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| Government control of private business.....
Posted: 10/22/2009 1:49:39 PM | The following are excerpts from an AP story............
WASHINGTON – The Treasury Department on Thursday ordered seven companies that received billions of dollars in government bailouts to halve total compensation for their top executives. But the big reductions will not apply to pay earned before November.
Cash salaries will be limited to $500,000 for more than 90 percent of affected employees. Personal expenses for such perks as company autos and corporate jets will be capped at $25,000 without approval from Feinberg's office for higher payments
This begs the philosophical question of government control over private business... Clearly there is no precedent for this in the US Consititution, so why then are politicians so complacent about it happening? AND, where is the proper end of this, or is there a proper end to it?
Paul K | |
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| Government control of private business.....
Posted: 10/22/2009 2:11:34 PM | well there are other ways to limit the bonuses but the government is afraid to use them.
they could create a bonus and golden parachute tax that increases exponentially with huge bonuses. Then it wouldn't be worth the bother unless the exec.s liked giving 99 percent to the government.
philisophically ... hmmm .... maybe moralisticly ...
wait ... these guys have no morals.
I have no sympathy.
they should have been put into bankruptcy and then the government could have bought them for 2¢ ... then fixed them any way they liked.
wait .... they sort of did that with GM ... hmmm
I guess we will just have to see what happens next. | |
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| Government control of private business.....
Posted: 10/22/2009 2:23:21 PM |
This begs the philosophical question of government control over private business...
It was silly for government bailouts to take place in the first place. | |
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| Government control of private business.....
Posted: 10/22/2009 2:31:54 PM | Hey thorb
you wrote:
"they should have been put into bankruptcy and then the government could have bought them for 2¢ ... then fixed them any way they liked."
Why is there a knee-jerk reflexive action to have the govt. buy the companies out of BK? I agree that they should have been allowed to BK, but then let other business buy up the assets left over, if there are any. Why didn't the govt. bail out Hudson, (car company), or American motors? They went by the wayside, and we survived nicely without the AMX, which was a very fun car, by the way.
The only thing I can think of is that 45-60 years ago, the idea was for govt. to interfere with private industry as little as possible.
Paul K | |
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| Government control of private business.....
Posted: 10/22/2009 3:51:56 PM | Paul you know about that Executive order that our last President signed. I think the the Congress is afraid. I don't know why but they are. However, as far as General Motors, it is the responsiblity of the stock holders (which are many average Americans) to vote to change the compensation of the executive and the board of directors. The Government has no buisness doing so. There is the arguement that American people own (Government) owns GM. This is un-true. The government has Prefered Stock (non-voting) therefore non-ownship stock. The Government has no business or authority in changing anything on GM, or any other business.
Heres the kicker. the TARP and TARP II, allong with the May 2007 executive order, gives the government authorization to make changes it deems necessary. Now, is it consitutional? I don't think so, however, it hasn't been challenged, and I'm no Juris Doctor. So the Sheepleople keep get fattened for the slaughter. | |
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| Government control of private business.....
Posted: 10/22/2009 4:09:23 PM | Hey gadget, soon to be "Piano Player in Chief"
Like you, I don't understand why congress or the senate hasn't gone apoplectic about what howdy doody is doing, but you don't have to be Justice Cardozo to know that what they are doing is nowhere part of the mandate that the Consititution gives to the Executive branch. Maybe it is one of those "hidden rights" that is found when necessary.
What are they afraid of? I would think that if a senator stood up and said "Hey, they can't do this, and I am bringing a lawsuit to challenge the authority of the executive branch to do this", that person would be on the fast track to be the Piano Player in Chief in the year 2012..................... It seems like everyone of the congressman and senators was bought off rather cheaply.
I listened to a congressman, who was one of the more vocal against both TARP 1 and TARP 2, speak at a town hall type of meeting. He waxed eloquently about how bad they were for us, the national debt increase.... yada yada. At the question/answer session, I asked him how much of the money was coming back to his district. He started to hem and haw, and said the he doesn't keep those numbers right at his finger tips, I interrupted and said just give me a guess. He said that he would have his aide look it up, and he would tell me personally after the meeting. I said GREAT!
However, not having been born yesterday, as soon as everybody stood up and started to leave, I left, in a hurry...............
I think I got away, as I haven't had anything bad happen to me yet...........
Paul K | |
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| Government control of private business.....
Posted: 10/22/2009 4:28:00 PM | He might be confused I would be between Tarp I, II and Stimulus who can keep up. The government is spending money like it is water from Niagra. Maybe Dukky is right about the FEMA camps and that what they are afraid of lol. Do you think someone in his own party would bring it are you mad, they would loose more then they would gain. That is how the political game is played. No it will have to be a common citizen to bring it. I just don't have the captial to bring such a suit, as we both know, good lawyers cost money.
I would've had listen to the aid. He would have had some numbers for you, it is important to re-elections. Most aids are hard working people. Even us Democrat types lol. Look both sides are corupt, it is bad very bad. Too bad there is no more Bull Moose Party, or United we Stand :( | |
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| Government control of private business.....
Posted: 10/22/2009 4:37:14 PM | | Since the government is shelling out big bucks to keep these companies afloat, do you not think that it's reasonable for the government to insist that the money be used to HELP these companies stay afloat... by paying down the debts they've accumulated instead of 'performance bonuses' to the people who were so asleep at the switch that they allowed things to get this bad in the first place...? | |
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| Government control of private business.....
Posted: 10/22/2009 4:48:22 PM | Don't forget that GM also has gov't contracts...military ones.
Not a good idea for such a company to go belly up, is it?
Especially when all the stuff they work on goes on the auction block.
Bailouts needd to be used to keep the companies afloat...but they also had contractual agreements to uphold also. If they didn't uphold those agreements, they could be in a whole new world of hurt through the various lawsuits that would follow. | |
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| Government control of private business.....
Posted: 10/22/2009 4:56:07 PM |
This begs the philosophical question of government control over private business... Clearly there is no precedent for this in the US Consititution, so why then are politicians so complacent about it happening? You're right. This is counter-intuitive, and it does restrict business, as this will demotivate employees from working harder. So let's see what you would do, if you were running the country:
You understand the needs of business. To properly support businesses, we need to treat the government as if it was a business. If the government was a business, then it would be a franchise, which receives dividends from the profit earned by those independent stores, in return for using the US name and logos, and for getting help from the government. Now, imagine that all the stores that sell banking products all made losses, massive losses, in the billions, and were bankrupt. Obviously, your first inclination would be to drop them, and let them go to the wall, as that's only good business sense to not throw good money after bad. However, they have so many customers who have lots of money invested in these products, that if they went bankrupt, millions of customers would lose their money, and you'd lose millions of customers, not to mention the bad PR, which could lose you all your customers.
So, despite your better sense to let them all go to the wall, you might be tempted to bail them out, to save your company's reputation and good image. However, if you did this, there would be hell to pay. You'd sack ALL of the directors, and put your own people in. Then you'd have them go through the entire company with a fine toothcomb, and sack ALL of the dead wood, and hire new people to replace them. You'd also put them on a VERY tight budget, and require daily reports, on their profits that day, and in the last 3 months, to be sent direct to your email. You'd put the directors on a commission-only basis. If they turn the company around, then they make money. If not, then they get absolutely nothing. You'd be totally hardline, until they were making a good profit for 6 consecutive months. Now, that's what you'd do.
What the government is doing, isn't even a patch on that. They're letting them continue on, with business as usual, and only demanding that they don't get paid a fortune for losing trillions.
You're right. They should sack ALL the directors. | |
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| Government control of private business.....
Posted: 10/22/2009 6:42:39 PM | Scorpio, I don't know much about the English banking system. However here in the US we have the FDIC Federal Deposit Insurance Corporation, a hold-over of the bank-runs of the great depression. Therefore, your bail-out senerio in paragraph 3 is unnecessary under current US regulation and safegaurds.
Now for Investment banks well, you run the risk. You can make a mint or you can loose your shirt. Much like a Casino. Anyone that invests their money in Investment banks should go into it knowing this, otherwise they are a fool.
Now to the GM having Military Contracts. The HMMWV (Humvee) is acutally manufactured by American General an Independent Auto maker. GM has nothing to do with them now. Even if they did, every contract with the Military is for a period of 5 years with an option to renew each year, usally around the begining of the FY. So, the Federal government had the option not to renew the contract once they saw the financial crisis in Sept. that Oct. and been in their Contractral rights to do so. So Ford a non bail out firm could've bid on the contract picked it up and the product could've continued to be produced without much headache.
What our government has done will cause a brain drain in these firms and cause them to go out of business. I wouldn't work for a company that I can't make the most money my talents will let me make. BTW these Bonus's are generally sales and executives salaries. They are making a percentage off the commision that they make in a year. They just call it a bonus, for tax purposes, meaning they can have withholding taken out instead of filling out a 1099-G. The large sum at the end of the year as a commison would be a red flag to the IRS therefore they would be audited every year. | |
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| Government control of private business.....
Posted: 10/22/2009 9:08:22 PM | This begs the philosophical question of government control over private business... Clearly there is no precedent for this in the US Consititution, so why then are politicians so complacent about it happening? AND, where is the proper end of this, or is there a proper end to it?
Paul K
The proper end of “this” should have already happened ….months ago. The government stepping in and bailing many of these companies out ..WHAT? Clearly this is where the problem started …isn’t it? What about you and I and the little guy …the government wouldn’t be bailing you or I out …so why do these huge corporations rate? These businesses should have been allowed to fall and fold. If the people didn’t rise up their arms to protest this bullsh**t …. It would have been “corruption as usual” Look at how much money these people are making???? It just boggles my mind and I don’t know about you, but I’m disgusted and totally amazed that this has been allowed to happen.
At the end of the day ….It’s you and I who end up paying these bonuses …wakey wakey people.
Peace & Equality …the FairyHealer …+*+*+* | |
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| Government control of private business.....
Posted: 10/22/2009 9:52:15 PM | Hi Fairy
When you say "peace and eqaulity', do you mean equality of outcome or equality of opportunity, or do you mean equality of opportunity as long as the outcome is the same? Just curious.
The problem with "the people" rising up with pitchfork in hand is that it is the very same hands that hold those pitchforks that cast the ballots that elected howdy doody to begin with. So, now they are letting him run rampant.
How about instead of worrying if the neighbor has a cow when you don't, and then wanting the govt. to come and take their cow away, how about getting your own cow? That way, EVERYBODY WINS. AND, isn't that the ultimate equality?
Paul K | |
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| Government control of private business.....
Posted: 10/22/2009 9:54:17 PM | you are so right, the worst part of all of this is that we will pay for it big time down the road in the form of interest rates. do the days of 8 10 or 12% sound familiar. i bought my first house and 18% was the rate and that was after a recession in the early 80 s
the fat cats want a bang for there dollar and so doew the goverment so how long before they start to jack rates. funny its the average tax payer footing the bill for these bail outs and it will br the average taxpayer that is going to get bent over in the end. imagine rates going from 4% t0 6% does not sound like much but thats a 50% increase in your mortgage so my last words are dont take on to much debt because no one cares about you | |
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| Government control of private business.....
Posted: 10/22/2009 10:14:14 PM | How about instead of worrying if the neighbor has a cow when you don't, and then wanting the govt. to come and take their cow away, how about getting your own cow? That way, EVERYBODY WINS. AND, isn't that the ultimate equality?
Paul K
ONLY if you want a cow .....
What I meant by Peace and Equality is just that .... If my business was failing the government would let it .... but this is not so with huge corporations ...and why? Hmmm is it because of WHO owns them .... perhaps it's about the $$$ that was given in the past towards this or that persons political interest or other funding situation. Or maybe it's because of some other "special" reason? The point is ...it shouldn't have happened .... Mis-management is just that, and it's how these companies got into this mess in the first place .... and obviously after the bailout and the BIG bonuses ...they've learned nothing, nor changed the way they run their companies.
Truth be known ....Equality for all is an illusion .... I suppose it was simply "wishful thinking"
Peace & Dreaming ....the FairyHealer | |
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| Government control of private business.....
Posted: 10/22/2009 10:32:42 PM | These companies accepted the money did they not? I'm sure that money was not a no-strings-attached offer. In order to protect the government's investment (our investment) the government insisted on a say on how things would be done at those companies. So, if the government is telling them that no huge outrages bonus for those greedy worthless fat **stards at the top are to be paid, then I say great. Glad to see Obama is doing his job.
You do realize that these bonuses are simply gifts the rich give themselves. They don't actually do anything to earn it. This is something that isn't announced on talk radio, so I can understand if some people don't know this. | |
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| Government control of private business.....
Posted: 10/22/2009 10:42:52 PM | Hey Ceb
So obama is doing his job........... Please show me where in the Consititution it gives hoody doody the power to hire and fire and set salaries.
What you may not realize is that whether you like it or not, the bonuses are a contractual arrangement between to independent entities; the company and the employee. Viciating that contract sets precedent that is very dangerous. A knee jerk reaction to the amount of money that they get is very shortsighted, especially when you think it is a good idea for a president to assume power he has no business having.
Amazing how you KNOW that "They don't actually do anything to earn it". People getting enormous amounts of money for sitting around and looking at Facebook, I guess. I had no idea that all of those great big huge buildings on Wall Street were populated by folks doing nothing.
Paul K | |
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| Government control of private business.....
Posted: 10/22/2009 11:07:55 PM | | The role of government is to protect its least fortunate citizens. Not the matter of business. This is not happening now, ten years ago, fifteen years ago, etc. Too much flowing into the hands of those who do not deserve the benefits. Blah, Blah,Blah and ..... And which of our citizens care for the possible ideal of democratic government that stands for social justice and the freedom to act in a truly free way? Give up any hope of that happening. I think we need to spank very hard these awful, terrible men and the minute number of women who are really running this show. And if that doesn't work, something else is afoot. | |
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| Government control of private business.....
Posted: 10/22/2009 11:12:03 PM | At the risk of being repetitive, we don't have a democracy, we have a representative republic.
Secondly, while a good spanking may be in order, they might just enjoy it...........
Hate to be the one to break it to you, but the role of government is to treat, or protect ALL of its citizens EQUALLY, and not just the least fortunate.
Paul K | |
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| Government control of private business.....
Posted: 10/22/2009 11:45:50 PM |
but the role of government is to treat, or protect ALL of its citizens EQUALLY
Hasn't been that way in, well, ever. The US government exists for the benefit of the wealthy few--or did, until last year. | |
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| Government control of private business.....
Posted: 10/23/2009 1:41:27 AM | Lets see now, since last year, when howdy doody was elected, the US govt. automatically now exists for the benefit of all but the wealthy?
When do I get my share? Should I send my credit card bills to the White House?
Paul K | |
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| Government control of private business.....
Posted: 10/23/2009 2:53:46 AM | Ceb, if you read the languge of TARP I it was a no strings attached bill. Therefore, any company that got money under that program and not TARP II is free and clear of Obama is Pay Czar. That in itself worries the hell out of me. But back to topic, so if funds weren't received under TARP II and they cap bonus's that is highly illegal and unconstitutional. It is what is called a Bill of Attainder, or a law after the fact. The US Consitution specifically prohibits such laws being passed. One of the few places where it is written very clear. See what happens when you pass bills without reading them. They got money no strings attached.
As far as Big guy vs. Little guy. Isn't your neighbor who works at GM or GE, B of A or some other fortune 1000 company a little guy? So you're saying forget them put them out of a job too. I'm not arguing for the bail out, I don't think anyone should've gotten treasury dollars. However, I don't buy the Big guy vs. Little guy arguement because when you boil it down the people that work for the big guy's are the "little guys" | |
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| Government control of private business.....
Posted: 10/23/2009 7:11:44 AM | Oh please....Obama basically up and fired the head of GM. No bailout for them unless he was gone!
Allowing a huge employer to go belly up would certainly hurt the local economy...and the national economy too!
Take a look at a small town with one major employer. IF that employer goes out of business or moves to Mexico or whatever, what happens to the town? Basically it dries up and starts to blow away. Large wage earners suddenly have a mortgage they can't pay...so they sell out at fire sale prices in order to keep their credit rating, and get out of a debt they can't afford to manage now.
They have to move where the jobs are, meaning paying for new housing.
This leaves the smaller businesses in town with less money coming in...soon they start closing down.
More people move away.
Almost everyone is now either working out of town or at small businesses (like a gas station
) for minimum wage. Possibly on welfare. Renters can only afford so much, so they have to go where the rent is cheaper. They still cna't afford to buy though!
Imagine, say, Detroit in that situation. All the big companies going down the tubes...the spin-off industries closing down, the support jobs closing down. People migrating away.
In a small town it doesn't take all that long for these things to happen. I live in one where this is happening. 88 (yep no typo!) students in the local primary school here. Can the town continue to afford to support it? Not really...so bussing will be in order within a year or two, just for the savings. Most students are already bussed here now. (Rural community.)
The main grocery store closed down and won't be re-opening. The two places that sell gas have a small section for milk, bread, and such, but no meat section (except pre-packaged cold cuts) no fresh veggies at all nor fruit. Not much for canned goods. They won't expand much simply becasue they will lose their investment IF a real "convenience store" does decide to open here.
Imagine a whole city shutting down. Budget cuts because of lowering tax revenues. What gets cut where? Police services? Fire services? Garbage pick-ups? Public transportation? What will those who work in those fields do when their wages get frozen or cut? Leave? Probably.
See where it ALL leads to? A bankrupt city. Which the Federal gov't cannot allow to happen. (Remember when they bailed out NYC? Big stink about it then...but look how it worked out! Who says gov't doesn't learn?)
So, I would take a wild guess and say a "bailout" is far cheaper for a company than a major transfer of monies to a city in order to keep it operating.
Gov't already controls private business, the moment they started taxing it and forcing owners to work for free filling out tax forms and such. (Ask any mom and pops operation!)
Also, when gov't decided it could dictate who you had to hire! You were forced to hire women and minorities, or you could get into big trouble, EVEN if there were better qualified people for the position! (This whole situation has almost stablized itself out now though...but it DID cause a lot of outcry at the time.) | |
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| Government control of private business.....
Posted: 10/23/2009 7:53:09 AM | | The business operates within the legal framework provided by government, to start with. There is always a measure of governmental control of business. The government in the US is for, by and of the people of the US. It's not like there is a government-free zone where business roams at will. The business structure itself is a matter of law, as are the transactions and contracts that are its business. I'm not sure about this implication that business can and does somehow operate in any other way than under the regulation of government. Businesses have a certain latitude within the legal framework, but overall do not exist apart from law, which is government. Is the goal of business to be an autonomous parasite existing within the country but above its laws? People, we the, have the ultimate authority here. That's the proposition and the reality for any business entity. | |
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| Government control of private business.....
Posted: 10/23/2009 9:07:19 AM | Any business that went cap in hand to the government for money to stay afloat has to be willing to accept the terms set by the lender. If you lend money to someone, he still owes it to you, but is buying a Mercedes....you'd be pissed.
In this case the lender has both the power to say you can't buy the Mercedes and the moral right to say you can't. Once they pay the money back, they can do whatever they want in terms of compensation. | |
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