When a company gets bailed out with taxpayer money, why is it not owned by the public now?
In: Economics
When Obama bailed out the US car manufacturers in 2008, treasury became a major shareholder, they sold their shares in 2012 at profit and made money for the tax payer. It just depends on who is doing the reducing and what their policy is.
Because in America and only in America we always think gov as morons, they are, but only because it’s America, so it’s always thought that the best ppl to run a biz are even more morons egomaniacs who failed many companies ie. Ceos, again, purely an American thing
In most developed countries that is the way it works.
In the USA, the companies run the government by bribing politicians. So it would be in the best interest of the politicians to keep the businesses happy.
Because it is not owned by the general public, but rather by the government, who acts as the major shareholder and can control the company without being too transparent over it. Generally the now major shareholder keeps some people on the board of directors, fire other, nominate new ones, and after a while it will start selling stocks to the market to get rid of most shares. Sometimes the government is able to sell all its shares. Sometimes it is not but eventually gets something like 5% of shares and decides it doesn’t need to intervene anymore.
Because these companies were failing and their shares are now more valuable, the government often “profits” from bailing out these companies.
Imagine your friend needs money to repair their car, you can give them the money, you can buy it from them or they can give it to you for free knowing you’ll fix it. If you give them the money it doesn’t mean it’s yours otherwise you’d have agreed that beforehand.
🇨🇦 bailed out GM Canada in the 2008 crisis. It took an ownership position, eventually selling the shares at a profit. This is the way.
This does happen with some companies, though a lot less with companies in the US. The people in the US tend to not like the government owning companies, at least that’s the story that’s presented. This isn’t much of an issue in other places.
So you may just be unaware if when it does happen, since the US bailouts are typically the biggest and most visible, but others are not, at least not talked about outside of their respective countries.
Capitalism is about privatised gains and socialised losses.
We have notions about who “looks” legit based on prejudice and they are given billions of dollars accordingly.
because you probably live in america. Where the people only have the illusion of power. They honestly dont care what happens around them for the most part, so long as every now an then they get to bitch an cry about bad stuff, but so long as their day to day life doesnt change, so long as the flag remains the same color, shape, etc. so long as their lifestyle doesnt change drastically they really dont care who owns or runs them behind the scenes. Although every once in awhile when a politician needs votes or a platform theyll disclose what countries own what businesses in the united states to “rattle the masses” into “thats not owned by merica” and do some general boycotting or hating rhetoric against said rival.
Hell they couldnt even jail a single banker during that whole shit fest a few years back. They cant even get the ingredients that are banned by most of the world out of their own food, because it drives so many highly profitable industries. Cancer causing substances, drives cancer treatments and medicines. Mental disorders, drives big pharma pills, so we definitely want to give people disorders. etc etc. Mind you most of that really only targets the poor to mid class because once your rich enough to buy that overpriced healthy food that doesnt have any of those harmful shit in, they can kill off people who arent similar to that class, slowly, slow enough to make shit tons of money off them as they work their lives away. slowly enough to indoctrinate your offspring, and ingratiate those of that class. it is an US vs Them mentality and at the end of the day, most people are not willing to risk their lifestyles, offspring, homes, jobs status and the loss there of, with making things better. Its a mixture of mass narcissicm, mass stockholm syndrome, mass societal standardization mixed with manipulation of pack dynamics, and psycological/biological manipulation.
Since the (american) {*you can generally insert any country here*} corporations are usually the ones fucking things up in someone elses country, and since those corporations are staffed by people of that country, when those employees of that country get shot at, kidnappped, ransomed, robbed etc. they can run the news story rhetoric of oh no look at your people being harmed, just to galvanize your military to hit those hitting you, when your probably the ones hitting first anyways, it gives the appearance to the masses that your the “good guys” cause for the most part, most people on average have next to nothing to do with most shit that goes on outside of their own little communities, let alone what corporations are doing in another persons country.
Im sure behind the scenes when the fed bails out companies their are arrangements made between that class of people, but since your not the fed and most likely not of that class of people, it doesnt really concern you.
here comes the downvotes, dont give a shit though.
This is really a five year’s old question certainly. The pure answer is that the rich get richer. The USA is not governed by the people it is governed by the corporations (The Rich). The corps have the politicians , the tax codes, and even their own political party to assist them. Researching what inane part of the economic recovery acts justify these bailouts is useless. Our country is governed by successful, greedy corporations and billionaires , and as they continue to give themselves more benefits probably soon to be called trillionaires.
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