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Governments Preparing To Bail Out DRAM Makers
An anonymous reader writes "DRAM makers are facing one of the worst downturns in their history and governments around the world are lining up to help companies through the mess. Taiwan, Germany and South Korea all appear poised to offer some assistance to their DRAM chip makers. The chip makers' problems are indicative of global woes. Easy lending terms and a bright view of the future prompted them to build too many new DRAM factories. Much of the new output was aimed at Microsoft's Windows Vista, which has higher memory requirements than XP."
Do government bail outs happen all the time, and its only recently that the term "bail out" has become popular? Or are all industries everywhere simultaneously going broke just now?
I don't follow the financial world much, so all of a sudden I see * industry bailouts over and over again... From an outsider's perspective, it kinda seems like a bandwagon
Where do I sign up to get bailed out of my personal company's (i.e. me) financial problems by the government?
Anyways, isn't bankruptcy supposed to be the "bail out," but with accountability instead of just writing large checks and calling it a successful bail out?
If anyone gets any government money, they ought to be held accountable for its use and for making sure that this situation never happens again.
I wish politicians, CEOs, and just the general public would start looking at the long term costs and benefits rather than focusing on immediate reward. Think of all the current worldwide problems we wouldn't have to worry about! Then again, thats much easier said than done...
It's not just the financial institutions - now it's the car companies (stalled for the moment), airlines - and foreign businesses are lining up for a handout now too.
Why bother with improved products or competitive pricing? Let's just build a factory, make some overpriced junk, then have the government give us a bunch of money? Seems like this is the new gold rush...
Bail out people, not businesses.
No.
Robbing Peter to pay Paul is wrong, whether Paul is a corporation or an individual.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
These Bail outs are out of control. Australian Prime Minister Kevin Rudd just bailed out Australian Car Dealers to the tune of $2B -- yes! That's car salesman! -- , hot on the heals of an $6B Bailout of Australia's world famous COUGH COUGH car industry. Not that America's $15B car industry is any more deserving. Oh and he just bailed out a failed child car company to the tune of $40M, but no one noticed. Hey real estate agents and IT workers are hurting too. What about bailing out us?
Now I understand bailing out banks via FIDC, but now we're bailing out investment banks too, and now of all things DRAM Makers? Because they overmanufactured? There comes a time to let nature take its course and let more efficient *smarter* companies rise from the ashes. Why are we propping up dinosaurs? With taxpayer dollars at that?
Ok, I see your point, but I still think it's flawed. If you just hand money over to corporations so they don't fail, those corporations are going to use that money the same way they used the money the earned...badly. If, however, we pay the employees (who are layed off), the companies will realize the fucked up, and change their business plans. The coporations will lose some money (short term), the layed off employees will get some money till they find new jobs and the corporations will finally learn that daddy-USA is not going to bail them out every time they screw up.
Auto Industry Poster
But the government is *for the people*. Corporations should never get the money, people should.
As the only remaining DRAM manufacturer in the US, what does this mean for Micron? How will they be able to compete if the overseas companies get bailed out?
Corporations should never get the money,
Up to this point, you're correct.
people should. ..and here's where you go wrong.
There is no action that is immoral for an individual, that becomes right when done by a collective. If I take losses in the stock market, I have no right to rob you to make up what I lost. It doesn't become right if I employ a gang of thugs to rob you. It doesn't become right if I have the government do it for me.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Economists have no mathamatics training.
They think the world is an infinite size with zero stoppage.
Try growing 1000 fish in a small fish tank, eventually it will get so crowded, that 90% die.
I think that 2B bailout wasnt free cash, it was just no questions asked loans, which the banks wont do anymore. Hello banks, you can keep all the billions in cash, but its useless if you cannot spend it, or loan it.
But no amount of free cash or 0% loans will save the economy. Its unsavable, it has to crash/reboot/reformat/reinstall a new system.
Liberty freedom are no1, not dicks in suits.
Much of the new output was aimed at Microsoft's Windows Vista
:-)
So you're telling me Vista is actually good for something, stimulating an industry?
-- http://ninthagenda.com/
I disagree. Moral imperatives are a function of the social system, there are no absolutes. In a democratic system where the people are sovereign, robbing corporations to benefit the people (for example) can easily be justified within the system, while the converse (for example) cannot (easily). There is a fundamental asymmetry.
Moral imperatives are a function of the social system, there are no absolutes.
If you believe that, then I certainly don't want you for a neighbor.
robbing corporations to benefit the people (for example) can easily be justified within the system
Rationalization and justification aren't the same thing.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Libertarian philosophy does not justify itself.
Freedom doesn't require justification. If you want to use force to impose your will on someone else, the burden of proof for the necessity of doing so lies with you.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
It's not justified in any case.
Besides failing morally, it also fails from a utilitarian standpoint. When a company fails, the market has shown that people don't want that organization to persist. Keeping it alive misallocates capital that can be better used elsewhere.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
The bail outs have a very specific purpose that ideally will be held to.
I think they should be handled better than they are but the theory behind them makes sense.
Let's assume all 3 major autos go out of business. With out the manufacturer to perform warranty repairs and someone to be held accountable for defects that are life threatening people will not buy those cars.
This causes layoffs and closings of the dealerships, potentially 10's of thousands or hundreds of thousands of people.
On top of the dealerships going under you'll have the parts suppliers losing both of their major clients, the auto makers and the dealerships that do repairs for those makers, this causes them to lay off people and close down, another potential hundreds of thousands of people for just the warehouse/store work. Without the store fronts and warehouses selling merchandise the manufacturing aspect of these companies will also be shut down, another potential 10's of thousands or hundreds of thousands of people laid off.
At this point you get the picture of how it could spiral downward from 3 companies going out of business.
They are major companies that are the backbone of a gigantic section of the US economy.
They need to fix their business model, last I heard they are losing several thousand dollars on each car sold and expecting to stay in business which is why they need another bailout, that and people not wanting to buy gas guzzling monsters when gas is $4/gallon.
I read the whole article replacing DRAM for DRM, but it was fun :)
dot slash dot slash dot org
Luckily, where I can or cannot live is not up to you, so your concern is unnecessary, thank you :)
True. Justification means proving legality within a system of laws, which is exactly what I'm claiming in this instance. However, your ideological preconceptions about right and wrong have clearly caused you to rationalize an absolute opposition to government bailouts, regardless of the circumstances.
Pure libertarianism is a recipe for disaster, poverty, concentration of wealth and power, abuse of the weak and, before long, an aristocracy and indentured servitude for the rest.
It is a step backwards to the medieval.
Weren't DRAM manufacturers just involved in a huge price fixing scheme? Oh yeah, http://en.wikipedia.org/wiki/DRAM_price_fixing.
So the industry that flouts the law is now requesting artificial support to help them through hard times? What's the real impact if these companies fail? Their assets get sold at a discount, their creditors take a loss, and the world moves on. The technology doesn't disappear. The knowledge of their employees doesn't evaporate. If the business can't survive without manipulating the market or government support, it doesn't deserve to exist.
If DRAM is a valuable technology, somebody, somewhere, can run a business doing it. If that's not possible, then stop doing it.
Maybe everyone should just name a new industry and then mandate that people give them money. That would be so much easier, than say, actually creating value.
The usual quote "eternal vigilance is the price of liberty" naturally applies. However, don't forget that intervention *is* the purpose of government. It is the official mechanism for imposing the will of the people, whatever that will happens to be.
"taxing corporations in order to feed the poor sectors" is inherently prejudicial.
Please explain how a tax on business profits to feed the poor is "prejudicial"?
You'd rather people starve or rely on charity? Welcome to grinding poverty and people starving to death. Whatever your "moral" feelings about tax and people or corporations right to keep their profits, you have to realise that no man (or company) is an island. Without the society they are in they would not be able to get where they are. Contributing back (yes, forced contributions in the form of tax) is not immoral in that light.
That is a really scary sentence and one that I don't think you've thought through. The purpose of the government is to enforce the laws not to impose the 'will of the people' willy nilly. That shifts like the wind and is often counter to what needs to be done, should be done and is right to do. There is such a thing as tyranny of the masses.
Well, thanks to the Internet, I'm now bored with sex.
There's a giant elephant in the room that no one wants to mention.
As companies increase their market share, they reduce competition, and increase the damage to the economy if they fail. The nation-wide, interstate banks in the US are a creature of deregulation unleashing unmitigated greed on the banking sector. If one of these banks fails, we're in deep excrement. A handful of companies control effectively ALL the DRAM manufacturing in the world. further it seems that this handful of companies behaves as a monolithic block. They collectively banked on Vista being a huge driver for more memory. Too bad, so sad.
If these outfits want government help, here's how I propose we give it to them (It's actually about the US auto industry, but can be applied to just about any heavily consolidated industry with a few tweaks).
You have that exactly backwards. Nobody abuses the weak more than governments, and government is the ultimate monopoly. The more power you cede to government (to save you from the scary rich people!) the less freedom you will have.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Justification means proving legality within a system of laws
Nope. Justification means to show or prove that something is right or reasonable. What you're doing is rationalizing.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Without regulation people are free to abuse others however the hell they feel like
Try to grasp the difference between the rule of law, and the government intervening to reward some people at other people's expense. The former is what we create governments for, to secure our freedom. The latter is how governments destroy freedom.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Social Security is as unfair and unjust as any other Ponzi scheme.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."