France could nationalize big companies if necessary: finance minister
reuters.com
reuters.com
Privatization done right can work. But you need to break up the big national companies into smaller regional companies that should be incentivized to expand into each others regions, thus providing competition.
Regional companies encouraged to lay duplicate fibre cables, duplicate power delivery or duplicate water or sewer systems, are not efficient.
By your reasoning the government is always becoming more inefficient by nature. Odd because the standard of life keeps going up and the % GDP taken in taxes remains steady(ish).
That’s never the case. Power is separated into producers, transmitters and retailers (you only deal with retailers who compete in service and negotiate with producers.
Telco’s lease line from national company, negotiate peering and retail to you.
Exception is cell telcos... these pay so much in spectrum auctions that almost undoubtedly few millions end up in polichickens pockets.
That said, it's good timing on the announcement because it's more a signal than anything.
'We will not hesitate' is pretty strong language, indicating faith in those institutions that are, at least for now 'too big to fail'.
It feels something is terribly wrong with the world and the basic laws of capitalism, now that it turns out many companies don't pile on stuff, and go out of business in a matter of weeks when supply is lagging behind.
Are there any examples of companies using "we can pay our employees for six months" as a competitive advantage on Wall Street you can point to? Industry self-regulation in this regard has a pretty dismal track record.
What if nobody is willing to invest in an insane business? Then they will all have more difficulty accessing capital than sane businesses.
Unless some completely new regulations are passed, nothing will change about the basic incentive structures of markets. And these incentive structures are more powerful than whatever an investor or a CEO may feel.
A related concept is the so-called "normalization of deviance".
But this is the basic law of free markets at work. If you can run on a leaner supply chain, you'll outcompete those that can't. It's regular market competition that makes systems extremely fragile - all redundancy is considered as waste, fat to be cut off.
I absolutely agree with your comment, but that's exactly what the original poster was referring to, I think, with "something is terribly wrong with [...] the basic laws of capitalism", one being the free market, as you just mentioned.
40 years ago it was illegal in the US to pile on debt and use that money for stock buybacks. Which frankly is reasonable as looting struggling companies is bad for the economy and arguably fraud.
Having cash on hand is leaving money on the table - you could put it to use in something that makes you grow, or lose to a competitor that does. It's a different thing than lean manufacturing, but same forces cause both.
Expansion seems like an obvious solution, but in a competitive market that’s not always a winning strategy. Read up on the rise and fall of Subway to see the issues.
That's the general idea, yeah, "buy low sell high".
There's no reason failing companies should receive "bailouts" - defined as government-granted low-interest loans, often without suitable collateral. If the government puts in money, it should receive shares.
In Europe, since the revolutions, the primary marker of crony isn't so much birth, it's education, i.e. Oxbridge/Grande Ecole etc., but once they're through that 'kind of egalitarian' gamut of education, it's mostly 'crony' from there on in.
This has a kind of nationalist/communitarian aspect which can be helpful in times such as this (cronie CEO is buddies with cronie Minister of Finance), but it's generally not good for competition and global competitiveness.
Nationalization to me isn't that different from a bailout, the government (and thus taxpayers) foot the bill. With nationalization I guess the government can exert greater control over how the company is run, but is that necessarily the best way to provide oversight?
Among other things, nationalization would all but eliminate institutional resistance to, and subversion of, public policy and regulations.
The counter opposite example is China and their industries, but that implies an even worse kind of relationship that greatly exploits people and their labor.
It's like saying Ford are shit cars after a drunk driver crashes one..
To expand a bit; an ideal system, IMHO, would be a hybrid "state-backed but citizen-controlled" entity (half-way between nationalized and publicly traded) wherein shareholders involve citizens but not govs official (who have their own agenda, etc.); this is to maintain a sane separation between "the things belonging to citizens" and "the affairs of the State as a government").
It also follows a fundamental (but long-forgotten) principle of democracy that citizens should be able to control (as in audit, not "run" executively) the public things. You'd expect such a hybrid entity to be run by good commanders of industry, typical board / CEO but vetted by some citizen-backed legitimacy, in the shareholder voting process (this is a mild / hybrid form of "election", which is too strong as it is for this hybrid entity, but worth the "backed by sovereignty consent" value).
These are businesses that have been run so poorly they're begging the government to force citizens to donate them money. I don't think there's any reason to believe the private sector has any particular genius here.
- Firefighting [1] - Education - Broadband [2]
Outside the USA, many governments run other companies well enough too, from energy companies, to rail/transport, banking, etc.
[1]: https://en.wikipedia.org/wiki/History_of_firefighting [2]: https://en.wikipedia.org/wiki/Municipal_broadband
the economy would be better off if nearly all capital/equities were tied up in small- to medium-sized businesses, not large corporations (or governments) and consolidated markets.
Who wants to invest in an enterprise when it could all be taken away arbitrarily.
which again makes my argument: avoiding consolidations of power that can devolve into fascism/corporatism to the detriment of citizens.
I’m honestly not sure if you’re being facetious or not.
You can’t buy machinery with worthless banknotes.
Bailout The government rescues stock holders and industry with cheap loans. In bailouts government shares the risk with owners but not the profits.
Nationalization Government rescues the industry and stock holders lose their assets. Government can later arrange IPO and get rid of the companies and recoup at least part of the profits, sometimes making profit. In nationalization owners have risk and profits, when company goes belly up, government takes the risk and profits. It's clean cut.
Matt Levine has good article related to the issue https://www.bloomberg.com/opinion/articles/2020-03-17/the-go...
As I understood they took example on what Germany did in 2008, and learned from what worked over there. Whether all countries do the same is another story altogether, but at least in France they might save a good number of jobs (by inflating the public debt, but that's a separate issue).
If a business loses 2-3 quarters of revenue/profit due to COVID-19, how will they "make it back" to payback their previously postponed taxes (from the quarter they made little to no money in)?
You filed the tax return in May 2019. your tax gets calculated and you have to pay 84k. You will have to pay only in 2020. But here‘s the catch. Finanzamt will assume you operate throughout 2019 at the same level as 2018. so they take 2*84k as a pre-payment for 2019 from you AND every quarter of 2020 they ask you to pay a quarter of 84k as a pre-payment for 2020.
I assume they will not ask for those pre-payments. That will help a lot.
- If you need to suspend your workers contracts, they are covered by the state. No need to fire them.
- all tax collections have been suspended
- your credit lines with commercial banks are covered by the state, so you can suspend payments or increase them if needed
- The BPI (Public Investment Bank) has an emergency loan available for companies that could run out of cash due to the situation.
They are not talking about the aftermath yet but these efforts cost a huge amount of money. My guess is that they will recover money by raising taxes for several years.
There are a few bad posts, simply calling someone an idiot, etc. Good: downvote.
But a lot are being downvoted because they express arguments that are disagreed with.
In my experience, that's always going to happen with voting mechanisms on comment sections. I tend to have disagreeable or extreme views on most subjects, and while I try to be considerate and not show any rudeness in my comments, I still get a lot of downvotes from time to time.
Still, the mindset of "I downvote good comments I disagree with" also generally leads to "I upvote bad comments I agree with" and that's not much better.
When I downvote something, I usually write a comment explaining why I think it's not useful, although I don't always have time to do so.
I feel like the admins and moderators do a decent job generally but they're not proactive enough IMO. I remember how we had a temporary moratorium on political stories around the time Trump was elected for instance (or was it just before? I don't remember exactly). The karma threshold for enabling downvotes should probably be increased given the "karma inflation" over the past few years. Users caught disagree-downvoting should lose their downvote privileges, at least temporarily.
Of course the natural process of any such forum is to eventually turn into Reddit but we don't have to sit idly by and watch it happen.
Of course it's not like that always. But I do see a lot more reasonable comments that aren't inherently inane/flame-wary get downvotes for no apparent reason. Perhaps there should be a mechanism in place to reduce its use eg having to pay downvotes with your own karma.
As a longtime forum user I generally assume many people are simply trolling. If I see a controversial and poorly supported argument I will sometimes downvote for this reason even if I agree with what their saying. I will also upvote an usually well supported arguments I disagree with.
However, I admit my personal bias makes me harsher on people I disagree with.
I don't know about that. What I know is that they sent all the production to China and Iran a month ago and now that we critically need masks there are none to be found even for medical professionals deemed 'not essentials'.
We're talking about a government that allowed elections to happen 3 days ago then quarantined the whole country today ...
That may wind up being the right call. China's ramping up production dramatically; the goodwill engendered may be to France's benefit.
Distributed supply means distributed failure (here and there). Central supply, means failure on the national level.
People footing the bill? Hell no. If we (taxpayers) are footing the entirety of the risk than we're also be taking the entirety of the profits (if any). Why do you expect the public to NOT play by the capitalist rules?
Low-term ownership of non-critical companies by government is usually a bad idea. Sure.
But isn't it better to nationalize, save and then, when the market is good, sell it for a profit (or break even) than just ... give out high-risk money hoping you get it back? Besides ... if a company was going to collapse without government intervention that means it's irrelevant to the current owners anyway since they have already failed and lost everything. The fact society managed to stop that from happening with extraordinary measures is irrelevant to that fact.
Don't get me wrong: I'm all for private enterprise. But I hate people who turn from "no government handouts for the poor" to "Companies need government handouts!" the second it's convenient.
Pump money into Amazon/FedEx/PostMates delivery services.
Keep restaurants open and tap them into the food supply chain.
Close all stores except to delivery services.
UBI and universal health care starts now.