7 ms·

What I learned in school growing up was that if I lose a bunch of money gambling at the casino with my credit card, I don't get a free bailout from the governme

What I learned in school growing up was that if I lose a bunch of money gambling at the casino with my credit card, I don't get a free bailout from the government. But maybe things have changed?

close04 7y ago
Companies get a bailout based on how big the fallout is if they fail (lost jobs, lost value for the economy, etc.) or how much value is expected they'll bring if they're saved. Like investing in Tesla even when they constantly lost money because you expect it to recover and bring you a profit. I am not considering any other interests involved, lobbying, bribes, etc. While important I'm sure the first part is already sufficient to explain what's behind a bailout. This creates some really bad incentives for companies and their executives. If you are not in the position to have such an impact, either good or bad, then nobody will ever bother to bail you out.
- SilasX 7y ago
  >Companies get a bailout based on how big the fallout is if they fail (lost jobs, lost value for the economy, etc.) or how much value is expected they'll bring if they're saved It's more like, they get bailout based on how big they can convince lawmakers, in an environment of little public debate, that will be. I know, it sounds like a nitpick, but sometimes the distinction is big.
  - close04 7y ago
    > I know, it sounds like a nitpick No, you're right. It's always about the perceived value or impact. And that perception can be formed by deceiving, bribing, showing your books, etc.
- lowdose 7y ago
  No all these companies in need of a bailout are suits without skin in the game. Elon took a big risk with his own money which means you as shareholder of Tesla are shielded from the classic agency problem. Suits empty the company in good times and when shit hits the fan they put their hands in the air and say "well I did my best".
  - quickthrowman 7y ago
    On the other hand, Elon Musk’s personal finances are so closely tied to the success of TSLA that he has an incentive to stretch the truth and push the limits to pump the stock price up. See ‘offer to go private at $420’ and the delivery numbers reported AH yesterday followed by a huge fade today, and that’s just scratching the surface. It’s usually not good when the SEC is chastising and/or disciplining the CEO of a company. I’m not long or short TSLA, just presenting the bear case :) I stick to trading the indices
  - close04 7y ago
    > No all these companies in need of a bailout are suits without skin in the game. You may be replying to the wrong comment. I explained the reasoning for bailouts in general. Your characterization is besides the point. I only gave Tesla as an example of investing based on future expectation of value, similar to the reasoning behind some bailouts. I wish people would stop getting so riled up at the mere mention of Tesla, so much so that reading comprehension flies out the window. This being said, at times Elon has also gone to great lengths to mislead the general public and the shareholders in order to pump up that value in critical moments ("funding secured", "virtually certain") or bailout family with other people's money (SolarCity). Court decisions already stand to confirm this. I guess everybody's "a suit" when it suits them.
    - lowdose 7y ago
      I hear you and also am against the bailouts. For me personally Elon gets a pass for his reality distortion field. I think when you are trying to bring real change especially in an area where we haven't seen progress for years.
HashThis 7y ago
The privileged class knows that congress sells us out. The privileged class are just again working to rob the masses to wealth transfer more to the privileged classes. Happens every year, some more visible than others. Hopefully this is one time congress won't sell us out.
- deleted 7y ago
  [deleted]
- kitotik 7y ago
  > Hopefully this is one time > congress won't sell us out. Uh, didn’t it already happen, again? Propping up aerospace and banks again with taxpayer money, sending only a fraction (call it a “token”) to SMBs, with near unchecked disbursement powers, seems like they’ve continued on their same general strategy of wealth consolidation.
  - siruncledrew 7y ago
    When the first tweets from the executive branch were “OMG we need to save Boeing!!!!” instead of “We need doctors and supplies!!!” that kinda summed up where the priorities were.
    - kitotik 7y ago
      Exactly. Made painfully clear with the messaging that “hey, a lot of people die from car crashes and the flu every year” directly followed by quotes of “these great American companies such as Boeing are NOT replaceable”. IOW: old and/or poor people are commodities easily replaced.
sytelus 7y ago
What your schhool didn't told you was that if you have super sized credit card, you can make friends in government and then you do get a free bailout provided you have few minimum wage workers you can threaten to layoff.
theandrewbailey 7y ago
It might be a variation on: If you owe the bank a million dollars, the bank owns you, but if you owe the bank a billion dollars, you own the bank.
- lotsofpulp 7y ago
  step 1: get sufficient voters invested in equities via index funds and ETFs, meaning pension fund investments, 401k, personal investments, etc. Step 2: bail out market each time as it’s politically untenable to let the broader market prices decline Socialism, but the higher % of total equity you own, the better the socialism works for you. Bonus if you have connections to people who can help you finance purchases, especially when the market is down.
  - cmrdporcupine 7y ago
    It's only "socialism" in the bizarre American definition where "socialism" = "anything government." Socialism is social ownership of the economy, what you're describing the opposite. There's another word for what you're describing, which is the extreme capture of the state by corporate entities: corporatism. The extreme form of which is fascism.
    - perpetualpatzer 7y ago
      >Socialism is social ownership of the economy Having a large portion of the population with fractional ownership over a broad portion of the economy (via ETFs, etc.) sounds a lot like "social ownership of the economy" to me. Unless, by social, you mean "equal" ownership (as GP points out).
      - cmrdporcupine 7y ago
        There's a yawning gap between your "fractional" and "equal" when you consider that the vast majority of the few million ETF and mutual fund shareholders with a few tens of thousands in their retirement accounts (if they're lucky) have an _extremely_ small fraction and really no voting power or control. I mean, they send me their prospectus. I can listen on the call. That's about it. And that's not even accounting for the fact that the majority of citizens don't even have retirement funds to get them through.
cmrdporcupine 7y ago
Marx said it 174 years ago... "The executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie" The state is created by the class of people who own capital, in order to mediate, protect, justify and manage a world in which they continue to own and profit from their ownership of capital.
- danharaj 7y ago
  I don't even know how this is controversial, and yet here we are. You said the Mx word, I guess.
  - cmrdporcupine 7y ago
    Whatever, it's just number points on the interwebbies. There is a libertarian tinge to discourse on HN, and libertarians have an opposite view of the state. I think this perspective on the state -- as "outside" and in permanent opposition to the market -- so permeates the dominant North American ideology that saying otherwise just sounds like nonsense to many people. I obviously don't think it's nonsense, but it doesn't surprise me it gets downvotes. I think it's sad though.
  - SpicyLemonZest 7y ago
    I'm just not sure what it means to talk about "the class of people who own capital". It seems to presume a country that's strictly divided between owners and workers, which hasn't been true for decades at this point; most Americans own at least a little capital.
    - cmrdporcupine 7y ago
      Americans, maybe. Worldwide, unlikely. But even saying that, having a mortgage and owning and having a few shares in your 401k ... you'd really call that owning capital? The depth of degree of difference between that and even the most minor members of a board of corporation is pretty huge. Not to mention it's very easy for us in the technical class to not even notice that the vast majority of the country isn't like us. Waiters at restaurants, house cleaners, and the typical taxi/Uber driver own 'capital' in only the most pedantic sense of the word. Honestly, with the wealth gap is wider than it's been since the 19th century, respectfully I think you're wrong.
raminf 7y ago
You do get to write-off your gambling losses, though. Not sure why, but there it is: https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you-claim-gambling-losses-on-your-taxes/L4lQ3IAWt https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you...
- nopzor 7y ago
  you can’t really write off your gambling loses, you can just use your loses to offset your winnings
twblalock 7y ago
These businesses are suffering because of the government's response to the virus -- an economic shutdown that was made necessary by the government's failure to act early and decisively like the governments of South Korea, Taiwan, and Singapore have done. This is not something the businesses brought on themselves by "gambling". Why isn't it reasonable for the government to compensate businesses (and people) who are suffering as a result of the government's screwup?
bob33212 7y ago
You are supposed to use another person's credit card after telling them that you have a system which can beat the casino

What I learned in school growing up was that if I lose a bunch of money gambling at the casino with my credit card, I don't get a free bailout from the government. But maybe things have changed?

close04 7y ago

Companies get a bailout based on how big the fallout is if they fail (lost jobs, lost value for the economy, etc.) or how much value is expected they'll bring if they're saved. Like investing in Tesla even when they constantly lost money because you expect it to recover and bring you a profit. I am not considering any other interests involved, lobbying, bribes, etc. While important I'm sure the first part is already sufficient to explain what's behind a bailout. This creates some really bad incentives for companies and their executives. If you are not in the position to have such an impact, either good or bad, then nobody will ever bother to bail you out.

SilasX 7y ago
>Companies get a bailout based on how big the fallout is if they fail (lost jobs, lost value for the economy, etc.) or how much value is expected they'll bring if they're saved It's more like, they get bailout based on how big they can convince lawmakers, in an environment of little public debate, that will be. I know, it sounds like a nitpick, but sometimes the distinction is big.
- close04 7y ago
  > I know, it sounds like a nitpick No, you're right. It's always about the perceived value or impact. And that perception can be formed by deceiving, bribing, showing your books, etc.
lowdose 7y ago
No all these companies in need of a bailout are suits without skin in the game. Elon took a big risk with his own money which means you as shareholder of Tesla are shielded from the classic agency problem. Suits empty the company in good times and when shit hits the fan they put their hands in the air and say "well I did my best".
- quickthrowman 7y ago
  On the other hand, Elon Musk’s personal finances are so closely tied to the success of TSLA that he has an incentive to stretch the truth and push the limits to pump the stock price up. See ‘offer to go private at $420’ and the delivery numbers reported AH yesterday followed by a huge fade today, and that’s just scratching the surface. It’s usually not good when the SEC is chastising and/or disciplining the CEO of a company. I’m not long or short TSLA, just presenting the bear case :) I stick to trading the indices
- close04 7y ago
  > No all these companies in need of a bailout are suits without skin in the game. You may be replying to the wrong comment. I explained the reasoning for bailouts in general. Your characterization is besides the point. I only gave Tesla as an example of investing based on future expectation of value, similar to the reasoning behind some bailouts. I wish people would stop getting so riled up at the mere mention of Tesla, so much so that reading comprehension flies out the window. This being said, at times Elon has also gone to great lengths to mislead the general public and the shareholders in order to pump up that value in critical moments ("funding secured", "virtually certain") or bailout family with other people's money (SolarCity). Court decisions already stand to confirm this. I guess everybody's "a suit" when it suits them.
  - lowdose 7y ago
    I hear you and also am against the bailouts. For me personally Elon gets a pass for his reality distortion field. I think when you are trying to bring real change especially in an area where we haven't seen progress for years.

HashThis 7y ago

The privileged class knows that congress sells us out. The privileged class are just again working to rob the masses to wealth transfer more to the privileged classes. Happens every year, some more visible than others. Hopefully this is one time congress won't sell us out.

deleted 7y ago
[deleted]
kitotik 7y ago
> Hopefully this is one time > congress won't sell us out. Uh, didn’t it already happen, again? Propping up aerospace and banks again with taxpayer money, sending only a fraction (call it a “token”) to SMBs, with near unchecked disbursement powers, seems like they’ve continued on their same general strategy of wealth consolidation.
- siruncledrew 7y ago
  When the first tweets from the executive branch were “OMG we need to save Boeing!!!!” instead of “We need doctors and supplies!!!” that kinda summed up where the priorities were.
  - kitotik 7y ago
    Exactly. Made painfully clear with the messaging that “hey, a lot of people die from car crashes and the flu every year” directly followed by quotes of “these great American companies such as Boeing are NOT replaceable”. IOW: old and/or poor people are commodities easily replaced.

sytelus 7y ago

What your schhool didn't told you was that if you have super sized credit card, you can make friends in government and then you do get a free bailout provided you have few minimum wage workers you can threaten to layoff.

theandrewbailey 7y ago

It might be a variation on: If you owe the bank a million dollars, the bank owns you, but if you owe the bank a billion dollars, you own the bank.

lotsofpulp 7y ago
step 1: get sufficient voters invested in equities via index funds and ETFs, meaning pension fund investments, 401k, personal investments, etc. Step 2: bail out market each time as it’s politically untenable to let the broader market prices decline Socialism, but the higher % of total equity you own, the better the socialism works for you. Bonus if you have connections to people who can help you finance purchases, especially when the market is down.
- cmrdporcupine 7y ago
  It's only "socialism" in the bizarre American definition where "socialism" = "anything government." Socialism is social ownership of the economy, what you're describing the opposite. There's another word for what you're describing, which is the extreme capture of the state by corporate entities: corporatism. The extreme form of which is fascism.
  - perpetualpatzer 7y ago
    >Socialism is social ownership of the economy Having a large portion of the population with fractional ownership over a broad portion of the economy (via ETFs, etc.) sounds a lot like "social ownership of the economy" to me. Unless, by social, you mean "equal" ownership (as GP points out).
    - cmrdporcupine 7y ago
      There's a yawning gap between your "fractional" and "equal" when you consider that the vast majority of the few million ETF and mutual fund shareholders with a few tens of thousands in their retirement accounts (if they're lucky) have an _extremely_ small fraction and really no voting power or control. I mean, they send me their prospectus. I can listen on the call. That's about it. And that's not even accounting for the fact that the majority of citizens don't even have retirement funds to get them through.

cmrdporcupine 7y ago

Marx said it 174 years ago... "The executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie" The state is created by the class of people who own capital, in order to mediate, protect, justify and manage a world in which they continue to own and profit from their ownership of capital.

danharaj 7y ago
I don't even know how this is controversial, and yet here we are. You said the Mx word, I guess.
- cmrdporcupine 7y ago
  Whatever, it's just number points on the interwebbies. There is a libertarian tinge to discourse on HN, and libertarians have an opposite view of the state. I think this perspective on the state -- as "outside" and in permanent opposition to the market -- so permeates the dominant North American ideology that saying otherwise just sounds like nonsense to many people. I obviously don't think it's nonsense, but it doesn't surprise me it gets downvotes. I think it's sad though.
- SpicyLemonZest 7y ago
  I'm just not sure what it means to talk about "the class of people who own capital". It seems to presume a country that's strictly divided between owners and workers, which hasn't been true for decades at this point; most Americans own at least a little capital.
  - cmrdporcupine 7y ago
    Americans, maybe. Worldwide, unlikely. But even saying that, having a mortgage and owning and having a few shares in your 401k ... you'd really call that owning capital? The depth of degree of difference between that and even the most minor members of a board of corporation is pretty huge. Not to mention it's very easy for us in the technical class to not even notice that the vast majority of the country isn't like us. Waiters at restaurants, house cleaners, and the typical taxi/Uber driver own 'capital' in only the most pedantic sense of the word. Honestly, with the wealth gap is wider than it's been since the 19th century, respectfully I think you're wrong.

raminf 7y ago

You do get to write-off your gambling losses, though. Not sure why, but there it is: https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you-claim-gambling-losses-on-your-taxes/L4lQ3IAWt https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you...

nopzor 7y ago
you can’t really write off your gambling loses, you can just use your loses to offset your winnings

twblalock 7y ago

These businesses are suffering because of the government's response to the virus -- an economic shutdown that was made necessary by the government's failure to act early and decisively like the governments of South Korea, Taiwan, and Singapore have done. This is not something the businesses brought on themselves by "gambling". Why isn't it reasonable for the government to compensate businesses (and people) who are suffering as a result of the government's screwup?

bob33212 7y ago

You are supposed to use another person's credit card after telling them that you have a system which can beat the casino