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Old 2022-05-23, 19:22   #1
kriesel
 
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Question GM bankruptcy (moved)

Quote:
Originally Posted by rogue View Post
Regulations have a function, whether it is to protect the employees, the local community, the environment, or the consumer. As for "oppressive ruinous confiscatory levels of taxation", do you have concrete examples of that in the US? I can argue that I don't see many businesses or wealthy people hurt by high taxes. I see an increasing gap between the wealthy and the poor. I see businesses making record profits while passing costs on to the consumers to protect a ridiculous profit margin.
During the GM bankruptcy proceedings, conservative-owned dealerships were TERMINATED. Effectively their franchise rights were confiscated, their businesses forced to close, by the Obama administration because of their political leanings. Numerous businesses died during the pandemic (~200k in the US more than normal, in part due to harmful government policies).
The rapid conversion of the US from a net exporter of energy to net importer in the past 18 months due to executive orders and predictable consequent jump in energy costs comes to mind also.
As does the proposal to tax UNREALIZED capital gains; taxing projected income an investor has not received and may never receive. Under some conditions, the total annual taxes and fees due (property, sales, state income, federal income, FICA, etc, and things, like IRMAA "income related medicare adjustment amount" which is an income tax surcharge by another name, vehicle licenses, recreational licenses, mandated insurance, etc) might exceed the taxpayer's actual real income. I know someone whose property taxes alone (on a modest dwelling) exceeded his income for 2021.

And all that is without considering the hidden tax imposed by deficit spending and inflation. Actual assets' numerical prices expressed in increasingly worthless currency go up and up, and while the true value may have changed hardly at all, or declined, the difference in sale price expressed in say year 2030 dollars vs. year 2000 dollars acquisition cost is largely a phantom mathematical "profit" that is a misrepresentation of conversion of savings from income or an inheritance from one form to another, so that it can be taxed again as fictitious income (capital "gains"). I'm old enough to remember when $20,000 would buy a nice new house, not merely a modest used car. The eventual value of essentially all real estate improvements or other durable goods is zero or less, not indefinitely increasing. Demolition and disposal at end of useful life uses labor and resources, costs money.
The US government has long been cooking the books to under-represent inflation indicators such as the consumer price index, including by treating substitution of lower value goods as not reflecting a cost increase. (Porterhouse steak or ribeye replaced by hamburger and then chicken/pork ground scrap hot dogs.)
Even so, for income tax purposes, capital gains are computed as if a 1976 dollar and a 2022 dollar had the same value. (I sure can't get a whole satisfying meal at McDonalds for 87 cents like in 1976.) While the tax rates are held constant in numerical values, inflation pushes fixed OR GRADUALLY DECLINING real value incomes into higher numerical amounts and therefore higher tax brackets over time. https://adjusted-for-inflation.com/us-household-income/
Inflation also yields numerically higher stock price numbers and "record" profit numbers even if the real values are unchanged or gradually declining.
Consider what your monthly income may be, as measured in gallons of gasoline at market price, rather than as expressed in fiat currency of no intrinsic value. I take the rate of increase of cost of a basket of items (food, electricity, housing, fuel, real estate, stocks) as an indicator of the real inflation rate; roughly 15+% annually, not the fictional 8% the government is peddling.
There is a considerable difference between the Rahn curve (what may be best in some sense for the nation and its citizens, maximizing economic growth rate) and the Laffer curve (what may be best in some sense for a nation's government and its government employees, maximizing tax revenues).
These are the sorts of problems that appear when a government is much too large for its own good, much less the nation's good.

Last fiddled with by EdH on 2022-05-24 at 13:22
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Old 2022-05-23, 19:32   #2
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kriesel, I appreciate that you "know your stuff". I cannot debate your points as I don't have knowledge in those areas.

I do agree that the US has been "cooking the books" for many years across many administrations. I fear what will happen when the bills come due.
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Old 2022-05-23, 23:25   #3
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Quote:
Originally Posted by kriesel View Post
During the GM bankruptcy proceedings, conservative-owned dealerships were TERMINATED. Effectively their franchise rights were confiscated, their businesses forced to close, by the Obama administration because of their political leanings.
<snip>
Last time I checked, bankruptcy proceedings were in the purview of the Judicial branch, not the Executive.
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Old 2022-05-24, 00:19   #4
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DOJ is part of the executive branch and was involved. Found in a few seconds online search. https://www.bakerdonelson.com/files/...titutional.pdf

Re the disproportionate impact on Republican donor dealership owners:
https://www.usnews.com/opinion/blogs...er-dealerships

Some resulting suits: https://lasvegassun.com/news/2011/fe...car-dealershi/

This article describes how ruinous the terminations could be for the businessmen with dealerships.
https://www.latimes.com/archives/la-...rs8-story.html
Elsewhere it's mentioned that GM dealers got over a year to wind down, but Chrysler dealers only 26 days.

There was also the news item that Obama in effect fired the Chrysler CEO. That's the stockholders' or board's call, not his.

Top auto execs also were told not to use the corporate jets the companies already owned and maintained, when called to Washington. These were very expensive people. The GM CEO's requested resignation was expensive too. https://www.cnn.com/2009/US/03/30/gm...ion/index.html "Wagoner announced Monday he was resigning at the request of the Obama administration"

“The big bad wolves in this,” said A. Bailey Wood, Jr., Director of Legislative Affairs and Communications and spokesperson for NADA, “is the Obama administration because they demanded these [franchise dealerships] be closed. Obama was the one pushing these dealerships to be closed there is absolutely no reason that closing these dealerships made any sense, it was a Wall Street play: The Obama administration likes to talk about shared sacrifice; the reality is that dealerships don’t cost manufacturers a dime – they rent that sign (GM, FORD, etc.) from the dealership – closing dealerships wouldn’t make any dealership more profitable or viable but Obama demanded they be closed.”
https://www.stgeorgeutah.com/news/ar.../#.YowmQ1TMJhE
This article indicates Congress was also involved, so all 3 branches. Too many cooks...

In Madison WI the very large Thorstadt Chevrolet complex sat vacant for many years.

Last fiddled with by kriesel on 2022-05-24 at 00:53
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Old 2022-05-24, 02:59   #5
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Ah, yes, the TARP program. It's all coming back to me now. The Bush Admin loaned GM something over ten billion, the Obama Admin "loaned" a lot more, much of it in the form of buying GM stock. So the government was at the table because it was a creditor.

GM paid back the government loans with money it took from other TARP accounts. Treasury sold off the GM stock for a lot less than it had bought it for. The main political consideration appears to have been, getting this off the Admin's plate as quickly as possible.

AFAICT it was bankruptcy rules that dictated which dealers had to be closed, not the political leanings of the dealer managers. And the Admin did not make those calls. Chapter 11 rules allow the company or a bankruptcy judge - not creditors - to nullify existing contracts.

NADA knew that at least 900 dealers would be closed without a bankruptcy, but that hundreds more than that would be closed with a bankruptcy filing. Which is why they fought against a bankruptcy filing. After the filing, NADA did manage to gain some flexibility for dealers - the possibility of selling different models, or arbitration. These remedies were often not applied, or did not work in the dealwers' favor, however.

With Treasury a major stockholder, right-wing pundits clamored for a boycott of "Government Motors."

I'm not sure what would have happened without the government bailout. Perhaps GM would have gone to Chapter 7 - liquidation.

I am brought to mind of the government bailout, circa 1971, of a major military contractor, Lockheed. It was something like 250 million dollars in government loans. I remember a cartoon of the time showing some of the Lockheed "suits" in a room, gleefully counting the money. A doorkeeper to the room was motioning them to hide it. A man was at the door asking to see the Board of Directors because, "It seems that, as a taxpayer, I am a majority stockholder..."

Purely coincidentally, Lockheed had been involved in a bribery scandal with foreign governments, notably Japan, from around 1950 to 1970. The Japanese were shocked - shocked! - that their folks involved in buying aircraft had taken bribes from a foreign company!
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Old 2022-05-24, 13:02   #6
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There's a lengthy description in a wikipedia article. https://en.wikipedia.org/wiki/Genera...reorganization
I'd appreciate it if a moderator would fix the misspelling of bankruptcy in this thread's title (not my doing, although it might appear to some to be).
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Old 2022-05-24, 15:32   #7
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"Organizations rot from the top down, not from the bottom up."

~Richard Parks in "Meltdown: Three Mile Island."

Last fiddled with by storm5510 on 2022-05-24 at 15:58
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Old 2022-05-24, 17:59   #8
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Quote:
Originally Posted by kriesel View Post
...
I'd appreciate it if a moderator would fix the misspelling of bankruptcy in this thread's title (not my doing, although it might appear to some to be).
Sorry for the misspelling of that word : it is my doing. It is not in my powers to correct the thread title. Someone with more powers will have to do that (if they feel like it.)
I'll sign : it is my wrongdoing (even if this costs 6 bytes.)
Jacob

Last fiddled with by S485122 on 2022-05-24 at 18:02 Reason: forgot to explain about the limits of my powers
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Old 2022-05-24, 18:18   #9
xilman
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Quote:
Originally Posted by S485122 View Post
Sorry for the misspelling of that word : it is my doing. It is not in my powers to correct the thread title. Someone with more powers will have to do that (if they feel like it.)
I'll sign : it is my wrongdoing (even if this costs 6 bytes.)
Jacob
Fixed even before I tried to fix it.
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