83 replies to this topic

[ᗅᗺᗷᗅ]

Some things, like health care, should be state-run. Making them private, for-profit entities is morally repugnant. But my point was merely that there are many governments that do it right.

[Lord Draculea]

State-owned companies are corrupted and inefficient by nature. The Government is the worst administrator anywhere in the world (there may be exceptions to this, but they only confirm the rule). Privatizing health-care institutions may sound morally repugnant, but so does firing people in the process of restructuring inefficient enterprises.

 

So what do we do then? Keep in place inefficient & corrupted systems as a mean of providing "social benefits" to the employees (plus holes to the state budget and substandard services to the clients), or replace them with functional private (or mixed) enterprises? I don't think any clever leftist Government should opt for the former solution, just for the sake of dogmatic & emotional reasons. Do you?

[Haflinger]

State-owned companies are corrupted and inefficient by nature.

All large bureaucracies are corrupted and inefficient by nature, regardless of who owns them.

[HordeLorde]

State-owned companies are corrupted and inefficient by nature.

All large bureaucracies are corrupted and inefficient by nature, regardless of who owns them.

LOL its sooo IRONIC you said that to Drac lol

[Lord Draculea]

All large bureaucracies are corrupted and inefficient by nature, regardless of who owns them.

 

I was referring to economic entities, not just any kind of bureaucracy. It's understood that large and small enterprises have their own specific issues, and that there's no such thing as a perfect structure invented by humans. That being said, capitalistic enterprises have evolved naturally, while similar organizations set up and run by the Government are artificial. That's what makes the difference. if you want, we can go deeper into it, and you're going to explain to me the socialist dogma, and I'm going to point out why I think it's fundamentally wrong. And then we're going to talk again about the "Swedish model", or maybe about the "Chinese miracle", and so on. 

[Haflinger]

I'm not really either a capitalist or a socialist. I'm opposed to large governments and large corporations, period. I think we should organize far more things than we do at the local level.

 

The largest employer in Canada is Bell Canada. I refuse to have any more dealings with them, sadly I still have to deal with some large corporations but Bell... Well let's just say that your complaints about communism really remind me of all my dealings with Bell.

[Lord Draculea]

I can understand that. Still, even a large corporation can go bankrupt if it fails its customers, while a similar governmental structure can't, because its owner is going to pump funds into it beyond any reasonable limit. What difference does it make to the Government? It's using other people's money, anyway...

[Haflinger]

No, it can't. What you fail to understand is that here in the capitalist world, large corporations affect so many people's lives that they are not permitted to fail. Take a look at the discussion about Volkswagen in another thread: I suggested that it would be appropriate to prosecute VW for criminal fraud in every jurisdiction where they committed it by selling their vehicles under false pretences. Jor correctly pointed out that doing this would almost certainly bankrupt VW, and so the laws aren't going to be enforced because it would throw too many people out of work.

 

Bell Canada operates mainly in the heavily regulated telecom & television industries, so the prices for its services are mostly set by government mandate. However, even were that not the case, look at the history of bailouts for large corporations in the west. It's a long history; when a huge company is on the brink of collapse, it invariably gets saved.

[Lord Draculea]

I know how bailouts work. It's a political decision for a Government to make on a case by case basis, but at least it has that option. Also, during the last crisis, many people realized that the "too big to fail" policy was wrong, and that such a thing should not be allowed. When a large corporation is not permitted to fail, it means that someone else will pay the bill for its wrongdoings, and that's the main reason why the effects of the crisis are still lagging. Yeah, I admit that the Western world has become more socialistic, and that the Governments will do almost anything for preventing the loss of jobs, but guess what, there's no free lunch, it all comes at a cost, and the cost is that structural weakness is accumulating in the system.

 

The VW case is something else. The company did something wrong and it should pay. Still, it has a first class product, and it's not on the brink of collapse because it can't sell it, but due to the amount of fines it's going to pay, which is an arbitrary political decision. That's quite the opposite case of a corporation being bailed out, isn't it?

[Haflinger]

In the VW case, it's not going to pay. That was my whole point. If it had been a small startup company that had committed that kind of fraud and got caught, it would have been knocked out of business.

 

VW's too big. So it's not accountable.

 

Are you referring to the recent financial crisis? Banks got bailed out all over the west. All the big ones got money to keep them in business. Little corporations, sure, they went titsup all over the place. But none of the big guys went down. Citigroup is fine.

 

The last time I can remember a large corporation going bust was Enron. And that was, well, an incredible set of circumstances.

[Lord Draculea]

Big banks got bailed out because if a big guy like that goes down, the chain reaction is going to hurt an incredible number of people and businesses. And that's the moment I was talking about, when many people realized that the "too big to fail" concept must be changed. Citi is already not what it used to be anymore. My point, when this side discussion arouse, was that in the case of a huge private enterprise you at least have that option (of letting it go down or not), while a government structure is not suitable for a flexible approach.

 

As for VW, what do you mean it's not going to pay? They'll pay. Big times. As they should.

[the rebel]

As for VW, what do you mean it's not going to pay? They'll pay. Big times. As they should.

They will only really pay if they lose customer trust on a huge scale and that is hard to tell at this point due to the whipped up media frenzy. It will stop people buying their cars for certain reason, likewise it won't stop people buying their cars for other reasons.

[ᗅᗺᗷᗅ]

VW has set aside $7 billion to deal with the fallout from the emissions scandal. Most industry experts say the final number will probably be twice that. That's more than their entire revenue for 2014 (about $12 billion). So, yeah, it's bad. But they will survive. The upshot will be some dirt-cheap VWs, especially all the 2015 diesels currently sitting on lots. They cannot be sold until everything has been sorted out and they have been retrofitted, by which time they will be at least one model year old, probably two. I bet they'll be practically giving them away.

[the rebel]

I bet they'll be practically giving them away.

And that's when I will be buying a new car, see everything has a silver lining

[Haflinger]

Big banks got bailed out because if a big guy like that goes down, the chain reaction is going to hurt an incredible number of people and businesses.

Yep. Too big to fail.

That's the whole point. In my more radical moments, I advocate a ban on large organizations of all sorts. Once you have these giant concerns operating in your economy, they just can't be shut down because of the ripple effect.

 

BTW, government departments can be shut down. I'm not sure where you get the idea that they can't.

 

As for VW, what do you mean it's not going to pay? They'll pay. Big times. As they should.

They won't. You just watch. Five years from now, they'll be fine.

[Lord Draculea]

I'm not saying they'll be out of business, if that's what you mean by "paying". I was merely talking about money.

[Haflinger]

Nah, the bill will be in the millions. Probably single digit millions.

[ᗅᗺᗷᗅ]

VW is not going to go out of business. Too many people would lose their jobs. But they will pay a big price. The German government is very angry and very serious; Martin Winterkorn and Ferdinand Piech could conceivably go to jail. As I said above, most industry analysts expect this to cost the automaker about $14 billion. They are going to lose a lot of market share, especially in the United States. They had recently claimed the title of world's biggest automaker (the relentless pursuit of which is largely to blame for the emissions scandal), but they are sure to lose it now.

 

Like I said, a good time to get a deal on a VW.

[Haflinger]

I'll be really surprised if the bill goes over $14 million.

 

It should also be noted here that the operating profit for Volkswagen Group in 2014 was US $14.412 billion. You're talking about them losing a year's profit and calling that a big price. I still doubt it'll come to that much, but realistically, these guys have an awful lot in the bank. It won't matter.

[ᗅᗺᗷᗅ]

It's going to matter a lot in the United States, where their hold of the market share was precarious to begin with. Most likely they will be selling a few models at a loss for a couple of years.
 
$14 million is ludicrously low. Billions, Haf. Billions. Hell, the cost of retrofitting all the cars already on the road will probably be more than a billion. VW will take a much bigger hit from this than you think. But they will survive.