Duh? It has never been the businessman that’s been an angel. Competition is the angel. Crony capitalism screws with competition.
To big to fail? Who came up with that idiocy. Feed on the corpse.
Too big to fail -> too big.
“Monopoly power” doesn’t require a -monopoly-, just a short list of competitors.
1) New chapter explicitly spelled out in bankruptcy code for ‘megacorps’ -> anything ‘too big to fail’ automatically qualifies.
2) The bakruptcy judge is to break the company in to no fewer than five chunks, each with it’s -own- Federal Trustee, who will be paid retroactively for performance.
3) Make it unpleasant for the executive level, so they steer the ship around the shoals in the -first- place. Bankruptcy has the power to break contracts – use this on all the deals with the executives for the past five years. (Executives are the -only- class of worker that should receive ‘pensions’ as opposed to ‘tax-defered cash whose ownership transfers -now-‘)
There are at least 2 forms of bankruptcy that apply to corporations:
Chapter 7, insolvency, the business assets are sold off to pay off creditors as best can be arranged.
Chapter 11, a plea for time to reorganize and meet debts. If successful the company remains intact under the same management.
Yes.
I’m asking for a third to be added for “Megacorps”.
When you have GM fail, we never let Chapter 7 happen. And Chapter 11 seems to always involve direct, specific meddling by Congress. Any contracts that are dissolved aren’t focused on making a strong company so much as stiffing opponents and rewarding supporters.
This is what “Too big to fail” -means-.
We’ve propped up GM massively, stolen the purportedly ‘safer’ bondholder’s equity, and ended up with… a massive company that’s still not-well structurally. And is -still- too big to fail and being subsidized “Hey, local governments – buy GM!” And the executives “resigned”. At most.
Split: GMC Trucks / Cadillac & Hummer/ Chevrolet / Saturn / GM Motors (engines only). Something like that. The executives that were at the helm: canned, chastised, cord-to-parachutes cut.
Now let the regular bankruptcy/bailout happen. Bankruptcy court appoints a Federal Trustee (per slice!), and each is handed cash and sent on its merry way. A couple years down the road, we will not be hearing about GM’s problems, because GM will be gone. We might be hearing about Chevrolet’s problems. Or not.
But they -fundamentally- won’t be “too big to fail” anymore. Witness: GM canned Saturn as a brand completely (at least partially because they hate non-union labor) once the unions were in charge. And – Saturn wasn’t “too big to fail”.
And: if the slice is -still- too big to fail, well, we can slice smaller. “Chevrolet too big? Ok, um, Corvette & Camero, Chevette and …”
Making executive penalties explicit is also pretty crucial for changing -behavior-.
One problem with GM is it didn’t go through one of the established bankruptcy procedures. Instead a special procedure was used to protect cronies of the regime (unions) at the expense of other creditors. As part of that special procedure government money was used for a bailout and rules were changed specifically for that company.
I suspect that had congress not interfered the company would have declared Chapter 11, and possibly later Chapter 7 when no restructuring deal could be worked. As part of either union contracts would be modified if not outright canceled. If Chapter 7 was declared the company would have been broken up and sold off, likely to other companies in the same business.
But that’s -exactly- what I’m talking about. Nothing “Too big to fail” ever goes through standard bankruptcy.
Put “Chapter 201: Bailout” on the books.
There are plenty of examples of pretty big companies going to Chapter 11 and coming out healthier.
But it the company thinks it it too big to fail, then they ask for cash. And they always get it. And there are no/minimal repercussions for the leaders. And it just keeps recurring. Because it’s basically low-risk.
This chapter might -also- be completely subverted. But if you’ve got it written down in advance, you can at least point out “We don’t need a special procedure, we’ve got something better than Chapter 7 for Megacorps already on the books.”
Yes, better than Chapter 7 – because things fixable in Chapter 11 generally aren’t the problem.
This is why I favor restrictions on corporate involvement in politics – particularly giving to campaigns and funding PACs. I realize that may seem “anti-freedom” or something, but the plain fact is that the established corporations will always use the powers they have at hand to kill competitors with government rather than with better prices or services.
If the CEO of Goldman Sachs wants to give his own, personal money to a campaign, fine, 1st Amendment protections for individuals, but he shouldn’t be able to use the corporate money (belonging to shareholders) to buy politicians. Pay that as dividends.
The rule I have long favored is that only citizen-constituents of an office may contribute to campaigns for that office. No corporations, unions, non-profits, outside influences or other groups. PACs could only take money from citizen-constituents. But I’m not wedded to the idea, as long as corporate and union money gets out of politics.
I’m a little conflicted. I don’t really like corporations spending vast sums on politics but they also should have the right to defend themselves in the media from attacks being made by politicians.
We’d see less big money in politics if there weren’t so damn much power concentrated in the hands of politicians. The way to defuse the power of corporations is not to block them from lobbying Congress, but to make lobbying Congress less lucrative.
Shift power Feds -> States.
Now lobby 50x as many places.
Apple, Google, Microsoft – they don’t tend to manage to completely buy their way through Europe.
This also means that there’s a scaling factor for -medium- companies. Joe’s Computer Co might manage to enact pro-internals-accessibility legislation in Idaho – to Apple’s expense (in Idaho).
I don’t know if “corporatism” is the best term for the problem, since Mussolini defined the term as something quite different (a uniting of business, labor, and government into one body). His use didn’t have much to do with corporations as we know them, as opposed to sectors of economic activity (agriculture, mining, power, industrial production, etc).
Leftists like to throw the word around to ignorantly link corporations to Fascism, but Italy never had very many large corporations, and the ones it did have were very small by European standards. Even today Italy only averages 3.6 employees per company compared to a European average of 15. It’s all small business and mom-and-pop operations. What leftists also overlook is that Fascist Italy was second only to the Soviet Union in the number of state-owned enterprises.
Unfortunately with size comes political power. A key element of Andrew Carnegie’s success in steel was the high tax on import steel, bought with his generous donations to the party in power.
The solution has been aggressive use of anti-trust laws to break monopolies up, with the explosion of innovation in the phone industry resulting from the break up of AT&T the textbook example. However the direction in the last 20 years has been in the opposition direction with Clinton/Gingrich’s repeal of the Glass-Steagall Act creating the current generation of “too big to fail” banks that required the Trillion Dollar Bush bailout as a good example.
And political power means zip if the government has no authority to favor one company over another.
The more you look at it the more it seems that power and corruption have an unbeatable hand. The insiders make the rules to their advantage.
Nice guys don’t get elected. The bigger the business the less it wants a fair field of play. Government finds monopolies easier to play with.
In isolated cases there may be fixes. But overall I don’t see how you eliminate the corruption.
There is even a belief that some have the right to play by unfair rules. They’d laugh at you if you expressed otherwise. I think IP is an example. Is Mickey Mouse really an eternal idea?
What is so funny is that folks here who complain about it in other industries advocate it in space where many are actively campaigning for NASA to pick winners and losers in programs like COTS/CCDev/CCP. So what if NASA needs access to ISS, why should they side track an industry to get it. And why is ISS in competition with folks like Bigelow in the first place other then because of the political support from space contractors and their advocates.
That’s not a fair assessment Thomas. Most here acknowledge that NASA exists and has a budget that is going to be spent. They just hate that it’s wasted on things like SLS and other pork. I’d like to see NASA broken up or done away with but there’s no point in researching the details because it ain’t gonna happen anytime soon.
I would like to see more competition. There is some. Instead of two and a half I like to see a dozen companies winning NASA contracts to deliver cargo and crew. But realistically, that will take a while.
I think we’re going to find that space transportation has a much lower barrier of entry than launch systems. It will take some time for that light bulb to go off. Which I think means there may someday be a large enough market that launch systems have a lot more competition than we see today. This happens after we begin to settle the solar system. I believe the value of that is so great we should be making plans for mars settlement right now (I believe this to be the fastest growth path.) It appears some are, but we have yet to see if their plans make any sense or can get the funding.
I believe it’s self funding, but somebody with the resources will have to find out if that’s true. No guts. No glory.
Ken,
Yes, the commercial settlement of the Solar System is the key to making space access routine and less expensive. But that is not going to happen if NASA keeps side tracking firms with its deep pockets and orbiting white elephants. I hope SpaceX just says no to “commercial” crew and works with Bigelow instead.
I was glad when under VSE the ISS was going to be dumped in the ocean in 2015 as it really opened up LEO for space commerce, but now we must wait until the ISS breaks down before its stops being a barrier to opening the frontier. The good news I guess is that the Russian Core is almost as old as Mir was when it was scrapped.
The danger does exist. The difference is Elon. They will never fully sidetrack him. I’m just waiting for IPO.
Duh? It has never been the businessman that’s been an angel. Competition is the angel. Crony capitalism screws with competition.
To big to fail? Who came up with that idiocy. Feed on the corpse.
Too big to fail -> too big.
“Monopoly power” doesn’t require a -monopoly-, just a short list of competitors.
1) New chapter explicitly spelled out in bankruptcy code for ‘megacorps’ -> anything ‘too big to fail’ automatically qualifies.
2) The bakruptcy judge is to break the company in to no fewer than five chunks, each with it’s -own- Federal Trustee, who will be paid retroactively for performance.
3) Make it unpleasant for the executive level, so they steer the ship around the shoals in the -first- place. Bankruptcy has the power to break contracts – use this on all the deals with the executives for the past five years. (Executives are the -only- class of worker that should receive ‘pensions’ as opposed to ‘tax-defered cash whose ownership transfers -now-‘)
There are at least 2 forms of bankruptcy that apply to corporations:
Chapter 7, insolvency, the business assets are sold off to pay off creditors as best can be arranged.
Chapter 11, a plea for time to reorganize and meet debts. If successful the company remains intact under the same management.
Yes.
I’m asking for a third to be added for “Megacorps”.
When you have GM fail, we never let Chapter 7 happen. And Chapter 11 seems to always involve direct, specific meddling by Congress. Any contracts that are dissolved aren’t focused on making a strong company so much as stiffing opponents and rewarding supporters.
This is what “Too big to fail” -means-.
We’ve propped up GM massively, stolen the purportedly ‘safer’ bondholder’s equity, and ended up with… a massive company that’s still not-well structurally. And is -still- too big to fail and being subsidized “Hey, local governments – buy GM!” And the executives “resigned”. At most.
Split: GMC Trucks / Cadillac & Hummer/ Chevrolet / Saturn / GM Motors (engines only). Something like that. The executives that were at the helm: canned, chastised, cord-to-parachutes cut.
Now let the regular bankruptcy/bailout happen. Bankruptcy court appoints a Federal Trustee (per slice!), and each is handed cash and sent on its merry way. A couple years down the road, we will not be hearing about GM’s problems, because GM will be gone. We might be hearing about Chevrolet’s problems. Or not.
But they -fundamentally- won’t be “too big to fail” anymore. Witness: GM canned Saturn as a brand completely (at least partially because they hate non-union labor) once the unions were in charge. And – Saturn wasn’t “too big to fail”.
And: if the slice is -still- too big to fail, well, we can slice smaller. “Chevrolet too big? Ok, um, Corvette & Camero, Chevette and …”
Making executive penalties explicit is also pretty crucial for changing -behavior-.
One problem with GM is it didn’t go through one of the established bankruptcy procedures. Instead a special procedure was used to protect cronies of the regime (unions) at the expense of other creditors. As part of that special procedure government money was used for a bailout and rules were changed specifically for that company.
I suspect that had congress not interfered the company would have declared Chapter 11, and possibly later Chapter 7 when no restructuring deal could be worked. As part of either union contracts would be modified if not outright canceled. If Chapter 7 was declared the company would have been broken up and sold off, likely to other companies in the same business.
But that’s -exactly- what I’m talking about.
Nothing “Too big to fail” ever goes through standard bankruptcy.
Put “Chapter 201: Bailout” on the books.
There are plenty of examples of pretty big companies going to Chapter 11 and coming out healthier.
But it the company thinks it it too big to fail, then they ask for cash. And they always get it. And there are no/minimal repercussions for the leaders. And it just keeps recurring. Because it’s basically low-risk.
This chapter might -also- be completely subverted. But if you’ve got it written down in advance, you can at least point out “We don’t need a special procedure, we’ve got something better than Chapter 7 for Megacorps already on the books.”
Yes, better than Chapter 7 – because things fixable in Chapter 11 generally aren’t the problem.
This is why I favor restrictions on corporate involvement in politics – particularly giving to campaigns and funding PACs. I realize that may seem “anti-freedom” or something, but the plain fact is that the established corporations will always use the powers they have at hand to kill competitors with government rather than with better prices or services.
If the CEO of Goldman Sachs wants to give his own, personal money to a campaign, fine, 1st Amendment protections for individuals, but he shouldn’t be able to use the corporate money (belonging to shareholders) to buy politicians. Pay that as dividends.
The rule I have long favored is that only citizen-constituents of an office may contribute to campaigns for that office. No corporations, unions, non-profits, outside influences or other groups. PACs could only take money from citizen-constituents. But I’m not wedded to the idea, as long as corporate and union money gets out of politics.
I’m a little conflicted. I don’t really like corporations spending vast sums on politics but they also should have the right to defend themselves in the media from attacks being made by politicians.
We’d see less big money in politics if there weren’t so damn much power concentrated in the hands of politicians. The way to defuse the power of corporations is not to block them from lobbying Congress, but to make lobbying Congress less lucrative.
Shift power Feds -> States.
Now lobby 50x as many places.
Apple, Google, Microsoft – they don’t tend to manage to completely buy their way through Europe.
This also means that there’s a scaling factor for -medium- companies. Joe’s Computer Co might manage to enact pro-internals-accessibility legislation in Idaho – to Apple’s expense (in Idaho).
I don’t know if “corporatism” is the best term for the problem, since Mussolini defined the term as something quite different (a uniting of business, labor, and government into one body). His use didn’t have much to do with corporations as we know them, as opposed to sectors of economic activity (agriculture, mining, power, industrial production, etc).
Leftists like to throw the word around to ignorantly link corporations to Fascism, but Italy never had very many large corporations, and the ones it did have were very small by European standards. Even today Italy only averages 3.6 employees per company compared to a European average of 15. It’s all small business and mom-and-pop operations. What leftists also overlook is that Fascist Italy was second only to the Soviet Union in the number of state-owned enterprises.
Unfortunately with size comes political power. A key element of Andrew Carnegie’s success in steel was the high tax on import steel, bought with his generous donations to the party in power.
The solution has been aggressive use of anti-trust laws to break monopolies up, with the explosion of innovation in the phone industry resulting from the break up of AT&T the textbook example. However the direction in the last 20 years has been in the opposition direction with Clinton/Gingrich’s repeal of the Glass-Steagall Act creating the current generation of “too big to fail” banks that required the Trillion Dollar Bush bailout as a good example.
And political power means zip if the government has no authority to favor one company over another.
The more you look at it the more it seems that power and corruption have an unbeatable hand. The insiders make the rules to their advantage.
Nice guys don’t get elected. The bigger the business the less it wants a fair field of play. Government finds monopolies easier to play with.
In isolated cases there may be fixes. But overall I don’t see how you eliminate the corruption.
There is even a belief that some have the right to play by unfair rules. They’d laugh at you if you expressed otherwise. I think IP is an example. Is Mickey Mouse really an eternal idea?
What is so funny is that folks here who complain about it in other industries advocate it in space where many are actively campaigning for NASA to pick winners and losers in programs like COTS/CCDev/CCP. So what if NASA needs access to ISS, why should they side track an industry to get it. And why is ISS in competition with folks like Bigelow in the first place other then because of the political support from space contractors and their advocates.
That’s not a fair assessment Thomas. Most here acknowledge that NASA exists and has a budget that is going to be spent. They just hate that it’s wasted on things like SLS and other pork. I’d like to see NASA broken up or done away with but there’s no point in researching the details because it ain’t gonna happen anytime soon.
I would like to see more competition. There is some. Instead of two and a half I like to see a dozen companies winning NASA contracts to deliver cargo and crew. But realistically, that will take a while.
I think we’re going to find that space transportation has a much lower barrier of entry than launch systems. It will take some time for that light bulb to go off. Which I think means there may someday be a large enough market that launch systems have a lot more competition than we see today. This happens after we begin to settle the solar system. I believe the value of that is so great we should be making plans for mars settlement right now (I believe this to be the fastest growth path.) It appears some are, but we have yet to see if their plans make any sense or can get the funding.
I believe it’s self funding, but somebody with the resources will have to find out if that’s true. No guts. No glory.
Ken,
Yes, the commercial settlement of the Solar System is the key to making space access routine and less expensive. But that is not going to happen if NASA keeps side tracking firms with its deep pockets and orbiting white elephants. I hope SpaceX just says no to “commercial” crew and works with Bigelow instead.
I was glad when under VSE the ISS was going to be dumped in the ocean in 2015 as it really opened up LEO for space commerce, but now we must wait until the ISS breaks down before its stops being a barrier to opening the frontier. The good news I guess is that the Russian Core is almost as old as Mir was when it was scrapped.
The danger does exist. The difference is Elon. They will never fully sidetrack him. I’m just waiting for IPO.