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Thread: Paul's stance on corporates?

  1. #1

    Default Paul's stance on corporates?

    I wonder if anyone have idea where Paul stands WRT corporates?

    Personally, I perceive big corporates as scourges on liberties and the root of all bad kind of lobbying (mind, I'm not saying lobbying itself is bad, but it's corporates that gives lobbying the bad name).

    I imagine Ron Paul is all for laissez-faire market, and would want to remove subsidies, welfare (he has written so in articles on official websites). That's great, but what about monopolies? What about accountability (or lack thereof)?

    Should corporate be re-defined so it's not a legal person? The trouble with such concept is that it's essentially without morals and because it's a group of people, the blame is diffused. Underlings doesn't blow whistles because they're obeying orders. Stakeholders are inclined to look the other way when they're raking in money. Board of Directors has no idea what's going on. CEO says he's doing the bidding of stakeholders. So on and so on.

    So... thoughts?



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  3. #2

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    No, the root of all bad kinds of lobbying is that government is allowed in areas it doesn't belong. There's no point in lobbying for legislation if that legislation just isn't allowed to exist. Without regulatory advantages corporations have to compete in the open market and don't do nearly as well as they do now.

    Corporations are the player, not the game.

  4. #3

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    But there'd still be some regulations? IINM, Congress can levy tariffs, no? And what about regulation of airwaves for example?

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    As long as there are regulations there are loopholes and exceptions to lobby for, and those with the big money will always manage those better than those without. Don't perpetuate a system that gives them advantages.

  6. #5

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    Maybe I'm being dense, but not sure how this answer the question?

    Are you suggesting that we have absolutely *no* regulations at all? I've thought a minimum set of regulation is necessary to protect the market from running into monopolies a la big business in Industrial Revolution?

  7. #6

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    Regulations *create* and *protect* monopolies, they don't protect anyone from them. Monopolies do not come about naturally very easily and they are very difficult to maintain. Regulations have the primary effect of making it nearly impossible for small competitors to exist, making it much easier for big corporations to exert monopoly influence.

    You need to read Bastiat's _The Law_ and Hazlitt's _Economics in One Lesson_.

  8. #7

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    And what of political regulations, such as tariffs?

    Didn't we had a tariff in 1800 due to British's dumping in effort t to destroy our economy?


    Another question: Should certain things be public property, such as roads, electrical infrastructure, cable wiring, and phone lines? I can't imagine having to pay for a private company to build a new phone line among several other lines to my house because they couldn't use the same wiring in place by their competitors?

    BTW, thanks for the book recommendations.
    Last edited by Banana; 02-17-2008 at 12:17 AM.

  9. #8

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    Using economic policy to 'protect' an industry against dumping is imperialism.

    Government's fundamental responsibility is to protect threat to life, liberty and to enforce contracts. Any philosophy that does more than that can be seen as simply a means of organizing resources.

    In some situations these novel philosophies of organizing resources by the government may produce short term benefits. That short term may be as long as 70-100 years. But they ultimately always fail and often times do so tumultuously.

    Efficiencies in economics are found when cost of entry _and cost of exit are low. Imperialism, communism, fascism, etc all greatly raise these costs of entry and exit. Those costs are not seen until it is much too late. Because these philosophies worked for x number of years governments grip tighter to them as they begin to fail and ultimately these governments end up defaulting on their responsibility to protect life, liberty and the enforcement of contracts.

    When economies are young, small and narrow, destruction of an industry can be catastrophic. However when an economy is mature and diversified (like ours is today) destroying an industry is like mowing over a dandelion. You end up cross pollinating all the industries that absorb the labor, capital and equipment of the 'destroyed' industry which creates an even more diversified economy.

    When economies are diversified, you only are hurt by dumping when you react to it. Just think, because we continue to react to steel dumping, we continue to manufacture and regulate for 2500 pound vehicles in order to transport 200 pound commuters. There has to be giant inefficiencies going on there.

    When expanding the scope of public property, you may very well end up with short term gains but you ultimately will end up with higher costs of entry and exit. We will continue maintaining roads (at an escalating pace in some instances) when the majority of the travel on those roads is unnecessary. As people spend hours on the road, other technologies are created that will remove their need to even be on the road. The more you pour into removing congesting the longer you delay those advancements and investment in areas that produce greater efficiencies.

    If SBC spends 10 billion dollars burying fiber optic cables all over the U.S. and nobody uses it, they'll end up selling it to someone who can find a use for it even at a loss. If the U.S. spends 10 billion dollars burying fiber optic cables all over the U.S. and nobody uses it...it will remain unused.

  10. #9

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    Abolish corporate personhood! ( brought to you courtesty of ........... government )
    http://www.corporatepersonhood.com/

  11. #10

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    So basically, there is really never a good political reason to intervene in economics, and that tariff in 1800s should have never happened? I understand that the Brits were intent on destroying our economy and thus hope to take control of us once weakened. After all, economy back then was immature, no?

    When discussing capitalism a while back, someone had pointed out to me that even government can be a consumer and manufacturer as well, citing example of PBS as the point of educational television. Can governments be treated as just another consumer?

    As for hypothetical SBC burying fiber optic all over US; suppose it was a raging success and everyone now has cheap internet access and cable. Doesn't that mean SBC has effectively shut out competitions because other companies would have to pay exorbitant price to piggyback on SBC's network or even more higher price to roll out their own line among SBC, thus cluttering the landscapes?

  12. #11

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    Quote Originally Posted by Banana View Post
    So basically, there is really never a good political reason to intervene in economics, and that tariff in 1800s should have never happened? I understand that the Brits were intent on destroying our economy and thus hope to take control of us once weakened. After all, economy back then was immature, no?
    I'm not suggesting that there aren't places where a collective can benefit from interventionist economics (slogan "Buy American" from the 80's comes to mind). The problem is that they have a hard time disbanding as they become a threat to the protection of life, liberty and enforcement of contract. Interventionist economics can be equated to a clingy ex-girlfriend. It was fun while it lasted, but there come a point of diminishing returns.

    When discussing capitalism a while back, someone had pointed out to me that even government can be a consumer and manufacturer as well, citing example of PBS as the point of educational television. Can governments be treated as just another consumer?
    Certainly not. As long as the government has the power to steal...I mean tax, they hold an unfair advantage in the market place because they have relatively limitless wealth to manipulate the market.

    As for hypothetical SBC burying fiber optic all over US; suppose it was a raging success and everyone now has cheap internet access and cable. Doesn't that mean SBC has effectively shut out competitions because other companies would have to pay exorbitant price to piggyback on SBC's network or even more higher price to roll out their own line among SBC, thus cluttering the landscapes?
    Individual players will have to make choices on how to play in such a game. Do they lease line, do they bury their own, do they purchase segments, do they offer products that improve upon (a la BASF in other industries). Do they offer a competing WI-FI style product, etc. That SBC had billions available to do such a thing only occurred because of regulation. However, even with such an unfair advantage there are places to compete.

    Even in a seemingly monopolistic setting SBC doesn't earn revenue when half their fiber remains dark. The price SBC charges to piggyback will certainly be below the cost of burying your own. The government should be trying to eliminate the arenas where you end up with complicated balancing of interests, not creating more of them.

  13. #12

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    Quote Originally Posted by cjhowe View Post
    Interventionist economics can be equated to a clingy ex-girlfriend. It was fun while it lasted, but there come a point of diminishing returns.
    Great line!

    Certainly not. As long as the government has the power to steal...I mean tax, they hold an unfair advantage in the market place because they have relatively limitless wealth to manipulate the market.
    What does that mean for public properties? Shouldn't there be a public roads for example? Besides, they still have to buy some lot of land to house their officials, no?

    Individual players will have to make choices on how to play in such a game. Do they lease line, do they bury their own, do they purchase segments, do they offer products that improve upon (a la BASF in other industries). Do they offer a competing WI-FI style product, etc. That SBC had billions available to do such a thing only occurred because of regulation. However, even with such an unfair advantage there are places to compete.

    Even in a seemingly monopolistic setting SBC doesn't earn revenue when half their fiber remains dark. The price SBC charges to piggyback will certainly be below the cost of burying your own. The government should be trying to eliminate the arenas where you end up with complicated balancing of interests, not creating more of them.
    I definitely agree that piggybacking would be cheaper than building own lines. To be honest, I'm having hard time envisioning how this would not lead to permanent monopoly or at least horrible inefficiency?

    Wouldn't we be better off if government were to buy the roads, lines and so on from companies, thereby making it public and accessible to all, while companies profit from building more of those (extra revenues from government buying them)?

    Quote Originally Posted by Truth Warrior View Post
    Abolish corporate personhood! ( brought to you courtesty of ........... government )
    http://www.corporatepersonhood.com/
    Now, I'm digressing from my initial question. Does anyone feel that the legal definition of corporations need to be revisited? I for one think that there are real problems with accountability within corporate. (Look at this article to see one reason why).

  14. #13

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    Another thing I'd like to know-

    Should we have a cap or limitation on corporate size?

    For example, I truly do believe the old legislation outlawing owning more than one media outlet (e.g. owning a TV station and radio station at same time) was good to have until it was took down and we had all that crazy mergers and are left with six gigantic companies that's totally out of touch with people.

    Also, if we were to make corporate nonperson, would it make the bad "big business" go away?

  15. #14

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    Quote Originally Posted by Banana View Post
    Another thing I'd like to know-

    Should we have a cap or limitation on corporate size?

    For example, I truly do believe the old legislation outlawing owning more than one media outlet (e.g. owning a TV station and radio station at same time) was good to have until it was took down and we had all that crazy mergers and are left with six gigantic companies that's totally out of touch with people.

    Also, if we were to make corporate nonperson, would it make the bad "big business" go away?
    The solutions are actually quite the contrary.

    First, eliminate the regulations around the FCC.
    This will allow more competitors to enter into this market. Often times the regulations actually perpetuate centralized control in the economy. The people who are chairs in the FCC are the very people who are top shareholders of these media corporations. The argument is that they understand the business best. But in reality, they make the rules in such a way to eliminate competition.

    Second, return honest money.
    When you do this you will prevent them from taking out huge loans at a lower rate then inflation so as to make these buy outs. This will also enable small businesses to adjust their prices properly since no more fiat inflation would occur.

  16. #15

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    Great, thanks therealjjj77.


    Can anybody explain about how privatizing roads, wiring, and pipes would be better for us? I'm still stuck with the imagery of redundant networks which leads to inefficiency and wasteful spending. Look at cellular services. Nobody can expect a consistent service because one network is more rooted in one area while weaker in other area. If all companies had the equal access to all of the network, everyone would have a better service, no?

    I envision something like this as the best solution: Make those a public property but essentially privatize the expansion; when a company adds a tower, it is "sold to government" with a interest as an incentive for companies to keep expanding while providing best service without having to build their own network.



    Another issue I trip over on is when some democrats tell me that if there were no regulations, business would kill off people. They would sell cheap food that would be bad for people, and point to tobacco industry as an example of dishonest business who care about profit first, customers second (mabye) and therefore we need regulations for those dishonest business... Any good rebuttal to that?

  17. #16

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    Quote Originally Posted by Banana View Post
    Great, thanks therealjjj77.

    I envision something like this as the best solution: Make those a public property but essentially privatize the expansion; when a company adds a tower, it is "sold to government" with a interest as an incentive for companies to keep expanding while providing best service without having to build their own network.
    You just described our current system. The government doesn't actually build anything itself. It taxes the people and then hires private corporations to do the work. The people who own the corporations and the people who work in the government are in bed with each other and many times they are the same people!

    If a company builds towers to be sold to the government what would be the most effective method for that company to increase sales? Why to infiltrate the government of course and become their own best customer

    If a government official has exclusive rights to purchase towers from private companies how might he use that to his advantage? By awarding contracts to the companies which contribute to his campaign, wine and dine him and perhaps even offer him a cushy 7-figure salaried job once his term in office expires.

    Aside from the rampant corruption that would and does occur in a system such as you have described, you ignore the simple moral principles. Why should citizens who do not own cell-phones be taxed to build towers? Why should citizens who don't drive be taxed to build roads? Why should citizens who are perfectly healthy be taxed to pay for heath-care?

    Collectivism works in small groups where every member of the group is closely linked and the interests of the individual are usually in sync with the interests of the group. But in large, diverse populations such as the U.S. collectivism can never serve more than a small segment of the population at the expense of everyone else because everybody wants different things. That is why free-market capitalism is the best system for large populations, because it promotes competition which provides multiple options so that as many people's diverse needs may be served without infringing upon the interests of their very different neighbors.

  18. #17

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    Quote Originally Posted by Banana View Post
    Great, thanks therealjjj77.


    Can anybody explain about how privatizing roads, wiring, and pipes would be better for us? I'm still stuck with the imagery of redundant networks which leads to inefficiency and wasteful spending. Look at cellular services. Nobody can expect a consistent service because one network is more rooted in one area while weaker in other area. If all companies had the equal access to all of the network, everyone would have a better service, no?

    I envision something like this as the best solution: Make those a public property but essentially privatize the expansion; when a company adds a tower, it is "sold to government" with a interest as an incentive for companies to keep expanding while providing best service without having to build their own network.



    Another issue I trip over on is when some democrats tell me that if there were no regulations, business would kill off people. They would sell cheap food that would be bad for people, and point to tobacco industry as an example of dishonest business who care about profit first, customers second (mabye) and therefore we need regulations for those dishonest business... Any good rebuttal to that?
    No more redundant that 5 grocery stores in a town or 10 gas stations. Your buying power plus the hard work and innovation of entreprenuers will determine in that area how many competitors should be allowed. What we would see is a much more efficient system being used. Telephone lines and electric lines above ground are not the most efficient. So we would gain our sky back. I would love to be able to look up and see no lines above head. =P

    Also, the government could use this as a great source of immediate revenue to give the Federal Reserve Bank a bunch of their notes back. Though you'd best be holding onto some real money like Liberty Dollars and in a community where they are prevalent.

    About the rebuttal to the "business would kill off people":

    When dealing with your Democrat friends, first point out to them that perfection is not something we will have(at least not in this lifetime!). But the solution we're looking for is the one that is the best. Not the one that would promise no more disease and cause more disease, but the solution that will cause the least amount of disease.

    Let's start with pollution. Both you and them would agree that pollution is a bad thing. I mean, no one wants dirty water and dirty air. Then tell them that in the United States we have a fairly large bureaucracy called the Environmental Protection Agency(which they certainly have heard about). However, in England, they don't have an EPA yet their water and air is extremely clean. Why?

    In the U.S. if a company wants to pollute, they go to the EPA and buy the rights to pollute in the place the EPA says they can pollute. So every company is doing that, the U.S. is making a ton of money off pollution, and we get to suffer! So when someone wants to file a class action lawsuit, the company says, "But we paid for the rights to pollute here within our lawful limits!" So you see when government gets involved, they benefit the company and NOT the people.

    However, in England, if a company pollutes, then people get together and file a class action lawsuit and all the other companies take heed while their polluting competition exits the market!

    The same thing goes for the FDA, the ATFE, and on down an assortment of government agencies that were supposed to protect the people.

    You see, we can never eliminate a company from doing something bad, but we can eliminate the bad companies that do so and thereby discourage future companies from repeating that same mistake. We have that buying power and that power to file lawsuits.

    Now, if a food place sold crappy food, that would come out and people would stop eating there, it would go out of business, and other businesses would take note not to sell crappy food. Now if they were deceptive in doing so, perhaps a class action lawsuit should ensue.

    Also, the tobacco industry does not kill off people. It is the people who pick the cigarette, knowing very well of the repercussions of their actions, and stick it in their mouth day after day with a lighter in the other hand that kill off themselves. Everyone knows cigarettes are bad and cause cancer yet people still smoke them. That's their choice. Gotta stop taking the victim mentality and start taking responsibility for our actions.

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    Wait a minute.


    So the argument is basically that lawsuits to this date has been largely ineffective because corporations struck a deal with government?

    That... makes frickin' lot of sense. No wonder why they can just pass around the buck when the $#@! hits the fan....

    I really appreciate you taking your time to sit down and explain those to me.

  20. #19

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    we continue to manufacture and regulate for 2500 pound vehicles in order to transport 200 pound commuters. There has to be giant inefficiencies going on there.
    You have to make the car move somehow. An electric car that goes 200 miles on one charge even weighs over 2,500 pounds, so I'm not buying that Groucho Marx joke.
    "That's one thing about freedom; you have to tolerate the nonsense too." - Ron Paul

  21. #20

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    Just one more loose end....

    Should corporates retain personhood?

    Some people says that the problem with treating it as a legal person is that it's still amoral, and the blame is diffused, so it's easier for corporates to do some evil things while workers think they're "doing their jobs", CEO rationalize it as serving the interests of stakeholders, while stakeholders trust the Board of Director to look into the matters and so on.

  22. #21

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    As a side note, I wanted to mention a few things that haven't been discussed:
    • Even without federal regulations on business, states and localities will still be free to pursue whatever regulations they want. Sure, libertarians might consider doing so to be unwise, but they can still do it. A lot of people act like, without federal regulations, there won't be any - however, that's not the case. It's much better when regulations on business are done in smaller jurisdictions, because then there's competition between different states and/or localities for businesses. The invisible hand of the market would lead people and companies to move to areas with the optimal level of regulation. However, when everything is dictated by a monolithic federal government, no experimentation or competition of policies can exist...and their policies are almost always bad and inefficient (at best) or completely corrupt (at worst...which is more likely).
    • In the absence of corrupt government agencies like the FDA that decide (through coercive force) what food and drug items can go on the market, cheaper and more efficient free market certification agencies would pop up in their place. Under the FDA, pharma companies can get in bed with them and get their [sometimes dangerous] products in the market while forcefully prohibiting [sometimes safer] alternatives from surfacing. Of course, since these products are FDA-certified, the pharma companies are pretty much indemnified from any responsibility...and since the FDA is the only show in town and is funded by the taxpayers, they're never held accountable or forced to do a good job, either. Government is "benevolent" and "out to serve the people - for free," except for the simple and inevitable fact that the world revolves around money and power. Under a free market, we'd have food and drug safety organizations popping up all over the place, and food and drug companies would pay them for their certification and "seal of approval." If one agency proved to be incompetent, consumers would not bother looking for their seal, but if an agency proved to be quite reliable, consumers would look for their certification label on all food and drug items. The market would tend to favor the most reliable and cheapest certification organization...this would work a lot like kosher certification, except it would be a much larger industry and certification would be on just about every safe product, since a lot more people care about safe food than kosher food.
    • As far as monopolies go...as others have stated, "free market" monopolies are usually quite rare. Almost all coercive monopolies or cartels were either directly created by government (i.e. your cable company probably got a 15-year monopoly contract from your local government because it wined and dined the politicians better than the other cable company) or exist because of other government invervention in the market that prevents competition from emerging, like regulations and/or corporate welfare. However, one thing that some people don't recognize is that "intellectual property rights," i.e. copyrights, trademarks, and patents, are also "unnatural" government constructs. While such government grants of exclusivity have their place in promoting the progress of the arts and sciences, they also hold an inherent danger of enabling some companies to become coercive monopolies or near-monopolies (especially if the laws are overly draconian). While this is worthy of its own discussion, Microsoft is a good example here. However, in the "perfect world," there's a much more subtle and elegant solution to having the government forcefully break such a company up: Instead, just revoke their exclusive copyrights, patents, and non-essential trademarks.
    • As far as corporate size: It's interesting that you ask. In our current economy, the market does seem to favor larger and larger conglomerates, doesn't it? There's a growing trend towards consolidation. However, this is not a natural market phenomenon; in a free market without corporate welfare and oppressive, competition-hindering regulations, smaller companies would be much better equipped to compete, and the optimal size for companies would not always be "as big as possible."


    Now, as far as your question about corporate personhood: I'm not sure how Ron Paul himself feels on it...I do know that he likes the idea of creating a new type of corporation particularly well-suited to employee-owned corporations. Because he has focused his efforts on limiting the coercive power of the federal government (which in practice may really be enough to solve all of our problems), he probably hasn't given the issue all too much attention.

    However, I can at least give my own opinion: You're right on the money, and we should end the idea of corporate personhood. The problem with corporate personhood is that it's a government-created construct, and as such, the "special rules" of corporations allow it to circumvent liabilities and responsibilities in ways that would not otherwise be possible with regular contracts. You do not need to create a corporation to have a joint-stock company (where many people can privately or publicly trade stock) - these kind of companies can easily be made by simple contracts between individuals...in such a contract, a person's liability would be limited to their stake in the enterprise. However, the "corporate veil" is unfair to society as a whole in that it allows stakeholders to limit their financial and moral obligations beyond their stake - it allows all blame and liability to be placed on the shoulders of a fictional "person," the corporation.

    While I have no problem with a government construct called a "corporation" that might make joint-stock contracts easy and streamlined (so the joint venture, the corporation, can write and cash checks and operate in many ways as a corporation does today), the whole "corporate veil" that limits accountability has to go. I'm hazy on exactly how such things are conducted right now, but I think if a "corporation" does something illegal, all officers of the corporation participating in such an action (and/or any stakeholders aware of and consenting to such action) should be liable for criminal trial. It is unfair to society for certain privileged humans to shrug their criminal liability onto a fictional entity that cannot possibly serve jailtime (the corporation itself)...
    Last edited by Mini-Me; 02-21-2008 at 07:57 PM.

  23. #22

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    Quote Originally Posted by Knightskye View Post
    You have to make the car move somehow. An electric car that goes 200 miles on one charge even weighs over 2,500 pounds, so I'm not buying that Groucho Marx joke.
    I know we are getting off subject but check out this vehicle:

    www.loremo.com

    -It's a diesel

    -It carries 4 people

    -Under 1320 lbs.

    -Gets about 157 mpg!!!

    -Has a range of over 600 miles on one tank

    -And is said to be very safe

  24. #23

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    Quote Originally Posted by Banana View Post
    Just one more loose end....

    Should corporates retain personhood?

    Some people says that the problem with treating it as a legal person is that it's still amoral, and the blame is diffused, so it's easier for corporates to do some evil things while workers think they're "doing their jobs", CEO rationalize it as serving the interests of stakeholders, while stakeholders trust the Board of Director to look into the matters and so on.
    I don't know really. I am leaning against it lately.

    There are two aspects, you hit on the criminal aspect but there is also the financial aspect(if it goes under it doesn't affect the stockholders other stocks, finances, or businesses). I believe it would be better for society as a whole if corporate stockholders were unprotected by the government from the criminal aspect. However, I haven't broken down why it would be beneficial for society for the government not protect the financial aspect though I am sure that would also not be prudent.

  25. #24

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    Quote Originally Posted by therealjjj77 View Post
    I know we are getting off subject but check out this vehicle:

    www.loremo.com

    -It's a diesel

    -It carries 4 people

    -Under 1320 lbs.

    -Gets about 157 mpg!!!

    -Has a range of over 600 miles on one tank

    -And is said to be very safe
    check out this one [ & some history ]

    at the turn of
    the last century many homes were supplied with compressed air lines installed
    and maintained by companies such as Chicago Air. This compressed air was used
    to run the cars that our grandparents once drove to and from work or on
    out-of-town trips up to several hundred miles and at highway speeds on a single
    charge!

    Standard Oil and Edison Electric bought into Chicago Air but not to invest in
    the way of the future but to destroy their competition by shutting down all of
    Chicago Air's suppliers and creating a monopoly that exists to this day.

    This monopoly may be coming to an end - and not a moment too soon! The once very cheap and plentiful gasoline that allowed us to continue to drive cars after the
    collapse of Chicago Air has now economically enslaved all mankind and risks
    destroying the whole world through pollution and wars.

    This is why the news story below is exciting.

    http://rawstory.com/news/2007/Air_ca..._air_0104.html

    [ ps : what about competition that eliminates beneficial invention like above to maintain their own industry ie oil ? & remember the electric car ]
    "It is from numberless diverse acts of courage and belief that human history is shaped. Each time a person stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current which can sweep down the mightiest walls of oppression and resistance." Robert Kennedy

    http://scully13.wordpress.com/about men of dark intentions

  26. #25

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    Quote Originally Posted by therealjjj77 View Post
    I don't know really. I am leaning against it lately.

    There are two aspects, you hit on the criminal aspect but there is also the financial aspect(if it goes under it doesn't affect the stockholders other stocks, finances, or businesses). I believe it would be better for society as a whole if corporate stockholders were unprotected by the government from the criminal aspect. However, I haven't broken down why it would be beneficial for society for the government not protect the financial aspect though I am sure that would also not be prudent.
    Here's why the government should not protect shareholders from financial obligations and debts (such as when the company goes bankrupt and owes tons of money, possibly as the result of a lawsuit):
    Under today's system, if a company becomes insolvent, its top shareholders don't have to worry about the debts the corporation incurred, and they get away scotch-free. This kind of protection essentially subsidizes bad behavior. If investors knew that they could be burned (proportional to their stake in the company) by investing in companies with questionable business practices that could get them sued or worse, they'd be a lot more careful not to invest in those companies, and the top stakeholders would be a lot less likely to allow those kind of shenanigans to occur on their watch. The end result: Less shenanigans would occur, less businesses would go insolvent, and less creditors and/or victims would be left uncompensated.

    Of course, there's a catch here, too: Most corporations have secrets and strategies and such that only the top shareholders (and executives) are really privy to. In other words, they might know if the company is tanking or doing something that could get them in trouble, but ordinary investors like you and me would not. In that case, it's not really fair that ordinary investors who are "not in the know" should be punished - however, this is not for the government to protect even them against. Instead, a better solution is this: Investors would learn to invest in only companies whose corporate contracts either,
    a.) Force only the top shareholders (ones privy to all information) to take all of the responsibility for debts, proportionately. This would make it safe for small shareholders. Or,
    b.) Make all investors privy to all information (probably not a good idea if you don't want your competitor buying a single share and knowing all of your secrets!). Or,
    c.) A combination of the two approaches.
    Last edited by Mini-Me; 02-21-2008 at 09:29 PM.

  27. #26

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    Quote Originally Posted by kill the banks View Post
    [ ps : what about competition that eliminates beneficial invention like above to maintain their own industry ie oil ? & remember the electric car ]
    I'm not a big fan of patents for this reason and others.

    This reminds me a story when Tyndale produced an english translation for the Bible in the 1500s and there was a catholic cardinal(who didn't want the layfolk understanding the scriptures) that came up with this great plan to just buy up all the Tyndale Bibles. But the problem was this not only gave Tyndale the money to buy more printing presses to print them faster, but it also gave him more incentive to print more. And so that catholic cardinal ended up helping Tyndale to spread one of the first successful english translations of the Bible.

    That would be the extent of what these big companies could do if there were no more patent laws.

  28. #27

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    Mini-Me,

    Sounds good but need one more thing: if we have something in place to avoid the situation of stakeholders bailing out, leaving the last one holding the whole bag, then we should be good to go.

    I understand that there has been past instances of corporates setting up some poor saps as a scapegoat just as they are about to go under.

  29. #28

    Default

    Quote Originally Posted by therealjjj77 View Post
    I'm not a big fan of patents for this reason and others.

    This reminds me a story when Tyndale produced an english translation for the Bible in the 1500s and there was a catholic cardinal(who didn't want the layfolk understanding the scriptures) that came up with this great plan to just buy up all the Tyndale Bibles. But the problem was this not only gave Tyndale the money to buy more printing presses to print them faster, but it also gave him more incentive to print more. And so that catholic cardinal ended up helping Tyndale to spread one of the first successful english translations of the Bible.

    That would be the extent of what these big companies could do if there were no more patent laws.
    interesting

    kill the banks
    "It is from numberless diverse acts of courage and belief that human history is shaped. Each time a person stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current which can sweep down the mightiest walls of oppression and resistance." Robert Kennedy

    http://scully13.wordpress.com/about men of dark intentions

  30. #29

    Default

    Quote Originally Posted by Banana View Post
    Mini-Me,

    Sounds good but need one more thing: if we have something in place to avoid the situation of stakeholders bailing out, leaving the last one holding the whole bag, then we should be good to go.

    I understand that there has been past instances of corporates setting up some poor saps as a scapegoat just as they are about to go under.
    In my opinion, this could be dealt with via contracts...
    In other words, large investors buying out from these "ship-jumping" shareholders should know what they're getting into - and by that, I mean they need to be smart enough to require all necessary information in advance as to whether or not investing in the company is a good decision. If such necessary information is withheld (information that would prove the corporation is about to tank, for instance), that would be a breach of contract on the part of the ship-jumping seller, and they'd be held completely liable.

    If this approach was used, a standard template contract to ensure this would probably develop over time...

    In terms of small investors who wouldn't be privy to corporate secrets at all, well...hopefully I covered that well enough in my last post (Which, by the way, I just edited a moment ago to make things a bit more clear)

  31. #30

    Default

    The shareholders can be protected through insurance for liability issues. Of course the cost of insurance would represent the expected risk, or lack of information to assess the risk.

    As for going bankrupt and defaulting on their debt, that would naturally be protected under the terms of the loans which would allow that, with the interest rates measuring the risk. In other words, the banks accept the risk of defaults and charge accordingly.
    TinyURL, Founder

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