Real problem in the USA: Risk = Public. Reward = Private

[Deleted member 4644]

All bullshit aside, the real and biggest problem in this nation is that the rules put in place by the rich have made almost all risk public and almost all reward private.

Dem or Republican, Rich or Poor we have ALL been moving in that direction for a long time.

I would argue that the rich republicans have the worst record on this, but I am sure examples can be found where poor democrats have lobbied for remarkably similar rules.

We live in a disgusting capitalist/socialist hybrid, where public money is collected and disbursed to the most greedy and corrupt among us:

Land developers, contractors, vendors and others who claim they are adding value to a local, but in reality, much of the time, are sucking quality jobs and substance out of the system.

Huge corporations like Wal-Mart and Cabela's get 100s of millions in direct and indirect subsidies, and bring few jobs, and shockingly few quality jobs.

Nasty left leaning government contractors get work on the basis of how many minorities they hire or who they know in the local council.

It is all fucked, and frankly I am almost glad things are going so badly right now.

I just worry the corruption will get worse, not better.

I am a strong believer in the public good of government and taxes and helping people get back on their feet. But I am disgusted by the way our government, on both sides, has turned its back on real values.

 

[bamacre]

Originally posted by: Deleted member 4644
I am a strong believer in the public good of government and taxes and helping people get back on their feet.

All the crap you complain about, and rightfully so, is done in the name of exactly what I just quoted.

And it is the middle class who gets most of the shaft, as the elite and the poor use the government to fight their battles.

 

[GTKeeper]

In general what we have in our country is as follows:

Profits are privatized and losses are socialised. I don't think people will put up with this for long. If companies are 'too big to fail' maybe they are too big to begin with.

 

[bamacre]

Originally posted by: GTKeeper
In general what we have in our country is as follows:

Profits are privatized and losses are socialised. I don't think people will put up with this for long. If companies are 'too big to fail' maybe they are too big to begin with.

The question is then, how did they get so big?

 

[MovingTarget]

Originally posted by: bamacre

Originally posted by: GTKeeper
In general what we have in our country is as follows:

Profits are privatized and losses are socialised. I don't think people will put up with this for long. If companies are 'too big to fail' maybe they are too big to begin with.

The question is then, how did they get so big?

Stock price plateaus, companies merge, massive layoffs commence, stock price rallies for a while, eventually reaching a peak. Rinse. Repeat.

I think the problem here is that people seem to think that Capitalism requires that we let companies or their shareholders simply do whatever they want to get high returns, no matter the cost to society. These past few years, many large companies have merged into truly large behemoths. The body responsible for overseeing and approving these just get a few small, token concessions that mean nothing in the long run so they can get around our now toothless antitrust laws. Meanwhile, consumers are left with fewer choices, diminished service, reduced competition, and hey, a lot of people find themselves out of a job.

It is time we give our antitrust laws some teeth again. This 'too big to fail' situation could've been prevented.

 

[QuantumPion]

The problem isn't that capitalism lets companies do whatever they want to get high returns. The problem is that when companies fail, instead of letting them fail to let more successful businesses take over, the government steps in to bail them out. They do this in the name of preserving jobs, as if the purpose of a company was to provide jobs to people as a social program, as opposed to making money.

 

[MovingTarget]

Originally posted by: QuantumPion
The problem isn't that capitalism lets companies do whatever they want to get high returns. The problem is that when companies fail, instead of letting them fail to let more successful businesses take over, the government steps in to bail them out. They do this in the name of preserving jobs, as if the purpose of a company was to provide jobs to people as a social program, as opposed to making money.

If they were smaller companies, would the government really care enough to bail them out when they fail? Having multiple smaller companies, and keeping them from getting too big, is a way of preserving jobs that I would argue is more efficient than propping up the big guys...

 

[QuantumPion]

Originally posted by: MovingTarget

Originally posted by: QuantumPion
The problem isn't that capitalism lets companies do whatever they want to get high returns. The problem is that when companies fail, instead of letting them fail to let more successful businesses take over, the government steps in to bail them out. They do this in the name of preserving jobs, as if the purpose of a company was to provide jobs to people as a social program, as opposed to making money.

If they were smaller companies, would the government really care enough to bail them out when they fail? Having multiple smaller companies, and keeping them from getting too big, is a way of preserving jobs that I would argue is more efficient than propping up the big guys...

That's a pretty naive and simplistic view of economics. You think big stores like Walmart are bad for the economy because smaller stores means more jobs?

What about the truck drivers that transport goods from depots to the big stores? The accountants and logistics people who organize the stores' inventory? The contractors that buy and sell goods to these companies? The small luxury goods stores like Starbucks that have customers because people who shop at big stores save enough money to spend more disposable income on luxury items?

Furthermore, large companies are much less likely to go under in a recession since they have a large amount of capital to work with. A few big companies have gone under recently like Circuit City, but how many small business went under (or fired employees) because they lack the resources to survive a recession?

I don't think the government should prop up any business, large or small anyway.

 

[Jaskalas]

Originally posted by: Deleted member 4644
Title: Real problem in the USA: Risk = Public. Reward = Private

Then join a third party that believes in making the risk private as well. We don't have to waste trillions on failed institutions.

 

[RichardE]

As long as no one wobbles the house of cards the system works. Its beauty is in its worldwide reach, no one can push it over the edge without destroying themselves.

 

[MovingTarget]

Originally posted by: QuantumPion

Originally posted by: MovingTarget

Originally posted by: QuantumPion
The problem isn't that capitalism lets companies do whatever they want to get high returns. The problem is that when companies fail, instead of letting them fail to let more successful businesses take over, the government steps in to bail them out. They do this in the name of preserving jobs, as if the purpose of a company was to provide jobs to people as a social program, as opposed to making money.

If they were smaller companies, would the government really care enough to bail them out when they fail? Having multiple smaller companies, and keeping them from getting too big, is a way of preserving jobs that I would argue is more efficient than propping up the big guys...

That's a pretty naive and simplistic view of economics. You think big stores like Walmart are bad for the economy because smaller stores means more jobs?

What about the truck drivers that transport goods from depots to the big stores? The accountants and logistics people who organize the stores' inventory? The contractors that buy and sell goods to these companies? The small luxury goods stores like Starbucks that have customers because people who shop at big stores save enough money to spend more disposable income on luxury items?

Furthermore, large companies are much less likely to go under in a recession since they have a large amount of capital to work with. A few big companies have gone under recently like Circuit City, but how many small business went under (or fired employees) because they lack the resources to survive a recession?

I don't think the government should prop up any business, large or small anyway.

Walmart? Yes, but that isn't to say I am against larger chain stores in general. If they went under, we would be in for a world of hurt economically. The truck drivers wouldn't be out of work, if say there were a number of competing regional stores (chains even) that they had to deliver goods to. Same with the supply depot people, because people will still be looking to buy the same goods that they do now. The accountants and logistics people would still have their jobs too, but there would be more openings because multiple organizations require more duplication of said jobs than a single monolithic entity.

To take your tech store example, that is a situation where there are multiple other chains that can swoop in and take over or other entrepeneurs that would fill the gap left by CC. Remember CompUSA or other smaller entities like Campo? They were healthy competition. If any one of BB, Frys, etc. failed, we would not be in as bad of a situation than if they had simply all merged. That would be hell for consumers and the government alike as they would hold enough of a single sector to hold a gun up to Congress' head for a bailout to keep them afloat. Smaller companies, if properly managed can survive a recession as easily as the big guys.

Another example would be what is currently going on with the big 3. Perhaps you remember all the smaller companies that were their predecessors....Chevrolet, Chrysler, Plymouth, Eagle, Hudson, Dodge Brothers, Mercury, Lincoln, Deusenberg, Cord, Olds, Herst, 4WD, etc. Many of them weren't simply divisions created within a larger company. They were their own entities at one point. Some merged, some died, but the fact of the matter is that if we had limited the growth in the "What is good for GM is good for America" era, then we wouldn't be in this situation. Sure, we'd have many failing companies, but we'd have enough built-up efficiency in the market that a single failure wouldn't absolutely kill our economy.

 

[Triumph]

Privatize the profits and socialize the losses: You are right. All particulars aside, that is really the fundamental problem. Because it isn't capitalism, because there's no risk of loss to provide a counterweight to taking the risks for profits. What happened to all the money that these large companies made the last few years? Shouldn't they have set something aside for a rainy day? And its not just the big companies, it is reflected at every level in our society. A middle class family wants a $600,000 house that they can't afford, now they want help on their mortgage. The government wants to spend money it doesn't have. Everyone needs a wake up call to our destructive behavior.