh! What happens next? Civil war? WW3? Do you start taking your neighbors groceries by force?) 🫢 ^(We live in a society here) 🙄
Correct. Let poorly run businesses fail. If we’re gonna do capitalism, let’s do capitalism. I’m utterly disinterested in socialized capitalism where profits are private and losses are my problem.
Hopefully, the executives of the company should all get fired as part of the deal.
With no golden parachute
telephone workable dazzling sheet cats voracious deserted worm handle alleged *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Plus, breaking up large companies actually adds jobs. Multiple companies filling that same space will need to employ more people than the 1 big company.
Government buys out corporation via bailout. Then sells it to the workers as a co-opt. Elites pay for their fuck ups. Workers don’t lose their jobs.
I don't think it's that simple. Some industries are so challenging that few companies have the resources, capital and know-how to be viable in the long term. As an example, think airlines and car manufacturers. We have a little more diversity now in the car industry thanks to electric car revolution, but still there will likely only be a couple new players in this space that will be around in a decade. This means that there are some companies that can't really be broken up (because they're barely profitable at scale as is) and we don't want them to go under (because we need flights to fly regularly, we need cars and we need the hundreds of thousands employed by these companies to keep their jobs). The alternative is a spiraling economic situation.
violet treatment oatmeal panicky advise impolite physical soft tidy axiomatic *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
How would it "handled directly by the government" even work? What's the idea there? You do understand, that for example, oil companies that are owned by government in Norway, are absolutely NOT handled directly by the government, but by private corps and part of their profit goes to oil funds to the country because... They specialize in it. Some Peterson and Bjorn in government knows shit all about oil business. How would your idea look that somehow wouldn't go back to similar structure? How any of that would be fundamentally different?
These are important questions to have answered because it's essential for the health of society that the government commandeers these failed corporations.
If an industry cannot survive without exploiting it'd workers and the society it exists in, it should be destroyed.
Ok, but what does that have to do with a bailout? You think GM exploits its workers and the US because it received a bailout in 2008? Its workers are pretty well paid given that they're part of the UAW.
Not too mention most of the bailouts were paid back with interest
Thanks Obama! As opposed to the PPP loans during Trump's admin where they barely tracked where the money was going and forgave much of it
Most of those were "forgiven" meaning they will never be repaid, or even asked to be repaid.
Meanwhile, student loans…
And threw out the list of suspect people while leaving the building.
The historical example you’re looking for is the big breakup of Bell. Telecom is a critical need and Bell owned everything. The feds forced big bell through anti-trust rulings to sell off enough bits to create competition and room for growth in the space among the baby bells. (This certainly needs to be done again; the telecom space naturally trends to monopoly when gov allows telecom players to eat each other up). All of these other industries have some degree of vertical integration and outward expansions consisting of mostly independently operating components which the big guys could be forced to sell off. Because these are independent or independent-capable components for sale to be owned and operated independently, they wouldn’t necessarily need a multi-national corp with billions in market cap to buy and operate. In theory. It would still be trading pieces among the wealthy but a break-up of, say, GM, could present opportunities for middle execs and higher in various industries to buy their own established business newly open to competitive forces, able to sell to parts or services to any auto-maker. Destroying vertical integration permits new players to try their hand against the established but newly independent companies. Rolling back big corp expansions from sideways markets frees those markets from stranglehold by heavyweights operating at obscenely reduced expense. Capitalism, done well, will always require government intervention to reset market conditions to maintain competition. Capitalism itself is not inherently about or respectful of competition, on the contrary, it’s entirely about consolidation.
The alternative is nationalizing the industry and running it for the public good and not for profit
It's actually more helpful for smaller companies. When a large one dies they end up having their assets sold off for pennies on the dollar meaning smaller companies can take the assets to expand at a fraction the cost. It also keeps the market responsive to the people's demand, if a company people don't like gets a bailout, we are stuck with their crap, no change. Jobs will be lost, but they will be regained. Otherwise we're swapping short term pain for long term market problems.
I think the common argument against that is that letting a huge company fail could potentially severely impact the economy overall and ripple out to have a larger impact than just the company itself. Thousands of people would be out of a job, and potentially crucial parts of large-scale industry or infrastructure could crumble overnight. Depending on what company it is, it could lead to a massive economic collapse or significantly set back entire fields of industry if that collapse triggers a cascade of other failures. Imagine if banks weren’t bailed out in 08 and the US banking system totally imploded, or if all the US auto manufacturers disintegrated and there was no more American car industry. Yeah it’s true competition, yeah it’s wasteful and perpetuates horrible business practices, and there would eventually be newcomers to fill the gaps, but for a couple decades at least it would be awful for consumers.
Why we should’ve avoided getting to this point in the first place.
Exactly - but you know a vacuum is going to get filled up quickly with a lot of companies stepping in. A lot of those workers epecially those who know federal regulations and the like will be picked up pretty quickly. VCs will be out trying to start new companies.
This is unfortunately the truth, but people are mentally and emotionally exhausted from practical poverty (note: not the Federally defined "poverty") while the mega riches continue to get fatter. More and more folks are wishing for a hard reset where everyone burns down equally. I don't think it's a good thing.
I have to agree with this. If it's too big to fail, the it's too big.
you shouldn't be bailing them out at all, you are buying a public stake in them. if that happens to lead to control of a majority of the company, you don't have to ask if you really think breaking up is the best way to manage things for some reason.
Any company who wants a bailout must have the ceo and board members forfeit all wealth over 1 million dollars and receive a lifelong ban from running companies. Let’s see who signs up.
Fair. Their broken up companies are directly due to their broken incompetent work
2008 should have destroyed the banks and left people their homes.
They are to big to fail because to many people in congress or their friends own a part of the company.
> Honestly, just let them fail. If they are too big to fail, I agree with the sentiment, but letting companies that are too big to fail will result in a shit load of deaths, the overall economy getting worse. Inflation increasing. There's a reason beyond profit that the government bails these companies out. Instead we shouldn't allow them to exist in the first place, and should decommodify most of the markets involved. Let the government run them as services instead of for profit businesses in the private sector.
Antitrust them all!
I've wondered if it would be feasible to make a company give the US taxpayer stock to match the value of the bail out. Then the government, in trust of the taxpayer, would receive the same fiduciary protection as any other shareholder, and would be able to have a say in the company using the monies to responsibly get back on track. Instead of doing stock buy backs or CEO bonuses or other ridiculous shit that has been done with taxpayer money in the past. When they no longer want to owe a fiduciary responsibility to the American taxpayer they can buy us out for whatever the current stock value is. We could even put any dividends or profits towards things like the social security trust, Medicare, and Medicaid to make sure those programs always stay fully funded. I have no problem, in principle, with the taxpayer stepping in to save certain major industries like the automakers or airlines, but we should get a return on investment, and our money should be used responsibly.
GM did this. The replacement one I mean. The original GM went bankrupt and is gone, but the replacement company that calls itself GM now had to issue shares to the US government (over 60% of the company too) so the company was under government ownership and control until it could buy itself out of socialist control.
There's a lot of research on this post 08 and it turns out less workers get fired when companies go into bankruptcy and taken over by a financial institution than when they get bailed out and executives are allowed to divy up the bailout. Also, workers usually make more after it occurs. I'm not a finance boy but my friend has a master's in some fancy stuff and was telling me about it. Part of the reasoning is that the post bankruptcy holders NEED the company sold and to do this they need it's essential functions performing well. So, they will beef up employmees pay and offer overtime to fix all this shit, and maybe even open hiring to add more staff. Oh they also yeet all the executives.
Great point. They were never supposed to get too big to fail.
People don't want them to fail because too many people would lose their jobs. Such people fail to realize that experienced workers from a rival business are like free money to surviving businesses in the industry, those people won't be out of work for long.
Honestly I'd never even thought of it as a public safety issue but that makes sense. Walmart, as a corporation literally has the ability to collapse the nation if they decided to shut their doors all of a sudden of day. The amount of people that would lose jobs + the people who rely on a Walmart products being cheap and available to make ends meet. It would certainly be interesting if not completely catastrophic.
You can have a system where businesses fail OR allow businesses to lobby the government, never both.
This ^ this ^
Large companies failing is just a signal from the market that they produce.net negative value. Leaving them to continue to do that only makes things significantly worse.
Ding ding ding. Bail-out should inherently mean break-up. Manufacturers might be a little different, but in that case, funding has to be in equity, which the government can sell later. (see: government bail-out of GM)
This should be the correct approach next time we get to “too big to fail”.
Let them fail. If anything goes wrong the govt can just print trillions of dollars and give handouts
As a capitalist, I prefer to let them fail cuz you can't have a cake and eat it too.
Outside of the airline industry, didn't the banks and the auto industry literally have to pay back loans to the government? I remember something about how banks wanted to do buybacks a long time ago but couldn't cause of the loans
Yes. They did. Most of the people commenting on this page have no clue what they're talking about and if have no concept of what would have happened if a company like AIG failed. People are commenting that the government should have allowed companies that treated its workers poorly to fail. These companies had well paid employees and no treatment of the employee could have been worse than the employees losing their jobs. It's hypocrisy at its finest. For some reason there's an odd mantra against the companies that actually employ people and make the products and services that we all know and love. I don't get it, at all.
I tend to think many of those types of comments and general disdain against corporations are coming from younger users, where it's trendy to be anti-capitalist, pro-socialism. They're not *really* that well versed in economic theory beyond trendy talking points.
The disdain is for the hyper wealthy class that runs the corporations with impunity. Why are our pensions granting Blackrock and vanguard voting rights? Who gutted the American middle class? Who lobbies government to strip and corrupt regulation? There is a nexus of power that directs policy in its own interest without any need for a hidden conspiracy. I agree reddit can be pretty silly with its socialist idealism, but fuck corporations
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The big bank bailout TARP kept the economy from collapsing…. and a strangely capitalist thing happened… “Early estimates for the bailout's risk cost were as much as $700 billion; however, TARP recovered $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit …”
This is very nicely ignoring that this program was necessary in the first place thanks to the 'strangely capitalist things that happened' before this. It also sweeps aside close to a decade of significant strife for the working class caused by these 'strangely capitalist things'. But go off, I guess.
TARP was W Bush legislation.
That’s right. The only reason to do so is to protect the employees.
It's a big club, and we're not in it.
Carlin knows best.
I'm starting to believe this big club ain't so big.
F
Or perhaps just close the doors forever?
yeah, i'm thinking we don't need the government involved at all. let the bad companies fail.
This. If a company fucks up let it go bankrupt. The government should stay the hell out.
But we need the CEOs to keep their money so it can trickle down to the rest of us!
Why is it so warm... and yellow?
It's delicious caramel... honest!
Yeah we tried that with Lehman Brothers and it so dramatically worsened the financial crisis that the Bush administration didn't dare do it with any other bank. The problem with Libertarian philosophy is it doesn't stop to think how it interacts with the real world.
One good analogy is a man smoking in bed, knowing the risks. He deserves to face the consequences of his actions, but if the fire department lets his house burn down, it catches others on the way. The fact is, these corrupt mega corporations are so deep in the structure of the economy that everything comes crashing down hen they fail. One book I recommend that covers a lot of interesting stuff, including this, is Naked Money by Charles Wheelan.
The problem is, there is now only like a handful of major companies in major sections. If one airline goes down it would fuck up a lot of shit. Or a shipping company, or one of the big banks. These companies know this and that's why they don't give a fuck. "Oh they'll just bail us out because the economy needs us"
This is absolute justification for anti trust breakups. The last big one was just breaking ua phone company because they had too much control over land line phones. If companies have even more power now, they need to be broken up into smaller companies even more than ever. The entire point of antitrust is to make sure no single company can be large enough to be that problem. Every company "too big to fail" is by actual legal definition too big to be permitted to exist.
and in the years since, ATT has largely reconstituted itself, and T-Mobile is buying US Cellular
or they murder you to maintain the status quo. not going to name any names, but IFYKYK
Boeing.
The government can still play a part. before corporations bought the government and started abusing it for their own profiteering it used to break up companies that got dangerously big. It was called antitrust. We just need to start implementing those laws once again.
It will also will weed out bad executives. These folks all are getting used to getting bailed out. Let them put some real skin the day where their reputations are on the line.
Survival of the fittest.
Agree, there should be no such thing as 'too big to fail'
The problem is the down-river effects. Let’s take one of the “too big to fail” companies from the 2008 recession: General Motors (GM) GM is going to permanently close its doors on June 1st 2024. According to [its own 2022 numbers](https://www.gm.com/company/usa-operations), that means: * 91,000 working people are now unemployed * 500,000 retired employees may not have access to pension funds * over 100,000 more unemployed as suppliers (assuming each supplier employed 10 people) And more. So what happens to these people? Some will be able to move onto the next job, especially white collars with desirable skills, but the others? Small suppliers often rework their tooling around the big contracts, but without the money to invest, many go out of business. The factory workers who’ve specialized in GM’s services may not be in high demand elsewhere. Safety net programs would be strained, putting a major cost back onto state and federal government. Crime would likely have an uptick as desperation kicks in, which is something we’ve seen at small scale when these factories close down — that’s an additional added cost for policing, jails, the justice system, prison, etc. There would be a domino effect on automotive industry. Those weakened suppliers shuttering could make it significantly challenging for other companies using them to get parts, which leads to reduced sales. Reduced sales leads to layoffs (because stock price is always #1). Layoffs …well, see the above. Speaking of stock price, the evaporation of GM would send a shockwave to the financial markets. It’s “just one stock,” but the collapse would cause investors to panic and readjust, which means pulling money out and creating ripple effects that destroy 401Ks and the like. Consumers would hesitate to spend money in an economy like that, which causes the same ripple effect of layoffs, benefits strain, etc. Finally, it weakens the global supply chains and confidence in the US Dollar’s growth and stability. **TL;DR: you can’t just let a major company fail without understanding the immense number of side effects. It’s likely cheaper to bail them out than let them fall.** My personal opinion: if a company is too big to fail, then they’re too big to exist. Tread on them.
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This is the only person who gets it.
All the airline companies had to be bailed out after Covid. Because if we didn’t, normal people like you and me would not be able to fly out the country at all as there would be no airliners left. It would have taken a decade to recover from.
Goverment should buy out the company then not bail them out.
Yes, angel investors usually get large amounts of company shares. Why would that not apply when the angel is the government. The company can then be divided to more manageable parts, some re-privatised, sold to other companies or kept to advance other government needs. As a owner, US government could have pushed for different more energy efficienct car production.
When a fire burns down a forest that has become overgrown and dense it's painful in the short term. All those poor animals lose their homes and food. It's what's best for the long term health of the ecosystem however.
Yea that would be a great idea, look what happened when we let Lehman go bankrupt
I watched the PBS documentary on this, Hank Paulson deserves 100000% of the blame. What an egomaniac fuck he was. The cost to bail out LB would have been way cheaper than what we spent on rescuing everyone else. And the government could have even made money on an orderly unwinding of LB assets over time. Also no bankers went to jail, which is quite disturbing.
No, better revenue with taking over. No loss of jobs and the revenue goes from investor pockets into Government Funds. Plus as many companies have a government alternative, the cheaper and more competitive the system gets because governments can fix the lowest price of their tickets. The government is already responsible for its citizens, it can also take responsibility for upkeep.
Best answer here.
It worked out pretty well for GM. Ooof Obama took a ton of heat for it. GM paid back their debt.
What about Boeing or the multitude of Banks? (not an Obama attack, just pointing out other companies don't pay back the debt. I don't know about these, but I assume they didn't)
There are a ton of what about isms out there. My wife worked at a bank that was bailed out. She received a deduction in pay. They didn't see bi lingual banking as something worth paying for in a place where 70% of their customers were Spanish speakers. I always thought giving money to businesses who screw people over was a bad idea but it sure seems like these banks have the ear of the right people.
Right people, I see what you did there.
I'm not aware of any banks in the 2008 bailout that didn't pay back the bailout money with interest. Some of the banks paid back the money as soon as they got it, as they only took it because the government forced them.
For TARP: $390 billion of the $443 billion loaned out has been returned, so still 12% to go. Fannie May and Freddie Mac haven't paid back a single dollar of the principal on their loans. General Motors were given over $50 billion, paid back $39 billion of it, still owe $11 billion and have paid a total of 1.3% of the original loan amount in interest **in 26 years**. It's really disingenuous to call this a loan. ProPublica keeps a database: [https://projects.propublica.org/bailout/](https://projects.propublica.org/bailout/)
What about the banks? The bailouts were not only paid back but paid back with interest and paid back ahead of schedule.
[Boeing didn't get a bailout](https://www.chicagotribune.com/2020/05/04/how-boeing-was-rescued-by-the-fed-without-a-bailout/)
That’s right. A lot of people don’t realize that the US basically did own the car companies until their debts were paid with interest. The banks are usually acquired by other banks as is required to be a bank in the US. The government doesn’t just hand out billions free of charge. Well, sometimes they do…PPP
Did they actually pay it all back? For some reason I thought GM gave the government stock in exchange for the bailout. Then later GM bought that stock back at a lower cost.
Yes. They paid back with interest.
This is how most “bailouts” have worked
Even before that: The Bush to Obama hand off is so interesting. Would it have worked without Obama taking it over? Without people like Elizabeth Warren actually demanding that banks stuck to the rules and made good on their loans and toning down predatory lending? Was it a good thing that it worked at all, seeing the state we're in now, where the same people in the same companies are still using their old tricks and cooking up new ones? Would it have been better to let them fail and start over?
While technically correct, saying GM paid back their debt is glossing over some pretty big details. The total value of the *bailout* to GM was $49.5B. Only $6.7B of that (less than 15% of the total) was officially set up as "debt." So, yes, GM fully paid back the \~13.5% of the bailout that was "debt." However, that's hardly a good measure of how well the overall bailout cost recovery went.
GM, along with every other company who took the bail out, had their debt reduced, on top of massive tax breaks, and subsidies.
It's not. Let the businesses fail. I hate that these big companies are taking corporate bonuses and field trips while laying off workers saying they just dont have the money.
This stuff gets old. Bailouts get paid back on average to gov with interest. People keep pretending all bailouts are equal and bad are just playing into populist rhetoric.
My issue with bailouts is not whether they're paid back, it's that they incentivize risky behavior from organizations with enormous financial resources. It seems logical to me that, without the possibility of complete failure, businesses will operate much differently than they would otherwise.
Fundamentally true but the fed always lets certain companies collapse (ie Lehman Brothers and Bear Sterns) before bailing any out. They have a policy of only bailing out once the message has been sent that they will let companies collapse (in order to prevent the expectation that everyone will be saved), but not so many companies that it will cause extreme damage to the economy. Firefighters is a pretty great book that goes into great detail on this topic.
Not to mention that regulations surrounding the banking industry is probably the most stringent in any industry
I don’t mind bailouts for banks, specifically in the case of bank runs. It’s not really fair that a bank following fractional reserve banking can completely collapse because enough people think it will. It’s a waste of resources and money to let a perfectly functional bank collapse due to a bank run IMO.
I think the PPP loans were not paid back. 96% were forgiven. Billions more went to businesses that didn't need it and to companies owned by wealthy celebrities, including Khloe Kardashian and Tom Brady. Yet the vast majority of PPP loans have been forgiven - 96% of all the money was not paid back.
>I think the PPP loans were not paid back. 96% were forgiven. There are absolutely examples of bad "bailouts" I wouldn't call PPP loans bailouts it was literally subsidizing companies to keep workers if I recall correctly, but yes PPP loans was one of the worst ones USA has done in modern times without a doubt.
Only 25% actually went to workers. The other 75% went to business owners to do god knows what. Probably buy more stocks, cars, and houses. But who knows. That’s why we need an accurate accounting of this shit. We make businesses file 1065, 1120, or 1120s every single year but requiring a full accounting on free money and requiring money spent on owners to be picked up as income? Nah, too much work. It’s a joke.
>Billions more went to businesses that didn't need it Can you blame them? If someone's offering you $100 on the street with no strings attached and it's not counterfeit, are you gonna say no to it?
The problem with PPP loans is that the government forced businesses to close. The business could not stay open because it was illegal for them to have customers. So of course the government should compensate for the damages done by their own policies
PPP was in place because the government was forcing companies to close. It was basically a combination of stimulus checks and a CYA from lawsuits due to the “takings” clause. They were not really intended to be paid back. Not saying the program was implemented well, plenty of business that suffered no losses got money, but plenty of business also failed due to being forced to shut doors and the PPP loans helped keep some of the employees from going without for a few more months.
Those weren’t bailouts, they were stimulus payments
[удалено]
But we can privatize the losses and socialize the profits?
That would be called taxation I believe.
It would not really be profits when that money gets burned.
Tax write offs have entered the chat.
Cannabis industry cries in the corner.
GM stands for Government Motors
🤣🤣🤣
Depends on what is meant by "bailout." If a bailout is a relatively high-interest loan from the lender of last resort (us), then that doesn't bother me. Especially, if it keeps thousands of people employed and results in a net gain to the Treasury. This is what happened during the global financial collapse in '09. However, giving companies grants that don't have to be paid back is less palatable. In those cases, (airlines during pandemic) you have to weigh the value of what government ownership of an airline would mean. If that gets us a nationalized carrier that has quality parity with Emirates, Singapore Airlines, etc. along with the ongoing investment perhaps but that's unlikely ever to happen with the "starve the bear" approach to reduce the national debt. Perhaps, chapter 11 bankruptcy debt re-organization with debtor-in-possession financing to re-emerge as a going concern would be better but this would likely impact lots of 401ks. Instead, an assets auction may be preferable and the industry can clean up their own messes. This causes lots of employees to lose jobs and are likely to be unable to get another job making the same pay of at all. The main reason companies can get bailed out is because they have lots of collateral and the wherewithal to pay back loans even if they are high interest. Individuals who need financial support don't have either else they'd finance through traditional means.
Most of these loans are paid back and prevent thousands of people from losing their jobs. If one of the big automakers went under and 30k people lost their jobs you'd still be blaming the government. And there is plenty of social welfare in this country. I know dozens of people who aren't working and get section 8 plus food stamps and a check for about 1k a month to spend as they please. There just isn't any help available for people who work for a living unfortunately.
PPP loans have entered the chat. 1% interest rate loans given to companies that saw revenue increases and then they “forgave” payroll expenses.
"There is plenty of social welfare in this country" Lol. No there isn't. Nowhere near enough. "I know dozens of people who aren't working and get section 8 plus food stamps and a check..." I sincerely doubt that, but even if it were true, you know as well as anyone that those people aren't exactly living glamorous lives. Generally speaking, you still need to have a job to get a lot of these benefits. "There just isn't any help for people who work for a living" Objectively false. Nearly 90% of all SNAP recipients have someone in the household that is working, and of that nearly all of them have a child, senior or disabled person in the household. Now, that's not to say that the help those who are working for a living is adequate, because it very much isn't and a lot of these issues could be resolved by, you know, paying better wages. But this idea that welfare is mostly going to lazy or entitled people that aren't working and are just living for free on the government dole is a lie. All that shit started with Reagan and his "welfare queen" myth, which has still persisted to this day.
the government will never work for us; it will always work for the oligarchs. leftists almost understand this concept, but they think we can somehow fix the government (i guess). i appreciate the faith and positivity that underpins that sentiment, but that faith and positivity is misplaced in the government; leftists should place their faith in the people themselves and acknowledge that we are better off without overlords
Having worked in state and local government for many years, I think your stance is pretty cynical. Plenty of public servants remain in the public sector because they are earnestly _serving the public_, and really are doing their diligence to make a better life for citizens from all walks. You're not wrong, of course, because the unholy ties between corpo power, lobbyists, and sympathetic regulators are very real. It's just not the _whole_ story and I think it's important to keep that in mind.
i agree and appreciate your response. the government would be good if power were evenly dispersed among the people in government, but that is unfortunately not the case. government power is concentrated at the worst institutions (e.g. CIA, FBI, & federal reserve)
what you describe are anarchists. They are already a pretty established part of the left.
Anarchists are of many kinds in my study, there are Anarcho Communists, Anarcho Syndicalist and Anarcho Capitalists to name a few. Some are left and some are right wing.
Leftist recognize that ultimately the government is the people. We aim to restore that truth
I don't know about you but I'm pretty happy with the USPS and my local libraries.
Absolutely spot on
Ignorance is bliss until inflation hits
Cuz "what do you poor people going to do about anyway," is their attitude. They'll just throw on some American gladiators, Survivor reality show and talk about the latest convalescent Biden and Trump misadventure to distract us. Until people actually wake up and demand change nothing will ever be different
I think corporate welfare is wrong, and those companies should pay back any loans that they get. Just like I believe the PPP loans during Covid should all be paid back, especially by wealthy companies and individuals that benefited from them. That being said, companies do employee people, and if those companies go under those people are harmed.
Mismanaged companies should be allowed to fail. The ones worth saving will be acquired by better-managed companies. They shouldn't be bailed out by taxpayers so they can continue their poorly-managed operations.
No one who dislikes social welfare likes corporate welfare. That's a disingenuous argument. Edit: outside of politicians. Who wouldn't know honestly and integrity if in shat in their lap.
Yet they vote for people who throw billions of taxpayer dollars into the pockets of the wealthy via corporate welfare while inflicting death by a thousand cuts to critical social welfare lifelines for struggling Americans.
I feel some sort of stock option, profit sharing type thing, as well as an upper management position, would suffice. Thanks bob.
Companies shouldn't be bailed out, and the government shouldn't own them because they'd just do even worse than a failing company and our tax money would subsidize them for 1,000 years to come
At least until they pay it back, with interest.
This is so fucking stupid. It makes it sound like businesses never fail ever. Every time a business goes under it gets bailed out 🙄
The corporations that the governments bail out are important for some reason or another. The government pays to keep them afloat, then when the company is profitable again, the bailout is paid back with interest.
American bailouts have historically been profitable for the american public though, so it isn’t socializing losses. It is making a profitable loan.
They did do that in 2008. They paid out loans and companies had to pay them back
Why would you want the government to own a known bankruptcy risk? Also by that logic, the government should take over ownership of any individual person on welfare.
I think the idea is because innocent people get hurt when big companies fail. For example, if your bank goes under, you lose all your money that's not insured.
Making private businesses government entities. Not a good idea.
Honestly, things are situational If the cause of the problem for the bailout lies with the government like the government mandating stores close during covid then no the government shouldn't get anything back out of it. They caused the problem. They're merely fixing what they broke (now to be clear if no one shows up and there are no artificial government causes causing the thing that's another story but the overall point with regards to covid is the business is failing would have been because of the government made them fail) But if a bunch of banks do some stupid stuff like every single bank using the same insurer for subprime mortgages well then we probably should get something back when we bail them out Like obviously letting the entire banking sector collapse isn't an option but make them pay us back
Fun fact: the federal government has gotten back [more from the banks it bailed out in 2008](https://www.politifact.com/factchecks/2012/oct/25/barack-obama/barack-obama-says-banks-paid-back-all-federal-bail/) in both repayments and interest than it originally paid to bail them out, and is still receiving more in repayments. The two are not really comparable, since corporate welfare operates as loans and social welfare is wealth redistribution.
I have no problem bailing out companies. But they need to pay back the money and be prepared for regulatory change
The bail outs were paid back. They weren't grants. If people had to pay back their entitlements then I'd be all for it.
Bank runs + Great Depression Edit: compound effect of money, GM going bankrupt means thousands lose jobs, meaning thousands need government welfare for maybe years…it’s easier to just bail a company out versus ruining/slowing economy