Compensated Nationalization

[David]

So I was posting in this thread (http://www.politicalfray.com/showthread.php?t=1467) and after making this post (http://www.politicalfray.com/showpost.php?p=12891&postcount=9) I started thinking. I asked myself how this could work and I came up with an answer.

Hypothetical Situation: A technology bubble based on telecommunications bursts leaving most telecommunication companies in America on the verge of collapse threatening the economy with the lose of jobs, internet service and mass communication. To prevent this, the US Gov't has decided to bail the telecommunications industry out. America being as wired as it is, even anti-bailout populism must be ignored as the US is incapable of surviving such a systematic failure of communications and economic activity.

My bailout strategy: A minimum of 50% +1 of each failing company's stock is to be bought by the gov't. This will give it control of said companies. If the shareholders are dangerously anti-gov't, a more significant share will be bought so as to secure the gov't's position. Where affordable, the companies will be bought out outright. Following this, a gov't organization known as the American Telecommunications Agency (ATA) will be created and the now nationalized companies will be merged slowly (so as to avoid interrupting service and allowing for the smooth ejection and compensation of former execs) and incorporated into the ATA. Once this process is complete and majority shareholderaship is no longer necessary for control by virtue of the ATA, each taxpayer at the time of the bailout will be analyzed for actual and proportional tax payments to the gov't that year. Based on the results, the ATA, which will be operated as a privately traded company, will distribute all but 20% of it's stock (the remaining being held by the gov't) to the taxpayers or their next of kin in the event of their death/incapacitation in the time between the bailout and stock distribution.

Following this, every newborn child from birth to the age of Majority (currently 18) or death, whichever comes 1st, will be given 1 share per year. Each student will receive an additional share per year of public K-12 schooling. In addition to this, students will receive additional shares as per their GPAs per semester, 0 for an F, 1 for a D, 2 for a C, 10 for a B and 20 for an A. Educational stock distribution will continue past the age of majority were applicable. Both distribution strategies will apply to only those born and entering the public school system after the bailout occurs respectively.

In addition to the above, taxpaying citizens (and this will be restricted to citizens) will have to option of paying a voluntary tax which will effectively allow them to buy additional shares, the amount depending on the extra taxes payed and the market value of the stock.

All stock will transfer to the next of kin where legally stated (will, life insurance policy, ect.) and to the gov't whenever it isn't upon death/incapacitation of the shareholder.

The ATA will be run by 2 bodies, the Board of Governors which will consist of 10 people appointed by Congress and possessing telecommunications and/or economic experience. This body will be the superior. The lower body will be the People's Council which will consist of 1 elected person from every state, territory or other dependency excluding military bases, embassies, ect. and regions under American control but were the ATA doesn't provide service. The elected councilors must be at least 18, a resident of an ATA region and a citizen. The ATA will also have a cabinet position. The ATA will be mandated to provide an easy to access public record of every action it takes so as to maintain transparency.

Foreign assets of the former companies will be sold off.

Te result of this strategy will be a more efficient telecommunications industry, a repayment of taxes with the added advantage of helping to raise out of poverty the poor who will find themselves shareholders of a major business, an increase in educational excellence due to the incentive of free shareholderaship and the potential ability to lower taxes while still seeing increasing tax revenue due to the voluntary tax.

Replace the telecommunications industry with any other and change the name of the gov't agency involved and I feel this could work well.

 

[myp]

Hypothetical Situation: A technology bubble based on telecommunications bursts leaving most telecommunication companies in America on the verge of collapse threatening the economy with the lose of jobs, internet service and mass communication. To prevent this, the US Gov't has decided to bail the telecommunications industry out. America being as wired as it is, even anti-bailout populism must be ignored as the US is incapable of surviving such a systematic failure of communications and economic activity.

If a telecommunication bubble were to form, I would argue that the government is not the best answer. Remember that a bankruptcy process is already in place and that any non-toxic assets are likely to be picked up by other firms.

Furthermore, a bubble would likely not be so big that all the telecomm. companies would be in peril. If the consumers still demand the product, as you have suggested (since according to your argument there would be little populism against a bailout since people want telecomm. services) some companies would almost definitely still be in business to provide those services and even if not, the firms that pick those assets and customer bases up are likely to keep them in operation if they really are profitable (if they aren't there may be some restructuring, but no one is going to ignore an entire industry where there are billions to be made and no competition.)

Let's also remember that this country and tons of markets around the world have gone through industry bubbles from airplanes in the early 20s to the recent internet bubble. We survived all that without nationalization.

Also, I think a telecomm. bailout would have populism against it, but that is another story

My bailout strategy: A minimum of 50% +1 of each failing company's stock is to be bought by the gov't. This will give it control of said companies. If the shareholders are dangerously anti-gov't, a more significant share will be bought so as to secure the gov't's position. Where affordable, the companies will be bought out outright. Following this, a gov't organization known as the American Telecommunications Agency (ATA) will be created and the now nationalized companies will be merged slowly (so as to avoid interrupting service and allowing for the smooth ejection and compensation of former execs) and incorporated into the ATA. Once this process is complete and majority shareholderaship is no longer necessary for control by virtue of the ATA, each taxpayer at the time of the bailout will be analyzed for actual and proportional tax payments to the gov't that year. Based on the results, the ATA, which will be operated as a privately traded company, will distribute all but 20% of it's stock (the remaining being held by the gov't) to the taxpayers or their next of kin in the event of their death/incapacitation in the time between the bailout and stock distribution.

Following this, every newborn child from birth to the age of Majority (currently 18) or death, whichever comes 1st, will be given 1 share per year. Each student will receive an additional share per year of public K-12 schooling. In addition to this, students will receive additional shares as per their GPAs per semester, 0 for an F, 1 for a D, 2 for a C, 10 for a B and 20 for an A. Educational stock distribution will continue past the age of majority were applicable. Both distribution strategies will apply to only those born and entering the public school system after the bailout occurs respectively.

In addition to the above, taxpaying citizens (and this will be restricted to citizens) will have to option of paying a voluntary tax which will effectively allow them to buy additional shares, the amount depending on the extra taxes payed and the market value of the stock.

All stock will transfer to the next of kin where legally stated (will, life insurance policy, ect.) and to the gov't whenever it isn't upon death/incapacitation of the shareholder.

The ATA will be run by 2 bodies, the Board of Governors which will consist of 10 people appointed by Congress and possessing telecommunications and/or economic experience. This body will be the superior. The lower body will be the People's Council which will consist of 1 elected person from every state, territory or other dependency excluding military bases, embassies, ect. and regions under American control but were the ATA doesn't provide service. The elected councilors must be at least 18, a resident of an ATA region and a citizen. The ATA will also have a cabinet position. The ATA will be mandated to provide an easy to access public record of every action it takes so as to maintain transparency.

Foreign assets of the former companies will be sold off.

Te result of this strategy will be a more efficient telecommunications industry, a repayment of taxes with the added advantage of helping to raise out of poverty the poor who will find themselves shareholders of a major business, an increase in educational excellence due to the incentive of free shareholderaship and the potential ability to lower taxes while still seeing increasing tax revenue due to the voluntary tax.

Replace the telecommunications industry with any other and change the name of the gov't agency involved and I feel this could work well.

Nationalization is not only unconstitutional, but susceptible to political and special interests. It is also likely to be less efficient than a private sector company (Fannie/Freddie, Sallie Mae, China's history with State Owned Enterprises, the list goes on and on.) Many GSEs have operated in partially independent manners over history such as that which you have suggest (except for a few differences, most notably the elected officials) and have time and time again underperformed their market counterparts.

When it comes to electing the officials for these companies, I would just see that as extra, unnecessary bureaucracy. The whole system you have proposed would recover an immense growth in government including those workers you'd need to handle the stocks, etc. For these reasons, taxes aren't likely to go down, but up because of this.

I am not sure the education incentive would be very effective either- frankly how many elementary school kids know what stocks are let alone care about them. Even those that do in high school, etc. likely wouldn't care.

And when it comes to owning stock in a major corporation- I remember reading some time back that some 100 million Americans are either directly or indirectly invested in the market. That is ~1/3 of all Americans including children. Furthermore, it is not hard for the everyday guy to buy stock and many corporations even offer price incentives to their employees on stock (Walmart being a good example.)

With all due respect, I think your plan would be a disaster.

 

[David]

If a telecommunication bubble were to form, I would argue that the government is not the best answer. Remember that a bankruptcy process is already in place and that any non-toxic assets are likely to be picked up by other firms.

Furthermore, a bubble would likely not be so big that all the telecomm. companies would be in peril. If the consumers still demand the product, as you have suggested (since according to your argument there would be little populism against a bailout since people want telecomm. services) some companies would almost definitely still be in business to provide those services and even if not, the firms that pick those assets and customer bases up are likely to keep them in operation if they really are profitable (if they aren't there may be some restructuring, but no one is going to ignore an entire industry where there are billions to be made and no competition.)

Let's also remember that this country and tons of markets around the world have gone through industry bubbles from airplanes in the early 20s to the recent internet bubble. We survived all that without nationalization.

Also, I think a telecomm. bailout would have populism against it, but that is another story


Nationalization is not only unconstitutional, but susceptible to political and special interests. It is also likely to be less efficient than a private sector company (Fannie/Freddie, Sallie Mae, China's history with State Owned Enterprises, the list goes on and on.) Many GSEs have operated in partially independent manners over history such as that which you have suggest (except for a few differences, most notably the elected officials) and have time and time again underperformed their market counterparts.

When it comes to electing the officials for these companies, I would just see that as extra, unnecessary bureaucracy. The whole system you have proposed would recover an immense growth in government including those workers you'd need to handle the stocks, etc. For these reasons, taxes aren't likely to go down, but up because of this.

I am not sure the education incentive would be very effective either- frankly how many elementary school kids know what stocks are let alone care about them. Even those that do in high school, etc. likely wouldn't care.

And when it comes to owning stock in a major corporation- I remember reading some time back that some 100 million Americans are either directly or indirectly invested in the market. That is ~1/3 of all Americans including children. Furthermore, it is not hard for the everyday guy to buy stock and many corporations even offer price incentives to their employees on stock (Walmart being a good example.)

With all due respect, I think your plan would be a disaster.

The telecommunications industry was an example and as a socialist, my aim is to destroy capitalism in the most painless fashion.

 

[myp]

The telecommunications industry was an example and as a socialist, my aim is to destroy capitalism in the most painless fashion.

Well my arguments still stand if it is another industry. Furthermore, in most other industries the "all Americans want this service so there wouldn't be a populist movement against a bailout" argument would not stand, further weakening your argument.

Gotta try harder if you want to try to topple capitalism

 

[David]

Well my arguments still stand if it is another industry. Furthermore, in most other industries the "all Americans want this service so there wouldn't be a populist movement against a bailout" argument would not stand, further weakening your argument.

Gotta try harder if you want to try to topple capitalism

What?

America being as wired as it is, even anti-bailout populism must be ignored as the US is incapable of surviving such a systematic failure of communications and economic activity.

Any bailout would trigger populist anger after what just happened and likely will for the next 2 generations if people stay politicly active.

 

[myp]

What?

Oh I misread your statement in that I thought you said there would be no/little populism. If there is populism though, that is just ignoring the people. I thought you support the idea of government for people?

Any bailout would trigger populist anger after what just happened and likely will for the next 2 generations if people stay politicly active.

So that makes it ok for the government to just ignore the people "for the greater good"? That is the type of thinking that leads to the transformation of free nations to restrictive ones.

Also, are you ok with being unconstitutional in order to do all this?

On top of that, any answer to the fact that this sort of thing has never worked and has always been inefficient?

And what about the special interests problem?

 

[David]

Oh I misread your statement in that I thought you said there would be no/little populism. If there is populism though, that is just ignoring the people. I thought you support the idea of government for people?

I do but what do you do if the people's will means the end? You wouldn't fire off all your nukes if 80% of the people demanded it would you?

So that makes it ok for the government to just ignore the people "for the greater good"? That is the type of thinking that leads to the transformation of free nations to restrictive ones.

Read the above.

Also, are you ok with being unconstitutional in order to do all this?

How is it unconstitutional?

On top of that, any answer to the fact that this sort of thing has never worked and has always been inefficient?

The military would disagree with you.

And what about the special interests problem?

When are they not a problem?

 

[myp]

How is the fall of the telecommunications or any other industry "the end"? Perhaps more importantly, what makes the government right and the people wrong?

Wouldn't you say the nuke example is a bit fear-mongering and perhaps relies on pathos more than logos? The likelihood of 80% of Americans wanting to blow up the world is pretty low.

As for Constitutionality, where does it say that the government can nationalize industries and run companies? Unless you can find that clause, the 10th amendment clearly states that all other powers belong to the people and the states.

The military is perhaps the one exclusion as per the Constitution. Run as a business, it is a losing business, but one that is needed if you believe in Mill's harm principle or something similar. The founding fathers recognized this and hence, the Constitution does give the Federal government the power to have an army.

As for special interests, if there is no one to lobby, then there is no lobbying.

 

[David]

How is the fall of the telecommunications or any other industry "the end"? Perhaps more importantly, what makes the government right and the people wrong?

I'm saying if populist will would bring the country down, is it really a good idea to follow it?

Wouldn't you say the nuke example is a bit fear-mongering and perhaps relies on pathos more than logos? The likelihood of 80% of Americans wanting to blow up the world is pretty low.

Just making a point.

As for Constitutionality, where does it say that the government can nationalize industries and run companies? Unless you can find that clause, the 10th amendment clearly states that all other powers belong to the people and the states.

Then implement this at the state level.

<Filler><Filler>

 

[myp]

My point though is that letting a company fail will never bring the country down. Furthermore, who is to say what will and will not bring the country down- no one for sure knows the future. I don't know about you, but I would much rather trust the masses of the people than the few politicians.

With the nuke example, I can turn it around and ask you what if 80% of politicians want to nuke somebody, does that make it ok? Really a fear-mongering argument either way in my opinion.

And to implementing it at the state level- while that would be relatively better in my books, I would still argue against it at the state level. It would be Constitutional (although whether it is as per state law is another story and can vary by each state) but the inefficiency and other problems would still exist. Furthermore, the state's don't have their own little inflation machines like the Fed gov't does, so it is a lot less likely.

 

[Dirk]

I thought you support the idea of government for people?

Personally, i believe the people should govern.

So that makes it ok for the government to just ignore the people "for the greater good"? That is the type of thinking that leads to the transformation of free nations to restrictive ones.

It's also the type of thinking that killed millions of Iraqi civilians.

Also, are you ok with being unconstitutional in order to do all this?

I don't get what the fixation with your constitution is. I can assure you there's far less fuss when the Bundestag votes to make a change.

On top of that, any answer to the fact that this sort of thing has never worked and has always been inefficient?

Oh dear... lesson 1: try not to use absolutes.

In this case, you are inaccurate.

 

[myp]

Personally, i believe the people should govern.

Agreed.

It's also the type of thinking that killed millions of Iraqi civilians.

Agreed.

I don't get what the fixation with your constitution is. I can assure you there's far less fuss when the Bundestag votes to make a change.

The Constitution is historically one of the greatest documents in terms of moving towards a free world. It has proven to work and it is the basis for this country. The ideas instilled in that document are at the core of what this country has traditionally stood for and for that reason it is important. I'm not sure how to explain it more and maybe non-Americans can't relate to it. Also, legally, it is the primary law of the land in that all other laws must fall in line with it as well.

Oh dear... lesson 1: try not to use absolutes.

In this case, you are inaccurate.

Example?

 

[Dirk]

The Constitution is historically one of the greatest documents in terms of moving towards a free world.

Okay...?

It has proven to work and it is the basis for this country. The ideas instilled in that document are at the core of what this country has traditionally stood for and for that reason it is important.

They're important because it's tradition? I'd disagree with that perspective.

I'm not sure how to explain it more and maybe non-Americans can't relate to it.

Maybe you're right.

Also, legally, it is the primary law of the land in that all other laws must fall in line with it as well.

Would you agree that such a strict adherence to a constitution could stifle necessary change or slow progression?

Example?

I'll give you two.

Codelco and British Rail. I'm talking about Chile and the UK.

 

[SpayAndNeuterLibs]

The telecommunications industry was an example and as a socialist, my aim is to destroy capitalism in the most painless fashion.

One thing is for sure. If you believe government is the solution, then you truly are a socialist as you claim to be. Is there anything I can do to cure you of your disillusionment?

 

[Dirk]

One thing is for sure. If you believe government is the solution, then you truly are a socialist as you claim to be. Is there anything I can do to cure you of your disillusionment?

I am a socialist and i see government as an obstacle to socialism.

 

[myp]

They're important because it's tradition? I'd disagree with that perspective.

Not because they are tradition, but because they worked better than any form of government before it and to this date.

Would you agree that such a strict adherence to a constitution could stifle necessary change or slow progression?

The Constitution can be Constitutionally amended. Furthermore, the document leaves a lot of power to the states and people, on which there are of course fewer restrictions. For example, if a state wants to have a health care mandate or bailout, it is not unconstitutional, but on the Federal level it is.

I'll give you two.

Codelco and British Rail. I'm talking about Chile and the UK.

Not familiar with those two, but I will read up on them (particularly on the financial and efficiency statistics) and get back to you.

 

[David]

Okay...?



They're important because it's tradition? I'd disagree with that perspective.



Maybe you're right.



Would you agree that such a strict adherence to a constitution could stifle necessary change or slow progression?



I'll give you two.

Codelco and British Rail. I'm talking about Chile and the UK.

It's an American thing. We're raised to be fanatically loyal to the Constitution and by extension the state while simultaneously to also be suspicious of the gov't. Most of the political ideologies that we have have this core belief in common. It seems to be eroding, hanse all the unconstitutional acts being undertaken but that's what free speech and guns are for. Protest and if that fails, rebel.

I think the most potent example of this is how some people call for secession in some states and yet are considered to be hardcore patriots. It seems to be counteractive at 1st glance to most non-Americans. It's not, just unequal American values being actively and publicly acted out.

 

[deanhills]

It's an American thing. We're raised to be fanatically loyal to the Constitution and by extension the state while simultaneously to also be suspicious of the gov't. Most of the political ideologies that we have have this core belief in common. It seems to be eroding, hanse all the unconstitutional acts being undertaken but that's what free speech and guns are for. Protest and if that fails, rebel.

I think the most potent example of this is how some people call for secession in some states and yet are considered to be hardcore patriots. It seems to be counteractive at 1st glance to most non-Americans. It's not, just unequal American values being actively and publicly acted out.

Enjoyed this posting! Would you then also say that that same loyalty to the Constitution is also what gets Americans to sign a blank cheque for a 1.2 trillion bailout package, no questions asked, no report back expected?

 

[myp]

Enjoyed this posting! Would you then also say that that same loyalty to the Constitution is also what gets Americans to sign a blank cheque for a 1.2 trillion bailout package, no questions asked, no report back expected?

Most Americans did not support the bailouts let alone sign a check for them. That was the work on Congress and the President.

 

[David]

Enjoyed this posting! Would you then also say that that same loyalty to the Constitution is also what gets Americans to sign a blank cheque for a 1.2 trillion bailout package, no questions asked, no report back expected?

Loyalty to the Constitution is why most Americans got angry about it, a few going so far as to go armed to gov't functions just to give a little reminder.