We talk a lot about individual welfare, and while I'm generally against a lot of entitlement programs, it's really small potatoes compared to how much of our tax dollars are thrown into corporate welfare.

Exhibit A: Looks like Countrywide Financial is getting a $51 Billion bailout.

http://www.rgemonitor.com/blog/roubini

I really like the last paragraph:

"The lesson of this sad and sleazy episode is that when profits are privatized and losses are socialized we get sleaze capitalism and corporate welfare that becomes public bailout of reckless lenders. All this from a US administration that hypocritically praises every other day the virtues of private markets capitalism. For all of us who do truly believe in free market economies where a variety of public goods are provided by governments and the financial sector is properly supervised and regulate this is not a capitalist system but rather socialism for the rich."

If we're going to purport to operate in a relatively free market, let's fucking man up and do it, even if it means that irresponsible corporate governance means that a lot of big companies may fold.

11/28/2007 8:59:13 AM

THe govt needs to stop giving out handouts, in my opinion. Giving a business a tax break is ok, as long as the other businesses its competing with get the same. However, state and local govts will give one company a tax advantage and even money that gives them an unfair advantage over the current businesses. I think this counteracts the free market.

If it is a poorly run business it should die off, many do every day in the US. However, when they employ large numbers the govt keeps them afloat. I can see the reasoning, but Im not sure I agree with it. At least these bailouts keep a company and its employees productive not like individual welfare.

11/28/2007 9:05:31 AM

Quote :

"At least these bailouts keep a company and its employees productive not like individual welfare."

CFC has about 48,000 employees after the most recent round of layoffs. The bailout in no way means that further layoffs will not happen. $51B divided among the 48,000 employees is over $1 million PER employee.

Individual welfare would be CHEAPER in this case, and that assumes that without the bailout, all 48k employees would lose their jobs, and that all of them would be unemployed for decades.

EDIT: I don't want this thread to degenerate into yet another individual welfare thread, but the real point that I want to make is that these bailouts may create some short term stability, but are very very bad in the long term.

[Edited on November 28, 2007 at 9:25 AM. Reason : asdf]

11/28/2007 9:22:40 AM

^ Nailed it.

11/28/2007 9:27:04 AM

Let's not forget corporate agriculture

http://www.time.com/time/magazine/article/0,9171,1680139,00.html

11/28/2007 9:42:02 AM

Its such bullshit. They fucked up. Let 'em burn.

11/28/2007 9:50:59 AM

and it encourages moral hazard

11/28/2007 9:53:22 AM

http://brentroad.com/message_topic.aspx?topic=503737

remember guys, Cheney says NO BIG Gov'T. unless you are one of his corporate buddies then it is ok to use tax payer money to provide welfare in order to save his business. a Vice President needs someone to go play golf at the country club with. Being seen w/ a unemployed exCEO or a failed business owner is just tasteless.

[Edited on November 28, 2007 at 9:55 AM. Reason : a]

11/28/2007 9:54:51 AM

No one is helped being made a ward of the state- individuals as well as corporations. The Constitution gives the federal gov't no authority to dole out welfare to anyone.

11/28/2007 10:02:30 AM

Quote :

"CFC has about 48,000 employees after the most recent round of layoffs. The bailout in no way means that further layoffs will not happen. $51B divided among the 48,000 employees is over $1 million PER employee. Individual welfare would be CHEAPER in this case, and that assumes that without the bailout, all 48k employees would lose their jobs, and that all of them would be unemployed for decades. "

Wow. Did you even read the sentence you qouted. I stated at least this money helps keep a company which employs thousands afloat and being PRODUCTIVE. THat was the point I was making between the two. If you ran a business you would not assume that 100% of income pays only for employees. I would imagine this company has HUGE overhead/debts that most of that money would go towards. So, your 1 million per employee isnt really a logical arguement.

However, you seemed to ignore the fact that we agree on this issue. As seen in the rest of the paragraph the sentence you qouted was in.

11/28/2007 10:03:51 AM

Quote :

" I stated at least this money helps keep a company which employs thousands afloat and being PRODUCTIVE. THat was the point I was making between the two"

The only benefit in terms of our economy in making sure that the company in question continues to be productive is to keep their employees employed and not collecting unemployment.

Beyond that, there is an overabundance of companies that would instantly fill any void left by the actual work that CFC does if it were to fold. That's a non-issue. That's the definition of competition.

Hell, if CFC did fold and its competitors bought up the existing loans on auction at cut-rate prices, they'd probably wind up hiring a lot of ex-CFC employees to handle the extra workload. Ultimately, the $51B gift is an egregious waste of our tax dollars

11/28/2007 10:48:01 AM

^I agree. As I said earlier I think these handouts counter act the free market.

I was trying to show the difference between cooperate welfare and individual welfare, how one at least prolongs some attempt at productivity.

11/28/2007 10:50:56 AM

I like how the WhiteHouse is happy to help out Countrywide Financial and other businesses but balks at doing anything to assist in the current mortgage crisis. Oh I forgot most of the aid during this situation is going to the banks and lending institutions to fluff their bottom line while the common American is being flung to the street.

The only thing that pisses me off more then crack moms getting welfare checks for pumping out babies; is hearing big businesses whining when they have a bad quarter and getting hefty sum of "assistance" from their friends in federal Government. Do not preach free markets and capitalism if you are going to bail out corporations who are about to fold due to natural market pressures.

I am curious how are self-labeled conservatives and W groupies hooksaw & TreeTwista10 feel about this. Will they support conservative ideals in that these non-profitable businesses should be allowed to crash n burn due to market forces; or will they play partisan politics and support the actions of our friends in the oval office.

[Edited on November 28, 2007 at 11:08 AM. Reason : a]

11/28/2007 11:04:49 AM

Quote :

"Do not preach free markets and capitalism if you are going to bail out corporations who are about to fold due to natural market pressures"

yes

"capitalism without failure is like religion without sin"

Quote :

"even if it means that....a lot of big companies may fold"

exactly

companies are practically immortal [legal] individuals

no matter what crimes they commit, they just pay the fines like it's a regular business expense



I kind of like the idea of citizen votes being able to revoke corporate charters

if flesh and bones individuals are subjected to the death penalty, corporate "individuals" should also be

although I haven't put much thought or research into it

thoughts?


[Edited on November 28, 2007 at 12:29 PM. Reason : ]

11/28/2007 12:26:50 PM

It's fucking hypocrisy. If a middle manager "mismanages" $2 million of corporate funds he's going to jail for 15 years for embezzlement.

If a major corporation i.e Halliburton "misplaces" $6 billion of tax payer dollars; they get a few shoulder shrugs and a new contract from Bush & Friends.

11/28/2007 12:46:14 PM

^you are right hur. However, sadly its not just to limited to that one company or only friends of whatever admin in office. There is waste from A to Z throughout our govt. Which is why I fight against handing over healthcare completely to them. It would just be another excuse for them to tax people more and waste it without any accountability.

[Edited on November 28, 2007 at 1:54 PM. Reason : .]

11/28/2007 1:53:44 PM

Yeah I had a 3 hour debate against my parents who are all about Universal Health Care. Everytime I'd make an assertion they would just say "you pay for the LaTika's health bill anyway"

A overhaul is overdue in the healthcare industry but handing out free coupons to see the doctor is not the right course of action imho

11/28/2007 2:06:00 PM

^how do you feel about govt getting out of the healthcare business? That would be my suggestion.

11/28/2007 2:10:30 PM

Quote :

"I like how the WhiteHouse is happy to help out Countrywide Financial and other businesses but balks at doing anything to assist in the current mortgage crisis."

wat



This post makes no sense.

11/28/2007 2:17:14 PM

Prawn, I think his point was to send the money directly to the families, perhaps in a credit card so they could blow it on strippers and booze, then want more.

11/28/2007 2:19:04 PM

^^I think he is talking about helping the "victims" of the subprime meltdown.


To be fair, though, this $51B bailout theoretically will help individuals in that Countrywide will use it to restructure loans to be more affordable to the individuals who were caught with an ARM that they can no longer pay for.


Either way, reading about this infuriates me.

Neo-conservatism - Where you can chastise a single mother abusing foodstamps by buying oreos with one side of your mouth, and with the other you pass out giant sums to incompetent businesses.

[Edited on November 28, 2007 at 2:23 PM. Reason : d]

11/28/2007 2:22:57 PM

Quote :

"Neo-conservatism - Where you can chastise a single mother abusing foodstamps by buying oreos with one side of your mouth, and with the other you pass out giant sums to incompetent businesses. "

Exactly. I do not dislike the NeoCon economic polices of the Bush admin b.c they want free markets and a hands off gov't approach to the economy. I do not like their policies b.c. they talk the talk of conservative economics; then instead of handing money to incompetent poor people who waste tax payer money they instead use it to provide corporate welfare for businesses run by incompetent leaders, those that aren't profitable, or just to give tasty contracts to their buddies with vested interest or power within a company who then waste tax payer money.

11/28/2007 2:44:04 PM

Lets be clear here: Countrywide has borrowed approximately 51 billion from the Federal Home Loan Bank in Atlanta over the course of the last year due to liquidity issues. They were not just given $51,000,000,000 by the government, and they are obligated to pay it back.

The reason that this is a "bailout" is simply because no other bank would take the risk of lending that kind of cash.

11/28/2007 2:54:45 PM

^Well that makes a difference.

There really shouldnt be an arguement, unless you expect the individual welfare people to repay thier money. You might disagree with the loan, and I do. However it shouldnt be compared to welfare.

11/28/2007 2:58:48 PM

It is absolutely a bailout because the collateral for such a huge loan consists of Countrywide's portfolio of foreclosures, subprime disasters, and loans in default.

In other words, a responsible bank wouldn't even dream of making that loan to Countrywide. It will end up being a bailout.

11/28/2007 4:12:08 PM

yes, a Gubment bailout may become necessary in this case, and Countrywide and others may become a conduit by which Gubment fixes capitalism's shortcomings.

to those of you who say, "you knew what you signed up for when you took the mortgage!", i say shut the hell up in this thread, because you knew what you signed up for when you voted for this administration.

or did you?

51% of you geniuses voted for this shit.

seriously, the writing has always been on the wall.

and i'm not even talking about the mortgage meltdown specifically.

they grounded a shit ton of F-15s today. guess what, new planes on the way baby!

our capital market stability is becoming dependent on our crack dealers raising production, and in turn buying stakes in our assets with those same petrodollars.

by itself, foreign direct investment is positive; but guess what happened this week? Citigroup basically BECAME A SUBRIME BORROWER! That's right smart folks, 11% dividend for the loss!

i don't want to sound like a scene from Syrianna, and I can't say it any better than Ike, so i'll just save myself the time.



so my dear geniuses,

the next time you feel like re-defeating communism and putting witty bumper stickers on your SUV, which runs on blood at $3/gallon and is costing your countrymen and arm and a leg (literally), just make sure you do it with someone like McCain, and not someone who sells for so cheap.


your truly,

the resident nasdaq democrat

11/28/2007 4:46:01 PM

^"Don't blame me, I voted for Kodos!"

11/28/2007 4:47:30 PM

This whole corporate welfare argument is why I turned Democrat. People always cite some sort of anecdotal evidence in that they don't want lazy good for nothing people sitting around and not working. Meanwhile a significantly higher amount of my tax dollars go businesses willing to distribute the costs of their reckless actions on the masses. Its like citing someone for jaywalking when theres an armed robbery going on.

11/28/2007 5:10:32 PM

I hate to burst your naivity bubble, dude, but corporations have politicians from both parties in their pockets.

11/28/2007 5:15:12 PM

I know, but only one party is interested in promoting or expanding social welfare programs. And the other one represents a disproportionately higher number of economic interest groups over public interest groups.

11/28/2007 5:19:07 PM

^^Exactly. This is in no way a partisan issue. Both parties are just as guilty.

^ You'll soon learn how similar both parties really are.

ssjamind

Quote :

"post"

Dude, you know damn well that this type of shit's been going on longer than this administration has been in power.

11/28/2007 5:22:39 PM

Quote :

"I know, but only one party is interested in promoting or expanding social welfare programs. And the other one represents a disproportionately higher number of economic interest groups over public interest groups."

Unions strike me as just a flip-side economic interest group, especially when they lobby for all kinds of anti-consumer policies (such as tariffs, frequently with the support of industry). And there's all kinds of corporate welfare that the Democrats support just as much - like Ag subsidies. I realize you already concede that neither side has clean hands, but frankly, the difference isn't even as much as you make it out to be.

11/28/2007 5:28:34 PM

Quote :

"while I'm generally against a lot of entitlement programs, it's really small potatoes compared to how much of our tax dollars are thrown into corporate welfare."

Yeah, I'm against a lot of entitlement programs, too, but welfare isn't the real killer so much as it's a whipping boy. Even besides bullshit corporate welfare, there are tons of domestic entitlement programs beyond basic welfare checks and food stamps that suck even more. they just aren't as easy to point fingers at.

Quote :

"so my dear geniuses, the next time you feel like re-defeating communism and putting witty bumper stickers on your SUV, which runs on blood at $3/gallon and is costing your countrymen and arm and a leg (literally), just make sure you do it with someone like McCain, and not someone who sells for so cheap."

agreed--McCain would be awesome. frustrates the hell out of me that it isn't a race for 2nd place in the GOP.

Quote :

"you knew what you signed up for when you voted for this administration."

I completely disagree.

Quote :

"they grounded a shit ton of F-15s today. guess what, new planes on the way baby!"

That was the result of a recent mishap. I don't know any more than is available on Google, but it appears that an F-15 experienced a structural failure. The F-15 is a 35 year old design, with the jets having logged a lot of very hard hours. I'm sure service life is starting to become a huge consideration. In addition, it's still very good, but it isn't really at the technological forefront anymore. The F-22, while incredibly expensive (partially because we downsized the order, spiking the per unit cost even more), represents a huge leap in capability in a number of areas. It will absolutely rewrite the book on fighter tactics.

11/29/2007 2:24:35 AM

Quote :

"The F-15 is a 35 year old design,"

but it is a badass one. John Boyd was the man.

11/29/2007 8:37:16 AM

Quote :

" agreed--McCain would be awesome. frustrates the hell out of me that it isn't a race for 2nd place in the GOP."

The problem I have with McCain is the same major problem I have with Hillary. McCain while a senator was relatively a moderate republican. Hillary a more conservative republican being part of the 3rd Way. Since the presidential race started though both candidates have substantially altered their views with McCain's face in the Christian Right's crotch; and Hillary pandering to all the minorities and hippies. So I really have no clue what they will actually do when in office. McCain in particular has been sounding like a Bush Jr. and seems to be more "Pro-War" hawkish then the still moderate sounding Giuliani. Giuliani would easily have my vote over hillary if he had a legitimate plan for resolving the Iraq situation without "Doubling Down" like Bush has been doing with the "Surge." I also do not want to vote for a president that is crying out war w/ Iran (or any other countries no sucking our dick); unless it comes down to Iran being a LEGITIMATE threat not some hearsay yellow cake crap like bush invented before the invasion of Iraq

[Edited on November 29, 2007 at 10:18 AM. Reason : a]

11/29/2007 10:17:37 AM

McCain reminds me of hillary. Say ANYTHING to try to get elected. The immigration bill will not be forgotten and will keep him from getting elected.

Hur, iraq war your main voting point? I tend to listen to thier plans on taxes. It affects me more and more personally than any other govt program. We will never be totally out of iraq. It will be another overseas base I bet.

11/29/2007 11:51:09 AM

Quote :

"I tend to listen to thier plans on taxes. It affects me more and more personally than any other govt program."

Anyone that cares about taxes should also be informed and carry a high opinion regarding the war on Iraq.

The war has to be paid somehow. As of right now another $50 Billion is being allocated for Bush's Oil Wars as we speak. $50 Billion that could be in our hands through tax cuts. I am not the biggest fans of a lot of the social programs paid for by the hard work of the middle and upper classes. I find a hard time complaining about this spending, however, when we just keep spending money on the financial black hole of Iraq. This war is like an old shitty Ford. Every time you put money into repairing something a week later something else breaks down and you are stuck with another $1000 bill with another week in the car shop.

12/2/2007 5:05:41 PM

A large corporation presumably provides a service to a large number of people, so when the former collapses, others will have to take care of the latter. This means either the rise of new firms, or the expansion of old ones, either of which provides an opportunity for experienced employees of the now-defunct company. Does this sound about right to everybody?

The above thought process leads me to reject corporate welfare except in times of real, honest-to-god crisis when even a relatively quick change is more costly than simply bailing out a badly-run company. These circumstances are rare to nonexistant. In more conventional times, my fears about the impact of thousands of unemployed workers are mitigated by the fact that most of their services will still be needed in some other capacity.

12/2/2007 6:08:25 PM

Yeah most free market economists point to bailouts as enabling monopolies and oligopolies when mega-corporations would otherwise be broken up into smaller companies in a market crisis.

However it seems like some companies in the airline and auto industries need a bailout every now and then to avoid bankruptcy during times of rapid market change.

12/2/2007 6:13:45 PM

Quote :

"However it seems like some companies in the airline and auto industries need a bailout every now and then to avoid bankruptcy during times of rapid market change."

let them fail

12/2/2007 7:05:51 PM

^
Yes.

Business failures send an important message to the market.

12/2/2007 9:13:38 PM