"have been funneled into social services" Thos jobs pay for the social services of many, and if GM and Ford went kaput, it would wipe out the governments abili

"have been funneled into social services" Thos jobs pay for the social services of many, and if GM and Ford went kaput, it would wipe out the governments ability to pay for those services. Now - I'm not saying it's the right thing to subsidize, but in a 'subsidize or collapse' situation, that is the reality. A corporation has many stakeholders: execs, staff, buyers, suppliers, investors, debtors, and then all the ancillary people who benefit independently - they're all in a power struggle to share in the surpluses. If a company is facing legit collapse, and the investors are truly willing to bite the bullet, it's because they don't think their is incentive there for them. The surpluses generated may actually be going into the other entities in the power equation: just because investors own the profits does not mean that profits represent the big chunk of surpluses. My ex-neighbour was a long-tim plant worker, he earned quite a lot, granted he was senior - those are in fact plumb jobs that often pay way above others when you factor healthcare, retirement etc.. Also consider low turnover - most people change jobs every few years and lose a few months pay. When you work in an auto plant, for a bank, for the government etc. the stability factor is a real economic benefit you can calculate. It's hard to tell if companies are bluffing or not, but in many cases they are not - and it illustrates really where the surpluses are and it's not with them. There's a big Boeing 777 business case that's used in B-School for accounting, and it basically demonstrates that the project is kind of a loser for them, and they should not invest. But the government came along with incentives, making it worthwhile. It's not a paradox, it's just a lesson in who profits from what and how.