@Ganymede said in Real World Peeves, Disgruntlement, and Irks.:
@Jeshin said in Real World Peeves, Disgruntlement, and Irks.:
Privatizing profits - When the economy is good only those invested benefit.
Private ownership of the means of production is the hallmark of any capitalist nation. This is true even in socialist nations, where people are allowed to own real and personal property. I do not understand why it is morally wrong to retain the profits one earns through one's labor and/or property.
Socializing losses - When the economy is bad suddenly the Government (via taxpayers) should come help a company that was all about profit for their shareholders and nothing else before. Suddenly it's in the national interest.
The fundamental principle of socialism is to enact policy to benefit the most people rather than favor a smaller group. Said another way, government should act in a way that benefits the greater good. Where there is catastrophe, a socialist nation should move to allocate government resources to where the most can benefit, and this is morally good, in my opinion. But this is also, as you put it, "socializing losses." Another way to put it is "insuring against common risk." I therefore do not see how "socializing losses" is morally wrong.
Socializing losses is a direct transfer of wealth from the tax payers to those who own assets. In essence you're telling asset owners that they should feel free to pursue maximum risk strategies with no concerns whatsoever because if anything ever goes wrong, that will be paid by the tax payers.
Now if you genuinely think that the purpose of a good government is to funnel money from those who pay taxes into the pockets of those who own assets, I'm sure you can view that as a good thing. However I happen to think that a good government should be trying to make the people as a whole prosperous rather then a wealthy minority pursuing high risk strategies.
If we're looking at the US specifically. A lot of companies used the low interest rate as an opportunity to take very large loans which they then used to buyback stocks to the benefit of senior executives who get paid in stocks. Now that there is a crisis, those companies have a huge debt and no revenue. Without intervention those companies are looking at a stock value of 0 dollars and a complete asset liquidation.
What possible benefit is it to society at large to bail out the creditors who gave out those loans and executives and investors who benefited from those buybacks? That's a straight up transfer of wealth to people who engaged in reckless behavior for short-term profit.
The correct thing to do in my opinion isn't to bail out the investors and the creditors, it's for the Government to force the investors and the creditors to take the loss, because they deserve that loss and take over the company so it can hopefully be resold to someone more responsible.