Posted on 04/07/2020 8:54:38 AM PDT by Kaslin
There is nothing worse than the government bailing out private industries. I've spent a career opposing corporate welfare giveaways. When an industry gets in financial trouble because of its poor business practices, the owners, shareholders and executives should bear the cost -- not the taxpayers.
The coronavirus crisis is a bit different because the government has ordered many industries to, in effect, shut down for many months. In the case of the major airlines, such as United and Delta, the government has precluded many passengers from boarding planes and even shut down many flights. That's why the government took steps in the recent $2 trillion aid package to keep these companies out of bankruptcy. It's providing grants (a bad idea) and loans to be repaid (a better way to provide temporary assistance) to the tune of up to $50 billion. American Airlines, for example, is eligible for up to $12 billion in aid.
None of this is ideal, but, for better or worse, the federal government has decided that airlines are an essential industry for America's economic recovery. Now the question is whether it should take some ownership stake in the airlines in the form of "warrants." A warrant allows the government to have the right to take stock in the company in the future.
Treasury Secretary Steve Mnuchin has supported this form of repayment to make taxpayers whole when all is said and done. His motives are good, but this is a bad idea that would set a dangerous policy precedent. We don't want the government to become a shareholder and perhaps even take a controlling interest in American companies.
This is the opposite of privatization. It is government "socialization" of private industry.
One can imagine the laundry list of unprofitable and misguided corporate policies the government "owner" might impose on airlines such as green fuel mandates, subsidized flight paths, "safe spaces" in every cabin, etc. Green energy policies could be imposed. How do you make airplanes that burn jet fuel "carbon neutral"?
Congress could mandate that companies have racial and gender quotas on their boards and require union representatives or even government officials as directors. The congressmen could start dictating how many flights have to leave from hometown airports, regardless of profitability. We see this with Congress mandating Amtrak service through certain towns, whether they make financial sense or not.
Government warrants would also defeat the purpose of the aid package in the first place, which is to get the airlines up and flying again -- back on the road to financial self-sufficiency. Warrants will reduce the value of airline shares because they dilute shareholder equity. This makes it harder for airlines to raise private capital.
The legislation authorizing the aid already includes fairly strict covenants prohibiting furloughs and layoffs. Douglas Holtz-Eakin, former director of the Congressional Budget Office, opposes the warrants and explains that the law already restricts the companies from engaging in stock buybacks, executive bonuses, dividend payouts and the like.
The government is exacting its pound of flesh.
Even the airline unions - the pilots, flight attendants, mechanics and so on - oppose the warrants, and with good reason. They said in a letter to Congress that warrants could "give the government as much as a 40% stake in airlines," which could hurt workers and the value of their pensions.
Countries such as China, Russia and Venezuela allow public ownership and direction of companies, but America has smartly adopted a hands-off approach and rarely allows direct government control of business management. We keep government out of boardrooms, which is one reason American companies so often out-compete foreign competitors.
The federal government should release the airlines from these unwise warrants, which only chase away the private investors these companies desperately need now.
Meanwhile, if the airlines want to thank taxpayers for their financial assistance during these dire times, perhaps they can give us free frequent flyer miles through their "loyalty" programs when they return to profitability.
Airlines are critical to our national well-being - I remember when they ATC pukes went on strike and Reagan fired the lot of them...the question is whether we should just shovel money their way without having enough strings attached to be able to recoup taxpayer money down the road...whatever the President does, it will have to have a sunset and/or other built-in protections to keep someone down the road from nationalizing huge sectors.
Imagine if Hillary had won the election. She would now be nationalizing all the hospitals and medical supply companies.
It is not our government I worry about controlling American companies - I worry the Chinese are the only ones with enough cash to snatch up the bargains now available. What happens when China owns 51% of major American companies?
I wager that when all is said and done, he's gonna do a number on them...if we can keep him in the WH....and win both Houses.
Obey the Constitution too and get Uncle Sam out of classrooms, among other things, too.
Ask Germany what happened to their US assets in 2 World Wars
FR: Never Accept the Premise of Your Opponent’s Argument
Think of the $2.2+ trillion federal bailout this way. Private industries will be recovering at least a small part of their own money that the feds have been stealing from states, industry and citizens' wallets, for the last century, state and private money stolen in the form of unconstitutional federal taxes, taxes that Congress cannot justify under its constitutional, Article I, Section 8-limited powers.
"Congress is not empowered to tax for those purposes which are within the exclusive province of the States." —Justice John Marshall, Gibbons v. Ogden, 1824.
The remedy for unconstitutionally big federal government that has been running the country into the ground for the last century…
The COVID-19 national emergency has provided us with a thankfully rare opportunity to repeal the 16th and ill-conceived 17th Amendments (16 & 17A). (Compare to post-Civil War amendments.)
While the states are slowly waking up to repealing 16 & 17A, patriots need to send "Orange Man Bad" federal and state government Democrats and RINOs home in November!
MAGA, also KAGA! (Keep America Great Always!)
Supporting PDJT with a new patriot Congress and state governemnt leaders that will promise to fully support his already excellent work for MAGA and stopping COVID-19 will effectively give fast-working Trump a third term in office imo.
"The “Holy Grail” of organized crime is to control government power to tax." —me
"The power to tax involves the power to destroy, [...]” —Chief Justice John Marshall, McCulloch v. Maryland, 1819.
"The 16th Amendment effectively repealed the involuntary servitude aspect of the 13th Amendment imo, evidenced by unconstitutional federal taxes." —me
"Congress is not empowered to tax for those purposes which are within the exclusive province of the States." —Justice John Marshall, Gibbons v. Ogden, 1824.
"13th Amendment, Section 1:
Neither slavery nor involuntary servitude [emphasis added], except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
"16th Amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
"It’s politically correct, under the Democratic Party and its tyrant judges, to use your voting power to make your fellow citizens involuntary servants." —me
"The ill-conceived 17th Amendment not only effectively politically repealed the 3/4 state supermajority requirement of the Constitution’s Article V for ratification of proposed amendments to the Constitution imo, politically correct interpretations of the Constitution now prevailing under Democratic judicial tyranny, but also consider this. That amendment also effectively nullified Congress’s constitutional Article I, Section 8-limited powers along with the Supreme Court’s clarification of Congress’s limited power to appropriate taxes." —me
"Congress is not empowered to tax for those purposes which are within the exclusive province of the States.” —Justice John Marshall, Gibbons v. Ogden, 1824.
"The constitutionally undefined political parties are basically rival, corrupt voter unions, “union dues” paid by means of unconstitutional federal taxes. Belonging to a political party means that you are a subject, not a member.” —me
"Patriots need to support PDJT in demanding that Congress moves "April 15" tax day to the day before election day." —me
"The smart crooks long ago figured out that getting themselves elected to federal office to make unconstitutional tax laws to fill their pockets is a much easier way to make a living than robbing banks." —me
"Federal career lawmakers probably laugh all the way to the bank to deposit bribes for putting loopholes for the rich and corporations in tax appropriations laws, Congress actually not having the express constitutional authority to make most appropriations laws where domestic policy is concerned. Such laws are based on stolen state powers and uniquely associated stolen state revenues." —me
Uncle Sam couldn’t properly clean toilets on a timely basis. Why would you put him on a corporate board? The only thing Uncla Sham can do is screw things up bigtime.
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