Reply
 
Thread Tools Display Modes
  #51  
Old 04-23-2013, 08:43 PM
Honesty Honesty is offline
BANNED
 
Join Date: May 2000
Posts: 1,819
Quote:
Originally Posted by Martin Hyde View Post
A corporation is just an organizational form, there is nothing spectacular about governments owning one. Like has been said, we have several that the U.S. government owns.

Based on Federal law we have two types of government enterprises: Government Sponsored Enterprises, and Government Chartered and Owned Enterprises. The distinction isn't always as clear as it should be, but a GSE is technically owned by private shareholders who can receive profits from the enterprise, but is sponsored by the Federal government. Typically the government holds "warrants" that entitle them to take an ownership stake in GSEs, usually a substantial percentage.

The Federally Chartered and Owned Corporations include:

Commodity Credit Corporation, Corporation for National and Community Service, Corporation for Public Broadcasting, Export-Import Bank of the United States, FAMC, Farm Credit Banks, FCIC, FDIC, FFB, FHLB, Federal Prison Industries, Gallaudet University, GNMA, St. Lawrence Seaway Development Corporation, Tennessee Valley Authority.

Now, some of these are operated with the expectation they will never generate a profit. Some of them are operated with the expectation they will generate a profit and be self-sufficient of any external government funding.

However generally speaking the Government picks this form of organization when at least a few of these possible criteria are met:

1. The service provided by the entity is seen as a necessary service to the public.
2. The private market is unable to adequately fulfill the need for this service.
3. The entity will operate more effectively as a quasi-independent entity as opposed to an agency of the government.
4. The entity has some potential to be financially self-sufficient through revenue generation.
5. The business involved is a natural monopoly.

If you look basically all government owned corporations meet at least a few of those criteria, some might even meet all of them.

Generally speaking we don't run any corporations because "the money we make from them could help alleviate the need for taxes." Some of the government corporations do make money, but mostly we use that money to fill various funds and trusts related to the business these corporations operate in.

The OP is talking about operating businesses in sectors that already have robust private market competition for the purposes of generating profits for the government. That is an unwise proposition, because government enterprises often either cannot compete with private competitors because of poor management (since top positions are inevitably political appointees), because of politicians lobbying for it to do various things real businesses wouldn't do, or alternatively the government enterprise unfairly competes with private enterprise and drives private competitors out of business with its "blank check" funding power. Either one of those things is not really good, because if a government enterprise drives competitive businesses out of the market then we've taken something with a healthy group of competitors and made it a government monopoly. Then if the government does a bad job managing that business that whole sector is now poorly managed.

This is exactly what happened in the United Kingdom. Some of the government enterprises in certain industries were unsustainable in the UK simply because those industries were no longer sustainable in Britain, they could not effectively compete in the real world with lower cost labor pools overseas. But some of the manufacturing businesses that the UK government took over could have been productive private enterprises but were mismanaged by middle class government appointees without any real government experience who were appointed to their position because they had gone to the most exclusive schools and had friends in government.

Read about the UK's experience basically owning auto companies, mining companies, textile mills, etc and what you ultimately find is a bunch of companies that either were never going to be profitable and thus had to be subsidized by taxpayers or a bunch of companies that were marginally profitable and ultimately undermined the long term health of that entire sector of the British economy.

The government industries in the UK absolutely were not a big revenue boon.

For your UK example, I'm not referring to simply taking up a cherished company or product and nationalizing it. That's stupid. I'm referring to building a new business for the sole purpose of generating profit from the free market. One example would be to open a bank. Banks play on the stock market and engage in high frequency trading in order to generate risk-free money (e.g. risk-free in that you don't have to work for it). The U.S government could likely do this and do this better than private industry given their resources. As for competition, I see no reason to believe that private industry cannot compete with the government.


Also, if you would, could you explain how you'd fix the debt? What importance do you find in fixing the government income with employment? It's completely unnecessary and does nothing but decrease tax receipts and increase the deficit.

- Honesty
  #52  
Old 04-23-2013, 09:11 PM
RickJay RickJay is offline
Charter Jays Fan
Moderator
 
Join Date: Jun 2000
Location: Oakville, Canada
Posts: 40,551
Quote:
Originally Posted by Honesty View Post
All-in-all, I've yet to hear anyone enunciate how the debt problem should be tackled. Why should the U.S government main source of revenue be linked to employment? This means that if there an ripple in the job market, there will be waves felt by the Treasury. The government's source of income should be stable and steady and not hinged on factors outside its control.
This post made me burst out laughing. You think owning a business is a stable, steady way of making money?
  #53  
Old 04-23-2013, 09:29 PM
Tom48 Tom48 is offline
Guest
 
Join Date: Apr 2013
Posts: 2
The U.S. Government took over a Whore House for back(no pun intended) Taxes years ago. The Whore House went Bankrupt. Now I don't understand how anyone could lose money running the business that is the oldest profession around. But the U.S. Government did. Those bozos in D.C. can't do anything right.
  #54  
Old 04-24-2013, 02:45 AM
Little Nemo Little Nemo is offline
Charter Member
 
Join Date: Dec 1999
Location: Western New York
Posts: 79,884
Quote:
Originally Posted by Tom48 View Post
The U.S. Government took over a Whore House for back(no pun intended) Taxes years ago. The Whore House went Bankrupt. Now I don't understand how anyone could lose money running the business that is the oldest profession around. But the U.S. Government did. Those bozos in D.C. can't do anything right.
Let me guess. You heard that story somewhere.

The Mustang Ranch in Nevada was seized for unpaid taxes in 1990. The government never attempted to operate the business. The property was sold at an auction.
  #55  
Old 04-24-2013, 11:25 AM
Honesty Honesty is offline
BANNED
 
Join Date: May 2000
Posts: 1,819
Quote:
Originally Posted by RickJay View Post
This post made me burst out laughing. You think owning a business is a stable, steady way of making money?
It's more stable than the current set-up.
  #56  
Old 04-24-2013, 11:28 AM
Honesty Honesty is offline
BANNED
 
Join Date: May 2000
Posts: 1,819
I also think the IRS tax penalties are too soft and not in-line with the private sector, contributing to the deficit. Has there ever been any study that linked IRS funding to more tax receipts? I'm wondering whether greatly enhancing the IRS budget would proportionally increase the amount of taxes collected. It may be, on second thought, that the revenue is out there but the IRS is hamstrung in collecting it.
  #57  
Old 04-24-2013, 12:12 PM
LonghornDave LonghornDave is offline
Guest
 
Join Date: Feb 2008
Location: Houston
Posts: 1,816
Quote:
Originally Posted by Honesty View Post
It is clear that these billions of dollars are not enough to cover the bills of running the U.S government. I am referring to the U.S opening it's own oil company to generate it's own profits in addition to whatever meager royalty payments you've described here.
No offense, but has it occurred to you that you are completely clueless on this subject? The meager royalty payments are something like $10 billion per year. Exxon, who was your reference company before, made $3.9 billion in profit in 2012 in their domestic oil and gas business. This is prior to taking into account corporate expenses. This also excludes capital expenses which I will cover in a minute.

The U.S. takes on very little risk, has very minimal overhead, no capital expenses, and essentially no expertise, and makes more than twice what Exxon makes already. Now, if you are proposing that the U.S. start up a global fully integrated company operating in multiple industries like Exxon, then good luck with that. Perhaps it might occur to you that some of the countries that Exxon does business in wouldn't want to allow a U.S. state owned oil company to do business there. Perhaps it might occur to you to look at the utter lack of success that some of the resource rich state owned oil companies such as those in Argentina, Venezuela, and Mexico experience. Why is the U.S. experiencing increased production while our neighbor to the South, with similar geology, can't replace reserves.

Take a look at the Eagle Ford which spans South Texas and Mexico. Why have private companies in the U.S. generated $61 billion in economic activity in 2012 alone in Texas but Mexico won't be able to drill as many wells in the next five years as are drilled every month on the U.S. side due to a lack of capital.

Now back to that whole capital expense thing that Exxon spends to generate that $3.9 billion in profit. Their acquisition and exploration costs were $9.7 billion in 2012 on just U.S. oil and gas. Back in 2010 they spent $45 billion in acquiring XTO. Your problem is that you see $40 billion in profit for Exxon and just assume that they have $40 billion in cash flow rolling in that could go to the general fund if it was a state owned oil company. It isn't anything like that. Only a small portion of that relates to U.S. oil and gas and since they are a real company and not a government, they actually spend money for investment purposes. In many cases, they have a net cash outflow due to their capex program. That's the difference between Exxon and PDVSA. PDVSA uses the cash flow they generate to give handouts to the populace resulting in declining production; they mortgage the future. Exxon cares about growing a long-term company. Their time horizon is decades in many cases.
  #58  
Old 04-24-2013, 12:21 PM
LonghornDave LonghornDave is offline
Guest
 
Join Date: Feb 2008
Location: Houston
Posts: 1,816
Quote:
Originally Posted by Honesty View Post
I must be living in a bubble, sheesh. The Fed is the Bank's bank. Individuals are not able to take advantage of the 0.25% interest rate but Banks are. If you've found a loophole in which the Fed will service the PUBLIC and not corporations, let me know as I'll open an account post-haste.

- Honesty
And here I thought your point was to make money for the U.S. treasury, not service the public. What exactly is it that you are trying to accomplish again?
  #59  
Old 04-24-2013, 01:00 PM
John Mace's Avatar
John Mace John Mace is offline
Charter Member
 
Join Date: Dec 2002
Location: South Bay
Posts: 85,197
Quote:
Originally Posted by Honesty View Post
It's more stable than the current set-up.
What makes you think that? Most new businesses fail.
  #60  
Old 04-24-2013, 01:34 PM
Shodan Shodan is offline
Charter Member
 
Join Date: Jul 2000
Location: Milky Way Galaxy
Posts: 38,404
Are the existing businesses going to continue to pay taxes that will be used to undercut their profit margins?

Regards,
Shodan
  #61  
Old 04-24-2013, 01:40 PM
Little Nemo Little Nemo is offline
Charter Member
 
Join Date: Dec 1999
Location: Western New York
Posts: 79,884
Quote:
Originally Posted by Honesty View Post
It's more stable than the current set-up.
The current set-up of having other people run businesses and then taking a share of whatever profits they make seems pretty stable. The government avoids the expenses and risks of running businesses but gets a piece of the rewards. Seems like the best of both worlds for the government.
  #62  
Old 04-24-2013, 01:49 PM
LonghornDave LonghornDave is offline
Guest
 
Join Date: Feb 2008
Location: Houston
Posts: 1,816
Quote:
Originally Posted by Honesty View Post
Banks play on the stock market and engage in high frequency trading in order to generate risk-free money (e.g. risk-free in that you don't have to work for it). The U.S government could likely do this and do this better than private industry given their resources.
You have a very odd definition for risk free money. Risk free usually means that you do not risk equity. It has nothing to do with not having to work for it. If I do consulting work for someone and get paid a fee for that, it would generally be seen as risk free. Obviously I am working for it. Conversely, if I lend some money to someone, then I haven't done a tremendous amount of work (not zero, but potentially far less) to get the interest income however, I am clearly taking a risk.
  #63  
Old 05-07-2013, 03:05 PM
Honesty Honesty is offline
BANNED
 
Join Date: May 2000
Posts: 1,819
Quote:
Originally Posted by Little Nemo View Post
The current set-up of having other people run businesses and then taking a share of whatever profits they make seems pretty stable. The government avoids the expenses and risks of running businesses but gets a piece of the rewards. Seems like the best of both worlds for the government.

It's not the best of both worlds, Little Nemo. The vast majority of money that the government takes in comes from taxes. Since 1981, the U.S has cut taxes over and over again, making the prospect of running a prosperous country hinged on dwindling revenues and a population with little appetite for taxes. There are countries like Mexico, Australia, and even New Zealand that sidestep this problem entirely by supplementing GDP with profits from government-owned enterprises. What I'm proposing is that government act more like a business and take proactive steps to reduce the debt.

Consider this, as well, Little Nemo: People can make money by starting businesses, cities can make money starting a business, and States can make money starting a business. For example, Pennsylvania generated nearly a half-billion dollars in profit on revenue exceeding $2 billion. Why, oh, why would the federal government be exempt from this trend? What's good for the goose, ought to be good for the gander.

Quote:
Originally Posted by Longhorn Dave;
No offense, but has it occurred to you that you are completely clueless on this subject? The meager royalty payments are something like $10 billion per year. Exxon, who was your reference company before, made $3.9 billion in profit in 2012 in their domestic oil and gas business. This is prior to taking into account corporate expenses. This also excludes capital expenses which I will cover in a minute.

The U.S. takes on very little risk, has very minimal overhead, no capital expenses, and essentially no expertise, and makes more than twice what Exxon makes already. Now, if you are proposing that the U.S. start up a global fully integrated company operating in multiple industries like Exxon, then good luck with that. Perhaps it might occur to you that some of the countries that Exxon does business in wouldn't want to allow a U.S. state owned oil company to do business there. Perhaps it might occur to you to look at the utter lack of success that some of the resource rich state owned oil companies such as those in Argentina, Venezuela, and Mexico experience. Why is the U.S. experiencing increased production while our neighbor to the South, with similar geology, can't replace reserves.

Take a look at the Eagle Ford which spans South Texas and Mexico. Why have private companies in the U.S. generated $61 billion in economic activity in 2012 alone in Texas but Mexico won't be able to drill as many wells in the next five years as are drilled every month on the U.S. side due to a lack of capital.

Now back to that whole capital expense thing that Exxon spends to generate that $3.9 billion in profit. Their acquisition and exploration costs were $9.7 billion in 2012 on just U.S. oil and gas. Back in 2010 they spent $45 billion in acquiring XTO. Your problem is that you see $40 billion in profit for Exxon and just assume that they have $40 billion in cash flow rolling in that could go to the general fund if it was a state owned oil company. It isn't anything like that. Only a small portion of that relates to U.S. oil and gas and since they are a real company and not a government, they actually spend money for investment purposes. In many cases, they have a net cash outflow due to their capex program. That's the difference between Exxon and PDVSA. PDVSA uses the cash flow they generate to give handouts to the populace resulting in declining production; they mortgage the future. Exxon cares about growing a long-term company. Their time horizon is decades in many cases.
Whatever, man. PEMEX, Meridian Energy, PetroChina, Sinopec, Medibank Private, Mercury Energy, CODELCO, and I can go on and on. There are many successful, profitable government owned enterprises. For example, PEMEX generated nearly a half-billion dollars for the Mexican Government in 2012. In this paper, the author writes, "As much as 30-40 per cent of government revenues in Mexico stem from oil taxes, mainly in terms of royalty payments from the state-owned oil company PEMEX". What's more, Longhorn Dave, is that because government spending in Mexico is "flat" (See Figure 14), the PEMEX contributing "4-5 per cent of GDP" (See Figure 5 & Box on Page 9). Now, if Mexico, isn't good enough for you. We can also do this with CODELCO, New Zealand, or the Pennsylvania Liquor Control Board just say the word.

Here's my question to you: Why should the government be dependent on tax revenues when, in it's current form, those revenues are dwindling?

Last edited by Honesty; 05-07-2013 at 03:09 PM.
  #64  
Old 05-07-2013, 03:43 PM
ISiddiqui ISiddiqui is offline
Guest
 
Join Date: May 2002
Location: Decatur, Georgia, USA
Posts: 6,466
Quote:
Originally Posted by Honesty View Post
For example, PEMEX generated nearly a half-billion dollars for the Mexican Government in 2012. In this paper, the author writes, "As much as 30-40 per cent of government revenues in Mexico stem from oil taxes, mainly in terms of royalty payments from the state-owned oil company PEMEX". What's more, Longhorn Dave, is that because government spending in Mexico is "flat" (See Figure 14), the PEMEX contributing "4-5 per cent of GDP" (See Figure 5 & Box on Page 9). Now, if Mexico, isn't good enough for you.
According to Wikipedia:

http://en.wikipedia.org/wiki/Pemex
Quote:
Petróleos Mexicanos (trademarked and better known as Pemex) (Spanish pronunciation: [ˈpemeks], Mexican Petroleum) is the Mexican state-owned petroleum company, created in 1938 by nationalized petroleum and expunging all private foreign and domestic companies at that time.
Yes, I'm sure you can make tons when you kick everyone else out and run a monopoly, but I thought you didn't want socialism?
  #65  
Old 05-07-2013, 04:28 PM
Little Nemo Little Nemo is offline
Charter Member
 
Join Date: Dec 1999
Location: Western New York
Posts: 79,884
Honesty, we've explained this to you several times so apparently it's just something you don't want to know.

You're continuing to ignore the scale involved. Can a country make some money running a business? Sure. But the United States will never be able to make enough money just by running businesses.
  #66  
Old 05-07-2013, 05:56 PM
Alessan's Avatar
Alessan Alessan is offline
Guest
 
Join Date: Jul 2000
Location: Tel Aviv
Posts: 23,861
Quote:
Originally Posted by Little Nemo View Post
Honesty, we've explained this to you several times so apparently it's just something you don't want to know.

You're continuing to ignore the scale involved. Can a country make some money running a business? Sure. But the United States will never be able to make enough money just by running businesses.
Furthermore, you can't prove that the government will make more money running businesses than it loses running businesses.
  #67  
Old 05-08-2013, 01:18 AM
LonghornDave LonghornDave is offline
Guest
 
Join Date: Feb 2008
Location: Houston
Posts: 1,816
Quote:
Originally Posted by Honesty View Post
For example, PEMEX generated nearly a half-billion dollars for the Mexican Government in 2012.

Woopty fucking doo. You're telling me that the state owned oil monopoly of a country with 2/3rds the oil reserves as the U.S. generated less than 1/20th of just the royalty revenue of the U.S. Why exactly should we be excited about this? Pemex is an embarrassment. I could blindly pick anyone at random from Nowheresville, TX and they would out perform the management team of Pemex.


Quote:
Originally Posted by Honesty View Post
In this paper, the author writes, "As much as 30-40 per cent of government revenues in Mexico stem from oil taxes, mainly in terms of royalty payments from the state-owned oil company PEMEX".
You want me to read a fifteen year old paper using data from two decades ago to support your thesis that a corrupt deadbeat company in a third world collapsing country is outperforming the envy of the world in the U.S. oil and gas industry? You are off the reservation.

Quote:
Originally Posted by Honesty View Post
What's more, Longhorn Dave, is that because government spending in Mexico is "flat" (See Figure 14), the PEMEX contributing "4-5 per cent of GDP" (See Figure 5 & Box on Page 9). Now, if Mexico, isn't good enough for you. We can also do this with CODELCO, New Zealand, or the Pennsylvania Liquor Control Board just say the word.
Yes, by all means explain to me how the Pennsylvania Liquor Control Board is outperforming the U.S. oil and gas industry. Jesus Christ, is this a joke?


Quote:
Originally Posted by Honesty View Post
Here's my question to you: Why should the government be dependent on tax revenues when, in it's current form, those revenues are dwindling?
Because your basic premise is incorrect? Tax revenues are not dwindling. Is that the right answer?
  #68  
Old 05-08-2013, 01:28 AM
Little Nemo Little Nemo is offline
Charter Member
 
Join Date: Dec 1999
Location: Western New York
Posts: 79,884
Quote:
Originally Posted by Alessan View Post
Furthermore, you can't prove that the government will make more money running businesses than it loses running businesses.
And even if you accept that as a premise the money isn't enough. In terms of profits, Exxon is the biggest company in history. And you'd need over a hundred Exxons to finance the national budget.

So to eliminate taxation, the government would have to run a hundred businesses - each of which would have to be more profitable than any company has ever been in history.
  #69  
Old 05-08-2013, 01:49 AM
adaher adaher is offline
Guest
 
Join Date: May 2003
Location: Florida
Posts: 28,789
This is a pretty simple one to answer. Okay, the government's going to start a business. They've got the startup cash, no problem.

So who runs it? A crony of the administration, of course, chosen for loyalty, not competence. How is it staffed? Through a complicated system that involves picking people for diversity reasons rather than talent. How are employees rewarded? They aren't. They get paid based on scales whether they do a good job or not. How are employees punished for doing a poor job? They aren't. Is the business conducted in a way as to maximize profits, or to fulfill various political missions the administration and members of Congress give it? Silly, why do you even ask?

Then you get what is known in modern times as epic fail.

But that's not even the end of the story. NOw you have a business that's providing jobs. So does the company's failure result in it getting put out of business? HA!!! Now it gets subsidies.

Last edited by adaher; 05-08-2013 at 01:50 AM.
  #70  
Old 05-08-2013, 01:57 AM
LonghornDave LonghornDave is offline
Guest
 
Join Date: Feb 2008
Location: Houston
Posts: 1,816
Quote:
Originally Posted by adaher View Post
This is a pretty simple one to answer. Okay, the government's going to start a business. They've got the startup cash, no problem.

So who runs it? A crony of the administration, of course, chosen for loyalty, not competence. How is it staffed? Through a complicated system that involves picking people for diversity reasons rather than talent. How are employees rewarded? They aren't. They get paid based on scales whether they do a good job or not. How are employees punished for doing a poor job? They aren't. Is the business conducted in a way as to maximize profits, or to fulfill various political missions the administration and members of Congress give it? Silly, why do you even ask?

Then you get what is known in modern times as epic fail.

But that's not even the end of the story. NOw you have a business that's providing jobs. So does the company's failure result in it getting put out of business? HA!!! Now it gets subsidies.
Exactly this. Great response.
  #71  
Old 05-08-2013, 02:53 AM
Little Nemo Little Nemo is offline
Charter Member
 
Join Date: Dec 1999
Location: Western New York
Posts: 79,884
Quote:
Originally Posted by adaher View Post
So who runs it? A crony of the administration, of course, chosen for loyalty, not competence. How is it staffed? Through a complicated system that involves picking people for diversity reasons rather than talent. How are employees rewarded? They aren't. They get paid based on scales whether they do a good job or not. How are employees punished for doing a poor job? They aren't. Is the business conducted in a way as to maximize profits, or to fulfill various political missions the administration and members of Congress give it? Silly, why do you even ask?
Exactly. It's like that time the Japanese bombed Pearl Harbor and the first thing Roosevelt did was appoint his brother-in-law to be in charge of the war.

The reality is there's plenty of competent people working for the government and plenty of incompetent people working in private businesses (in some cases running them).
  #72  
Old 05-08-2013, 04:10 AM
adaher adaher is offline
Guest
 
Join Date: May 2003
Location: Florida
Posts: 28,789
This is true. And my scenario is not going to happen at every step. But it only takes one of those things being true to make the business uncompetitive. So maybe the President does appoint someone competent to run the business. It's still likely to be subject to political direction. Look at state pension funds. Their purpose is to make money for pensioneers, but politics keeps on causing them to drop certain investments and make certain investments, thus reducing performance. And any government sponsored enterprise is also likely to inherit government job protections. It will also be implicitly backed by a promise to bail it out should it fail, which will reduce incentive to actually succeed. Workers will treat it as a government job and act accordingly.

But more likely than not, the President would appoint a political crony. That's how most of the Cabinet is staffed. But since this business venture would be a new thing, we'll be generous and assume the President would have a major incentive to see it succeed. Future Presidents, unfortunately, would not be all that invested in its success, not having created it.

The military is a different case. It doesn't have to be. If we ran the civilian side the way we did the military it would probably work better. But we don't. And there's a reason for that. Wars are important. If the US had lost the war, FDR would have been disgraced, if not executed, either by a conqueror(unlikely) or a revolutionary government(more likely). Politicians are good at self-preservation. A business by contrast, or any other government program, if it fails or is inefficient, it doesn't really affect the politicians any.

Last edited by adaher; 05-08-2013 at 04:12 AM.
  #73  
Old 05-08-2013, 12:52 PM
Agnostic Pagan Agnostic Pagan is offline
Guest
 
Join Date: Dec 2005
Location: St Louis, Missouri
Posts: 1,013
I had considered similar ideas in the past, particularly state-owned industries to supply the government with key resources such as paper, fuel, etc. It seems very inefficient to lease oil rights to companies and then purchase the fuel from those companies. Why not cut out the middle man and refine our own oil? Several posts have given good reasons why that would not work, at least at the national level. Mainly Congress has shown that they are the worst board of directors ever. (And most presidents have not been the best C.E.O.s either.)

There are many municipal-owned enterprises from utilities to parking garages to arenas. The key is determining the right size to enable efficiency and accountability. And they still have major problems with keeping enterprises from being over-politicized to serve whatever interests - from major donors to major unions. (Civil service is great for agencies focused on service. Not so great for enterprises focused on generating revenue and profit.)

Yet I would not consider a state-owned enterprise socialism per se. If they nationalized the entire sector and forbid any competitors, yeah, that is old school state socialism. (And I won't argue that certain municipal utilities don't meet that definition, though no one is forced to live in those cities that I am aware of.) But having them compete in the open market? It is still a capitalist enterprise, just with a different class of shareholders.

If government needs to increase tax revenue without raising tax rates, then the best method I think is increasing the size of the revenue pool to be taxed - i.e. enable more businesses to generate more taxable profits. In other words, old fashioned economic and business development. (Not the same as allowing businesses to become 'too big to fail' and then require government bailouts.)

I think the federal government does a decent job with the Small Business Administration and several other Commerce dept programs. Economic development is a mixed bag around the country and could use more focused leadership at the national and state levels, but most state economies are growing. I think there is room for more municipal or state (i.e. local) owned enterprises. But not at the federal level. Not with our government.

The jury is still out on China and the Arab sovereign wealth funds. It may work with their cultures. I do not see it working within ours.
  #74  
Old 05-08-2013, 08:57 PM
Little Nemo Little Nemo is offline
Charter Member
 
Join Date: Dec 1999
Location: Western New York
Posts: 79,884
Quote:
Originally Posted by adaher View Post
The military is a different case. It doesn't have to be. If we ran the civilian side the way we did the military it would probably work better. But we don't. And there's a reason for that. Wars are important. If the US had lost the war, FDR would have been disgraced, if not executed, either by a conqueror(unlikely) or a revolutionary government(more likely). Politicians are good at self-preservation. A business by contrast, or any other government program, if it fails or is inefficient, it doesn't really affect the politicians any.
Keep in mind the military is not some rare exception to a supposed general incompetence in the government. The military, which you feel is well run, is the largest part of the government by far. The "typical" government employee is an enlisted man in the Army.

There are about 4,049,000 people who work for the United States government. The largest group are the 1,430,000 active-duty members of the armed forces. The second largest group are the 779,000 civilian employees who work in the military. The third largest group are the 517,000 people who work for the postal service. No other group is larger than 200,000.

So if you feel the military is well run, you're basically saying the government is mostly doing a good job.
  #75  
Old 05-08-2013, 09:16 PM
adaher adaher is offline
Guest
 
Join Date: May 2003
Location: Florida
Posts: 28,789
Quote:
Originally Posted by Little Nemo View Post
Keep in mind the military is not some rare exception to a supposed general incompetence in the government. The military, which you feel is well run, is the largest part of the government by far. The "typical" government employee is an enlisted man in the Army.
The military is well-run as far as employee performance. It's actually as crappy as any other government agency when it comes to handling money. Maybe worse.
  #76  
Old 05-08-2013, 10:24 PM
Little Nemo Little Nemo is offline
Charter Member
 
Join Date: Dec 1999
Location: Western New York
Posts: 79,884
Quote:
Originally Posted by adaher View Post
The military is well-run as far as employee performance. It's actually as crappy as any other government agency when it comes to handling money. Maybe worse.
But the military's role is not financial. Their job is to blow things up and they do that real well.

The only part of the government that I can think of offhand that's supposed to produce income is the IRS. And say what you will about them, they get the job done. Every year they produce billions of dollars in income.
  #77  
Old 05-08-2013, 11:33 PM
adaher adaher is offline
Guest
 
Join Date: May 2003
Location: Florida
Posts: 28,789
They blow things up well because they have discipline. If they couldn't be demoted or fired or reassigned for poor performance, they'd get well, poor performance.
  #78  
Old 05-09-2013, 12:11 AM
Honesty Honesty is offline
BANNED
 
Join Date: May 2000
Posts: 1,819
Quote:
Originally Posted by LonghornDave View Post
Woopty fucking doo. You're telling me that the state owned oil monopoly of a country with 2/3rds the oil reserves as the U.S. generated less than 1/20th of just the royalty revenue of the U.S. Why exactly should we be excited about this? Pemex is an embarrassment. I could blindly pick anyone at random from Nowheresville, TX and they would out perform the management team of Pemex.
Show me a company in Texas that's doing better than Pemex.

Quote:
Originally Posted by LonghornDave View Post
You want me to read a fifteen year old paper using data from two decades ago to support your thesis that a corrupt deadbeat company in a third world collapsing country is outperforming the envy of the world in the U.S. oil and gas industry? You are off the reservation.
<shrug> It was the cite I could find on Google. If you have a cite that you'd like to bring forth, then by all means, please do so. It's real easy to criticize but a cursory search on this thread shows me that you haven't provided a link or a hyperlink, so you know, at least I'm trying, unlike you who is preening about your in-the-mirror expertise without putting anything on the table.


Quote:
Originally Posted by LonghornDave View Post
Yes, by all means explain to me how the Pennsylvania Liquor Control Board is outperforming the U.S. oil and gas industry. Jesus Christ, is this a joke?
I must be living in a bubble. This entire thread hasn't just been about the oil and gas industry, it has been about government-owned enterprises which could, in theory, include a copper company or a chain of liquor stores . I am not saying that the PLCB generates more than the U.S oil and gas industry, that's your strawman which you've heroically slayed with your scythe of vengeance +1. The strawman collapsed to the ground, shuddering and moaning until it ceased all movement. Congratulations. What I am saying is that the PLCB can generate a stream of revenue for a State (in this case, Pennsylvania) to supplement revenue from tax receipts.


Quote:
Originally Posted by LonghornDave View Post
Because your basic premise is incorrect? Tax revenues are not dwindling. Is that the right answer?
Listen, LonghornDave, I don't know whether you're being dense or you're playing some artful game of semantics. But according to this chart, revenue (% of GDP) has decreased since the 2000 and hasn't recovered. The point, LonghornDave, is that there isn't enough revenue to cover the current 100% GDP-Debt ratio. As I've stated in my thesis, the American taxpayer has voted to cut federal taxes over and over again since 1981, which should suggest to you (and everyone here) that the revenue problem will continue to persist.

Quote:
Originally Posted by Little Nemo View Post
The only part of the government that I can think of offhand that's supposed to produce income is the IRS. And say what you will about them, they get the job done. Every year they produce billions of dollars in income.
The IRS does a horrible job. The IRS charges less interest than the private sector as well as capping the amount of interest charged. The IRS budget has remained essentially flat (See Page 3) with sequential budget reductions in FY11 and FY12. If the IRS can collect over 2 trillion in revenue on 11 billion dollar budget, imagine how much they could collect with a 20 or 30 billion dollar budget.
Quote:
Originally Posted by Little Nemo View Post
You're continuing to ignore the scale involved. Can a country make some money running a business? Sure. But the United States will never be able to make enough money just by running businesses.
While I emphatically disagree with this statement based on the success of GSE's in other countries, it's my belief, after considering this thread, that my idea may not work, but it's not because government is so inefficient that it'll mired in own clumsiness, it's because Congress is no longer a steward of the people's business. The tale of the Post Office which was described upthread is a deafening example.


Quote:
Originally Posted by adaher View Post
So who runs it? A crony of the administration, of course, chosen for loyalty, not competence. How is it staffed? Through a complicated system that involves picking people for diversity reasons rather than talent. How are employees rewarded? They aren't. They get paid based on scales whether they do a good job or not. How are employees punished for doing a poor job? They aren't. Is the business conducted in a way as to maximize profits, or to fulfill various political missions the administration and members of Congress give it? Silly, why do you even ask?
Why are you acting as if private industry doesn't do this every single day. My god. I have had a job where the owner of the company has her kid working as a "quality insurance" whom, by the way, got paid more than all of us to watch Netflix movies in her office. If you think nepotism is somehow government job specific, let be the first one to assure you that's not true. The rest of your response doesn't deserve a counterpoint as it's just a veiled attack on diversity and affirmative action programs, which clearly you feel have no benefit.



Quote:
Originally Posted by agonstic pagan View Post
There are many municipal-owned enterprises from utilities to parking garages to arenas. The key is determining the right size to enable efficiency and accountability. And they still have major problems with keeping enterprises from being over-politicized to serve whatever interests - from major donors to major unions. (Civil service is great for agencies focused on service. Not so great for enterprises focused on generating revenue and profit.)

Yet I would not consider a state-owned enterprise socialism per se. If they nationalized the entire sector and forbid any competitors, yeah, that is old school state socialism. (And I won't argue that certain municipal utilities don't meet that definition, though no one is forced to live in those cities that I am aware of.) But having them compete in the open market? It is still a capitalist enterprise, just with a different class of shareholders.
I concur with this.

- Honesty

Last edited by Honesty; 05-09-2013 at 12:16 AM.
  #79  
Old 05-09-2013, 12:19 AM
Honesty Honesty is offline
BANNED
 
Join Date: May 2000
Posts: 1,819
Response to Little Nemo

The IRS does a horrible job. The IRS charges less interest than the private sector as well as capping the amount of interest charged. The IRS budget has remained essentially flat (See Page 3) with sequential budget reductions in FY11 and FY12. If the IRS can collect over 2 trillion in revenue on 11 billion dollar budget, imagine how much they could collect with a 20 or 30 billion dollar budget.

Last edited by Honesty; 05-09-2013 at 12:20 AM. Reason: Forgot hyperlink in previous post
  #80  
Old 05-09-2013, 12:21 AM
adaher adaher is offline
Guest
 
Join Date: May 2003
Location: Florida
Posts: 28,789
Quote:
Originally Posted by Honesty View Post

Why are you acting as if private industry doesn't do this every single day. My god. I have had a job where the owner of the company has her kid working as a "quality insurance" whom, by the way, got paid more than all of us to watch Netflix movies in her office. If you think nepotism is somehow government job specific, let be the first one to assure you that's not true. The rest of your response doesn't deserve a counterpoint as it's just a veiled attack on diversity and affirmative action programs, which clearly you feel have no benefit.


- Honesty
Of course it happens in the private sector. and if it causes the company to fail, the problem is solved. A government enterprise wouldn't be allowed to fail, thus the moral hazard.

as for diversity programs, I feel they do have a benefit. The way it's supposed to work is that you recruit and develop promising minority candidates. But you don't show a preference for minority candidates. that's discrimination.

Last edited by adaher; 05-09-2013 at 12:21 AM.
  #81  
Old 05-09-2013, 12:22 AM
adaher adaher is offline
Guest
 
Join Date: May 2003
Location: Florida
Posts: 28,789
BTW, the government does run a pretty big business now called TVA. And the President wants to sell it because there is major risk for the taxpayers to the tune of $30 billion.
  #82  
Old 05-17-2013, 07:12 PM
LonghornDave LonghornDave is offline
Guest
 
Join Date: Feb 2008
Location: Houston
Posts: 1,816
Quote:
Originally Posted by Honesty View Post
Show me a company in Texas that's doing better than Pemex.
I'll respond to the rest of your post later, but this one was too ridiculous to pass up. First, I realize that you may think I am using a hostile tone, and for that I apologize. I honestly feel like you need to take a step back and realize that you may not be very educated in the area you are attempting to discuss. I am not trying to lord my expertise over you, but you are just wrong with much of what you are saying. I will try to write in a more friendly manner, however.

To answer your question, I can name you dozens and dozens of companies in Texas in the same industry as Pemex that are doing better. Better by what measure, you might ask? Well, by most of the measures that oil and gas companies score themselves. Things like production growth, reserve replacement, cash flow growth, profitability, etc. We could start by looking at Pemex's situation. Here is a handy place to start.

Pemex Fact Sheet

Please note that this fact sheet is current as of May 2013. Also, put it in perspective that we are essentially living in the period of a renaissance of the oil and gas industry. Pemex, is a monopoly controlling an incredibly resource rich land. The geology in many ways is very similar to much of the incredibly resource rich areas of the U.S.

Pemex's performance is putrid. They have declining oil production. They have declining gas production. Their proved (1P) reserves have declined. Their developed proved reserves have declined more. They have an increasing amount of debt. Their debt to EBITDA ratio has increased. They have a negative equity position. They lost money in their refining sub-sector. They lose money in petrochemicals. They are rated one notch above junk bond status by Moody's, S&P, and Fitch. Again, this is a state run monopoly in a resource rich country.

Now, do you really think it would be difficult for me to come up with some oil and gas companies headquartered in Texas that are doing better than that?
  #83  
Old 06-21-2013, 10:17 AM
LonghornDave LonghornDave is offline
Guest
 
Join Date: Feb 2008
Location: Houston
Posts: 1,816
Here's an applicable article about Pemex.

Mexico's President Pushes Reforms for State Oil Company Pemex

Quote:
Originally Posted by Bloomberg
The bottom line: Mexico, facing a steady decline in oil output, needs foreign money to develop shale gas and deep-water reserves.
Quote:
Originally Posted by Bloomberg
Without some private capital and expertise from abroad, Mexico risks becoming an importer in the next decade. Many of Mexico’s politicians and policymakers have known this for years. Yet Mexican nationalism, resistance from the unions, and the sheer size of the task of transforming Pemex have stood in the way.
Quote:
Originally Posted by Bloomberg
He has, however, been sending signals to international oil companies that he needs their help to arrest eight years of decline in Mexico’s crude output. “It’s obvious that Pemex doesn’t have the financial capacity to be in every single front of energy generation,” the 46-year-old president said in an interview in London on June 17, before he traveled to Northern Ireland for meetings with Group of Eight leaders. “Shale is one of the areas where there’s room for private companies, but not the only one.”
  #84  
Old 02-11-2019, 11:39 AM
Really Not All That Bright Really Not All That Bright is offline
Guest
 
Join Date: May 2003
Location: Florida
Posts: 67,942
So... the US should start an oil company because the Mexican government may be able to successfully bail out its mostly money-losing nationalized oil business?
  #85  
Old 02-11-2019, 12:03 PM
bump bump is offline
Guest
 
Join Date: Jun 2000
Location: Dallas, TX
Posts: 16,779
Quote:
Originally Posted by Alessan View Post
From your link:



Nothing there about turning a profit for Uncle Sam.

The TVA and similar projects are grand and noble enterprises, designed to benefit the people and the country as a whole. They also are not what the OP is talking about.
If anything, the government's best at doing things that AREN'T profitable, and never would be- stuff like flood control projects, etc... Or for that matter, things that could be profitable, but probably shouldn't be- potable water production and distribution, public safety provision, military services, etc...

One problem that would hamstring any government attempts at running businesses would be governmental regulations on itself that would slow its ability to adapt to changing business conditions-the whole lowest bidder purchasing scheme, and the greater degree of hiring/firing difficulty would be a clear hindrance on the bottom line for a company trying to compete in today's marketplace.

Like others have said, that doesn't imply competence or incompetence, but rather that a governmental agency can't realize that a business unit is unprofitable and shit-can it like a private company can. And it can't recognize a business opportunity and write a check to get stuff bought, people hired and things built like a private company can. It's got to go through RFPs and bids and all that crap. They could be streamlined somewhat, but the fact remains that private companies can sacrifice cost effectiveness for speed or efficiency in a way that governments are explicitly prevented from doing.
  #86  
Old 02-11-2019, 12:05 PM
Omar Little's Avatar
Omar Little Omar Little is offline
Guest
 
Join Date: Apr 2000
Location: Within
Posts: 12,390
How about the government start a TV series about zombies?
  #87  
Old 02-11-2019, 02:13 PM
kopek kopek is offline
born to be shunned
 
Join Date: Jul 2007
Location: Southwestern PA
Posts: 14,103
Quote:
Originally Posted by Omar Little View Post
How about the government start a TV series about zombies?
Well put.

When this thread was alive my first reaction was a flashback to the old David Frye as Richard Nixon routine announcing his "the United States going out of business sale". I forget the specifics but I remember laughing hard enough to feel the pain afterwards.

Last edited by kopek; 02-11-2019 at 02:13 PM.
Reply

Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is Off
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 07:21 PM.

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2019, vBulletin Solutions, Inc.

Send questions for Cecil Adams to: cecil@straightdope.com

Send comments about this website to: webmaster@straightdope.com

Terms of Use / Privacy Policy

Advertise on the Straight Dope!
(Your direct line to thousands of the smartest, hippest people on the planet, plus a few total dipsticks.)

Copyright © 2018 STM Reader, LLC.

 
Copyright © 2017