NationStates Jolt Archive

Amongst conservatives, libertarians and liberals of all persuasions, I think we concentrate on social welfare at the expense of discussing an equally important issue-- Corporate welfare.

I am strongly against it in any form as I believe it grossly distorts the free market.

Current corporation law gives them the legal status of "personhood," which is a fictional concept. Clearly, this concept is not reasonable so long as corporations have special protections and dispensations from government that individuals do not have. After all, if individuals don't have these protections like corporations do, corporations cannot reasonably be considered to have "personhood."
I believe corporations should have no greater legal standing than individuals do. They should essentially be joint-stock ventures with unlimited liability, just as individuals have unlimited liability. There should be no special restrictions of any kind and no special grants of power either.

Now I don't villify corporations like some groups do. A good corporation offers jobs, and to be successful, offers products or services that people choose to purchase. But giving out handouts to any corporation negates the benefits of a free market system, namely competition.

I say it's time we started paying attention to corporate welfare, and put an end to this unfair practice once and for all.

I couldn’t have said it better myself. Bravo.

We'd probably have functional health and welfare systems if less was poured into corporate welfare, but I guess rich greedy people have more influence than struggling poor people.

We'd probably have functional health and welfare systems if less was poured into corporate welfare, but I guess rich greedy people have more influence than struggling poor people.
It didn't take very long for someone to hijack this thread and turn it into a discussion about social welfare. :rolleyes:

Stay on topic, please. There's a hundred other threads in which you may discuss social, not corporate welfare. Move your soapbox to one of them.

It didn't take very long for someone to hijack this thread and turn it into a discussion about social welfare. :rolleyes:

Stay on topic, please. There's a hundred other threads in which you may discuss social, not corporate welfare. Move your soapbox to one of them.

Oh fine. If you want it that way.

The trouble with corporate welfare in general is it totaly distorts the market.
The big corporations get lions share of it, and tend to dominate the market they are in because the smaller players are already at an disadvantage as they get less corporate welfare. So what happens to prices in a monopoly or oligopoly situation with the big boys are in charge, higher prices and less competition. Hence the less financially well of suffer. It's a really good way to make people poor. That's why corporate welfare is not good.

You seem to have misunderstood limited liability. What it means is that when a corporation goes bankrupt it doesn't exists any more. A corporation without limited liability would not be a corporation. And if an employee of a corporation hurts you, you can still get the same amount of damages as if there was no limited liability. The only time you see a negative side of limited liability is when you have lent money to a corporation that goes bankrupt. Then you cannot go after the owners to get your money. And that you know before lending, so you can avoid all harm by not lending money to corporations.

That said, you are right in that we should really put an end to corporate welfare. Taking money or other property from people to help a corporation is theft.

You seem to have misunderstood limited liability. What it means is that when a corporation goes bankrupt it doesn't exists any more. A corporation without limited liability would not be a corporation. And if an employee of a corporation hurts you, you can still get the same amount of damages as if there was no limited liability. The only time you see a negative side of limited liability is when you have lent money to a corporation that goes bankrupt. Then you cannot go after the owners to get your money. And that you know before lending, so you can avoid all harm by not lending money to corporations.

That said, you are right in that we should really put an end to corporate welfare. Taking money or other property from people to help a corporation is theft.
I understand limited liability enough to know that individuals can hide behind the LLC laws to avoid directly being sued. Like you said, I cannot go after the owner(s) to get my money. To me, that's certainly a special privelage that corporations have above, say, a typical small business (I'm a small business owner who could lose everything were I ever successfully sued).

Either way, we seem to agree that corporations should have no unfair advantages that people cannot possess for themselves.

I understand limited liability enough to know that individuals can hide behind the LLC laws to avoid directly being sued. Like you said, I cannot go after the owner(s) to get my money. To me, that's certainly a special privelage that corporations have above, say, a typical small business (I'm a small business owner who could lose everything were I ever successfully sued).

Either way, we seem to agree that corporations should have no unfair advantages that people cannot possess for themselves.

That's the funny thing about corporations. They have the same of "rights" as people and more! Small business can't really compete as corporate welfare has been built into the capitalist system now - it's distortionary and really political interferance from government as part of the market mechanism.

Thought out becoming a corporation? If only on paper?

Either way, we seem to agree that corporations should have no unfair advantages that people cannot possess for themselves.
A "Corporation" is essentially a legal entity, and as such defined differently to a legal entity known as an individual.
If there weren't any special treatment for a corporation, it wouldn't be a corporation anymore, it would be a...a partnership? Someone with a Law Degree help out here!

Thought out becoming a corporation? If only on paper?
I've thought about it, but I'd kinda feel like a hypocrite. Although in the current legal and political climate, I may have to. :(

Someone with a Law Degree help out here!
Where's Cat-Tribe when ya need him?

I'm not a lawyer but in Australia there's many "types" of businesses

Sole Trader/Proprietorship - one person company (no Limited Liabilty)
Partnership - owned by many people (no Limited Liabilty)
Not-for-profit organisation - covered by the Incorporations Act (known as <name here> Pty)
Corporation (for-profit organisation) - covered by Corporations Act (known as <name here> Pty Ltd)
Government owned business - one of those pseudo government private businesses

I've thought about it, but I'd kinda feel like a hypocrite. Although in the current legal and political climate, I may have to.

I don't know enough about corporate welfare to make a judgement.

As for limited liability:
That is a bare necessity. It makes a company its own entity. When that company commits suicide (bankrupt) you can no longer suck money from it. Without limited liability the only difference would be that people would be so deep in debt that they would never be able to pay it off. Either way, the people aren't getting their money.

Partnership - owned by many people (no Limited Liabilty)
:) So I was right then.

Besides some interesting talk about the nature of corporate law, it seems that everyone so far has been strongly against corporate welfare.

Don't you find it funny that this is never, ever brought up by either party as a harmful practice that should be stopped? I wonder why... ;)

Some glaring examples of corporate welfare that should never be repeated are when the government bails out a corporation or an entire industry.

The Chrysler event, the savings and loan bail-out, recent bankruptcies with airlines. The S&L scandal cost taxpayers about $400 billion. I don't think there should be a parachute for corporations - they accept risk in return for possible profit, a fatal error should be just that.

Governments or political connections should not guarantee favorable terms in event of failure.

Some glaring examples of corporate welfare that should never be repeated are when the government bails out a corporation or an entire industry.

The Chrysler event, the savings and loan bail-out, recent bankruptcies with airlines. The S&L scandal cost taxpayers about $400 billion. I don't think there should be a parachute for corporations - they accept risk in return for possible profit, a fatal error should be just that.

Governments or political connections should not guarantee favorable terms in event of failure.

Ah but the price of failure can be great. Some compaines go down and take many with them.

The Government has the power to stop thousands of people from losing jobs by meddling in failed companies, won't they catch hell from their constituents if they don't? If all the airlines go under, what will all those travellers do until more airlines are slowly built by the market forces? Suffer?

I'm not arguing that its right, but I AM arguing that its a clear moral hazard. Which is more likely to sway a politician, the painful long term solution, or the quick and easy bail out?

I don't think that corporations should have more rights than individuals. There is also another point I would like to put out there - that corporate welfare is sometimes good because eventually the government makes more money back in tax revenues from the now-successful corporation than it put in.

Partnership - owned by many people (no Limited Liabilty)

Rules vary nation to nation; but partnerships can be incorporated. Also there is something called a limited partnership; don't ask me what the difference between incorporating a partnership and creating a limited partnership; I don't know if there is and how much it varies from nation to nation.

I understand limited liability enough to know that individuals can hide behind the LLC laws to avoid directly being sued. Like you said, I cannot go after the owner(s) to get my money. To me, that's certainly a special privelage that corporations have above, say, a typical small business (I'm a small business owner who could lose everything were I ever successfully sued).

Either way, we seem to agree that corporations should have no unfair advantages that people cannot possess for themselves.

Typically, small business owners incorporate themselves to protect their personal assets. At least, intelligent small business owners do. If you choose not to protect your assets, its your fault if bankruptcy sends you to the poor house. You had the option to incorporate and chose not to.

Limited liability promotes entrepeneurship by limiting the risks an entrepeneur has to be willing to accept. The lower the risks, the higher the chance that a person will be willing to undertake a business venture. When new businesses are created new jobs are created, new wealth is created, and competition is increased which helps everyone. Limited liability is a necessity for an economy to thrive.

Also, limited liability promotes capital investment (buying stocks, for example). This is a good thing because it provides companies with money to grow and as they grow they create more jobs, more wealth, and share that wealth with their investors. If limited liability did not exist, then buying a stock would be a very risky endeavor. If you bought stocks in Enron in the 90s, believing it to be a strong company likely to help your portfolio grow, its collapse couldve led not just to the loss of all the money you invested in it but to the loss of your car, your house, and other personal assets. How many people would be willing to invest in the stock market with the knowledge that they arent just risking their investment, they are risking everything they own?

Think of the implications this would have to a person's retirement funds. If one company does something like Enron did, the bankruptcy and law suits could cost you not just the portion of your money that was invested in that stock, but all of your retirement savings because they are fair game without limited liability. A 401k plan would no longer be a viable retirement instrument because the risk would be too high.

I see nothing wrong with unlimited liability, though the legal system and the accounts have to be well done. Which unfortunately like the Enron case, people are susceptible to taking underdesk money and fudging accounts.

I thought we've moved into the information age darn!

Ah, it'd be nice if corporate welfare was finally taken out of the economy, but there is a better chance of me living to see Ralph Nader rule China.

Two thing piss me off about corporations rights:

First, media can destroy a person reputation with basically with pure lies with no repercussion, but shouldn't they dare to pronounce McDonald and a bad word in the same sentence even to denounce real thing.

Second, how some business owner can go free even after blatant fraud.

Some glaring examples of corporate welfare that should never be repeated are when the government bails out a corporation or an entire industry.

The Chrysler event, the savings and loan bail-out, recent bankruptcies with airlines. The S&L scandal cost taxpayers about $400 billion. I don't think there should be a parachute for corporations - they accept risk in return for possible profit, a fatal error should be just that.

Governments or political connections should not guarantee favorable terms in event of failure.
I'm far from favoring preferential treatment of anyone when it comes to subsidies and tax breaks, but there are a couple things that just rub me the wrong way in this post.

The Chrysler "event" was a loan guarantee, not a giveaway. If you're referring to the ~1980 guarantees that Iacocca got, Chrysler never got a dime from the government.

The S&L scandal was a mess and could have been better handled than it was. I don't think the gov't should have been in the business of selling real estate -- that should have been contracted out. But, what if the S&Ls were allowed to fail and the Fed had to cover all the lost deposits on their FDIC insured deposits? I think that might have been even worse than it was.

just listened to a Democracy Now! podcast the other day about this sort of stuff, talking about how despite claims of 'making jobs' and bringing in tax revenue, most of these corporations dont really do that. (especially if you consider that something like a walmart can kill x amount of small local businesses, which could both employ more people and pay more taxes) in addition to the amount of welfare needed to support people working there, since it is rare that these corporations pay livable wages.

some of the suggestions were that if the government provides grants, or tax-cuts, that they come with a 'money-back guarantee' sort of deal, in that if the corporation does not provide x amount of jobs, growth, or tax revenue, then it has to return all that money.

also, suggested adding stipulations to the grants/tax breaks, such as hiring from the local populace, providing actual living wages and health benefits for employees, etc.

they cited a recent case (though they did admit it was unusual) where a? i think it was a computer company? recently moved, and betwixt state and federal grants, recieved 300 million for a facility that only costs 100 million....

I'm far from favoring preferential treatment of anyone when it comes to subsidies and tax breaks, but there are a couple things that just rub me the wrong way in this post.

The Chrysler "event" was a loan guarantee, not a giveaway. If you're referring to the ~1980 guarantees that Iacocca got, Chrysler never got a dime from the government.

The S&L scandal was a mess and could have been better handled than it was. I don't think the gov't should have been in the business of selling real estate -- that should have been contracted out. But, what if the S&Ls were allowed to fail and the Fed had to cover all the lost deposits on their FDIC insured deposits? I think that might have been even worse than it was.

True on both points. A better example of corporate welfare would be the hotly debated use of government funds for embryonic stem cell research. One has to be very careful with the elimination of all corporate welfare because without the ability of the government to rescue in extreme situations the effect could literally harm the entire nation. That said, politicians being people will abuse the power for their own objectives at every chance that presents itself. Tis a tangled web we weave.

Liverbreath']True on both points. A better example of corporate welfare would be the hotly debated use of government funds for embryonic stem cell research. One has to be very careful with the elimination of all corporate welfare because without the ability of the government to rescue in extreme situations the effect could literally harm the entire nation. That said, politicians being people will abuse the power for their own objectives at every chance that presents itself. Tis a tangled web we weave.
We see it different ways. If the government was to remove those silly regulations, the private sector would hop on the chance to start their own testing, since the results would prove to be extrememly profitable and heal millions.

We see it different ways. If the government was to remove those silly regulations, the private sector would hop on the chance to start their own testing, since the results would prove to be extrememly profitable and heal millions.

What silly regulations? There is nothing preventing private companies from stem cell research. There are dozens of them at it as we speak. If the private sector wants to research stem cells they are perfectly free to do so. But to give private companies taxpayer dollars to fund it is flat out corporate welfare. Where do we differ on opinion here? Why should private companies be given taxpayer dollars to fund their R&D?

well, i may be wrong on this, but i thought we had regulations and such preventing any new lines of human stem cells, and all of the research going on now has been done with a rather limited amount of human stem cell lines (sorry, i cant remember the actual number)

also, i was under the impression that govt funding towards scientific research didnt go towards corporations, but towards research facilities/universities? i would be upset (but not alltogether surprised) if it was going towards corporations.

With you %200. I am a Libertarian and therefore in favor of a free market. Not a market in which some industrial efforts are shown more favor than others by the government. BUt I do not think merely ending corporate bailouts and 'loan gaurantees' (If I could get the fed to insure my business loans I would certainly call that an advantage over my competitors!) is quite enough to level the playing feild. We must also look at taxations and regulations Such as fees and liscencing. By imposing these added costs on certain interests the fed DeFacto imposes an entry fee into certain industries above and beyond their operating costs. This gives unfair advantage to those who can afford these extra expenses over those who cannot.

well, i may be wrong on this, but i thought we had regulations and such preventing any new lines of human stem cells, and all of the research going on now has been done with a rather limited amount of human stem cell lines (sorry, i cant remember the actual number)

also, i was under the impression that govt funding towards scientific research didnt go towards corporations, but towards research facilities/universities? i would be upset (but not alltogether surprised) if it was going towards corporations.

The best reference I could find in five minutes was from an old USA Today article (http://www.usatoday.com/tech/news/techpolicy/2004-03-08-stem-cell-petition_x.htm). If this is a profitable line of R&D, then the biotech companies have every reason to pursue this without Federal support. I suspect they are just looking for an edge, like everyone else.

Government funding covers a large spectrum of recipients. Some grant money does go to universities, but SBIR funding can go to anyone that presents a good plan. Also, government acquisitions can be considered R&D funding if they are paying a large portion of NRE for the company involved.

I'm going to make the generalization that government grants to universities can be eliminated and the only folks that might be affected are the Profs that can't make it in industry. Maybe that would re-focus universities toward teaching as a part of achieving tenure as opposed to favoring those who can obtain the most grant money. That doesn't mean that a university can't establish a non-profit like GTRI or Lincoln Labs to work on legitimate government contracts.


On Aug. 9, 2001, President Bush announced that federal money would be available only for research on stem cell lines created before that date. While the National Institutes of Health identified 78 cell lines that met the restrictions, only 15 are currently available for study.

snip

thanx for the info, i didnt think it was very many lines though.

anyways, hmm... i dunno, im kinda in favor of university research, but to be honest, i dont really know much about it, especially on the economics/funding end of it to really argue or make any assumptions.

but yeah, i think it would be great if the governement sponsored research, either through its own labs, or through non-profit ones.

recently heard that the governement has cut a lot of scientific funding (another reason im not too fond of the bush admin, is they havn't been too friendly to the science community)
and some people were speculating that if we dont keep up our tradition of being at the cutting edge of research and development, we will loose our place as a world leader, both militarily and economically... a bit more to it then that, but it kinda made sense.

(snipped to essence).

I am strongly against it in any form as I believe it grossly distorts the free market.



I agree - but just to make sure - lets verify a few things -

The government should not have stepped in and taken over airport security. The airlines, airports and security should have been sued into bankruptcy after 9/11.

Chrysler should not have been bailed out by the government regardless of the number of jobs it saved. They should have brought Lee Iacocca in before the governments help was needed.

The Savings and Loans should have all been declared insolvent rather than bailed out. If granny had looked closer at what assets were backing her savings then she'd have known she might lose her deposits if they became insolvent.

Trade tarrifs should be removed. If a US corporation is not competitive enough to compete with foreign companies then it should be closed.

I could go on...

well, i may be wrong on this, but i thought we had regulations and such preventing any new lines of human stem cells, and all of the research going on now has been done with a rather limited amount of human stem cell lines (sorry, i cant remember the actual number)

also, i was under the impression that govt funding towards scientific research didnt go towards corporations, but towards research facilities/universities? i would be upset (but not alltogether surprised) if it was going towards corporations.

There are no regulations on the number of lines that can be created, however only the ones in existance before August of 2001 can recieve federal funding. The US is actually very friendly toward embryonic stem cell research especially compared to Canada and some parts of europe. The US does not regulate in any way research financed by private, local or state funds. It even allows the cloning of them, which in Canada is a 100,000 dollar fine and 10 years in prison. In Germany it is 3 years and over 60,000 just to e-mail the instructions on how to do it.

Unfortunately that is incorrect, even if it was at one time the origional intent. What has happened in the past few years is that Universities have started creating their own corporations and enjoying the funding at the same time. In other cases they have been parterning with corporations and splitting the funds, while enjoying the marketing ability of the established corporations. Several schools have already lost their tax exempt status, but efforts in these areas have come to a halt for some reason. Guess the IRS has too many people making 30,000 a year to keep an eye on to bother.

Unfortunately what we read in the paper and hear from the media is usually far removed from the truth in order to suit someone elses personal agenda. In this case it was all overblow and distorted in order to create grief for the current administration. While the Bush administration has been very generous toward science endeavors, it has been very hard on junk science and phoney research. This is where the bad propaganda came from. When make your living off government grants and find out that the mating habits of the idle rich is no longer a valid research topic, thats a good reason to spread lies and discontent.

I agree - but just to make sure - lets verify a few things -

The government should not have stepped in and taken over airport security. The airlines, airports and security should have been sued into bankruptcy after 9/11.

Chrysler should not have been bailed out by the government regardless of the number of jobs it saved. They should have brought Lee Iacocca in before the governments help was needed.

The Savings and Loans should have all been declared insolvent rather than bailed out. If granny had looked closer at what assets were backing her savings then she'd have known she might lose her deposits if they became insolvent.

Trade tarrifs should be removed. If a US corporation is not competitive enough to compete with foreign companies then it should be closed.

I could go on...

Yeah, but bankraupting major airlines and closing US industry shoots the US economy further into the black hole that the current Republicans have taken it so far.

Not trying to obstruct free trade or anything, but there's a point that you have to stand in and protect your own national corporations.

But don't also take that as I support massive increases in government spending for "public safety" and defence when the billions of dollars ends up in the hands of a few select corporations either.

Also, http://www.truthout.org/docs_2005/063005X.shtml is a great article related to this topic.

Yeah, but bankraupting major airlines and closing US industry shoots the US economy further into the black hole that the current Republicans have taken it so far.

Not trying to obstruct free trade or anything, but there's a point that you have to stand in and protect your own national corporations.

But don't also take that as I support massive increases in government spending for "public safety" and defence when the billions of dollars ends up in the hands of a few select corporations either.

Also, http://www.truthout.org/docs_2005/063005X.shtml is a great article related to this topic.

Truthout.org is a leftist propaganda site. I don't believe most would be so inconsiderate as to send you to Ann Coulter for the unbias truth. Have a little consideration please.