Limits of State Power
POSTED BY: SergeantX
UPDATED: Sunday, December 14, 2025 21:53
VIEWED: 37205
PAGE 25 of 36
Quote:
Originally posted by Geezer:
From what I've been reading of the government's involvement with GM and Chrysler reorganization plans, Treasury Department "advisors" have been involved every step of the way, letting the companies know which actions would be acceptable to the government, and which wouldn't. I doubt the carmakers would have taken such a big step without getting the OK from these advisors. I read in the business section of the Washington Post today that the government actually wanted GM to close 2,000 dealerships.
"Keep the Shiny side up"
I'm getting a lot of conflicting information on the whole Chrysler debacle. Some reports are saying FIAT will own Chrysler outright, others say that FIAT is only going to become the largest single shareholder, but that they won't even hold a majority of voting stock - some 53-57% of the votes would actually be held by the UAW themselves, meaning that the autoworkers actually would, for the first time, own their own factory and have a REAL driving influence in how the company proceeds.
Problem is, I only heard that last from one source, and haven't been able to verify it (because to be perfectly blunt about it, I haven't spent any time trying to run it down yet. :) )
S'wenyways, if it's true that the UAW themselves would be the majority stockholder in one of the Big Three automakers, that would change the landscape a mite. It would be fascinating to watch how they behave and what they do. Will they vote narrow interests, or will they take the wider view? Stay tuned, 'cause it's likely to get very weird in the days to come...
Mike
Build a man a fire and he'll be warm for a day...
Set a man on fire and he'll be warm for the rest of his life.
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Quote:
Originally posted by Magonsdaughter:
So in other words, Serg, I want government to have less control over personal decisions that I make that affect myself..who I marry or have relationships with, whether I carry a child to term or not, whether to smoke or take drugs. I think we should be responsible for ourselves and our own families, but I think the provision of a good healthcare and education system will benefit everyone. I think there should be a welfare net, but some mutual obligation for using it.
Ahhh... but do you see how these two aims conflict? Setting up government in a caretaker role gives them a vested interest, and a powerful incentive, for exerting more control over society. The healhcare example is good case in point. If we're all responsible for our own health care, it's acceptable to take a live and let live approach to personal decisions affecting health - like dangerous hobbies, tobacco/alcohol/drug use or unhealthy diets and such.
But when we declare health care to be a right, that must be supplied gratis by the community, suddenly there's a compelling reason to control our personal decisions - since personal health is no longer a private matter, and very much the business of the state.
SergeantX
"It's cold and it's a broken hallelujah"
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You know, that's something that bugs me. I'm low risk and don't really ever get sick. So I pay money into the system, and the insurance companies take it happily, because I'm unlikely to ever need it. But so long as they won't be liable for anything, they'll take the money from someone who DOES need medical insurance and give the exact same service, which is to say NONE.
Something just isn't right about that.
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Quote:If the corporations want the money, then, yes, they'll have to meet the Fed requirements. Their other option is bankruptcy. it's their choice.
From what I've been reading of the government's involvement with GM and Chrysler reorganization plans, Treasury Department "advisors" have been involved every step of the way, letting the companies know which actions would be acceptable to the government, and which wouldn't. I doubt the carmakers would have taken such a big step without getting the OK from these advisors. I read in the business section of the Washington Post today that the government actually wanted GM to close 2,000 dealerships.
AFA telling what is and isn't acceptable in a reorg plan, I find that a lot more efficient and fairer than the "hidden hoops" method, which is.... you keep submitting plans and we'll tell you whether we like it or not and after, oh- -about 540 iterations- you'll eventually suss out what we had in mind. At least with this approach the corporations know where there stand and can make informed decisions. It's called transparency and I'm all for it.
The only issue that I have is how the government is handling the automakers in relation to how it is handling the banks, which IMHO are getting a free pass. The first $350 billion was let out under Bush w/ no strings attached and was FORCED on banks whether they needed it or not. THAT was ridiculous. And I think the Obama administration is far too willing to help ailing banks limp along. Personally, I think that bankruptcy should be an option for banks too.
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Quote:Corrected for you.
Ahhh... but do you see how these two aims conflict? Setting up business in a caretaker role gives them a vested interest, and a powerful incentive, for exerting more control over society. The healhcare example is good case in point. If we're all with the same insurance company it has a vested interest in our weight, tobacco use, genetic history, number of dependents etc.
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Yeah. If we're all forced into the same insurance plan, the control incentive will be irresistible, regardless of who runs it, business or government.
SergeantX
"It's cold and it's a broken hallelujah"
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Citizen: RE INFLATION
What is "money"? It's the ability to buy something. That something could be a car or it could be an automobile plant. In either case, the purchase is facilitated with money. It's possible to replace money (currency) with a "promise to pay" (debt). A promise to pay is just as good as actual currency in creating demand, in that sense it works just like "real" money, and it IS real money- FUTURE real money. Now, the classic definition of inflation is "too much money chasing too few goods". Debt-based demand behaves just like "too much money". In fact, the Fed routinely manipulates the money supply by raising and lowering interest rates: Lower interest rates make more borrowing cheaper, demand rises, and the economy behaves as if there is "too much money" floating around. If you doubt that reasoning, just Google deflation 2009. You'll pop up with this right away:
Quote:www.economicpopulist.org/?q=content/deflationary-recession-2009
The economic issue going forward is, therefore, will the Fed and the Treasury's combined attempt to flood the financial system with money overcome the deflationary impact of a collapse of consumer spending in time to avert a deflationary recession in 2009? Despite the fact that the Federal Reserve is now increasing the money supply at a 10% annual rate, the signs are that it may be insufficient to overcome the tsunami of deflation which is just starting to crash ashore.
My point is not that we're necessarily creating a deflationary period (We are in one now at the moment) but that inflation is not NECESSARILY in the cards just because the government is printing more money. What occurs depends on whether or not the money supply is increased more than it was decreased by the collapse of the real estate bubble. It's an issue of relative rates.
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Quote:
Originally posted by JKiddo:
What is "money"? It's the ability to buy something. That something could be a car or it could be an automobile plant. In either case, the purchase is facilitated with money. It's possible to replace money (currency) with a "promise to pay" (debt).
No, because in order to lend the money has to exist somewhere. Debt is a mechanism for moving money that does exist, from where it is to where it's needed. It's not a way of creating money.
Money isn't merely the ability to buy something either. It's a commodity in it's own right, especially under a fiat system.
Quote:
Originally posted by JKiddo:
A promise to pay is just as good as actual currency in creating demand, in that sense it works just like "real" money, and it IS real money- FUTURE real money.
It's now real money. A readers digest version would be that the lender is giving you money they have, on the promise you'll pay that and more back later. But at no point is the money imaginary or "future money". It has to exist right now to be lent.
Quote:
My point is not that we're necessarily creating a deflationary period (We are in one now at the moment) but that inflation is not NECESSARILY in the cards just because the government is printing more money. What occurs depends on whether or not the money supply is increased more than it was decreased by the collapse of the real estate bubble. It's an issue of relative rates.
I think you misread your link. Printing more money WILL cause inflation. It's not a possibility, it's a certainty. The question raised by your link is whether that inflation that will happen, will off set the deflation (caused by lack of demand) that will probably happen. The money supply has not been decreased, there's the same amount of money in the system now as there was before, the issue is that that money isn't moving any more because market confidence is low. Consumer prices may drop because demand for goods might fall, that would be the mechanism for any deflation. The difference is that when demand falls the deflation is in the worth of the goods, while inflation due to more money being printed is due to the money itself having a lower intrinsic value.
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Geezer
"From what I've been reading of the government's involvement with GM and Chrysler reorganization plans ..."
Cites, references please.
***************************************************************
Silence is consent.
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Quote:it is if the debt is based on a bubble, like a real estate or stock bubble. If I borrow $100,000 against a house which is valued at $500,000 and on which I owe a $400,000 mortgage, and the value of the house drops to $400,000, that $100,000 which I spent no longer exists.
Debt is a mechanism for moving money that does exist, from where it is to where it's needed. It's not a way of creating money.
Quote:Banks routinely lend out money which does not exist. They lend out based on their capital (which is "real money"- typically about 5% of bank value) plus their assets- ie performing loans. If those assets should go under that money has in effect evaporated. I know its a screwed system, but that's the way it currently works.
It has to exist right now to be lent.
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