GM's CEO Rejects Repaying Feds for Bailout Losses

PolygamousRanchKid writes with news that GM's outgoing CEO doesn't agree with the National Law and Policy Center's call for GM to repay the loss made by the Treasury from their bailout. From the article: "GM CEO Dan Akerson rejects any suggestion that the company should compensate for the losses. He says Treasury officials took the same risk assumed by anyone who purchases stock. Akerson said that GM repaid all the debt issued by the government beginning in December 2008 when George W. Bush was still president and extending into the first year of Barack Obama's presidency. He added that it was the Treasury's decision ... to take an ownership stake in the form of company shares."

Comments

Wrong use of money these days

[MrDoh!]

Why on earth pay back 10B to the tax payers when that could buy a whole load of politicians to lend(give away) more money?

Re:Wrong use of money these days

[Joce640k]

Because:

a) It's the right thing to do, the money he took belonged to the people.

b) It won't affect him, personally, on any level. His paycheck will be as big as ever.

I guess he just enjoys being a tyrant and saying "no" to people when they come to him with reasonable requests.

Re:Wrong use of money these days

[Sockatume]

It doesn't affect him personally, but it does affect GM's bottom line and it's his duty to the shareholders to protect that. Ultimately he's got to choose between two sets of investors: GM's shareholders, and the general public, and he's chosen the ones who still hold shares. As far as is economic function is concerned he has done exactly the right thing. Of course one would like to think that CEOs of all people weren't reduced to the role of an amoral intelligent agent serving the mother company, but at the end of the day even a brain cell doesn't get to argue with the body's need to survive and flourish.

Re:Wrong use of money these days

[spikesahead]

Neither of these statements are facts.

Saying it's the 'right' thing to do is purely subjective. You don't know what he believes is the right thing to do, I'm sure in his mind he's already done the right thing and trying to argue that he should do YOUR right thing instead of his own right thing will never get you anywhere. It's a null argument.

It very much will affect his position at that company. His overriding goal is to make choices that keep the company strongest to the exclusion of all other considerations. If there is a choice to be made, his job is literally to make the choice that keeps the company as strong as possible. If he takes other concepts into consideration, such as 'the greater good' or 'common human decency or dignity' or even 'keep us from going extinct in a thousand years' he is quite literally not doing the job he's payed so very very much money to do. That's what could get him fired!

I personally share the same perspective of you, I think this is a dick move by a dick of a person in service to a dick corporation and it saddens me that there's no good way to make it more profitable to be ethical and responsible than it is to make every shady 'fuck you' deal you can. I think the only effective, non-violent solution to this will probably be the erosion of privacy for the upper classes, think universal ubiquitous paparazzi letting anyone who wanted to watch them 24 hours a day, even when they sleep, to make sure nobody's whispering shady evil deals into their profit hungry ears. It's only fair, the upper classes literally have the capacity to do that to any of us already, things will begin to change when we can do it back. The evil ones will wither under the glare of public attention while those honorable and respectable will be proven so and rewarded. I can't see any other positive future.

Re:Wrong use of money these days

[confused one]

He didn't take the money, Treasury chose to invest the money under direction of both the Bush and Obama administrations, in order to keep GM and its supply chain from collapsing. While they lost money on the face of it, the economy gained value, likely in excess of the $10B loss. If the end result exceeds the scenario where government did nothing, then government did it's job by stabilizing the economy.

This isn't personal. His job is to protect shareholder value. He indicated, in the interview, that if he paid back the $10B loss he would be opening GM up to lawsuits from every other shareholder who lost money in the bankruptcy.

Re:Wrong use of money these days

[Vanderhoth]

According to TFS, the government bought controlling shares in GM. Does that not mean the government, and the tax payer by extension, are the shareholders?

Re:Wrong use of money these days

[Sockatume]

The government has sold its remaining shares, at a lower price than it bought them for in the first place. That's the loss alluded to in the summary.

Re:Wrong use of money these days

[Anonymous Coward]

To me that sounds like a problem created by the government. Either keep your shares and potentially sell them later for a higher price and have some control in the company, or sell at a loss.

Re:Wrong use of money these days

[Sockatume]

Yes, I would love to hear the economic rationale for selling when they did.

Re:Wrong use of money these days

[unitron]

Yes, I would love to hear the economic rationale for selling when they did.

To shut up all the people whining about the government being in the car business?

Re:Wrong use of money these days

[mehtars]

The treasury sold it voluntarily. The treasury could have waited until the price was non-loss making.

Re:Wrong use of money these days

[Vanderhoth]

Nail, meet hammer. *BANG*

Re:Wrong use of money these days

[flyneye]

Let's reframe the problem; GM's outgoing CEO doesn't agree with the National Law and Policy Center's call for to repay the loss made by the TAXPAYERS from their bailout.

So, we send a load of hoodlums to the next meeting of the board of directors and cut a finger from each of their hands, slap them around a little and set their cars ablaze in the parking lot. Next time it will be worse, the interest just went up to 100%, and you better have a goddamn payment ready next time we see you. We know who you are and where you live and when your wife fucks the mailman.

Good old fashioned lending...

Re:Wrong use of money these days

[unitron]

He didn't take the money, Treasury chose to invest the money under direction of both the Bush and Obama administrations, in order to keep GM and its supply chain from collapsing. While they lost money on the face of it, the economy gained value, likely in excess of the $10B loss. If the end result exceeds the scenario where government did nothing, then government did it's job by stabilizing the economy.

This isn't personal. His job is to protect shareholder value. He indicated, in the interview, that if he paid back the $10B loss he would be opening GM up to lawsuits from every other shareholder who lost money in the bankruptcy.

The shareholders who lost money in the bankruptcy were those who held the previous shares, the ones from GM's first Initial Public Offering from back in the early 20th century, or shares issued subsequently, but before the bankruptcy.

Technically, the corporation of which those shares were shares no longer exists.

And those who bought bonds issued by that previous corporation have a much more legitimate gripe than the government.

GM would be facing suits by others who bought the same shares the government did, the shares issued after the bankruptcy.

The federal government brought the loss on themselves by first buying some of those shares and then holding them until they went down in value and then selling at a loss instead of continuing to hold them in the hope that they would go back up again.

Those shares have done what stock sometimes does, declined in value relative to the IPO price.

In the future they may go down even further or they may go up again.

That's the risk of capitalism.

Re:Wrong use of money these days

[Nerdfest]

Want to punish them? Don't buy their vehicles when they act like dicks.

Re: Wrong use of money these days

[Sockatume]

Run? Whatever losses GM made during that period would seem to be the GM leadership's own responsibility. They nearly went bankrupt in the first place after all.

Re:Wrong use of money these days

[Stolpskott]

a) Those 'other shareholders' bought the shares voluntarily. The taxpayer didn't.

Very true, but "the taxpayer" did not choose to invest in GM in the first place, the US Government did. Equally, "the taxpayer" did not choose to sell their shares in GM, at a lower price than those shares were bought for (thus generating the losses), the US Government did.
The US Government had a very compelling reason for buying those shares and shoring up the GM corporate entity and its supply chain. However, there was no contractual obligation for them to sell the shares when they did - as far as I can tell, that decision to sell was made for purely political/PR decisions. Admittedly, those reasons are also compelling - if the US Government introduces and legislation that will have some kind of positive impact for car manufacturers, then there is a conflict-of-interest issue to be addressed, so it is in the Government's interest to avoid holding the shares for an extended period.
However, the Government decided to sell when it did, and the Government is (or should be) responsible for the losses incurred through that decision. After all, if the transaction had yielded a massive profit, the Government would not have been willing to hand that profit over, either back to GM for further investment or to some other organisation that could use it. That profit would go to the treasury to be used.
The company whose shares are being bought and sold has no control over that process, as the shares are freely tradeable on the open market. So without any leverage of control, the company cannot assume the liability for losses. Want to complain about it? Welcome to capitalism. Complaints can be addressed to our Complaints Manager, Helen Waite. Her office is in the basement. Form a queue outside the door, and when someone asks what you are doing, tell them that you were told to go to Helen Waite.

Re:Wrong use of money these days

[Flammon]

But, he survived and flourished because of the tax payers. They'll fail again and we'll see with the tax payers will help them survive a second time.

Re:Wrong use of money these days

[GNious]

Wouldn't it simply be a question of whether the government ever need to do either GM or a company run by Dan Ackerson a favour, they refer to this case and say, "sorry, we're disinclined"...?

Re: Wrong use of money these days

[Entrope]

That GM lost money is their responsibility. That the dollars came from taxpayers, and the loss is now effectively part of the national debt, is the government's fault.

Re: Wrong use of money these days

[mehtars]

My argument is the treasury didn't have to sell and take a loss. They could have left the stock on its balance sheet as stock.

The whole point of the bailout was to prevent a systemic collapse of the US economy. A GM failure would have probably caused losses upwards of 105 billion dollars of lost tax revenue (http://money.cnn.com/2013/12/09/news/companies/gm-bailout-stock-sale/), which is paltry in context of the direct loss of 10 Billion.

The treasury would have had to sold it at 53 USD to break even on the stock. Today's price is around 41 USD. I don't think it would be unusual to see a move closer to 53, as long there is no major calamity in the general economy or through the performance of GM.

Re: Wrong use of money these days

[Entrope]

Government is no better than other investors, and often worse. Take Solyndra as an example: private investors basically gave up on it until corruptocrats at DoE decided to funnel cash down that toilet. There's also a conflict of interest when government has a big stock position in certain companies. Given that the US has traditionally not made that kind of investment in private companies, I certainly do hold the government responsible for losing taxpayer dollars there. Do you think private investors are, or should be, off the hook when they make money-losing investments?

Re:Wrong use of money these days

[emj]

Some perspective when Sweden bailed out the banks in 1994 the government waited a long time to sell. It was a very good investment.

Re: Wrong use of money these days

[Entrope]

That you believe those numbers is your fault. For example, when was the last time GM stock traded above $45? Why do you think one of today's shares will ever be worth more than $50?

Re:Wrong use of money these days

[Sockatume]

I didn't say it was right, just that amoral decisions by human beings are the inevitable outcome of the survival instincts of the vast and terrible creature they compose.

Re:Wrong use of money these days

[cheesybagel]

GM is correct of course. This was not a loan and the State could have chosen to sell off their shares after the economy rebounded and GM stock went further up. Assuming it ever did.

What the State can do to get the money back from the auto industry is to start taxing cars more. But I suspect they would not like that either.

Re:Wrong use of money these days

[Talderas]

By holding stock, they (the US government) may only recover whatever someone else is willing to pay for it. If, and only if, GM offered to buy back the stock in question could the price ever be remotely guaranteed to be close to what it was purchased for. Instead the US government sought to dump that stock for politically expedient reasons which manifested itself as the "loss" to the taxpayers. Had the US government issued a loan to GM this would not be an issue. Had GM and the US government signed a contract that said GM would cover the difference if the US government sold the stock below the purchase price, this would not be an issue.

Re:Wrong use of money these days

[Rockoon]

a) Those 'other shareholders' bought the shares voluntarily. The taxpayer didn't.

I wonder if you feel the same way when its taxpayer money used for social programs that have near-certain negative returns.

The problem began when the government moved to help the company with taxpayer dollars. It is no surprise from that point forward that the taxpayers lost value, because the government does not evaluate taxpayer value the same way that taxpayers do. Most members of government evaluate legislation as a tool to gain campaign donations, with taxpayer value nowhere in sight of this evaluation.

So here we are. Big government protected big business and fucked over the tax payers in a big way again. This is exactly as was predicted by the Libertarians that protested the bailouts (both the Democrats and Republicans did not protest the bailouts.)

Re: Wrong use of money these days

[Mashiki]

That you believe those numbers is your fault. For example, when was the last time GM stock traded above $45? Why do you think one of today's shares will ever be worth more than $50?

That probably would have been around 2005-06, and guessing at their sales figures? I'd say mid to late 2014, depending on whether or not the current administration moves forward with it usual business of not having a clue about how the world works or not. Nothing kills economic growth faster than a government that's uncertain, or enables business killing regulations(see Ontario and California).

Re: Wrong use of money these days

[unitron]

Government is no better than other investors, and often worse. Take Solyndra as an example: private investors basically gave up on it until corruptocrats at DoE decided to funnel cash down that toilet. There's also a conflict of interest when government has a big stock position in certain companies. Given that the US has traditionally not made that kind of investment in private companies, I certainly do hold the government responsible for losing taxpayer dollars there. Do you think private investors are, or should be, off the hook when they make money-losing investments?

If you're going to talk about Solyndra, you really should include mention of China dumping solar cells on the U.S. market below cost as a big part of Solyndra's woes.

And how the federal government didn't really do anymore to prevent that then they did to keep the Japanese from destroying domestic television set production via dumping back in the '70s, despite the government's ability and duty to regulate commerce.

Re: Wrong use of money these days

[Joce640k]

But only if the government is involved, it is all the fault of of the government, right?

When the government uses force to take money from ordinary people "invests" it for them, losing $10 billion on the deal, then yes. It's their fault.

If the people whose jobs/future that were saved by that "investment" now have an excess of $28 billion in cash, they should give it back to the people who were forced to help them (with threats of jail, etc. if they didn't).

Re:Wrong use of money these days

[Joce640k]

That only punishes the workers (and the taxpayer if they need another bailout because of it).

The people who really need punishing will happily watch you do that from their yachts.

Re:Wrong use of money these days

[Nerdfest]

The same shareholder based decision making applies. If the company loses value because of decisions of the CEO, the decision will be changed. Hopefully the CEO will be replaced for not predicting the effect on the brand as well.

Re: Wrong use of money these days

[fnj]

Maybe we should also mention something else, like the real real reason Solyndra failed. They had a very innovative idea that seemed like a winner at the time, but was based on a false premise - that the 2008 cost of polysilicon ($400/kg) would remain very high rather than collapsing to $30/kg within 4 years.

The biggest reason for the big breakthrough in polysilicon cost? Not Chinese dumping. US industry investments in production.

On the other hand, the collossal "anti-dumping" tariffs put in place against Chinese solar panels backfired. The reason? The US was actually exporting now-cheap polysilicon to China to be made into solar panels. But the Chinese imposed a retaliative tariff on those imports into China. That is not good news for the polysilicon manufacturers. Will the price of polysilicon zoom again?

Re: Wrong use of money these days

[OS24Ever]

What confuses me is how does buying stock in a company help the company stay afloat? They don't own the shares, the shares do nothing for them once they've sold them. It only gave whomever owned the shares prior to the government purchase a gain/loss from their previous purchase.

I don't get why whomever held those shares sold them. I bought a single share of GM for shits and giggles a while back. It's been steadily gaining over the last ~ six months and there was no reason to sell other than political reasons. If anything that should be what people should be focused on. Our idiots sold their shares at the worst time to do it and lost money. Why is that GM's fault?

Re:Wrong use of money these days

[fnj]

Bingo. Maybe the taxpayers have a very incompetent portfolio manager. The federal government.

Re:Wrong use of money these days

[atomicxblue]

Without the US taxpayer bailout of their private company, he wouldn't have shareholders to protect at this moment. With that kind of attitude, we should have just let them go under.

Re:Wrong use of money these days

[Nemyst]

And if they kept them for any significant length of time (you know, enough for GM to get some value back), you'd have all those right-wing nutjobs (many of which are in the government) crying foul socialism. They just wanted rid of them as soon as possible.

Re:Wrong use of money these days

[Trailer Trash]

He didn't take the money, Treasury chose to invest the money under direction of both the Bush and Obama administrations, in order to keep GM and its supply chain from collapsing. While they lost money on the face of it, the economy gained value, likely in excess of the $10B loss. If the end result exceeds the scenario where government did nothing, then government did it's job by stabilizing the economy.

The harm to our economy from the various bailouts far outweighs the money spent and lost in these things. A free market works well if allowed to, but it requires a feedback cycle. Do well, be rewarded. Do stupid shit, be punished. We've allowed them to keep the reward side but collectivized the punishment side.

Imagine being unable to feel pain. Sounds great, right? It's terrible:

http://www.nbcnews.com/id/6379795/

"Many things they couldn’t anticipate. Ashlyn’s baby teeth posed big problems. She would chew her lips bloody in her sleep, bite through her tongue while eating, and once even stuck a finger in her mouth and stripped flesh from it."

This is what we're doing to big business in America. They can do stupid shit and we pay for it. Their execs still pay themselves bonuses as if they did a good job. There's no impetus for these businesses to do well, to truly prosper, and to be innovative. None. Your rich uncle will bail you out if you have a problem, but he'll let you keep the money if you do well. In that scenario it doesn't matter what you do.

We've broken the feedback cycle. GM should have been allowed to go bankrupt. It would have, in the long run, been a blip. They are a huge part of the car market and the only way for that hole to have been filled would have been for competently managed companies to buy their assets and continue production on their lines. Competently managed. Note

Instead, they get to do whatever they were doing before. It ran them into a hole then, it will again.

The real harm is that new and innovative companies can't compete against the government-backed crap. That harms us all. Greatly. Far more than the few billion that we lost.

Re: Wrong use of money these days

[CauseBy]

Oops, you mean it's your fault, since this is a democracy.

"The government" isn't a thing. "Governments" don't make decisions or take actions. You can't point to a "government"; you can't weigh a government and you can't take a picture of a government. A government is a concept, it's not a real thing.

Humans are real things. Humans make decisions and take actions. In our society, the humans comprising "government" are selected by the whole people, so if you want to blame anyone, blame yourself.

Re:Wrong use of money these days

[CauseBy]

No, the taxpayers chose to invest in GM because they run the show. There is no such thing as "The US Government" making choices. Governments aren't corporeal things; they don't have agency and can't make decisions. Humans do that. Human voters chose other human representatives to make decisions. We live in a democracy so if you're passing the buck, you have to pass it to a human being, and the human beings at the end of the line are voters.

It's your fault or credit, depending on your opinion, that we bought the shares.

Re: Wrong use of money these days

[msauve]

The government didn't buy shares on the open market, GM issued and sold new shares to the government, receiving cash in return.

(It's actually much more complex. The "old" GM went bankrupt, and sold all it's assets to a "new" GM, which is a different legal entity. It's shares in the "new" GM which the government purchased.)

Re: Wrong use of money these days

[OS24Ever]

Ah, thank you. I missed that part.

Re: Wrong use of money these days

[fustakrakich]

...the government's fault.

Which means it's the voters' fault.

Re:Wrong use of money these days

[wiredlogic]

A 100M investment buys a lot of hookers and blow.

Re: Wrong use of money these days

[BarefootClown]

Companies have the option of issuing new shares to raise additional revenue.

Re:Wrong use of money these days

[BarefootClown]

While they lost money on the face of it, the economy gained value, likely in excess of the $10B loss.

Debatable. Had GM gone through a proper bankruptcy, the profitable assets could have been put to more productive use in an entity run competently. We've lost the value of that opportunity. However, nobody sees that because the loss is diffused over the entire economy, as compared to a loss that would have been felt acutely by the employees who would lose their jobs in Detroit (despite the jobs that would have been gained in, say, Atlanta). One has a face now; the other doesn't, so we get bailouts instead of housecleaning.

Re:Wrong use of money these days

[hypergreatthing]

I think you're explanation was a bit too wordy.

Basically: When has the US public EVER had a choice on how tax money is spent?
Is the answer never? I'm fairly sure it is. So why is this any different? This is 10B in loss. I can point out any year in the past 50 and show 100B in waste in every single year. That would be a very simple task, considering the waste is probably 10x greater than that on average each year.
Welcome to America.

Re:Wrong use of money these days

[rsborg]

Bingo. Maybe the taxpayers have a very incompetent portfolio manager. The federal government.

Which is filled with cronies to assist their "helpless" megacorps like GM. Yes, the federal government is not nearly as competent as it should be - mostly because it's representing it's funders.

We the taxpayer have allowed corporations to control our government. We live in a socialist corporatocracy - where the corporations get bailouts and emergency loans while the citizens get taxed, spied on and are not represented.

Those who blame government are correct, but the answer - to cede more power to the corporations that are undermining it - is like going from the frying pan into the fire.

Re: Wrong use of money these days

[Vitriol Angst]

I could rebut a lot of things you just said, but I figure if people don't see what you said as moronic, they deserve the kind of system that preserves profits for a freeloading CEO over the compensation of wages for people who have to work and raise families.

He got a LOAN -- it's not a speculative investment. He got bailed out.

Moron.

Re: Wrong use of money these days

[triffid_98]

If you're going to talk about Solyndra, you really should include mention of China dumping solar cells on the U.S. market below cost as a big part of Solyndra's woes.

And how the federal government didn't really do anymore to prevent that then they did to keep the Japanese from destroying domestic television set production via dumping back in the '70s, despite the government's ability and duty to regulate commerce.

Bingo. A very similar thing drove US companies out of the the chip fabrication market (excepting high value components such as CPU and ASIC) in the 1980's. A very similar thing drove all US companies out of the LCD/LED/Plasma display market in the 1990's, etc.

I'm not totally sure what that has to do with the issue at hand, but I'll leave you with this quote.

"[America Is] a unique society in which we have free enterprise for the poor and socialism for the rich."
-Gore Vidal

Re:Wrong use of money these days

[Trailer Trash]

Maybe you should take a look at the Ford testimony about the bailout. You know, Ford? The car company that *didn't* take any bailout funds?

Apparently you don't know Ford:

http://blogs.cars.com/kickingtires/2010/12/report-ford-took-federal-funds-too.html

Re:Wrong use of money these days

[flyneye]

Then it isn't a bailout.
If it's a bailout, it needs paid back.
Pick one, bailout, or investment.
If it's an investment, some government needs circumcised, starting with the clown who had the bright idea to begin with.

Re: Wrong use of money these days

[Entrope]

I wasn't one of the suckers who voted for the current President. Were you? If so, I'll happily assign some of the blame for the Government Motors stock losses to you. You seem like an idiot, anyway, insisting that government isn't a thing.

Re:Wrong use of money these days

[mcgrew]

Oh, for fuck's sake, GM is opening five new factories in the US this year and hiring a shitload of workers, they can't keep the cars on the lots they're selling them so fast; last night the TV said one was sold every 40 seconds. What the taxpayer "lost" by this is nothing, since all those now-employed people are taxpayers, as well as the ones who would have been out of work if GM had collapsed. This is increased revenue, not decreased revenue.

Can't libertarians do math?

Re: Wrong use of money these days

[Entrope]

Even if you were right about Solyndra (fnj explained why you are wrong), it does not change that investing in the company was a horrible idea that the US government should have recognized as such.

If China wants to dump marginal-quality solar cells in the US market, I say let them. Technology is changing so quickly that today's solar cell factories will probably need multiple major refits over the next decade, and once things start to settle down, we can revisit whether the US should try to compete in that field. Using government money to prop up a long-term-money-losing venture for a short period is corporate welfare, plain and simple, and the US government does way too much of that.

Re:Wrong use of money these days

[Rockoon]

Libertarians can do math. Tour problem is that you cannot do research.

With regards to the 5 "new" factories, "GM would say only that it will create or keep 1,000 positions."
Now lets be really generous and suppose that they will create 1000 new positions, thats at a cost of $10 billion in taxpayer money or about $10,000,000 per position.

Now, what were you saying about doing math? Oh thats right..you were saying "The mcgrew family can subtract, but can only subtract the number of ignorant points the mcgrew family racks up every day from the previous days large negative number"

See, your problem is that you latch on to the first thing in sight that confirms whatever unfounded notion you have (and you and I both know that you know that its unfounded) and then proceed to act like you know something (and you and I both know that you know that you do not know shit.) You are not a smart person, nor a creative thinker. You are a shallow bullshit artist (and both you and I know that you know that thats what you are) whose games only work on your even less educated friends.

Come back when you know what the fuck you are talking about.

Re:Wrong use of money these days

[mdielmann]

There are a number of things to consider, though.

There is now a precedent. Screw up too badly, and the government might bail you out. Fuck them over in the process, and well, maybe they won't.

Politicians are a quantity that GM has to consider. Certainly, there is no evidence that politicians care if they spend money poorly. However, leave them with egg on their faces, and it might take more "campaign contributions" to make them forget that.

Taxpayers are also consumers. People rarely feel brand loyalty towards companies that screw them and their friends over. Even if it is only about $35 per person.

These are some other things that need to be weighed, rather than just what the next quarter will look like.

Re: Wrong use of money these days

[Bite The Pillow]

The government held 900 million shares of GM stock in 2009. The next data point I can find is Nov. 2010, when GM had 1.5M shares.

That would have made USA a major stockholder, if not the majority stockholder. Failing to enforce this control by voting is the government's fault.

If they only wanted to guarantee payback by investing in stock, they were stupid. If they failed to vote, they were stupid. Someone decided stock was a good idea, and it wasn't.

That GM lost money is at least partly the fault of the shareholders and board.

Re: Wrong use of money these days

[CauseBy]

As it so happens yes I voted for the current President -- the one who DIDN'T bail out GM.

But I didn't vote for the previous President -- the one who DID bail out GM.

Still, this is a democracy, so the voters are left holding the bag. Voters elected a person and trusted him with policy and that trust resulted in the GM bailout. Voters can blame themselves. I know for sure the Bush years taught me important lessons about voting.

And government isn't a thing. If it is, point to it. Tell me what color it is and how much it weighs. That's not possible because 'government' doesn't exist in the material universe; its existence is a shared notion. And okay, so it's a shared notion, fine, and notions "exist" sort of, but notions don't have agency, notions don't take action, governments can't be "at fault" for a policy. Policy comes from human beings, actions are taken by human beings. It's meaningless nonsense to "blame the government".

Re:Wrong use of money these days

[j-beda]

While they lost money on the face of it, the economy gained value, likely in excess of the $10B loss.

Debatable. Had GM gone through a proper bankruptcy, the profitable assets could have been put to more productive use in an entity run competently. We've lost the value of that opportunity. However, nobody sees that because the loss is diffused over the entire economy, as compared to a loss that would have been felt acutely by the employees who would lose their jobs in Detroit (despite the jobs that would have been gained in, say, Atlanta). One has a face now; the other doesn't, so we get bailouts instead of housecleaning.

On the other hand, while the economy might have emerged stronger after the short term shock brought about by GM's failure, it is also quite possible that the fallout of such a large scale failure would have been amplified as suppliers and suppliers of suppliers (etc., etc.) failed in turn due to their own inability to weather the transition. The recovery might have been delayed enormously.

In theory I'm with you - let the screwups fail, let the owners lose their investments and move on. In practice, without stronger social safety nets, food, shelter, and medical support for the peons, I'm a bit more sympathetic to the "too big to fail" idea.

Re: Wrong use of money these days

[Entrope]

GWB's administration gave GM and other companies emergency loans. Obama's administration intervened in GM's bankruptcy, giving unions a sweet deal that they never would have gotten in a normal bankruptcy (at the expense of other creditors, like GM's white-collar retirees), and buying oodles of stock as an indirect bailout. This wasn't that long ago -- you have no excuse for either forgetting, or for being unable to look it up.

Your insistence that a thing needs to have a color or be pointed to is a category error. Separately, everyone (except you) understands that talking about what goverment does is really a shorthand reference to the government officials who make decisions and carry out those actions. Voters didn't decide to bail out GM, and I certainly didn't decide to buy any of their stock. It is flatly wrong to say that when I blame government for those things, it is really my fault.

Re:Wrong use of money these days

[Talderas]

Despite what the media and press may lead you to believe the TARP program was setup to have the US government purchase assets as well as issue loans. The government chose to use a majority of the funds for GM, under TARP, by purchasing assets rather than issuing a loan.

Re:Wrong use of money these days

[flyneye]

Lame idea, the government is full of people unqualified to wipe their own asses, let alone make financial decisions. I give Congress and the Senate as examples.

Re:Wrong use of money these days

[mcgrew]

Now lets be really generous and suppose that they will create 1000 new positions, thats at a cost of $10 billion in taxpayer money or about $10,000,000 per position.

Most of that $10b is equipment, all of which has to be manufactured, meaning a lot more than 1000 jobs. And look at all the jobs in related sectors that would have been lost if Obushma had simply let GM die. Do you have any idea how many parts and plant equipment would have gone out of business had GM collapsed?

You are not a smart person, nor a creative thinker.

My IQ has been tested at 150 in the educational system and I have a novel for sale. So yeah, I'm as dumb and uncreative as you are civil.

Since you seem to be incapable of civility, this conversation is over. Fuck off.

Re: Wrong use of money these days

[CauseBy]

"GWB's administration gave GM and other companies emergency loans."

Yes, exactly. Bush was the one who bailed out GM, like I said. Bush is the one who gave taxpayer dollars to GM, like you said. And you know, Obama received that less-bad-than-the-alternative policy and finished the work, which was right and proper of him to do, but it wasn't his policy.

"everyone (except you) understands that talking about what goverment does is really a shorthand reference to the government officials who make decisions and carry out those actions."

This is false. People who say that do not understand that, and neither did you until I pointed out how stupid it is. Henceforth, if you don't think that "the government" is taking actions and making decisions, then you shouldn't say that it is. Or else forgive your interlocutors for responding to what you said instead of whatever you want to revise your earlier statements to mean.

Re: Wrong use of money these days

[Entrope]

I will try to make this simple enough for you to understand it:

GWB's administration (not Bush himself, but I know you get confused when people start cooperating) extended something like $10B in loans to GM in Dec 2008-Jan 2009, with some strict conditions attached. Obama's administration came in and made more loans, and wrote big checks during GM's bankruptcy and restructuring. According to PolitiFact, GM's bailout totaled $67B. GM and Obama claim that GM has repaid all its loans -- although media factcheckers say that's a bit of a stretch -- but the point of this entire discussion is that the government[1] lost at least $10B because it paid a lot for stock, and sold the stock at a loss. GWB and his administration had nothing to do with buying shares in GM. That's all on you, the guy you voted into office, and the bunglers he appointed.

[1]- Maybe you think I personally lost the $10B, or that you did, or that taxpayers did, or that your creepy uncle Bob lost it. I assume you wouldn't accept saying that "the country" lost the $10B, for the same reason that you refuse to recognize the Federal government as an entity. I say "government lost" the money because everybody-except-you understands that saying that means that asshats in Washington decided to spend current-or-future taxpayer money on a deal that everybody in the private sector realized was a losing proposition.

Re: Wrong use of money these days

[CauseBy]

We agree. Bush gave GM the money; therefore he bailed out GM. That's what a bailout is.

Obama did some other stuff like buy stock. Buying stock isn't a bailout, that's taking ownership stake in order to exert control. That would make it something like socialism. Did you mean socialsim when you said bailout?

In my opinion paying $10 billion to prevent a worldwide depression is a great bargain, especially considering we came out ahead on the whole TARP thing. It's remarkably good governance. Saving the economy was probably worth a trillion dollars and we got it for within rounding distance of zero? Wow, what a stunningly great deal for taxpayers. Three cheers for government involvement in markets!

Re: Wrong use of money these days

[Entrope]

If you think making a loan counts as bailing someone out, have you thanked all the corporations that bailed you out for school, auto, housing and simple credit cards? How has that averted global financial catastrophe worked out for Greece, Cyprus and the many millions of Americans who have given up on even looking for work? Is the left finally admitting that Obama is an unrepentant socialist? Did you have to fellate some Dem honcho to get such high-grade propaganda-laden crack?

Re: Wrong use of money these days

[CauseBy]

Uh, yeah, when government funds are loaned as a loan-of-last-resort to a failing business in order to prop it up during a tough period, yeah that's the definition of a bailout. Yes. Exactly. And if I were standing in place of a government program, and the school, auto, or housing companies were failing and I gave them an emergency loan, then yes that would be a bailout. And if I were not acting for the government, or if the corporations weren't failing, then no that wouldn't be a bailout. Phew, gosh, you seem to have a super hard time understanding bailouts! I thought this was all pretty simple stuff.

Now moving on: how was the averted global financial catastrophe worked out for everyone? Better than the alternative, if we can conclude anything from the experiment run in the 1930s. Other than that it's pretty hard to say. How has your life turned out compared to what would have been the life of the sperm that got to your mama's egg in second place? It's sort of a nonsense question.

If Obama were an unrepentant socialist then he probably would have held onto the GM stock, don't you think? I would probably call him a reluctant socialist, given the evidence, just the same as I'd call Bush.

risk? with a printing press?

[turkeydance]

now if it had been Bitcoins.......

Risk pool payment, not payback.

[patrixmyth]

Absolutely right, they shouldn't be forced to pay back government losses. They, along with every other too big to fail corporation, should pay annually in perpetuity into risk pool that will handle all future bail-outs. Not as a tax, but as an insurance pool, that coincidentally, should be required to be held in US treasury bonds.

I'm sure if you presented that idea, they'd rush to substitute the $10b payback.

Re:Risk pool payment, not payback.

[howardd21]

No, that makes no sense. There are inherent risks in investing and the investors assume those risks. Stop creating yet another bureaucracy to manage the private companies that are too big to fail (and who is "too big to fail" anyway?). Just let them fail and lose their investment, then behaviors will change. Your approach continues to reward poor decision making.

Re:Risk pool payment, not payback.

[gl4ss]

uh that makes no sense at all.

they should have gone bankrupt - or loaned money backed by their assets... having a pool that's kept only to keep failing companies running belongs to the history of the ussr.

Re:Risk pool payment, not payback.

[PolygamousRanchKid]

(and who is "too big to fail" anyway?)

The famous economist John Maynard Keynes wrote something like:

"If I owe the bank 100 pounds, I have a problem."
"If I owe the bank 100,000 pounds, the bank has a problem."

The US government decided that GM is to big to fail. Which meant they had two problems:
1) GM was bankrupt . . . in other words, it failed.
2) GM is too big to fail.

Problem 1) was solved by fleecing the US taxpayers of billions of dollars. GM is solvent now.

But problem 2) was not solved. GM is still too big to fail. Which means that GM knows that it can fail again, and will be bailed out by the US government, again.

So, to solve problem 2) . . . GM has to shrink. How can the US government help achieve this . . . ? Well, how about the government buying from someone else, when they are looking for new cars . . . ?

Re:Risk pool payment, not payback.

[swb]

I wonder if any economist has ever modeled what it would look like if all risk was pooled into a central risk pool versus the myriad risk pools we have now for all the various forms of hazard insurance.

Maybe it wouldn't make any sense, but one of the principal arguments for most health care reform schemes is risk pooling. Maybe it only makes sense for like risks, but there are plenty of insurance companies that sell policies for essentially dissimilar risks (ie, my home insurer also provides my boat policy).

Maybe this is largely accomplished by the reinsurance industry, at least on a macroeconomic level.

Re: Risk pool payment, not payback.

[Entrope]

Re #1, GM is solvent *for now*, but it is far from clear that they have fixed the structural problems that led to their bankruptcy. The biggest effect of their bailout may simply have been to prolong the pain and economic dislocations due to their collapse, not to to prevent their collapse.

Re:Risk pool payment, not payback.

[unitron]

uh that makes no sense at all.

they should have gone bankrupt - or loaned money backed by their assets... having a pool that's kept only to keep failing companies running belongs to the history of the ussr.

Who should have gone bankrupt? General Motors? They did.

Or at least the previously exisiting corporation known as General Motors did. And the value of the shares of stock in that corporation fell to $0, and that corporation doesn't really exist any more.

A new corporation also known as General Motors came into being, and issued stock, and it is some of that stock which the federal government purchased and then chose to sell for less than what they paid.

Re:Risk pool payment, not payback.

[Charliemopps]

You mean a new tax. I don't see them batting an eyelash at that. It's not like THEY will have to pay it.

Re:Risk pool payment, not payback.

[iserlohn]

Usually 2) is solved by forcing a break up of the company after it has recovered. In this case, it's probably the best course of action.

Re: Risk pool payment, not payback.

[toddestan]

Actually, GM did go bankrupt. Part of the reorganization was that a new company was formed, the stuff they wanted to keep got transferred to the new company, and the old one which included stuff like Pontiac went bust and basically shut down. So kind of like AT&T, what we now know as GM is not the same GM from decades past. Though I agree that they aren't healthy, and seem to act like they'll be able to keep selling gas guzzling trucks and SUVs essentially forever.

Re:How is this news for nerds ?

[Anonymous Coward]

Economics and finance are topics which can easily be described as nerdy. Just because it doesn't matter to you doesn't mean it isn't Stuff That Matters to someone else.

real socialism

[duckintheface]

The word socialism gets tossed around carelessly by right wing pols who don't know what it is. To them it's just a nasty thing you say when liberals like me want to redistribute a little wealth. But real socialism, as meant by Karl Marx, is defined as "the ownership of the means of production by the state". Domestic spending on public education or health care is NOT socialism. But government assumption of corporate shares is the real thing. In our system of economics, corporations are not people and governments do not own the means of production.

Re:real socialism

[FriendlyLurker]

True. The US is the biggest corporate welfare socialist regime in the world. Socialism is only a dirty word when you, dear tax payer, demand more social service bang for your buck. Why spend good tax $$$ on a dignified social security net when you can spend (appropriate?) X times more on an effective police state to crack down on the resulting crime due to a lack of one, or sell more health insurance even.

Re:real socialism

[Anonymous Coward]

I think you need to look up your terms. Redistribution of wealth is socialism. State ownership of production is called communism. Just saying.

Re:real socialism

[inode_buddha]

If charity worked we wouldn't need taxes. As it actually is, people are incredibly selfish antisocial bastards. Also, most of those who do not work, wish that they could get it. Just a few facts for you to ponder - as opposed to what the "media" would have you think.

Re:real socialism

[Charliemopps]

um, no...

socialism
        1. a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

The united states is partially socialist. Not as socialist as the USSR was or China is. Most of the western world is to some degree socialist. This is a matter of degrees not absolutes.

Re:real socialism

[cheesybagel]

The government of China works pretty well. So did the governments of Soviet Russia during the so called war communism period. Economically at least.

State control of the economy and planned economics did not begin with communism, despite what Marx would have liked to think, since Palace economies in the distant past worked pretty much that way. The problems are always the same. Lack of innovation and lack of drive to push efficiency further. But in a place where the individuals actors themselves cannot act to produce infrastructure, a state controlled apparatus with centralized power can do things individuals cannot. This is why it worked so well for electrification in the Soviet Union and other things like that but failed miserably at coming with new technology like biotech or computers.

Re:real socialism

[cheesybagel]

To some degree you need funding from corporations to get elected in the first place. I mean who pays for the campaign? That they get served in returns is bound to happen.

The fact that in the US it is bloody hard to create alternatives to both leading parties is a problem as well insofar as the less people you have to buy off the easier it is to buy them off.

Re:real socialism

[Anonymous Coward]

The problem with your reasoning is that most, if not all corporate property is a form of theft in of itself; theft in the form of surplus value usurped from workers who have no other choice but to take poorly-paying jobs in order to enrich the portfolios of fat cat shareholders and executives.

To call the repatriation of property back to the rightful owners, i.e. the workers, theft is the ultimate form of deluded ironly and is perhaps the greatest indignity underlying capitalism and neoliberalism today.

Re:real socialism

[Charcharodon]

Charity does work, people who don't work starve unless they aren't a douche bag and have friends.

The key for charity to work is zeroing in on the whole not being a "douche bag" part

Here let me give you a few examples to help you understand.

1. You are the town drunk/drug user. You've been arrest 10 times before you were 18 and now you are homeless and hungry. Douche bag.

2. You are the child of the town drunk. Your father is in jail....again and you are hungry and homeless. Not a douche bag

3. It's ten years later since you were the child of the town drunk, and now you are out on the corner begging for money because you are a drug user, hungry, and homeless just like your dear old dad. Douchebag.

4. You are a bunch of politically connected and corrupt unionized workers and corporate boobs at the largest automobile manufacturer in the world and after decades of helping run the company into the ground, need a 50 billion dollar bailout in order to avoid being unemployed. Douche bag

See how that works. Not a douche bag, you deserve help. Douche bag you should be told to go pound sand.

Re:real socialism

[Mashiki]

The government of China works pretty well. So did the governments of Soviet Russia during the so called war communism period. Economically at least.

Yeah...I don't think so. If you think it was economically sound, then all you need to do is find people who lived during the period, and ask them about the lack of *everything* from basic necessities, to food. Hell, I can even give a small story from a ex-professor of mine(teaches criminal law and drug laws here in Canada). Back in the 80's they had a group of 10 soviet police officers come over as part of a training program. Their firm belief was everything was staged, from people driving cars, to full shelves in every store, to people walking around and not being subject to search, arrest, and documentation checks. They believed, that the government had created giant potyomkin villages(ottawa, and toronto), just to impress them.

Re:real socialism

[Anonymous Coward]

I can't wait until you're unable to care for yourself, or you and one of your loved ones gets injured in a car accident.

If your dreams for this country come true; you'll be left to rot and die.

Oh but I'm sure when all of that happens you'll be happy to take advantage of the programs and still cry a foul.

We're not advocating for charity for the homeless. We support taking care of our fellow Americans who by act of nature or crime, can't support themselves.

This country only works if everyone lives to be productive. This isn't some reality tv show like survivor. There is no prize at the end for your kind or for any kind. You die. Plain and simple. You can't take your ridiculous imagined wealth with you and it's a waste of your efforts if it's not used.

Re:real socialism

[Anne Thwacks]

We the people give permission to people/corporations to operate profitably amongst us, and in return expect to have a contribution towards providing the infrastructure needed for them to operate (which included educating potential employees in sufficient numbers that their wages do not get over-inflated, and keeping them healthy by curing other people who might otherwise infect your employees and make them sick). In civilised countries, there are steps taken to avoid the terminally greedy stealing from the weak - at least partly to avoid the weak deciding that they would be better off if they went out burning and looting as an amusement..

Most of us, unlike Karl Marx, do not believe you need to own something to control it - the evidence is that it is quite possible to alter the volume on someone else's stereo, or drive a stolen car. The man was an idiot.

Scumbags like you think that the object of life is to be "greedier than thou".

Re:real socialism

[zippthorne]

Yes, but you realize that "means of production owned by the state" is pretty much the thing that conservatives and right-wingers fear the most. Incidentally, your description of socialism also sounds a lot like fascism...

Anyway, conservatives will question the logic of solving the problem of too much power concentrating in the hands of a few corporations by further concentrating that power into the hands of a single, enormous entity.

Re:real socialism

[smpoole7]

> Yet people like you ... never complain when the IRS giving our money to the Military, or to form a police state ...

Stereotype much? :)

I hate big government AND I hate big corporations. (I'm an equal-opportunity curmudgeon.) So yes, I will complain about the GM bailout, but I will also complain about the military buying weapon systems that it arguably doesn't need and will almost certainly never use.

Re:real socialism

[Anne Thwacks]

So did the governments of Soviet Russia during the so called war communism period.

Yes, its fine to deliver 100 tons of shoes by making 100 identical shoes left that weigh one ton each!

State control apparatus always slides downwards into a pit of sewage because no one gains from doing a job better than the next guy, but many benefit from doing it worse, and anyone doing anything in a new way is undermining the status quo, and by implication undermining the government,

Re:real socialism

[cheesybagel]

Mao's problems started when he went from the Soviet planned development model, which had been working fairly well, to his Great Leap Forward movement and the repression where he started punishing professors and scientists in most sectors of the country. The only person who I can think of which was even more evil in the past century is probably Pol Pot. The only sector which escaped was probably ICBM development. But even that after the freeze in relationship with the USSR their development was undermined by lack of technical cooperation with an industrial partner with existing technology and know-how.

As for the deaths yes they happened. I still consider these development models to be flawed. Meiji Japan and Imperial Germany managed similar growth rates without these kinds of death tolls. But the growth rates were historically high in those periods, in the double digits, so it is naive to assume they did not work.

Re:real socialism

[cheesybagel]

This is in part because resources were channeled to the defense sector. Khrushchev tried to increase the production of commodity products but he failed. Miserably. Planned economics seldom works in the consumer products sector.

Re:real socialism

[cheesybagel]

Had they done that when Stalin was in power they would have been denounced as 'wreckers' and sent to the Gulag in Siberia or killed immediately. So no that did not happen. There was shoddy production quality in the rush to meet production quotas. But if you did that in any strategically relevant sector you would not live a happy life for long.

Re:real socialism

[cheesybagel]

Example: See what happened to Tupolev after the ANT-20 requirement and quality control issues.

Re:real socialism

[couchslug]

In our (real) system of economics, corporations own the government by proxy and are superior to mere "people".

We are indoctrinated to fear the government interfering in business, but not business manipulating government against us including having the government save its arse.

Business is war, so if you want to deal with business, act coldly and without compassion because amoral business has none for you.

That's why contracts and agreements should be very, very carefully drafted.

Re:real socialism

[inode_buddha]

5. Social darwinist: douchebag.
6: Liberals: douchebags
7: Conservatives: Douchebags
8: Libertarians: douchebags ......

These are they who believe that every man is an island unto himself. It usually works, until they need help all of a sudden for some reason.

These "captains of industry" are among the most antisocial douchebags you'll ever encounter, and why should all the rest of our society suffer for their folly? Hence the bailout.

BTW what about the disabled, are they douchebags for not working?

Re:real socialism

[RavenLrD20k]

To those who are unwilling to work, they deserve nothing. To those who are very willing but unable to work, they need the help to live comfortably. To those who are willing and able, they need compensation equal to their skill with a bare minimum to cover temperature controlled housing, food, transportation, utilities, and monthly entertainment for a family of 4. Where I live, this amounts to a net pay of about $2-4K per month. The current minimum wage does not come close to this requirement. Having both parents making minimum wage just barely covers this, but then there is no one to stay at home to ensure that the young one(s) are properly taught the very basics

In the current state of things, your average person has to work is ass off to barely tread water while you have the ultra fat-cats with enough personal GDP to tow the rest of the population through the ocean at the speed of a Cigarette.

My other peeve with the current state of how things are: There are disabled people in America who are very willing to work and quite capable of performing many roles but cannot get stable employment. I personally know of several who are in this boat. One is disabled from birth with a mild physical form of Cerebral Palsy but is mentally very sharp. She acquired a degree in networking and has put together some of the most stable high end systems I've ever seen. She's never been able to get a position in the field of her degree or aptitude. She doesn't have the rounded aptitude to be able to manage her own business, and places that she's worked or tried to work will normally cut her off just before the date when her benefits would kick in (usually the day before her three month anniversary with a company). She needed a hand up, and I got along quite well with her personally, so I married her.

There are many other people that I know of that have very useful skill sets and aptitudes, but they cannot maintain employment because employers around here only see people with disabilities as liabilities. Most of the big name employers will hire people with disabilities for the PR or to fill the ADA quota that shows that they don't discriminate, placed in some kind of showcase position (like door greeter at Wal-Mart), and in all but the most exceptional cases people with disabilities are usually terminated around the time that their benefits package would activate (3-6 months).

Re:real socialism

[Anonymous Coward]

The truth pisses you off? Follow the link, check the numbers - they are correct and completely spearate from the social security and medicare part of the social safety net . Rant on about how you do not believe/like/hate people saying it all you like, but it would be better if you actually supported your rant with evidence. The evidence presented so far from multiple sources clearly shows that the US really is the biggest corporate welfare socialist regime in the world. People like you always seem to focust on the "social security and medicare part". Shill, astroturfer or just blinded by corporate media, it is hard to tell...

Re:real socialism

[Anonymous Coward]

FTFL: "About $59 billion is spent on traditional social welfare programs. $92 billion is spent on corporate subsidies. So, the government spent 50% more on corporate welfare than it did on food stamps and housing assistance in 2006. Before we look at the details, a heartfelt plea from the Save the CEO’s Charitable Trust..."

Re:real socialism

[sl4shd0rk]

In our system of economics, corporations are not people and governments do not own the means of production.

You've forgotten Citizens United and the Montana ruling in 2012. Also ties to private companies and high ranking political leaders are currently the norm. Agreeably, you're statement is where we should be but is nowhere near where we currently are.

Re:real socialism

[inode_buddha]

repeated for emphasis (from some other post...)

To those who are unwilling to work, they deserve nothing. To those who are very willing but unable to work, they need the help to live comfortably. To those who are willing and able, they need compensation equal to their skill with a bare minimum to cover temperature controlled housing, food, transportation, utilities, and monthly entertainment for a family of 4. Where I live, this amounts to a net pay of about $2-4K per month. The current minimum wage does not come close to this requirement. Having both parents making minimum wage just barely covers this, but then there is no one to stay at home to ensure that the young one(s) are properly taught the very basics

Re:real socialism

[ragefan]

Please tell me how sole-provider and no-bid contracts handed to a few corporations by our government is completely different from "means of production owned by the state". When government contracts like Lockheed-Martin or BoozAllenHamilton will do anything the government pays them to do, often without transparency, the net effect is the same.

Also, cite examples of any "conservatives will question the logic of solving the problem of too much power concentrating in the hands of a few corporations by further concentrating that power into the hands of a single, enormous entity." The conservatives were the ones that supported the deregulation that allowed banks to consolidate to become "too large to fail" in the first place.

Re:real socialism

[XcepticZP]

9: Statists: douchebags

We're not captains of industry, we're captains of freedom. And the disabled are not douchebags, they disabled. That's where charity comes in to play.

Statists are the biggest captains of industry, they're the enablers, the socialist drug pushers, and the violent thugs. Since you like using names for people.

Libertarians and anarchists are on a far better plane than people like you. We value morals and ethics over utilitarianism which is all too easy to misuse by tyrants.

Re:real socialism

[inode_buddha]

"Libertarians and anarchists are on a far better plane than people like you. We value morals and ethics over utilitarianism which is all too easy to misuse by tyrants."

So its better to watch society fall apart? I think that is what would happen. What do you think would happen? IME libertarians and anarcho captalists are extremely unrealistic about human nature. I argure that we do need a strong social safety net, and that the government can in fact do some things well. I do think the government needs to be about 50% smaller and that regulation is needed (see: financial sector, food safety)

(and no, I'm not a statist. More like a bitter ex-republican who vote ron paul.)

Re:real socialism

[ak3ldama]

When other progressives say stuff like this, it really pisses me off. Your statements are more than a little misleading.

Do you mean to say that those on the right never say statements that are misleading? That the big ag lobby never misrepresents the tremendous aid they get from the farm bill, while the pawns in the house try to cut spending on nutrition programs? That we do not comply with our free trade agreements - and that those other nations are merely trying to lash out at us unfairly? (I listen to ag radio, you wouldn't believe the nonsense. One day the corn lobby is complaining about the EPA relaxing the ethanol mandate; the next the beef lobby is saying how great it is since they have had to buy that over priced corn and have seen some red ink the last couple years. All the while no one cares about this particular case where government is regulating a free market?) You can pick another sector if you want, food alone is just so easy to refute you with. So please step off your soap box and review the situation(s) in the real world.

Re:real socialism

[dgatwood]

Most if not all charities today also get some money from the government. If the real concern was people not being generous enough to charities why not mandate everyone give X percent of their money to charity instead of taking it at gunpoint and redistributing it. At least then people would have a choice about which charity THEIR money is going to support.

I'm fairly certain that the vast majority of money charities get from the government is in the form of tax breaks for nonprofits. Those dollars are spent by the government in proportion to the money given by individuals, so in effect, people do have a choice about which charities their money is going to support. Compared with that, all other government grants to charities (NEA and NSF grants, for example) are almost certainly lost in the noise.

Re:real socialism

[CauseBy]

You have the definition of Socialism right but you are wrong that "in our system of economics governments do not own the means of production." Often we do!

* State-run schools is Socialized Education.
* State-run security is Socialized Police.
* State-owned roads is Socialized Transportation.
* Government-run snowplows is Socialized Snow Removal.
* Government-owned parks are Socialized Recreation.

I love our form of socialism, I think it's quite moderate and nice. I like public schools, I like having public police, I like having public roads, and I think public parks are awesome. I would oppose privatization (un-socialization) of any of those industries. I wish we could get a little Socialized Medicine, a little Socialized Telecommunications, certainly I'd like a Socialized Energy Sector. But I don't want Socialized Automobile Companies or Socialized Toothpaste Distribution. It's sort of a case-by-case basis.

But no matter my personal preferences, it its clear that America has been a moderate Socialist state for longer than any current American has been alive.

Re:real socialism

[Dishevel]

Actually liberals are much tighter with their money than conservatives are. Conservatives tend to give a higher percentage of their wealth away than liberals do.

Also. The US citizens give more money in foreign aid than the US government does. Most of it is much more effective as well.

Re:real socialism

[XcepticZP]

Obviously having society fall apart is bad. I'm not saying that we should let society burn just to satisfy our morals. But then again, you can't entirely claim that we have such a black/white scenario. Just because we up and decide one day to start being moral about things, doesn't mean that society will start crumbling. We obviously need an implementation and transitioning plan. Which definitely needs to be gradual, otherwise we'll end up being another Somalia. With a gradual change in the world, new social ideas, groups and support structures spring up to replace what the state currently provides, in a more moral manner.

See, we may very well be unrealistic and naive when it comes to human nature. But that's the beauty of having a truly free society, the statists are more than welcome to create a state while leaving the free individuals alone. But as soon as you rid the world of the state's monopoly privelage over land, free movement will start solving all problems. War torn countries will soon realize that the resource they need most are humans, and no one wants to live in a warring state.

If anything, that is the only thing that needs to be gotten rid of. Borders and barriers to immigration and free-trade. The state will crumble soon after that.

Re:real socialism

[dywolf]

Chinas economy IS working very well.
The USSR's economy may not have been stellar, but they were getting by.

the only reason Russia's communist government fell was because we outspent them. Literally. Reagan ramped up the military, and the Soviets felt compelled to match us. And they spent themselves into a severe economic depression, and they lacked the outside financial support to sustain it or survive it. We spent trillions on defense, and the Soviets tried to keep up, and they failed to such a degree that enough people finally said they weren't going to take it anymore.

Since then hasnt been pretty pink roses, but the ramnifications are simple:
if Reagan hadn't spent them into the ground the USSR would still stand to this day.

Re:real socialism

[Anonymous Coward]

The Victorians were really in to Charity, in fact some victorian gentlemen created whole towns out of charity.

And we know how well that worked for everyone, the UK was a land of milk and honey, there was no starvation, every child was educated to degree standard, there was virtually no crime.

Re:real socialism

[Wycliffe]

Why would a mandate not be workable? Yes, it is a form of wealth distribution and yes it would still be taken by gunpoint
by the IRS but it would at least improve one leg of the problem so that at least I have a say of where my money is spent.
It could be easily done with existing tax deductions in a short simple bill if congress wanted to. i.e. every dollar you donate
decreases your taxes dollar for dollar not just your gross like it currently does. Even 50 cents on the dollar and you would
see charitable contributions go through the roof. If I could donate twice my tax liability to a charity of my choice instead
of paying taxes I would do it in a heartbeat just so the federal government doesn't keep growing uncontrollably.
I would even go one step further and set up the military, etc... as charities and instead of mandating that everyone must
give X percent to the government that instead they must give X percent to a charity of their choice. Schools, hospitals,
and NASA would be well funded while random wars in countries people can't even locate on a map would instantly lose
their funding.

Re:real socialism

[fustakrakich]

the only reason Russia's communist government fell was because we outspent them....

Wrong. The reason the Soviet union fell is because they lost control of their mass media when Ted Turner marched in with his satellite dishes in the middle 80s. Government propaganda fell to Charmin bathroom tissue and Ivory Soap, and of course to Dallas and Mork and Mindy.

Re: real socialism

[Anonymous Coward]

People quickly forget that churches used to handle the duties of homeless shelters, feeding the poor, caring for orphans, and running most hospitals among other things. It's only when the government has gotten involved and taxed people so heavily that they have little left to give when it's all gone down hill.

You want to know why the country is broken, it's because it's so difficult to save enough money to quit your job and start a business. Unless you are in a service field with little overhead (programming, plumbing, HVAC, etc) the notion of saving enough money to quit your job and start a business is a foreign concept. If I want to start something that will require $50k in capital as well as anticipate going at least a year with no income the amount of time it would take to save is insane. Instead, I have to find an investor which will either be generous family or a 1% who will have a piece of my business and continue to get richer. That is the cycle that creates the 1%. Stop taxing the middle class so heavily and you'll create a lot of people who can go start businesses and create jobs. My wife has 16 employees after starting a business 5 years ago. She makes about 30% more than she would if she just had a job in her field and took minimum wage for 3 years in order to build it to that. We nearly went bankrupt 6 times during that stretch just trying to make payroll.

Starting businesses is really really hard and people are so focused in being angry at the 1% that they continue to vote for taxes that impair the middle class from trying to fix the situation.

Re:real socialism

[tomhath]

Domestic spending on public education or health care is NOT socialism

I'm pretty sure that public schools are indeed owned by the government and the teachers/staff are employed by the government. That sure seems to meet your preferred definition of socialism. Whether the US should follow the same model with health care is an ongoing debate.

Unfortunately it's human nature to be lazy; if people can live in reasonable comfort without having to get up with the alarm clock five days a week, many will choose to do so. A safety net for people who need help is one thing, expecting to be taken care of by the government cradle to grave with no intention to contribute anything in return is something else entirely.

Re:real socialism

[tompaulco]

Maybe charity would work if people had any money left to give to charity, but unfortunately the government takes a huge cut to pay for social services. Not that I am in favor of other areas of waste in the government, either.
The federal government should only be involved in matters that require national cooperation, such as defense and infrastructure. Everything else is tying to use a jackhammer to set a thumbtack.
Local charitable organizations are still quite successful despite all the money that the government takes away that could be used locally. Think of how much more effective these organizations could be if the government would allow people to keep more discretionary spending money.

Re:real socialism

[pnutjam]

Seconded!

Single payer healthcare neatly solves this problem.

Re:real socialism

[TsuruchiBrian]

There are many ideologies self identified as socialist, Marxism being one (albeit an important one). A broader definition of socialism is simply the opposite of individualism, and under this definition public education and healthcare would qualify. If you feel that other forms of socialism ( i.e. non Marxist forms) are not "real socialism", then that is only a semantic debate.

I think the real tragedy is that the label socialism has become so toxic. (e.g. if you can prove something is socialism, then it is automatically bad, because socialism is bad a priori). Rather than participating in this pointless game, I think it makes more sense to simply reject the idea that socialism is bad by virtue of being socialism. It makes more sense to me to analyze all systems whether categorized as socialist, capitalist, etc on an individual basis. Maybe Marxism had weaknesses, that doesn't mean variants of Marxism or other versions of socialism are doomed to fail. The same goes for capitalism.

Re:real socialism

[AlphaWolf_HK]

Not caring isn't antisocial, nor is it even defined as any type of disorder by any competent psychologist.

If a moose dies in the woods, nobody will really give a shit. Sure, they might say "oh yeah that's sad" or whatever, but they aren't going to dig a hole to bury it.

Two days ago I went the whole day without eating mostly because I just didn't feel like getting up and going to the store. That was mostly just a problem of me being lazy and ultimately I got over it. I don't think anybody else gives a shit about that any more than I give a shit about some guy who doesn't want to work at all and chooses to be homeless. Hell, unlike me he doesn't even have to pay for his food, he can just go down to a shelter and some college student being forced to do community service will serve him with a silver platter (well, stainless steel to be more precise.)

Re:real socialism

[ttucker]

Do you mean to say that those on the right never say statements that are misleading?

Brilliant rhetorical strategy, "The other side says stupid stuff too!"

Re:real socialism

[Anonymous Coward]

@inode_buddah....Are you talking about the charity of the individual, US corporations or the US in general? Either way I am sure you would find the individual as well as the Nation and it's Corporations, quite high up the charitable list, whichever list you look would like to look at. Maybe you should look into your judgement so US citizens being "incredibly selfish antisocial bastards" before you talk in favor of true Socialism from a mind like Karl Marx. Demanding the individual be responsible for his and her own actions is not selfish at all and the amount of charity the US as well as the individual demonstrate with in a free society pull quite counter to your unfounded claim.

http://www.nptrust.org/philanthropic-resources/charitable-giving-statistics

http://www.nps.gov/partnerships/fundraising_individuals_statistics.htm

http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=42

http://philanthropy.com/section/How-America-Gives/621?cid=megamenu

http://www.bostonglobe.com/opinion/2013/12/01/gifts-charity-differ-regions/FmhJQb4EJ3m6ygna2DIKDP/story.html

http://www.irs.gov/pub/irs-soi/11esgiftsnap.pdf (No Profit donations)

http://www.irs.gov/pub/irs-soi/08pfsnap.pdf (Private firm donations, grants and contributions)

https://www.blackbaud.com/nonprofit-resources/blackbaud-index

http://www.huffingtonpost.com/2013/07/16/most-charitable-companies-2012_n_3599349.html

The UK came eighth on the index and finished joint third, alongside Thailand, in terms of giving money, with 73% of the population having donated to charity. However its former colonial possessions - Australia, New Zealand and the United States - were far more charitable

Re:real socialism

[cellocgw]

Conservatives tend to give a higher percentage of their wealth away than liberals do

[citation needed]

And the reason you need to provide citations is that every source I've found in the past suggests that this is only true for "conservatives" who are below middle class, and further that it's only true if you include contributions directly to churches. And I do not accept that giving cash to a church (or to your favorite TV evangelist) in any way counts as charity.

Re:real socialism

[Dishevel]

Because giving to your church is a less effective use of charitable monies than "giving" to the government? Are you insane or just trolling?

Re:real socialism

[ttucker]

This is why I find it particularly hypocritical to see self-proclaimed "Christians" running on the Republican ticket, when that party's economic policies are precisely the opposite of what the Bible teaches.

For all of these years everybody thought the bible was teaching about charity and giving money to the church, when it turns out you have discovered it actually wants you to pay federal income tax. Silly Christians!

Liberal policies are just forcing the rich to cough up a tiny fraction of their fair share.

My relatively modest income requires almost 45% of my income go to income taxes, but if you make half of what I do, tax liability drops nearly to 15% (payroll tax only). At what point are the supposed rich paying their fair share? Are you thinking something closer to 75% of their income, or perhaps 100%....

Re:real socialism

[Raenex]

It really doesn't work when you have a military superpower who has already twice used nuclear weapons on civilians aiming all of their nuclear weapons at you and picking fights with you at every opportunity around the world.

You seem to forget that the USSR was itself a military superpower with nuclear weapons and had to be around the world asserting its authority in order to be in those fights.

The US did it by mortgaging the futures of their children and failing to provide for a large portion of their population, the USSR did not take that path and paid the price. Don't be mistaken that we came pretty close to collapsing our own economy in the process.

Do you know nothing of Stalin and the millions who died from starvation? And the US has been a welfare state for a long time. The difference between the US and the USSR was that in the USSR everybody was poor except for the elites.

Re:real socialism

[ak3ldama]

If you want to have honest conversations with people, you need to be clear what you're talking about.

I was not applying some sort of rhetorical strategy. What anon was alleging is that you cannot have any meaningful conversation with some progressives because they try to mislead people, and that they do not tell the whole story. I was merely bringing up the reality that no one wants to have an honest conversation. Further: It's misleading statements like that that turn off moderates (who can easily google the federal budget) from believing in the good intentions of us on the left. I would assert that neither side has "good intentions" but merely their own interests at heart. Each side sort of has to keep repeating things over and over and over again for the truth to sink in, to kind of catapult the propaganda and hope that the way they frame things wins out.

Imagine if a (real not Koch-brothers-fake) community action group approached regulars on the street with a whitepaper and said: Here in these 50 pages we outline the background behind Social Security and provide statistics that reinforce our belief that everyone needs to contribute 37% more. What would those people do?

Re:real socialism

[TsuruchiBrian]

What is the point of having freedom if you are not a utilitarian?

Re:real socialism

[Urza9814]

Do you mean to say that those on the right never say statements that are misleading?

You should never assume -- particularly on Slashdot, in my experience -- that people are die-hard supporters of one of two non-existent "teams".

Particularly when there's so little difference between them...odds are anyone who is actually paying attention and hates one is going to hate the other just as much.

Re:real socialism

[Gryle]

You're painting with a rather broad brush. There are quite a few high-profile churches/televangelists/pastors who seem more interested in the lining their own pockets than feeding and clothing those in need. There are also a lot of churches where the pastors and staff live just above the poverty line so they can operate food banks, homeless shelters, and other poverty-relief efforts. The latter just don't make news that often.

Re:real socialism

[thaylin]

Except SS and medicate SHOULD NOT BE included...Those are paid for by something other than the base income tax. They are paid directly as a tax FOR those things. It does not matter if people consider them to be part of the system or not,

Re:real socialism

[Jane Q. Public]

"The word socialism gets tossed around carelessly by right wing pols who don't know what it is... But real socialism, as meant by Karl Marx, is defined as "the ownership of the means of production by the state". Domestic spending on public education or health care is NOT socialism. But government assumption of corporate shares is the real thing."

And as we see here, it ALSO gets tossed around by left wingers who equally don't know what it is. What a silly thing to say.

Socialism -- like many such "isms", is both an economic and political system. Marx's definition is only about the economic aspects of socialism. But denying the political aspects is to deny reality.

In the real world, as a practical matter, a socialist State has to distribute the proceeds from that State-owned production. How does it do so? By means of such things as "socialized medicine".

So while "socialized medicine" may not define the political system of a country, it is definitely a step toward a Socialist State.

AND, I will add: even if the political aspect did not exist or was not important, you'd still be wrong. Because "health care" is about 1/6 of our ECONOMY, and pretty much total Government control of 1/6 of the economy is very definitely socialist, even by your own non-real-world definition.

Re:real socialism

[RavenLrD20k]

At least it would if it weren't implemented by 535 people with serious cases of cranial rectal inversion who can't see the forest for the trees and turn everything into a party issue to the detriment of real progress.

Re:real socialism

[TsuruchiBrian]

Donating money to a church is less effective than donating to non-profits like doctors without borders, etc, that don't have ulterior motives like converting people to their religion

And BTW you still need to provide citations for claims like "Conservatives donate more to charity", rather than simply asserting it. How else would we know if it is true? We all know conservatives can't simply be trusted. Afterall, most false assertions without citations are made by conservatives [citation needed].

Re:real socialism

[Talderas]

Does SS and medicare get funded by taking taxes out of my paycheck? Yes. Then there's no difference.

Re:real socialism

[JesseMcDonald]

We the people give permission to people/corporations to operate profitably amongst us...

How magnanimous of you. Guess what: they don't need your permission. Which means you don't get to attach strings or demand concessions.

If you choose to build some infrastructure without any prior arrangement, you can deny them access to it but you have no basis for charging them for it. That was your decision, not theirs; you bear the costs.

Most of us, unlike Karl Marx, do not believe you need to own something to control it - the evidence is that it is quite possible to alter the volume on someone else's stereo, or drive a stolen car.

Marx got a lot of things wrong, but he had the right idea here. While you can control something you don't own, you do need to own it to have the right to control it. That's what ownership means: the right to control. If you take control of something then you are acting as the owner, whether you have any legitimate right to do so or not. If the state claims the right to control the means of production, then the state is claiming to own the means of production. There is no meaningful distinction.

Re:real socialism

[TsuruchiBrian]

Do you think laziness is a choice? Why would someone choose to be lazy or choose not to be lazy?

You say you ultimately got over your laziness. What if you didn't? Why don't other people get over their own laziness?

Re:real socialism

[Obfuscant]

Maybe charity would work if people had any money left to give to charity, but unfortunately the government takes a huge cut to pay for social services. Not that I am in favor of other areas of waste in the government, either.

It isn't even an issue of having money left over to give. The lack of giving to charity is a direct and obvious side effect of teaching people that government is the solution to every problem. The natural question is, why should I give more of my money to a charity when I'm already giving lots of my money to the government to use for charitable purposes? If only those damn rich people paid their damn fair share all the poverty problems could be solved by the government.

Re:real socialism

[thaylin]

Except those food banks and homeless shelters are not done just because they want to help people, but to try and proselytize. Such as why do we give gifts to a charity who is then going to tell the kid it was a gift from a deity, and not from a nice person far away.

Re:real socialism

[TsuruchiBrian]

Lets say there were 2 options....

Option 1: keep everything basically the way it is (Rich people stay rich, poor people stay poor)

Option 2: Distribute the wealth so that everyone can have the basic necessities. But not just for the United States, for the entire world. This would mean that rich people all forfeit nearly all their wealth, because all the money created in the world is only enough to give each person $865 / month.

Which would you choose?

Or would you rather have a 3rd option that spreads wealth only within the United States but keeps the rest of the world poor?

Re:real socialism

[Sentrion]

I think that sounds nice in theory, but wealthy donors will tend to donate to arts programs and prestigious universities that serve the propsperous and well-to-do areas they live in. The working class will donate to local jobs training programs and scholarship funds for working-class kids. Some nerd types might donate to NASA or DOD, but there would almost certainly not be enough support to continue the programs that exist today. Nobody would donate to hospitals since hospitals will over-bill the crap out of you whether they are for-profit or non-profit. Aid for the impoverished, hungry, disabled, or any other extremely needy individuals will fall short because there won't be enough money left after all the taxpayers have chosen to competitively fund the "charities" that serve their own best interests.

Aid to starving villagers in third world countries or refugees fleeing conflict? It will fall from everyone's mind as blind and lame beggars return to America's streets, while poor and orphaned American children drop out of school to return to grueling hours of manual labor. If you would like to fantasize about a world where free markets prevail and private charity is the only form of aid for the needy, go read some books by Charles Dickens.

Re:real socialism

[nmr_andrew]

My relatively modest income requires almost 45% of my income go to income taxes, but if you make half of what I do, tax liability drops nearly to 15% (payroll tax only). At what point are the supposed rich paying their fair share? Are you thinking something closer to 75% of their income, or perhaps 100%....

I usually don't jump into these sorts of threads, but I have to call foul on the above.

Assuming SS (payroll) taxes take out 7% and you live in an expensive state with 10% upper tax bracket, that means you're paying 28% in federal taxes. That rate starts at just under $88k of AGI, which means before deductions you're probably making at least $100k. I can only consider that "modest" if you live in a very expensive area (NYC, SF, etc.).

Furthermore, every time I see anyone trot out numbers like 45% in taxes, they invariably are doing one of two things:

• 1. Including ALL taxes, property taxes, sales taxes, etc. which are levied locally
• 2. Stating the rate on only the highest taxed portion of income and ignoring that due to tax brackets a large portion of the total income is taxed at a much lower rate.

If I give the benefit of the doubt here and assume neither of these is the case ,to have a 45% overall probably means at least some of your income has to be in the 33% bracket, which starts at $183k and is way above "modest".

Re:real socialism

[Dishevel]

Here

Notice how the "Conservative states dominate the top of charitable giving? See that big block of Blue at the bottom. Does this quick view of the way things are let you infer anything?

Further into the article you also see that the rich are not the most giving either. That the middle class in those states give a far higher percentage of their income out. The US is filled with good people that care and want to do good. They do not need to have their money taken from them in order to do good.

Re:real socialism

[RavenLrD20k]

The third option sounds the best. You cannot help others until you help yourself first. Once the American economy is again self sufficient, and we tackle the problems of hunger within our own borders, then we will be in a better position to be able to help those outside our borders with what is left over. I say to hell with a global economy. One piece of regulation that American really needs that a decent portion of the rest of the civilized world has is "If you want to sell here, it must be built here." This means stop importing rubber dog shit and other such shiny from Asia; electronic entertainment systems, phones, etc. all need to be manufactured here. This means stop accepting Indian call centers on American services; if AT&T wants to have 24 hour service, there are more than enough people right here willing to put in night shift hours. The only trade agreements that we should have with other countries is when they involve raw materials that cannot be found local within our borders. This means that we should be refining and using our own oil, rather than giving money to those who would just as soon stick us in the eye as look at you.

Also note, just because I want to give a hand up to those within our borders and spread the American GDP among legal American citizens, it doesn't mean that the people should be allowed to take that for granted. If the people that receive a handout refuse to take the steps to be a productive member of the society around them, then they should be left behind. America was once a great nation that didn't get to its greatness by catering to the lowest common denominator, but by pushing those who fell in that bracket to try and better themselves, or leave them behind. We made it to the Moon...and then, for all intents and purposes, stopped. If the nation stopped trying to cater to this lowest denominator on a federal level and instead let the local levels handle the work to find what will increase the lowest of values, we might just be able to start rolling forward again and hopefully reverse the downward course we've been travelling for the last 30 years.

Re:real socialism

[ttucker]

Render therefore unto Caesar the things which are Caesar's; and unto God the things that are God's.

Jesus is telling you that your taxes count as taxes, your charity counts as charity, and not to confuse the two.

Re:real socialism

[ttucker]

Alright, 45% is hyperbole, but lets really get an itemized total:

15% payroll tax (half of this is usually hidden from the employee, but make no mistake, it is a tax they pay.)
4% state income tax
16% federal income tax (total tax/total income)

For a grand total of: 35%. Considering that there is a point where the supposed non-rich only pay payroll tax, the contrast remains striking. I pay twice the percentage.

Now that I been perfectly frank with you, please return the favor by answering the actual question: At what point are the supposed rich paying their fair share?

Re:real socialism

[crunchygranola]

Because giving to your church is a less effective use of charitable monies than "giving" to the government? ...

Okay, Dishevel - what fraction of the money contributed to a church actually gets passed on in a form that resembles what is commonly thought of as "charity"?

Many churches (most, I suspect) make the record of their finances public - so it is easy to find out what is typical for the "overhead" of this charitable church operation. Remember - your contention is, I believe, that all of the money given to a church is charity, not just some of it. This is certainly how the sources you point to analyze the data.

As a for-instance, type "church financial statement" into Google and go down the list that is returned in order. You can use some other selection method if you like, but this one can be repeated and has no in-built bias.

The first church that is returned is the First United Methodist Church of Austin. Its 2011 audited financial show contributions of $2.357 million. How much of that is passed on as charity? Well, the only part of their budget that contains items for aiding the community is called "Missions", which expended a total of $735,692. Essentially all of the rest is spent on the same church members who are contributing, mostly in funding its religious worship.

As a charity this is just an awful return - only 31% is being spent on actual charitable services. The remaining 69% is being spent on a religious social club - fine for the members, but in no way a "charity".

But wait! That's a "liberal church"! They must be tight-fisted charity givers, right? The third on the list is the Faith Promise Church of Knoxville, Tennessee, a very conservative Evangelical ministry. It has 2012 revenues of $7.9 million. Its charitable works spending? Its "programs and missions" budget is just $582,000, or 7.4%

You will find this for any church budget you care to analyze, the 31% of the Austin church really surprised me, it is one of the highest I have ever seen. Typically less than a quarter of the money that goes to a church (often much less) gets spent in any charitable fashion.

And when you make this adjustment, the "generous conservative" disappears.

Re: real socialism

[inode_buddha]

http://www.nationaljournal.com/magazine/the-return-of-the-welfare-queen-20131212

Might want to double-check a few of your stereotypes. I'm not against kicking off those who are just plain lazy (and I've known a few...)
HOWEVER
I have a problem with those who can't seem to understand that maybe there *aren't enough jobs*
and *some people are physically unable* (I have been there)

In other words, there are many times when people legitimately are screwed and need help - and this happens far more than the Right wants to admit. I'm saying this as a former registered Republican.

Speaking of welfare queens, what about all those corporate subsidies and tax write-offs?

Re:real socialism

[nmr_andrew]

Although I made no comment as to whether the numbers were fair or not, since you asked IMO that point comes when the percentage of all income taxes paid by the rich is roughly equal to the percentage of all income they make - and we should include capital gains in the calculation. I'm pretty sure we'll disagree on this.

I realize that the rich do have a top federal tax bracket of something like 39%. They also stop paying payroll tax somewhere in the 28% bracket if I'm recalling the ranges correctly.

Re:real socialism

[Dishevel]

So much better to give to government. Where a higher percentage of the monies are used to ....

What?

Government programs have done zero good for the poor. Government housing is the worst and lack of any controls make these hot beds of horror and crime. Government assistance (Food Stamps and Welfare) have created nothing. They reward bad behavior and make getting off the dole more difficult. You have a program that pays subsidies to farmers to not grow food to keep prices high. One that subsidies milk to keep the price low, You have programs distributing the food. You have government agencies battling other agencies to advertise to more people that getting on the dole is a good thing. Social pressures to fend for yourself have been removed.

You have people putting up their own youtube videos demanding their food stamps. There is no shame left in society. Where you do not have shame as a control you get what we have today. We have a bunch of people that to this day believe that stealing wealth from those that earn it to give to those who did not makes them good people. Taking my money to give to some poor person does not make you a good person. It just makes you a thief. We are all responsible for ourselves and the well being of our neighbors. We do this through community. Communities are built by and large (With some very large and effective notable exceptions.) by churches.

Communities of like minded individuals pulling together as one to help those of their community that needs it is orders of magnitude less destructive than what the Federal Government has been doing. Not even looking at the good it does. We have been doing this the Big Government way for many decades now. Crime is rampant. (Confined mostly to the ghettos. Which makes life for the poor Ohh so good.) Personal responsibility is at an all time low. Care for others is right there as well. After all. Why worry about your neighbors well fare when that is the job of the government?

I am filled with anger that I must let go of every time I broach this subject. Because I know that those who preach that it is the responsibility of the government to prevent harm do it out of self will. If I can make the government responsible then I do not have to be. I do not bear any responsibility for what befalls me and I have no responsibility to those around me. "I gave at the office."

Caring people would look at the outcome of these government programs and weep.

Re:real socialism

[tftp]

It's sort of a case-by-case basis.

That's often hard to achieve. You are likely to receive a fixed set of features, without ability to customize. Like when you are selecting a spouse :-)

Socialized services tend to spread over time. The government can win over the private enterprise by several ways. In time of NEP in USSR this was done by excessive taxation of private businesses. The government can easily sell a product or a service below the cost, and that was done in USSR too. This distorted the market because no private enterprise could compete with arbitrary pricing schemes of the government - who wasn't responsible for financial results and reported to no one.

I wish we could get a little Socialized Medicine

Go find someone from the ex-USSR and ask them about their experience at the dentist. Do you know that in USSR most of the dental work was done without anesthetic, and using the cheap, belt-driven dental drills? That there was no assistant to the doctor? That there were no dental X-rays, let alone digital ones? This is what you get when medicine becomes socialized - you, from being a precious, valuable paying customer, are downgraded into one of those annoying patients that don't affect anyone's salary but just distract the staff from reading newspapers and discussing things. You get processed and sent out of the office as soon as possible, with minimum attention to your ills and your needs. Do you know what is the typical word said in such case? "There are many of you, but only one of me." That should be said with expression of hate toward the customers.

Re:real socialism

[CauseBy]

Yeah maybe but I'm not proposing government monopoly. In my opinion, the free market sucks hard at providing medicine and I'm confident the government could do it better but if I'm wrong, then nobody would go to the government doctor, they'd just keep paying to see their private doctor. Likewise, today some people hire private security instead of relying on the police, or send their kids to private school instead of socialized schools. In this way government provides a baseline standard of care. Look around, how many private schools are shittier than the public schools? None, obviously, because nobody would go to them.

Socialized services tend to spread over time because they are inexpensive, high quality, and people like them. Imagine that. Sometimes they don't spread over time, sometimes we get rid of them because they suck, but golly gosh usually the government does a pretty good job running them.

Your anecdote about USSR medicine really points to a lack of democracy not some problem with socialism. Neither would my anecdote about well-plowed streets prove that all socialist industries are dandy. Democracy is the cure for excesses of poor-quality socialized services.

Re:real socialism

[TsuruchiBrian]

This is why it is important to cite sources.

You could infer that conservatives are more charitable from this data. But there are other alternatives.

Conservative states donating more money is not the same as conservatives donating more money. We all know conservative states are poorer than liberal states. Maybe there is more charitable giving within those states because more charity is required. This would also mean that there is also more charity being received by red states.

Total money donated to charity is only 1 measure of charitableness. Another one might be charity donated minus charity received. If we used this measure I suspect the blue states would be on top just because they have more money and therefore will give more than they receive while the red states tend to receive more than they give.

They do not need to have their money taken from them in order to do good.

I think people are very well intentioned. However I think the money they donate to charity is not well spent. People donate money to all kinds of inefficient or misguided charities all the time (churches being a good example). When 9/11 happened everyone donated so much money that each family of 9/11 victim would get millions of dollars on top of whatever insurance they would get. People killed in other ways get typically only a few hundred thousand $ of life insurance. When the Boston bombing happened, people donated so much blood they had to throw most of it away. The rest of the time there isn't enough blood.

People are irrational. Their good intentions don't always translate into effectively helping people who need it. I am not saying the government is perfect or even better, but sometimes it's nice to have some central planning to tell people things like "we don't need any more blood now, but we will in 6 months" or "9/11 victims' families are now financially secure, but there are kids whose parents died in other ways, that are just as orphaned as those whose parents died in 9/11", etc.

I actually agree that the government should probably mostly remove itself from the charity business, although I think it should focus on a few key areas like healthcare, housing and meals, etc for people who can't afford it. Private charities can do this too, but usually with lots of gaps in who they can help, because their efforts are not well coordinated.

Re:real socialism

[TsuruchiBrian]

Maybe all the people making over $250,000 should all help eachother get to at least $1million/year before helping people earning less than $250,000. Afterall, you have to help yourselves before you can help others.

Re:real socialism

[Dishevel]

Name one the government does well.

Just one.

Re:real socialism

[TsuruchiBrian]

name one what?

Re:real socialism

[kenshin33]

45% of what and 15% of what?
I have 50$/day I loose 15% (7.5$), there go my lunch for the day. I have $1B I loose 45% ($450M), it's a lot of monney but I still have $550M to spend.
Taxe brackets may need some rearangement, but I doubt he was talking about your relativeley modest income!

Re:real socialism

[tftp]

In my opinion, the free market sucks hard at providing medicine and I'm confident the government could do it better but if I'm wrong, then nobody would go to the government doctor, they'd just keep paying to see their private doctor.

And that would be fine with me. However why haven't Obama done his healthcare reform this way? By setting up a government-owned doctor? I suspect it's because such a system would be very expensive; more expensive than private healthcare. It's easy to see why: nobody would be interested in working efficiently. Everyone would be working to earn maximum money while doing the minimum work. In private sector you have the patient who monitors your work by his wallet. In public sector the patient does not pay; and those who do pay are far, far away, and all that they ask for is mere paperwork. That is easy to provide without actually helping people. This is what happened in USSR. Doctors went through the motions of seeing patients. Not all of them cared; but those who saw more patients per day were rewarded. Those who saw fewer patients (and spent more time with each) were called "underperforming."

Socialized services tend to spread over time because they are inexpensive, high quality, and people like them. Imagine that.

That's not now things work. I was there. Were you? If you haven't seen firsthand how destructive socialism is, please ask those who were there. What you are saying is just a nice dream. Hint: nobody likes socialized services because they are always of low quality. A popular Soviet joke says: "You can use free healthcare, but only if the outcome does not matter." People used to bribe doctors to get a treatment that is just a little better than what is allocated to everyone else. There was no reward for doing a good job - the feedback loop was too long, and the salary matrix was cast in stone. It's not so when the customer pays you on the spot and then recommends you to his friends.

Your anecdote about USSR medicine really points to a lack of democracy not some problem with socialism.

What has democracy to do with socialized services? The UK is democratic, officially, but NHS is just as deadly as Minzdrav was in USSR. You can elect one representative or another, but if there is a fixed sum of money to treat everyone, everyone gets treated equally. Since there is never enough money in public coffers to treat everyone well, everyone is treated poorly. Usually the plank is set to just keep people alive and functional, for some period of time. Losing ten or twenty teeth is not an impediment - you still can sweep the street or work the machine.

It is truly sad how much societies love to step into the same pile of $hit, over and over again. Nobody cares about *actual* processes and causes that resulted in failure just a decade ago. First, everyone is saying "no, they haven't done it right, but we will." Then the history is forgotten, and old devils are reincarnated as saints. (Che Guevara was a psychotic killer, for example.) Now Socialism and Communism are in favor again; all the rivers of blood that were spilled due to them are conveniently forgotten, and people are $pleasing_themselves with ideas that were tried and found to be absurdly untrue. Eventually they get their wish... and then they will regret it. Again.

Does this mean that we cannot have a plentiful and free society? Of course not. But that society will not be Socialism. It was *a crime* to have a private business under Socialism. Do you want to be imprisoned for making a small profit on repairing computers for other people? That's what will happen. Socialism suppresses private enterprise because it cannot compete with it, other than by force of law. The end of socialism was written on the wall when Gorbachev allowed private enterprise. Government-owned sector could not compete, and did not want to. It died on its feet, standing still and not caring. Socialism is a non-free society by definition, and you cannot build anything good on that foundat

Re:real socialism

[HornWumpus]

Bullshit on the growth rates. And I have a cite.

http://en.wikipedia.org/wiki/File:Graph_of_Soviet_National_Income_Growth.png

Also plenty more cites, in the wiki footnotes.

Main article: http://en.wikipedia.org/wiki/Economy_of_the_Soviet_Union

The deaths were unnecessary, communism didn't work.

Re:real socialism

[HornWumpus]

You have a book a philosophy, we have history.

That makes you wrong.

Re:real socialism

[flyneye]

Chinas government may work, but not for the people fueling it. I think the criteria needs to be not just how a government works, but how Communism works.
Ask a Democrat, our country works fine, see what I mean? Cuba? Now there's a nice place to live, huh? Russia was the same. GOVERNMENTS WORK WELL, that is a given, they feed, clothe and indulge their wildest fantasies, who could give a shit?
Marx stole his best ideas from Kropotkin, then managed to fuck them up. I'm taking none of the usual half baked apologeas for his shoddy thinking.

Re:real socialism

[ttucker]

Considering taxation percentage as a ratio of total tax paid to total income is the only really fair way to do it. Otherwise there is confusion about amounts paid at lower taxes, standard/itemized deductions, and any number of other things, including paying only capital gains on certain income. We most likely agree that any legitimate discussion on the matter must revolve around what is actually earned, and what is actually paid... not idle conversation on tax brackets. Some amount of disagreement arises from trying to guess what the wealthy pay in terms of taxes, because for the most part it is secret to the casual observer. Pundits on either side will inflate/deflate the actual percentage paid to convenience, all while neither side actually knows shit about the truth of the matter. Show me that Bill Gates is paying 16%, and you have truly convinced someone to see things the way you do.

One of my biggest concerns with the fair share argument is that it almost never outlines what a fair share is, besides a strong implication that the present condition of things does not fit the definition. Anyone who can articulate an idea of what they would consider to be fair, in terms of actual numbers, earns almost infinitely more respect in my book. Saying a number indicates that, in your view, there can ever be a fair accommodation. Frequently, this talk is nothing more than mush mouthed class warfare shit, with people who can not see any fair solution. So maybe we disagree on the magnitude of taxation, but I respect you enough to be curious about what you think.

Is your proposal that the tax percentage paid should be roughly pegged to the percentage that their total income represents of all income in the US? Say the total income earned in the US is approximately 1,000,000,000/year, and someone earns $50,000/year; their tax would be c*(50,000/1,000,000,000)%... is this correct?

Re:real socialism

[kerrbear]

but I will also complain about the military buying weapon systems that it arguably doesn't need and will almost certainly find an excuse to use.

FTFY

Re:real socialism

[j-beda]

Unfortunately it's human nature to be lazy; if people can live in reasonable comfort without having to get up with the alarm clock five days a week, many will choose to do so. A safety net for people who need help is one thing, expecting to be taken care of by the government cradle to grave with no intention to contribute anything in return is something else entirely.

I would tend to agree, but with continued advances in productivity, eventually we are going to get to a point (I would argue that we already have in many "western" countries) where the number of producers needed for enough "stuff" for the entire population is much smaller than the number of people there are in the country. I don't know how we should arrange things so that everyone has at least some opportunity to thrive . If the country makes all this stuff with only a few workers, how SHOULD resources be divided?

Re:real socialism

[CauseBy]

Hint: nobody likes socialized services because they are always of low quality.

This is exactly what I'm saying isn't true. We love our socialized water supply, our socialized military, our socialized police, our socialized parks, our socialized roads, our socialized schools, our socialized coast guard, our socialized national monuments, and so on.

But that's not universal. Nobody is clamoring for socialized razor blade manufacturing, socialized hollywood movies, socialized gas stations. Some things we think government does better, some the market. And the only reason we ever even consider letting the government take over is when the market completely fails.

At the end of your comment you seem to have slurred socialism to mean communism. Do you think those are different? I do.

Re:real socialism

[nmr_andrew]

Unless I'm reading something wrong as I'm just starting on my morning coffee, yes, what you have in the last paragraph is something like I would propose, although it would probably need to be tweaked a bit for those way at the bottom of things. I'd personally probably still keep some sort of progressive tax rates, but cutting loopholes and giveaways that only practically apply at the upper end would go a long way on their own.

The problem comes when we have someone like Warren Buffet who self-admittedly ends up paying a much lower percentage of income in taxes than his secretary does, or the Mitt Romneys of the world who pay something like 12% total federal tax on ~$250M of income.

Re:real socialism

[lsatenstein]

9: Statists: douchebags

We're not captains of industry, we're captains of freedom. And the disabled are not douchebags, they disabled. That's where charity comes in to play.

Statists are the biggest captains of industry, they're the enablers, the socialist drug pushers, and the violent thugs. Since you like using names for people.

Libertarians and anarchists are on a far better plane than people like you. We value morals and ethics over utilitarianism which is all too easy to misuse by tyrants.

One answer to you

Guantanamo

Re:real socialism

[XcepticZP]

Not sure I understand your point? Guantanamo is set up by the state, and run outside the border in order to evade the legal system of even the country that set it up. It's statist hypocrisy at it's finest.

Re:real socialism

[dgatwood]

15% payroll tax (half of this is usually hidden from the employee, but make no mistake, it is a tax they pay.)

No, it isn't. Taxes on businesses, including payroll taxes, are invariably passed on as part of the cost of doing business, and are thus paid by the people who buy goods and services from those companies. The poor, most of whom spend the majority of their income on goods and services, end up paying a disproportionate amount of those taxes (relative to their income). They also pay a disproportionately large percentage of their income as sales tax. Those regressive taxes more than balance out the reduction in income tax on the lower tax brackets, so on average, the poor pay a larger percentage of their income in taxes than the rich (in every state but Vermont, at last check).

Re:real socialism

[nobuddy]

Odd that someone would think a federal bond is a fake IOU. Surely, as you are commenting on this topic, you are aware of basic facts, such as any money loaned out of the SS fund is done so with federal bonds....

Re:real socialism

[nobuddy]

The vast vast bulk of the taxes you pay go to corporations. Not the baby mama with 12 kids (that does not exist) that you are picturing in your warped and rancid little mind. Which is what this is pointing out. You are outraged at the theft of your hard earned income- but are too dense to see who is really stealing it.

Re:real socialism

[nobuddy]

And the disabled are not douchebags, they disabled. That's where charity comes in to play.

Want a shock to your errant beliefs? The disabled(including elderly) are 90% of all welfare recipients. Eliminate the "freeloaders" you seem to think are a suck on the system and nothing changes. Eliminate corporate welfare, and everything changes. If corporations paid their taxes on profits, the need for your income tax is virtually eliminated. More than half of the total profit of this country remains untaxed. Collect that, and income taxes as a whole can be dropped to very low levels.

Re:real socialism

[nobuddy]

Building another megachurch because the current one is *GASP* 10 years old!!! is NOT a worthy charity.

Re:real socialism

[nobuddy]

They are including church tithing, and they love to include ALL church donations as Conservative because, clearly, no liberals go to church.

Re:real socialism

[nobuddy]

Now, take church donations/tithing out of that and where are we? I don't care if the Pastor has a new Rolex or if the church has enough billboards, that is not a worthy goal.

Re:real socialism

[nobuddy]

Judging by your post, Education is clearly not one of their successes.

Re:real socialism

[nobuddy]

Bearing in mind that they also consider, and list, evangelism as charitable work. Saving a soul is more important than feeding a starving child.

Re:real socialism

[nobuddy]

Note that the people you decry here work full time jobs, and often more than one of them. If the minimum wage was sufficient to live on, they would not need assistance like this, now would they?

Re:real socialism

[nobuddy]

A great example is the Salvation Army. All those donations for shelters and soup kitchens... but if you do not accept Christ as your savior and take communion at the door- no soup for you.

Re:real socialism

[nobuddy]

There is no 45% income tax bracket, and the highest bracket-35%- is for those with an income over $1M per year. This is in no way "modest" income. So, you are either a liar (most likely) or are both very rich and too stupid to hire an accountant. Neither bodes well for you. I make a good income, and my income tax rate after deductions is about 15%, give or take a percent. That is a bit high, but not unreasonable.

Re: real socialism

[nobuddy]

Why should hard working US citizens be forced to support welfare moms

There is where you went wrong. While a few do this, it is as much a non-issue as voter fraud. Welfare has a less than 2% fraud rate, and over 90% of it goes to the disabled and elderly. The remainder is mostly short term food stamps to the underemployed. This means they have a job, but the job does not pay enough to survive on. See WalMart Employees for reference. The whole "Welfare Queen" is a red herring put forth by right wing sources to free up more of your tax money for corporate welfare rather than social welfare. like the Farm Bill- that cut food stamps nearly 50% for "budgetary reasons" yet was twice as big as the previous one and paid 30% more in corporate farm subsidies.

Re:real socialism

[Dishevel]

If a church starts doing stupid shit with my money I can give somewhere else. When the government decides to pay people to not grow food I have no choice but to pay. Do you understand the difference or are you stupid?

Re:real socialism

[Dishevel]

How correct you are government fails badly at education. Spend more money to get less results. Unless of course you are the teachers union. Then you get good results.

Re:real socialism

[Dishevel]

If you got your ass any kind of skill or cared about your work at all you would not be working for minimum wage.

If you can not bring more to the table than a guy willing to work for minimum wage or your employer will not pay over minimum wage to keep you at his place of employment then you suck.

Re:real socialism

[XcepticZP]

Taxing the corporations won't fix anything. They're not magical little ponies that make money out of thin air because all the money they have comes from us. If you tax a corporation, the money they use to pay those taxes will be absorbed by either smaller salaries for employees or by higher prices in the products/services they sell. Either way, we pay.

On a side note, I understand why you want to tax corporations. In your mind (and a lot of others') they make a butt load of money, and that is true. In essence, your "corporate taxation" idea is essentially "tax the rich" misguidedly re-branded. This is probably a very fundamental thing that I don't think we'll agree on. It feels good to think that we can just tax the well-off to fix all the ails in our world. They can probably handle the increased taxes, anyways. But I tend to look at it more from a ethical point of view rather than a practical one. Sure, taxing the super rich may work to help us a lot, but it's not ethical. It definitely isn't ethical in a society that prides itself on "equality".

However, getting rid of "corporate welfare" is very important and it's something I completely agree with you on. Lots of industries currently have a slew of government aide. Ranging from tax rebates on certain activities, to lowered tariffs, to all sorts of exemptions that the rest of us don't have. Finally, government has been aiding quite a few cartels over the years. All of these things result in subsidies paid by our taxes, or higher costs for the things we buy.

Following from my above paragraph regarding government aide to certain industries. A lot of the inequality we today see between the ultra rich and the rest of us is quite possibly the direct result of government meddling in the free market. We like to think of government as our only means of recourse against the greedy but often times government is the very tool that the greedy use to milk us. Fix that, and most of the problems you feel the need to fix by taxing the rich or corporations will vanish.

Re:real socialism

[ttucker]

Try reading the rest of the thread.

Re:Not agreed upon?

[Joce640k]

Yep. There's no *legal* requirement for him to pay back the money he took from the people that are keeping him in a life of luxury, so why should he? It's not as if his management was in any way linked to the shitty cars that weren't selling enough to keep the company going. Nope. Not a bit.

Re:Welcome to the stock market

[Joce640k]

The government did not issue a loan, they bought a large amount of stock.

a) Would they have purchased that stock if it hadn't been a "bailout"?

b) A "loan" would have left them with nothing if the company had tanked. A stock purchase would entitle them to some company assets to sell off, this is what most people call "security".

Right and wrong

[Monoman]

He is technically right and morally wrong.

Let the shareholders decide by vote. We the consumers (and the taxpayers) can then decide if we want to continue to buy their products, bail them out, or invest as shareholders. This is a decision that will have very long term effects on GM that will affect them long after the CEO is gone. I know it will affect my future buying decisions.

Re:Right and wrong

[ebcdic]

I know it will affect my future buying decisions.

But if you don't buy GM products, they will need another bailout. You have to pay them whether you like it or not.

Re:Right and wrong

[TangoMargarine]

Are you saying that because the government bailed them out, all taxpayers are now shareholders?

Because I'm sure the shareholders who actually bought shares of their own free will would not be interested in voting themselves a $10 billion loss...

Re:Right and wrong

[Monoman]

He represents the company and his job is to protect shareholder value. ... I just purchased a new car, and it was a Ford.

Hmm. I think you may have illustrated a point.

Re:Right and wrong

[Monoman]

Only for the shares we purchased. Unfortunately we the taxpayers were never asked about the purchase or the sale.

Re:How is this news for nerds ?

[rvw]

As per $SUBJECT. If Slashdot wants to run these stories they should be hidden by default.

It's another one of those car analogies!

its NOT the same

[YoungManKlaus]

Some banker investing in a company does so because he expects profit, the money the state invested was to save the company which was done in turn to save work places (which is part of the job of a state). So they did not have the same choice as a banker but are now expected to play by the same rules? Sounds a little unfair to me ...

Didn't the politicians get what they wanted?

[cascadingstylesheet]

Bragging rights? Bought and paid for? "Bin Laden dead, GM alive"?

Re:Welcome to the stock market

[Godwin O'Hitler]

How many cents in the dollar do you think a fire sale in a bust motor factory would raise? I'm assuming there's no way you could sell it as a going concern.
There again it's not my government so who am I to ask.

Re:Welcome to the stock market

[Sockatume]

As a loan creditor the government would be entitled to some portion of its liability in any bankrupcy sell-off.

If the Treasury still owns (lots of) stock (and vo

[wisebabo]

Fire him

Re:How is this news for nerds ?

[confused one]

perhaps because business and government dollars pay for our nerdiness... without the dollars, we would all be toiling in the fields with everyone else.

Re:Welcome to the stock market

[wienerschnizzel]

You are wrong.

a) As a "bailout", the fed took ownership of the company through stock. How shall GM pay their owners? From what? Shall they take a loan to pay them? From whom? Should they only pay the fed or the other owners as well?

b) If the company had tanked, its assets would be liquidated and payed out to the creditors. Not the owners, you see, because they are the ones who failed. They are left with nothing when the company fails

Re:Welcome to the stock market

[halexists]

Whereas as stockholders come behind creditors in bankruptcy proceedings. So if a loan left the with "nothing," stock would have left them with less in such an event.

Re:Welcome to the stock market

[Sockatume]

Depends on the shares. I would be surprised if the shares the government was issued with did not explicitly include an entitlement to GM's assets in the case of bankrupcy.

Unless they were bonds

[msobkow]

Unless they were bonds, suck it up. The stock market is a gamble, not a GIC or Treasury Certificate.

I'm long past tired of "investors" suing for their losses. You want to gamble with your money, you take the risk of losing it.

If you don't like the risk, buy bonds or deposit your money in a bank for their paltry returns.

Re:Unless they were bonds

[Joce640k]

I'm long past tired of "investors" suing for their losses. You want to gamble with your money, you take the risk of losing it.

It wasn't their money to gamble with. It belonged to the taxpayers.

The people at GM should be glad they still have a company and jobs to go to. Saying "thankyou" to the taxpayer doesn't make any sense to you? It's not like they don't have the money (in cash) to do so.

Re: Unless they were bonds

[Entrope]

Smart money says GM stock (in constant dollars) will never exceed the price that the US paid.

Re:Unless they were bonds

[Rockoon]

It wasn't their money to gamble with. It belonged to the taxpayers.

Its not your property if you do not retain the rights afforded to property owners.

The idea that the money did not "belong" to the government is a fantasy based on wishful thinking. Its a pipe dream that doesnt jive with reality. The members of government that decide the fate of these vast sums of money are not asking you, the supposed "rightful owner" of the tax dollars, what to do with it.

Nobody with the power to decide asked the question "is this good value for the taxpayer?" Nobody with the power to decide asked the question "what is the best thing we can do for the taxpayer with this money?" Those are not the questions being asked by those with the power to decide. The vast majority of government spending is value lost for the taxpayers.

Current FY2013 Federal spending is about ~$30000 per household, and thats only about half of all government spending (State and Local spending in total is similar)

~$60000 in government spending per household. This particular loss for the taxpayers is about $100 per household. If you are really and truly up-in-arms about the government dropping $100 per household in this case, why aren't you a member of an armed and violent rebellion against the government right this moment?

My guess is that for the most part that you defend government spending on the grounds that you dont know specifically which corporations are benefiting, but as soon as a specific corporation is named you are suddenly and magically upset about it.

Re:Unless they were bonds

[JesseMcDonald]

Its not your property if you do not retain the rights afforded to property owners.

While that's true enough, so far as it goes, the taxpayers do retain the rights afforded to property owners. You don't lose the rights to your property just because someone stole it from you, even if you're powerless to do anything about it. Might does not make right.

Re:Pay up

[Joce640k]

Why should he? This wasn't a loan. They took stock just like any poor shlub who tried to make a buck on GM stock.

Who's "they"?

Did "they" buy shares voluntarily or were they forced to buy them by a government who was trying to save people's jobs?

Re:Welcome to the stock market

[Ihlosi]

b) A "loan" would have left them with nothing if the company had tanked. A stock purchase would entitle them to some company assets to sell off, this is what most people call "security".

Err ... I think you're confusing things here. When a company tanks, its assets get sold off (or otherwise turned into money) to satisfy the creditors (the people who gave loans) demands. In this process, the stockholders shares go *poof*, mostly.

When a company tanks, the creditors are in a slightly better position than the stockholders. In fact, the creditors might end up being the new owner of the company.

This just in: welfare recipient ungrateful s.o.b.

[argStyopa]

...at all levels.

As I calculate, the cost to the government is REALLY more like net $70 billion, when you take the $50bn aid, the devaluation, the forgiven loans, and then deduct the small amount that came back to the government as it sold off its shares.

The FACT is that government handouts validate, enstantiate, hell, they ENCOURAGE and reward the sorts of shitty decision-making that caused them to be necessary in the first place. At ALL socioeconomic levels.

Treasury isn't a regular shareholder

[dutchwhizzman]

The Treasury is the Government. If the government wanted to, they could pass a law that would nationalize GM and make all shares currently owned by shareholders worthless. Or they could just do it for the amount they feel GM owes them. Maybe GM shouldn't let it get that far. They got bailed out by the only one that wanted to bail them out at terms that they "just could not refuse". Maybe they need to watch the Godfather a few times to let it sink in?

Re:My next truck wont be GM

[SecurityGuy]

Ford wouldn't have paid investors for losing money on their stock either. Nor should they. Do you think the government would have given GM the money had they profited? Of course not. Why do you think it should go the other way?

Welcome to United State (non)capitalism

[Required Snark]

This illustrates that anyone who thinks that the US economy is actually capitalism is delusional.

All the really big players are self serving cartels run for the benefit of the top tier insiders. The stock holders, clients and workforce are short changed and the largest profit goes to the Chief XXX Officers and the Board of Directors.

When the Feds bought GM stock it was poison. No one in the investment world would touch it. If the government didn't take a gamble then GM would have been out of business. Remember that in capitalism larger risk should reap larger rewards for success. However when it comes to bilking the government (and thus the taxpayers), suddenly basic principles of risk and reward no longer apply.

Speaking of rewards, look what happens when CEOs and the like screw everything up. No matter how horrible a job they do, they are always paid vast sums of money. Their performance has nothing to do with their payout.

Look at Mozilo, the CEO of Countrywide Financial. Time magazine him one of the "25 People to Blame for the Financial Crisis". He made hundred of millions of dollars. He settled all civil and criminal charges against him for $67.5 million, with Countrywide picking up $20 million. When Countrywide was at it's height, he made loans to all sorts of insiders at Fanny Mae and and Congress members and their families under a program called the "Friends of Angelo (FOA)" VIP program. It's all been swept under the rug.

Another example is that unlocking a smart phone under contract is a federal level felony, like interstate drug dealing or kidnapping. Even though the Obama administration said they would try and change the law, the Trans Pacific Partnership treaty has a provision making this permanent. Since it's an international treaty, there would be no way to overturn this other then renegotiating the treaty will all the other countries. The phone company cartel has their dirty hands all over this. The various carriers only compete on one thing: who gets to take more out of you wallet while delivering the minimal service they can get away with.

No real competition in the US. Move along, nothing to see...

GM is correct in this case

[Dcnjoe60]

Whether they should have been bailed out, people can argue until hell freezes over. However, since they were bailed out, it was totally up to the government when they sold their stock. They set an arbitrary date to divest themselves of the GM stock by the end of the year. They could have held the stock longer until it recovered their cost. As such, the loss is becuase of the government's action, not GM's.

Maybe they (the government) should have purchased bonds, but they didn't. They (the government) made a decision to purchase stock and they made a decision to sell it below what they paid. Why should GM be faulted for that?

Re:Welcome to the stock market

[Sockatume]

They're low on the totem pole, but that's not (as the post I was replying to asserted) exactly zero money back.

not news for nerds

[nimbius]

arguably not even stuff that matters. Most major banks fought repaying debts to the government under TARP, but lost. There is no reason to think GM would be so bold as to think they could get away with it. The real story, if any to be attributed, is that GM thinks raising a stink about this isnt likely to affect their public image or piss off the cloistered elite.

Lemon socialism, the willful and intentional bailout of free market capitalist corporations at the expense of regular citizens, is something for which most americans have a seething distate but thats largely been ignored by the plutocracy. when it cant be shrouded from limelight, the rich funnel cash to the rich to convince the everyman that somehow poor people are a larger financial and social demon than the plethora of warbucks and moneysworths that strongarmed our leadership into writing off their willfull ignorance and criminal disregard for society outside their inculcated elite. GM does great disservice to this veil by hauling from the grave these hastily rested memories.

when GM dog-eared its pockets in front of congress they were so displaced from how americans lived it took them two tries to get their sad-face and beggary right. they frustratedly plodded off their leer-jets and said goodbye to their inflight perignon as americans collectively cried WTF. They foresook their ferarris and told the driver instead to pilot an american SUV to the whitehouse in lieu of the Rolls Ghost to which all were accustomed. this to them was the equivalent of donning a shoeshine boys flatcap for an afternoon as they arrived still clad in a regality most americans would struggle to even approach. 'pay up of they all starve' they said, and pay up the government did. Through TARP and cash for clunkers and rebates innumerable the united states automotive industry received the largest bailout in history and for its efforts was rewarded with another eight years to kick its heels onto its mahogany desk while real innovators like Tesla were demonized at their behest for loans they legitimately worked to earn. Outflanked by foreign competetors, again, GM brokered deals with Nissan and Toyota to secure token technologies that customers wanted like hybrid or all electric systems but were rebuffed by a market that largely found an affordable and reliable solution elsewhere. They secured a token few volt owners; the battery powered equivalent of a diesel train. They buried the Aspine hybrid, the very same vehicle which executives traveled to congress, and instead invested in platforms designed in europe and brazil for the small efficient reliable vehicles they were incapable of producing domestically.

so for GM to suggest they shouldnt pay back a part of a loan, while no different than any other industry, should be remembered as the day when the pot-bellied cousin of the elite dared to bring up its uncles marriage counseling.

Of course they shouldn't repay

[gravis777]

GM had met the terms required of it from the bailout - some of which was paying back in cash, and some of which was paying in stock. The government decided to sell the stock at a loss. That's not GM's fault.

Here is my question - what happened to GM stock when that many shares suddenly flooded the market? Wouldn't that make stock prices go DOWN? Ironically, though, the stock price went up considerably as investors are happy the government no longer holds a part of GM.

In any case, whether GM benefited from this or not, the point is that 1)GM fulfilled its obligation and 2) the government sold stock at a loss. Maybe this lesson will force the government to make better financial decisions. Okay, probably not, but one could hope

The Treasury didn't take the risk.

[jcr]

The TAXPAYERS took that risk, and we took it involuntarily.

GM should have been liquidated.

-jcr

Re:The Treasury didn't take the risk.

[Stumbles]

Disagree about GM being liquidated. Instead of Obama acting outside the scope of his authority (unconstitutionally), GM should have been allowed to enter into the normal bankruptcy process as thousands of other businesses have done over the past. Only after the various bankruptcy phases were completed and it became clear no resolution could fix their problem; then they should have been liquidated. Punishing GM by immediate liquidation because of Obama's irresponsibility is irresponsible.

Re:Welcome to the stock market

[unitron]

The government did not issue a loan, they bought a large amount of stock.

a) Would they have purchased that stock if it hadn't been a "bailout"?

b) A "loan" would have left them with nothing if the company had tanked. A stock purchase would entitle them to some company assets to sell off, this is what most people call "security".

You don't seem to have as good a grasp as you might about how stock ownership works.

Stockholders are the last in line when it comes to dividing up the assets of a failing company and paying off creditors to the extent possible.

That's the risk of ownership.

Just ask those who were still holding shares in the previous corporation known as General Motors.

Some of those shares were purchased at around $100 per share back in the mid to late '60s when that would have bought 300 gallons of gasoline.

Although they received dividends over the years, those who bought a share at that price and held that share 'til the bitter end lost all $100.

Meanwhile, what assets there were went towards partially paying off all of the creditors in line ahead of those shareholders.

Re:Ok, then next time ...

[argStyopa]

Not if there are votes to be bought.

"Not our fault the government is stupid"

[unitron]

Shares of General Motors Company (GM) hit new 52-week high of $33.77 on May 17, which is above its previous level of $32.44 as well as the Initial Public Offering (:IPO) price of $33.00 (held in Nov 2010) for the first time since May 4, 2011.

The government could have sold then and turned a profit (or at least a capital gain).

They chose to wait and sell after the share price had gone back down again, and to not wait and see if it went back up in the future.

GM had no control over those actions.

I'm sure many others who bought at the IPO have sold their shares at various times since then, and taken the then-going price.

If they did so at a loss, GM doesn't owe them anything, and if they did so at a profit, they don't owe GM anything.

Re:"Not our fault the government is stupid"

[mdsolar]

Not sure this counts as stupid since the government has other interests (like preserving competition) but if the government is stupid, why would that not be our fault?

Re:"Not our fault the government is stupid"

[unitron]

I put quotes around it because I was pretending that it was GM saying that it's not GM's fault that the federal government was unable to time the market.

In other words, if GM could get away with just laying it out there instead of having to be all diplomatic about it, that's how I envision them answering this ridiculous notion of covering losses the government brought on itself by selling at the wrong time.

If GM has any sort of moral obligation to the government or to show gratitude to the government, it's not in this particular area.

Re:"Not our fault the government is stupid"

[mdsolar]

Check.

He's right

[ai4px]

He's technically right. It was stupid of the government to save GM the way they did. This too big to fail mentality has got to stop. If GM had failed, someone would have bought up the pieces and they would have gone forward under a new name. Shame on the government for saving them. At this point, "we" should heed the addage "fool me once, shame on you, fool me twice, shame on me".

Re:He's right

[asylumx]

At this point, "we" should heed the addage "fool me once, shame on you, fool me twice, shame on me".

The point is, you can't get fooled again!

Re:He's right

[CauseBy]

Yes. Someone would have bought up the pieces and they would have gone forward under a new name. And that person would have been a foreigner, and that name would have been foreign, so the American economy would have been weaker and exporting more value to foreigners, and that would be bad. Since that would be bad we didn't do it. Instead we chose the bailout, which is something we hate to do, but is less bad.

From my perspective the solution is to tax corporations according to their gross receipts on a progressive scale. As a corporation grows in terms of receipts, its tax burden progresses. Eventually it becomes unprofitable to continue to grow, so companies would stop growing. If we'd had that system 120 years ago, today we'd have 35 (or 350) car companies instead of 3, and if one failed we would not have to bail it out in order to avoid bad outcomes.

But alas, we have economic rules which strictly and unflinchingly demand unchecked upward growth, so sometimes we get stuck doing bailouts because it's better than the alternative.

Re:He's right

[0123456]

If we'd had that system 120 years ago, today we'd have 35 (or 350) car companies instead of 3, and if one failed we would not have to bail it out in order to avoid bad outcomes.

No, you'd be riding horses, because no-one could run a car company profitably in America, and Americans would be so poor they couldn't afford to buy imports.

Re:He's right

[Vitriol Angst]

Meanwhile about a million jobs dissappear because of all the parts and services related to automobiles? Sorry, but we were in free fall mode at the time.

And this ingrate blowhard says;

He says Treasury officials took the same risk assumed by anyone who purchases stock

I'd like that standard first applied to banks who give people credit cards. THEY are investing in someone and they should take the same risks as if I was dumb enough to buy GM stock in 2004.

Re:He's right

[Vitriol Angst]

No, you'd be riding horses, because no-one could run a car company profitably in America, and Americans would be so poor they couldn't afford to buy imports.

So you've heard of Supply-Side economics?

Re:He's right

[CauseBy]

Help me understand your logic by expanding your comment. Somehow a large number of competing businesses resembling the ideal free market would impoverish the country? Are you trying to argue against markets? My argument is against oligopoly as a market-wrecking mechanism.

Hmm

[nightsky30]

Either they pay back the 10.5 Billion, or maybe take a 10.5 Billion loss when tax payers refuse to buy their vehicles. I will not buy from GM. The failure can be their responsibility next time.

Other GM investment

[mdsolar]

Sales of the Chevy Volt don't look too shabby. http://www.greencarreports.com/news/1088113_plug-in-electric-car-sales-for-oct-volt-leaf-hold-steady This is a move that carried quite a lot R&D investment and promises to get a battery industry going in the US. Intervention also seems to have brought about movement on CAFE standards. Possibly, we are getting a good deal on this.

Re:Pay up

[Sarten-X]

"They" is the Treasury, instructed by the publicly-elected Congress to purchase stocks using federal funds, so really "they" is referring to the public at large.

Indirectly (as the United States isn't a direct democracy), the public spent the public's money to keep jobs for the public. When the public realized that meant the public owned stock, the public complained, so the public pushed to sell the stock quickly, and now the public is complaining that the stock was sold at a loss.

Re:Welcome to the stock market

[wienerschnizzel]

If the company's liquidated assets total to less then it's outstanding debt, then yes, even the top preferred shareholders get zero money back. Back in 2008 when GM was bailed out the asset to debt ratio was about 1/2...

So much for the High Road

[rmdingler]

Ford was in some measure of financial strife when it decided not to take Bailout Bucks like Chrysler and General Motors. Though admittedly a small sampling, a number of my acquaintances who'd been dyed-in-the-wool Chevy Men (some since their father's grandfather's generation) were driving new F-series trucks shortly thereafter. Perhaps GM could have redeemed themselves somewhat with a "Cinderella Man"-style payback of the welfare it received, even though and especially since they didn't have to.

Re:So much for the High Road

[s122604]

Nothing magic about Ford, it was in terrible shape at that time too, but they did managed to get their massive loan financed privately before the credit markets froze. If they would have waited a few more weeks, they would have been in exactly the same shape.
Good for them, but still, lets not make them into something they aren't

Re:Welcome to the stock market

[Sockatume]

Ouch. That certainly puts it in perspective.

All the more reason...

[jomcty]

What a dirtbag. All the more reason to buy a Ford.

Should have let them fail

[xednieht]

GM cars suck anyway, will never buy one.

Re:If the Treasury still owns (lots of) stock (and

[Ksevio]

The US Government sold all of its GM stock.

GM CEO Rejects Repaying Feds like...

[Bill_the_Engineer]

I reject the notion of purchasing a shitty GM vehicle.

Re:GM CEO Rejects Repaying Feds like...

[ducomputergeek]

The last 3 GM Vehicles I've purchased have all been great cars. The current one in the drive way is a 2004 Impala. 140,000 miles and all I've done is routine maintenance. Before that I had a 96 Saturn that got 120,000 miles on it before I bought a Malibu. Unfortunately the Malibu got totaled when a sheet of ice fell on it off the roof of a building. So I didn't own that one long enough to really say much. I guess my dad's Astro van did need a new fuel pump after 15 years and 180,000 miles. In fact it's going on 20 years old now and over 200,000 miles and we still have it. Doesn't get driven as much but extremely handy to borrow when I need to get plywood or haul something. I guess we're lucky on getting the non-shitty GM ones.

I plan on keeping the Impala around at least another year, maybe two and let the wife finish paying off her Nissan Altima. It's paid for, insurance and personal property taxes are affordable on it.

Am I going to be as brand loyal due to the bailout? No. But last time I looked at Ford I about got sticker shock. The cars I was looking at were priced nearly the same as an entry level BMW. I know that's before doing the sales shtick. And my wife loathes Subaru for some reason.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Philosophy of failed capitalism

[ElitistWhiner]

Refuse to honor your debt to society who bailed your assets out of imminent bankruptcy.

Capitalism failed. Repeat. No lessons were learned. The U.S. economy post-captialism is run by failures.

This can't be true

[0123456]

I remember around the time GM was bailed out, lefties kept claiming that this wasn't really a bailout and the government would make a big profit on their GM shares. How could that possibly not have happened?

Re:This can't be true

[pedrop357]

Because it wasn't about the truth, it was about winning the argument.

They knew that the feelings and controversy surrounding the bailout would fade and that the only thing that would hang around was the narrative that the government made money on the deal.

Now if someone brings it up, we'll hear about how "we" had to do something, that it was too long ago to bring up especially in light of more pressing current problems, etc.

think bigger

[Chirs]

A hurricane comes in and wipes out a huge swath of land. A this point individual charity doesn't work very well, because many of the people that know the people involved are themselves also involved.

At some point the scale of a problem becomes big enough that individual charity is no longer effective. This is not to say that we shouldn't be charitable as individuals, but that there is a role for government support of people in trouble.

Re:think bigger

[TsuruchiBrian]

Well it's not the government doing the supporting. It is the government forcing one group of people to help another group.

Charities and other forms of aid can be very large in scope. For example a large insurance provider will have no trouble helping in a large disaster. Afterall what is government aid (e.g. FEMA) but a giant insurance program. The only difference is that in government programs like this, participation is mandatory.

I'm not arguing for or against individualism or socialism. I am just pointing out that the significant feature of government welfare is not it's size, but rather it's ability to compel people to participate.

One could imagine a society where the government provides the same kind of insurance for disaster relief, but allows communities of people (e.g. states) to opt out. They may save some money by not having to pay the government for this service, but they also don't get the protection. This would be the same system we have now, except it would be voluntary.

A private insurance company could conceivably be just as large (to cover a whole country), but it would lack the authority to make participation mandatory.

Government does have a role. It's role is to deny the freedom to opt out. It's role is to compel people to pay for insurance they don't want, in order to help people they don't want to help. Is this a good or a bad thing? I guess it depends on the situation and how much you value freedom over safety.

Re:Welcome to the stock market

[dkman]

Just out of curiosity I wonder how many congressmen held stock that was "bought" by the taxpayers.

Re:Not agreed upon?

[tompaulco]

Yup, the government left a huge hole in the agreement. Hopefully they will learn their lesson and next time GM et al come flying in on their corporate jets with their hands out, the government will just let them die. Probably won't be long either with the attitude of the GM CEO.

Re:Welcome to the stock market

[tompaulco]

Is it even legal for the government to invest taxpayer money in stock in a corporation? I would think not.

GM is legally right, morally wrong

[davidwr]

GM is absolutely correct, legally speaking.

Morally speaking, they are in the wrong.

They would've had a much better PR situation if they had said something like

Although the legal debt to the American taxpayer was settled years ago when the Government agreed to take payment in the form of stock, we owe a great debt of gratitude and plan to voluntarily give [some amount, at least $0.25, preferably $1.00] to the American taxpayer for every $1.00 of dividends that are paid to stockholders for the next [large number of years], or until the balance is paid off, whichever comes first.

GM's position on the government as shareholder

[Todd Knarr]

I might have some sympathy for the CEO's position, save for the fact that GM and it's management argued that as majority shareholder the US Government should not actively vote and control GM's business as anyone else with an ownership stake normally would. One of the things that goes along with taking the risk of an ownership stake is the ability to control the business, meaning that your share of the risks are essentially in your own hands. GM's management however wanted the government to shoulder all of the risks of ownership with none of the control. So to that degree GM, not the government, should be shouldering the risk of loss due to GM's business decisions.

Re:Rent Seeking Revolution

[Sentrion]

Mod parent up!

the power of preconception

[Coop]

Your story shows how strongly our beliefs grip us, no matter how strong evidence to the contrary.

Re:Welcome to the stock market

[wienerschnizzel]

Very little, maybe none. The stock was not bought from the shareholders. The company had to emit new stock, meaning the value of the existing stock went down. Pretty drastically. So the owners of GM were hurt by the "bailout".

That might sound like a great way to punish the people who own the company who messed up - until you look at who the people are. In 2008 the greatest shareholders were the US and Canadian governments. The second greatest were the GM employees. The rich people are not stupid, they got rid of the stock before everything went down the drain.