The French government (as with most European governments) has a closer relationship with industry that we see in the Anglosphere, so this is not quite a surprise.
That said, it's good timing on the announcement because it's more a signal than anything.
'We will not hesitate' is pretty strong language, indicating faith in those institutions that are, at least for now 'too big to fail'.
I would really like to see new laws (or deleted old ones) in order to increase safety for such unexpected conditions.
It feels something is terribly wrong with the world and the basic laws of capitalism, now that it turns out many companies don't pile on stuff, and go out of business in a matter of weeks when supply is lagging behind.
Don't we want people who do too much stock buybacks to lose their businesses to be replaced by people who are more sensible? Putting all these guardrails on would just make sure insufficiently conservative CEOs never lose their jobs.
Sure, if you don't care at all about the employees and customers affected by industry-wide collapses of companies all doing the same "goose the stock" tactic.
Are there any examples of companies using "we can pay our employees for six months" as a competitive advantage on Wall Street you can point to? Industry self-regulation in this regard has a pretty dismal track record.
Trouble is that in order to remain competitive all companies have to take the same risk as the lowest common denominator. If there is a regulation, then there is no market pressure to take the risk.
This has nothing to do with how investors feel. Sufficiently strong competitive pressure will create the same situation again. The market fundamentally can't handle low probability events, even if they're absurdly high-impact (i.e. the so-called black swans).
A business like this is not insane per se. The time horizons relevant in investing are so small that you can round the probability of a black swan to zero. So there will be investors, and reserve capacity will be cut.
Unless some completely new regulations are passed, nothing will change about the basic incentive structures of markets. And these incentive structures are more powerful than whatever an investor or a CEO may feel.
I don't think this is true. People analyze every detail of the books on those public filings. If the culture of investors changes such that a low cash reserve (or whatever) is considered risk, that will be factored into the stock price. This is particularly true if having continually low reserves bumps you off important indexes.
The level of reserve investors require may initially be high after this, but it'll go down over time, bit by bit. What I'm saying is that market isn't static, and the forces that move it are stronger than individual risk tolerance. The pandemic will change the risk tolerance, but it'll revert over time.
A related concept is the so-called "normalization of deviance".
The CEO gets to use the entire staff as cannon fodder first. Even CEOs that are forced out for disappointing the investors are usually given a golden parachute on the way out.
The CEO and the board usually negotiate the golden parachute on the way in. Sometimes, the board can convince a CEO to waive the parachute on the way out.
> It feels something is terribly wrong with the world and the basic laws of capitalism
But this is the basic law of free markets at work. If you can run on a leaner supply chain, you'll outcompete those that can't. It's regular market competition that makes systems extremely fragile - all redundancy is considered as waste, fat to be cut off.
>But this is the basic law of free markets at work.
I absolutely agree with your comment, but that's exactly what the original poster was referring to, I think, with "something is terribly wrong with [...] the basic laws of capitalism", one being the free market, as you just mentioned.
I thought they meant "wrong" as in "deviate from pure ideals of capitalism". But I agree that these pure ideals are wrong in a social/ethical/risk management sense.
Having cash on hand is independent of being a lean company.
40 years ago it was illegal in the US to pile on debt and use that money for stock buybacks. Which frankly is reasonable as looting struggling companies is bad for the economy and arguably fraud.
> Having cash on hand is independent of being a lean company.
Having cash on hand is leaving money on the table - you could put it to use in something that makes you grow, or lose to a competitor that does. It's a different thing than lean manufacturing, but same forces cause both.
For an efficient buisness excess capital is no longer a competitive advantage. A hypothetical movie theater can only pull in so many people cost effectively from the surrounding area. Whatever maximizes long term profits is the limit after which they need a new business model.
Expansion seems like an obvious solution, but in a competitive market that’s not always a winning strategy. Read up on the rise and fall of Subway to see the issues.
From the same government that were selling Aéroports de Paris few months ago... Sells profitable entreprises and buys those in need of cash, then complains about debt and rises taxes. The aftermath will be salty for citizens, which are already amongst the most taxed in the world.
The "country" doesn't have to do anything special to turn the company around - the company's management ought to be capable of that once the economy recovers. As long as the government doesn't pack the board with cronies, nothing should change. Assuming that's the case, it should make no difference who the majority shareholder is: the government, a large institutional investor, or the general public.
There's no reason failing companies should receive "bailouts" - defined as government-granted low-interest loans, often without suitable collateral. If the government puts in money, it should receive shares.
Almost all of the French industry is led by 'cronies'. Macron is the 'top crony' - he was plucked from the layer of 'new young cronies' to save France from Le Pen.
In Europe, since the revolutions, the primary marker of crony isn't so much birth, it's education, i.e. Oxbridge/Grande Ecole etc., but once they're through that 'kind of egalitarian' gamut of education, it's mostly 'crony' from there on in.
This has a kind of nationalist/communitarian aspect which can be helpful in times such as this (cronie CEO is buddies with cronie Minister of Finance), but it's generally not good for competition and global competitiveness.
Haha, those two things are not the same. Generally governments pay a premium for companies that they could probably pick up out of bankruptcy and then later they sell them off via a set of bankers who take a massive cut and undervalue the sale. A Great British example was Royal Mail, IPO'd at 330p per share, by the end of the day it was trading at 458p. It jumped 38% on the first day and eventually peaked at 87% over the original IPO price in the next few months.
Government motors worked out okay for taxpayers in the USA. Not sure France is going to relinquish control though. They seem to like central planning / high unemployment over there.
Nationalization to me isn't that different from a bailout, the government (and thus taxpayers) foot the bill. With nationalization I guess the government can exert greater control over how the company is run, but is that necessarily the best way to provide oversight?
Government departments exhibit "institutional resistance to, and subversion of, public policy and regulations" all the time. Why would a govenrment-owned corporastion be any different?
No, Venezuela is a poignant example of what nationalization does to companies and industries. They simply bog down in eventual corruption and massive inefficiency to the point of stopping or limping along.
The counter opposite example is China and their industries, but that implies an even worse kind of relationship that greatly exploits people and their labor.
Yeah, "nationalization" is ambiguous ... I think in this case, it's not nationalization as in "stealing" like Saudi Arabia nationalized Aramco or what happened in Venezuela, but as in "rescuing" after a bancrupcy (instead of "bailing out" - giving loans - i.e. rewarding investors into failed companies with really cheap credit).
The electricity providers in Denmark is a better example. All money stays in the company so no one gets rich. They also provide some of the best internet in the world.
You really can not compare Venezuela and France like this. I love both countries but they are worlds - ok, continents - apart in how they are governed and to what degree corruption is prevalent.
The point of nationalization isn't oversight, the point is that if the public is an investor into a business, the public should receive a share of the profits generated by the business.
Problem is, that rarely happened because govs are generally bad (not skilled / trained) at running businesses. Pretty much the opposite.
To expand a bit; an ideal system, IMHO, would be a hybrid "state-backed but citizen-controlled" entity (half-way between nationalized and publicly traded) wherein shareholders involve citizens but not govs official (who have their own agenda, etc.); this is to maintain a sane separation between "the things belonging to citizens" and "the affairs of the State as a government").
It also follows a fundamental (but long-forgotten) principle of democracy that citizens should be able to control (as in audit, not "run" executively) the public things. You'd expect such a hybrid entity to be run by good commanders of industry, typical board / CEO but vetted by some citizen-backed legitimacy, in the shareholder voting process (this is a mild / hybrid form of "election", which is too strong as it is for this hybrid entity, but worth the "backed by sovereignty consent" value).
> Problem is, that rarely happened because govs are generally bad (not skilled / trained) at running businesses
These are businesses that have been run so poorly they're begging the government to force citizens to donate them money. I don't think there's any reason to believe the private sector has any particular genius here.
I think there's a fair argument to make that running a profitable business isn't government's core competency. They operate under different financial constraints. At the same time though, we've overspecialized in the private sector. We have people so specialized in running a business that the actual thing the business does is abstracted away. Putting them in positions of control turns the business into a social parasite.
When we see that the US airline business is asking for a $50 billion bailout, having engaged in $45 billion of stock buybacks, it appears that the sector is dominated by owners and execs who are either completely incompetent at risk management, or really in the business of robbing the public purse.
I'd definitely say the latter. But that's not surprising, really. A lot of the entities I've heard of that do government contracting aren't there to deliver value, but to rob the government. Companies doing quality work tend to get outbid.
There's plenty of services and industries that used to be private and are now either fully or controlled by the government, or have good competition by the government. Some examples in the USA:
- Firefighting [1]
- Education
- Broadband [2]
Outside the USA, many governments run other companies well enough too, from energy companies, to rail/transport, banking, etc.
We bailed out the car companies not long ago and they all paid us (the government) back. If they can guarantee something like that I think most people would be fine with it. But here's one guy's opinion on why airlines for instance should be different (low margin/high capital/generally much riskier but somewhat vital to nation):
https://slate.com/business/2020/03/airlines-bailout-coronavi...
the better argument against nationalization is to reduce the consolidation of power (and money and corruption), not a government vs corporation pick-your-poison tradeoff.
the economy would be better off if nearly all capital/equities were tied up in small- to medium-sized businesses, not large corporations (or governments) and consolidated markets.
You raise another important point - which companies are nationalized will be a political games from the start. The gov't will basically decided which companies live and which ones die, and I have no doubt personal relationships between government and executives will help that process.
Yes. Bailouts have moral hazard in them, nationalization does not.
Bailout The government rescues stock holders and industry with cheap loans. In bailouts government shares the risk with owners but not the profits.
Nationalization Government rescues the industry and stock holders lose their assets. Government can later arrange IPO and get rid of the companies and recoup at least part of the profits, sometimes making profit. In nationalization owners have risk and profits, when company goes belly up, government takes the risk and profits. It's clean cut.
It doesn't have to be either-or. We could have some form of mandatory "bailout insurance" for companies - if you're "too big to fail", then you're big enough to pay into the rainy day fund.
> Le Maire also welcomed a decision by France’s financial markets authority to ban short-selling during trading on Tuesday on 92 French stocks and said the measure could be extended up to a month if necessary.
This is peak retardation by people who do not understand how the economy/markets work. French companies have lost lots of their competitiveness due unions, legal barriers, high taxes, etc... A recession/crisis would force these companies either to shutdown or restructure making them stronger in the future and letting the economy run on its own.
If the government has failed to pass previous reforms, why would they think they'll successfully save these companies?
Have you ever considered that you have terminal America Brain and that your particular economic theories haven't exactly proven robust or even helpful for the past century?
Because its the natural state of all life on earth. Its the condition every living thing has to struggle against. It can be fought individually, it can be fought collectively, but it still has to be fought and even then you are not guaranteed success.
Think of all the people in conflict areas who could live a decent life were they allowed to simply be in peace. Think of all the people who have lived good lives and then been displaced by horrific natural disasters. Its not an issue of economics. Its just a fact of reality.
It's worth noting that the Our World in Data plot is misleading in the pre-1980 part. What it is actually showing is neither poverty, but some relationship of GDP to poverty, nor the population of the world, instead it is almost entirely the Western world.
The World Bank, UN and the IMF use extreme poverty as a measure and define it as having the purchasing power of $1.90 (in the US in 2011 for the OWiD plot) a day. But that's very low and pretty arbitrary. €6.70 a day is needed for decent nutrition, $7.40 for typical life expectancy, $8 a day to reduce infant mortality rate. The US poverty line in 2015 was $30 a day.
Pinkner has a lot to say about the reduction in violence that I agree we should be optimistic about. And there's much to be said about improvements in technology, access to education (especially for girls), increases in vaccination globally. But that OWiD plot is used to jump on the New Optimism bandwagon to say a lot more than anything you should conclude from a such an arbitrary set of data.
Not GP, but banning short sales is known to be absurd by pretty much any economist or financial expert out there. Distorting true price always leads to negative effects.
Now people investing in french companies will pay unfairly high prices for their shares.
Switching to nationalization, it’s pretty clear that that removes the incentive to take on risk and found a company since you are always at risk of the government stealing your assets.
Sorry I didn’t include citations but I would really encourage you to read about rational pricing and healthy market dynamics. Those that think you can just artificially decide the price of a security rather than let the price discovery mechanism play out are doomed to repeat the same problem we see in communist countries: you can buy bread for a “fair” price, but there’s no bread to buy because the price was too low.
__blockcypher__ at least gave some reasoning behind the expressed position. A fact-free, argument-free rebuttal does little to refute such a post, even if the post is wrong.
Could you give some evidence or argument or both to explain why you think __blockcypher__ is wrong?
Maybe I came off too hard, and lacking details didn't help either. My point is, this is a situation without precedent, unlikely to repeat very often, and not all private industry is being nationalised. Same goes for banning short sales. It won't last forever.
That is why I think you oversimplified. This is not a communist takeover of France.
Note: I did not, and wouldn't have downvoted you for your comment. Yours is a fair opinion to have.
And it doesn't work for housing and about a million other goods and services that have been subject to price controls.
Just look at California's water shortage issues. Water prices are basically fixed so huge farms suck up all the water to irrigate a desert while ordinary people are told to stop bathing. Seems like an externality of price regulation, no?
All of the US, each state has a department of insurance
edit: wouldn’t let me reply, I know they regulate existing product prices and that new products need to be filed and that states have different laws regarding coverage limits and litigation details
It’s not perfect but it prevents a scenario where Fortune 500 companies buy up as much as possible and use their position as a source of profit growth.
What about a bimodal model, people have a right to a reasonable volume of water. Companies have to both pay for the water (at the price-fixed rate) and have to acquire a right (like a ration token) to have water. People then would always be able to afford to buy enough water to sate them, but companies need to buy their tokens in order to get water. Most people would probably sell their tokens back to the water company, who would sell them on at a profit. But equally you could save them for times of water crisis when the token price soars and pay off your own water bills.
That proposal is just a complicated and inefficient bureaucratic reinvention of a supply & demand marketplace. Just let S&D do its thing and take its course, and people will get water.
To be fair, price gouging laws prevent companies from increasing prices of goods like, say, toiletpaper, such that they remain in supply. Thus the shortages.
In other words, we already have “soft” price-fixing.
> The price gouging laws allow prices to increase without limit to pay for increased wages or costs
Higher profits from gouging is what motivates people to increase the supply. Altruism only goes so far. Profit motive to provide needed supplies is far more effective.
Remove the profit motive, relying on the government and altruism, is a very poor substitute.
The point is, gouging creates MORE availability. Remember those hurricanes? People outside the devastated zones promptly filled jerry cans with gas, drove into the disaster area, and sold gas out of the back of their pickup trucks for high prices.
That is, until the government made it illegal to do that. The next disaster meant people had no gas until the government got around (days later) to bringing some in and rationing it.
TP is not quite the inelastic situation you posit it is. For example, there's been a boom in sales of bidet toilet attachments. High prices for tp make it very attractive to switch, thus making tp available for others. High prices mean people who already have more tp than they need will be tempted to sell it. High prices mean TP makers will ramp up production as fast as possible. High prices mean people will be motivated to make & sell TP alternatives. High prices mean people have no reason to hoard TP.
Anti-gouge laws lead directly to hoarding and no TP available.
Hoarding toilet paper will not increase supply of it. The toilet paper manufacturers are not making any more of it, because this is a temporary blip on the demand side, and because they know that they aren't going to sell any more toilet paper in the long run.
Hoarding resources that we aren't globally in short of, actually makes the situation far worse. The demand spike is solely caused by hoarders and price gougers, to the detriment of everybody else.
There are no shortages when gouging is allowed. Gouging disincentivizes hoarding. See my other posts in this thread.
Anti-gouging laws mean that you'll either do without or pay even higher prices for black market goods. The more you punish black marketeers, the higher go the prices you'll have to pay.
There are when a bunch of people buy up the entire supply, and try to resell it at 5x the rate.
> Gouging disincentivizes hoarding.
Only after the gougers have hoarded everything they can.
The gougers in this case aren't making any more toilet paper appear in the world. The factories aren't making more of it, just because a few people bought it out, because the global demand for it is constant. They simply created an artificial shortage, and introduced themselves as a parasitic middleman.
> The gougers in this case aren't making any more toilet paper appear in the world.
Things don't happen in a vacuum. If the gougers create an artificial shortage, then there is money to be made by increasing the supply. In fact, there'll be plenty of money to be made selling to the would-be gougers. The supply is not fixed and gouging will increase the supply.
In a theoretical world, with instant market reactions, instant transportation, and perfect price and supply information, yes. In the real world, no.
1. The absolute supply of toilet paper on a long-term timescale will not increase.
2. The cost of increasing manufacturing capacity may not be worth the increased revenues from selling into a two-week shortage.
3. There's a lag time. By the time you increasing manufacturing capacity, and get paper into groceries, the demand curve would have flattened out.
4. There isn't an actual shortage, there are some very localized shortages, which will get smoothed out once supplies sitting in warehouses get to store shelves. Nobody in Mexico increases toilet paper manufacturing capacity because the corner store across my apartment is out. Nobody working in grocery logistics is going to be calling people in to work overtime to deal with this, either.
I’m not spreading misinformation. On the contrary, your link validates what I said.
Countering misinformation is good, but please don’t call it misinformation if you don’t understand what the text you link says.
Prices need to be able to increase beyond just any cost increases from the TP manufacturer. Without freedom to set prices as desired, we will continue to have shortages.
The prices can increase for any labor or material costs for both manufacturing and transit. If you can prove that your increased prices are due to increased costs you can raise prices as much as you wish. The only thing this prevents is increased profit in times of crises.
We see shortages of hand sanitizer, and at least one person facing criminal charges for charging high prices for them. And those charges are because the government is fixing prices with anti-gouging laws.
> Have you ever considered that you have terminal America Brain and that your particular economic theories haven't exactly proven robust or even helpful for the past century?
I certainly don't since America has bailed out companies many times in the past and is considering bailing them again this time.
While the GP might have been off base, there has got to be a better way to phrase this argument. The quality of discussion on HN has exponentially decreased in the past few days. It would be cool if we all started to add to these conversations instead of insult each other.
Meta: IMO part of the problem is the way the site handles opposition, passive-aggressively making unpopular opinions gradually near-impossible to read doesn't support the concept of high-brow, adult, conversation.
I think pg was wrong to endorse "down-vote for disagreement"; downvotes should be for poorly made arguments, ad hominems, memes [on this site] and other low value comments.
My ideal is something akin to what slashdot has, multi-axis voting that allows users to select to their preferences.
Wow, say what you will about whatever economic theories you're attacking, "America Brain" (with the obvious implication that you're calling the person stupid because they're American and hold some view you view as stereotypically American) is super racist.
I'm ashamed on behalf of HN that your comment hasn't been flagged or downvoted into oblivion on that characteristic alone.
What would France stand to gain if these companhias are forced to shut down due to a "force of nature" event, or worse be bought out by a foreign investor due to the restructuring you're advocating?
I'm all for market efficiency, but the real world works differently than text books.
I generally agree, and I'm very much in favor of market based economies. There is nothing wrong with France doing what is necessary toward production, during such an extreme event.
The US extending massive credit to businesses, bailing out the airlines (coming), bailing out Boeing (coming), and the 407 other bailouts yet to come, are all variations of immense state intervention into the economy, due to a force of nature event. They're also necessary, as the alternative is a much harder reboot with dramatically more damage. You can let a few companies fail in a normal recession, if we let everything go here, the unnecessary economic damage will be measured in the $10 trillion type range. And some of it we may never get back (eg letting Boeing fall down now, they might never get back up, given China is absolutely coming online in the next 10-20 years with competitive planes).
An American example is: A company outsourced all its production over the last few years to China. With the global pandemic production of the goods in China came to a halt. The company experiences a crash due to their inability to get the goods from China. In its place competitors who kept production domestic but who had higher production costs would now rise to the top. If you "bail out" every bad company you distort the market completely and reward non-efficient behavior.
You need to ensure they now get their reward for that choice, otherwise you're rewarding taking the wrong decisions (for resilience) and then you're paying more to have a less optimal system. In a way, the companies making essentials that aren't struggling right now are the ones you should be supporting .. but we have to address the crises at hand first.
> What would France stand to gain if these companhias are forced to shut down due to a "force of nature" event, or worse be bought out by a foreign investor due to the restructuring you're advocating?
The economy restructures itself to be more resilient to such events? The coronavirus is not even close to the smallpox which has been circulating for much of humans history. Companies/Economy should be able to withstand such events.
> The economy restructures itself to be more resilient to such events?
That's the kind of stuff that only exists in textbooks. In the real world you just get important parts of your economy be controlled by foreign corporations.
> The coronavirus is not even close to the smallpox
That's entirely irrelevant. We're talking about a disruptive event to an economy. It makes absolutely no difference if you can imagine worse events or diseases if we're discussing stuff regarding the economy.
Bruno Le Maire is the current minister of economy of a G8 country, a post he holds after a career in which he has been minister of agriculture, secretary of state for European Affairs and chief of staff of the prime minister. I will surmise than he has both an idea and hand on experience with how a market based economy works.
You might argue that he is mostly a good politican but considering it's pretty hard to do better as a student in France (ENS, received first at aggregation, ENA), I might hazard that he is probably not a complete idiot either.
And I'm telling you that despite completely disagreeing with the political opinion of the man.
If the government is competent the nationalization can be good. French govt already took control of their face mask supply. Ensuring at least more face masks to healthcare providers. It’s hard to argue this specific action hurts the French society. People need to analyze whether specific actions by the government are good or bad for society not if it fits into your ideological narrative
> French govt already took control of their face mask supply.
I don't know about that. What I know is that they sent all the production to China and Iran a month ago and now that we critically need masks there are none to be found even for medical professionals deemed 'not essentials'.
We're talking about a government that allowed elections to happen 3 days ago then quarantined the whole country today ...
> What I know is that they sent all the production to China and Iran a month ago and now that we critically need masks there are none to be found even for medical professionals deemed 'not essentials'.
That may wind up being the right call. China's ramping up production dramatically; the goodwill engendered may be to France's benefit.
Why is it hard to argue that? In my country, the ban on private sales and mismanagement of forced central supply of protective gear lead to serious issues. Hospitals are asking for donations of protective masks and respirators from private citizens, because they can no longer buy them on the market, and are running low on their stock, and central distribution is a huge bottleneck, and any mismanagement there affects the whole country, not just one company or one hospital. It's actually a big fiasco. Noone can buy anything, and government is constantly apologizing and telling people to just wear whatever. Tomorrow it will be required to wear protection in order to do shopping, and noone can buy it, so people are shopping with scarves over their faces. I sewed up something together from a handkerchief, so that I could do groceries today. It's pitiful.
Distributed supply means distributed failure (here and there). Central supply, means failure on the national level.
People footing the bill? Hell no. If we (taxpayers) are footing the entirety of the risk than we're also be taking the entirety of the profits (if any). Why do you expect the public to NOT play by the capitalist rules?
Low-term ownership of non-critical companies by government is usually a bad idea. Sure.
But isn't it better to nationalize, save and then, when the market is good, sell it for a profit (or break even) than just ... give out high-risk money hoping you get it back?
Besides ... if a company was going to collapse without government intervention that means it's irrelevant to the current owners anyway since they have already failed and lost everything. The fact society managed to stop that from happening with extraordinary measures is irrelevant to that fact.
Don't get me wrong: I'm all for private enterprise. But I hate people who turn from "no government handouts for the poor" to "Companies need government handouts!" the second it's convenient.
>But a lot are being downvoted because they express arguments that are disagreed with.
In my experience, that's always going to happen with voting mechanisms on comment sections. I tend to have disagreeable or extreme views on most subjects, and while I try to be considerate and not show any rudeness in my comments, I still get a lot of downvotes from time to time.
I know this opinion gets thrown around a lot but after coming back to HN after a few years away the discussions have changed a lot. I feel in the past the downvote mechanism was used less frequently and debates were possible without them. It's still far better than a lot of discussion boards and like all communities growth creates change but as a heavy user in the past (I think I hit the top 100 users at one point) it's definitely much more 'reddity' now depending on the subject.
I honestly don't know why there's a downvote function to begin with. I cannot downvote (yet?), but I wouldn't use it if I could. In the case that I disagree with someone and I happen to be knowledgeable on the subject at hand, I'll write them a reply if I have the time to do it. What downvoting does, instead, is fostering polarization and bias, on top of silencing controversial comments that could very well be absolutely sensible and truthful.
I sort of agree, there's already a semi-hidden "flag" feature for guideline-breaking content.
Still, the mindset of "I downvote good comments I disagree with" also generally leads to "I upvote bad comments I agree with" and that's not much better.
I think the reason for the two mechanisms for signaling is to differentiate between "this person is being a jerk/is misinformed", and "Nuke this comment from orbit with extreme prejudice". That way, the flag function's significance for spam/malevolence/badness doesn't get diluted by people who would be content to downvote.
I downvote things that seem poorly thought out, poorly argued, incendiary, or in general seem to be adding noise to the conversation without adding anything meaningful. It seems like there has been a rise in this sort of low-effort posting in the past few years, and I think downvoting is helpful to combat it.
When I downvote something, I usually write a comment explaining why I think it's not useful, although I don't always have time to do so.
Eternal September will happen sooner or later. The current pandemic is probably speeding the process up given how many generic news article about the coronavirus are making it up the frontpage at the moment.
I feel like the admins and moderators do a decent job generally but they're not proactive enough IMO. I remember how we had a temporary moratorium on political stories around the time Trump was elected for instance (or was it just before? I don't remember exactly). The karma threshold for enabling downvotes should probably be increased given the "karma inflation" over the past few years. Users caught disagree-downvoting should lose their downvote privileges, at least temporarily.
Of course the natural process of any such forum is to eventually turn into Reddit but we don't have to sit idly by and watch it happen.
It's not just you. At times it feels people downvote out of spite, to reciprocate how they feel they've been treated. It's annoying since instead of having a discussion or even replies that would make you see "aha, I might have been wrong", you just get a series of downvotes.
Of course it's not like that always. But I do see a lot more reasonable comments that aren't inherently inane/flame-wary get downvotes for no apparent reason. Perhaps there should be a mechanism in place to reduce its use eg having to pay downvotes with your own karma.
As a longtime forum user I generally assume many people are simply trolling. If I see a controversial and poorly supported argument I will sometimes downvote for this reason even if I agree with what their saying. I will also upvote an usually well supported arguments I disagree with.
However, I admit my personal bias makes me harsher on people I disagree with.
Most of them were originally national companies, like BNP Paribas or Renault. Those two were privatised in the nineties. It's the same thing in Spain, and I reckon all around Europe. A shame, if you ask me, that many of them were providing essential public resources (telecommunications, energy, food, banking, etcetera) and eventually underwent a very sketchy privatisation process.
The problem isn't national vs private companies. It's monopolies vs true competition. Any monopoly or oligopoly is inefficient by nature, and tend to become corrupt over time. National companies are monopolies. Incorrectly privatized national companies is just transferring a monopoly from one party to another.
Privatization done right can work. But you need to break up the big national companies into smaller regional companies that should be incentivized to expand into each others regions, thus providing competition.
Privatization has in some cases created even larger, multi-national of course, conglomerates, which are more inefficient still. It's not just monopolization that makes companies inefficient, but size, even if the two go hand in hand.
Regional companies encouraged to lay duplicate fibre cables, duplicate power delivery or duplicate water or sewer systems, are not efficient.
By your reasoning the government is always becoming more inefficient by nature. Odd because the standard of life keeps going up and the % GDP taken in taxes remains steady(ish).
> Regional companies encouraged to lay duplicate fibre cables, duplicate power delivery or duplicate water or sewer systems, are not efficient.
That’s never the case. Power is separated into producers, transmitters and retailers (you only deal with retailers who compete in service and negotiate with producers.
Telco’s lease line from national company, negotiate peering and retail to you.
Exception is cell telcos... these pay so much in spectrum auctions that almost undoubtedly few millions end up in polichickens pockets.
Same discussion coming up in Germany, although there have been voices for years now saying that the only way to stop the decades-long decline of the German railway network is to nationalize Deutsche Bahn again (also privatized in the 90ies).
Yes, at least in France. They passed (or merely announced?) a number of measures so that SMEs don't collapse due to treasury problems: postponed/cancelled taxes and contributions, paid time off for the staff without the usual delays, etc.
As I understood they took example on what Germany did in 2008, and learned from what worked over there. Whether all countries do the same is another story altogether, but at least in France they might save a good number of jobs (by inflating the public debt, but that's a separate issue).
If a business loses 2-3 quarters of revenue/profit due to COVID-19, how will they "make it back" to payback their previously postponed taxes (from the quarter they made little to no money in)?
Can‘t speak for France but in Germany companies and self employed pre-pay taxes. Say you made 200k profit gross in 2018, it was your first year of operation. Your tax rate is 42%. We keep it simple, Freiberufler, no Gewerbesteuer.
You filed the tax return in May 2019. your tax gets calculated and you have to pay 84k. You will have to pay only in 2020. But here‘s the catch. Finanzamt will assume you operate throughout 2019 at the same level as 2018. so they take 2*84k as a pre-payment for 2019 from you AND every quarter of 2020 they ask you to pay a quarter of 84k as a pre-payment for 2020.
I assume they will not ask for those pre-payments. That will help a lot.
French business owner here. The current goal is to prevent companies from failing to avoid mass unemployment:
- If you need to suspend your workers contracts, they are covered by the state. No need to fire them.
- all tax collections have been suspended
- your credit lines with commercial banks are covered by the state, so you can suspend payments or increase them if needed
- The BPI (Public Investment Bank) has an emergency loan available for companies that could run out of cash due to the situation.
They are not talking about the aftermath yet but these efforts cost a huge amount of money. My guess is that they will recover money by raising taxes for several years.
Can anyone here say to what degree EU state aid & competition law is going to help or hinder governments over the next few weeks, as they try to shore up rapidly collapsing national economies?
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[ 4.9 ms ] story [ 232 ms ] threadThat said, it's good timing on the announcement because it's more a signal than anything.
'We will not hesitate' is pretty strong language, indicating faith in those institutions that are, at least for now 'too big to fail'.
It feels something is terribly wrong with the world and the basic laws of capitalism, now that it turns out many companies don't pile on stuff, and go out of business in a matter of weeks when supply is lagging behind.
Are there any examples of companies using "we can pay our employees for six months" as a competitive advantage on Wall Street you can point to? Industry self-regulation in this regard has a pretty dismal track record.
What if nobody is willing to invest in an insane business? Then they will all have more difficulty accessing capital than sane businesses.
Unless some completely new regulations are passed, nothing will change about the basic incentive structures of markets. And these incentive structures are more powerful than whatever an investor or a CEO may feel.
A related concept is the so-called "normalization of deviance".
But this is the basic law of free markets at work. If you can run on a leaner supply chain, you'll outcompete those that can't. It's regular market competition that makes systems extremely fragile - all redundancy is considered as waste, fat to be cut off.
I absolutely agree with your comment, but that's exactly what the original poster was referring to, I think, with "something is terribly wrong with [...] the basic laws of capitalism", one being the free market, as you just mentioned.
40 years ago it was illegal in the US to pile on debt and use that money for stock buybacks. Which frankly is reasonable as looting struggling companies is bad for the economy and arguably fraud.
Having cash on hand is leaving money on the table - you could put it to use in something that makes you grow, or lose to a competitor that does. It's a different thing than lean manufacturing, but same forces cause both.
Expansion seems like an obvious solution, but in a competitive market that’s not always a winning strategy. Read up on the rise and fall of Subway to see the issues.
That's the general idea, yeah, "buy low sell high".
There's no reason failing companies should receive "bailouts" - defined as government-granted low-interest loans, often without suitable collateral. If the government puts in money, it should receive shares.
In Europe, since the revolutions, the primary marker of crony isn't so much birth, it's education, i.e. Oxbridge/Grande Ecole etc., but once they're through that 'kind of egalitarian' gamut of education, it's mostly 'crony' from there on in.
This has a kind of nationalist/communitarian aspect which can be helpful in times such as this (cronie CEO is buddies with cronie Minister of Finance), but it's generally not good for competition and global competitiveness.
Pump money into Amazon/FedEx/PostMates delivery services.
Keep restaurants open and tap them into the food supply chain.
Close all stores except to delivery services.
UBI and universal health care starts now.
Nationalization to me isn't that different from a bailout, the government (and thus taxpayers) foot the bill. With nationalization I guess the government can exert greater control over how the company is run, but is that necessarily the best way to provide oversight?
Among other things, nationalization would all but eliminate institutional resistance to, and subversion of, public policy and regulations.
The counter opposite example is China and their industries, but that implies an even worse kind of relationship that greatly exploits people and their labor.
It's like saying Ford are shit cars after a drunk driver crashes one..
To expand a bit; an ideal system, IMHO, would be a hybrid "state-backed but citizen-controlled" entity (half-way between nationalized and publicly traded) wherein shareholders involve citizens but not govs official (who have their own agenda, etc.); this is to maintain a sane separation between "the things belonging to citizens" and "the affairs of the State as a government").
It also follows a fundamental (but long-forgotten) principle of democracy that citizens should be able to control (as in audit, not "run" executively) the public things. You'd expect such a hybrid entity to be run by good commanders of industry, typical board / CEO but vetted by some citizen-backed legitimacy, in the shareholder voting process (this is a mild / hybrid form of "election", which is too strong as it is for this hybrid entity, but worth the "backed by sovereignty consent" value).
These are businesses that have been run so poorly they're begging the government to force citizens to donate them money. I don't think there's any reason to believe the private sector has any particular genius here.
- Firefighting [1] - Education - Broadband [2]
Outside the USA, many governments run other companies well enough too, from energy companies, to rail/transport, banking, etc.
[1]: https://en.wikipedia.org/wiki/History_of_firefighting [2]: https://en.wikipedia.org/wiki/Municipal_broadband
the economy would be better off if nearly all capital/equities were tied up in small- to medium-sized businesses, not large corporations (or governments) and consolidated markets.
Who wants to invest in an enterprise when it could all be taken away arbitrarily.
which again makes my argument: avoiding consolidations of power that can devolve into fascism/corporatism to the detriment of citizens.
I’m honestly not sure if you’re being facetious or not.
You can’t buy machinery with worthless banknotes.
Bailout The government rescues stock holders and industry with cheap loans. In bailouts government shares the risk with owners but not the profits.
Nationalization Government rescues the industry and stock holders lose their assets. Government can later arrange IPO and get rid of the companies and recoup at least part of the profits, sometimes making profit. In nationalization owners have risk and profits, when company goes belly up, government takes the risk and profits. It's clean cut.
Matt Levine has good article related to the issue https://www.bloomberg.com/opinion/articles/2020-03-17/the-go...
This is peak retardation by people who do not understand how the economy/markets work. French companies have lost lots of their competitiveness due unions, legal barriers, high taxes, etc... A recession/crisis would force these companies either to shutdown or restructure making them stronger in the future and letting the economy run on its own.
If the government has failed to pass previous reforms, why would they think they'll successfully save these companies?
Think of all the people in conflict areas who could live a decent life were they allowed to simply be in peace. Think of all the people who have lived good lives and then been displaced by horrific natural disasters. Its not an issue of economics. Its just a fact of reality.
https://www.amazon.com/dp/B073TJBYTB/ref=dp-kindle-redirect?...
https://www.amazon.com/Factfulness-Reasons-World-Things-Bett...
https://newint.org/sites/default/files/u354/LongreadFig2%2C3...
It's worth noting that the Our World in Data plot is misleading in the pre-1980 part. What it is actually showing is neither poverty, but some relationship of GDP to poverty, nor the population of the world, instead it is almost entirely the Western world.
The World Bank, UN and the IMF use extreme poverty as a measure and define it as having the purchasing power of $1.90 (in the US in 2011 for the OWiD plot) a day. But that's very low and pretty arbitrary. €6.70 a day is needed for decent nutrition, $7.40 for typical life expectancy, $8 a day to reduce infant mortality rate. The US poverty line in 2015 was $30 a day.
Pinkner has a lot to say about the reduction in violence that I agree we should be optimistic about. And there's much to be said about improvements in technology, access to education (especially for girls), increases in vaccination globally. But that OWiD plot is used to jump on the New Optimism bandwagon to say a lot more than anything you should conclude from a such an arbitrary set of data.
Now people investing in french companies will pay unfairly high prices for their shares.
Switching to nationalization, it’s pretty clear that that removes the incentive to take on risk and found a company since you are always at risk of the government stealing your assets.
Sorry I didn’t include citations but I would really encourage you to read about rational pricing and healthy market dynamics. Those that think you can just artificially decide the price of a security rather than let the price discovery mechanism play out are doomed to repeat the same problem we see in communist countries: you can buy bread for a “fair” price, but there’s no bread to buy because the price was too low.
Could you give some evidence or argument or both to explain why you think __blockcypher__ is wrong?
> Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.
In what way am I seriously oversimplifying reality?
That is why I think you oversimplified. This is not a communist takeover of France.
Note: I did not, and wouldn't have downvoted you for your comment. Yours is a fair opinion to have.
1. shortages
2. gluts
3. black markets
Just look at California's water shortage issues. Water prices are basically fixed so huge farms suck up all the water to irrigate a desert while ordinary people are told to stop bathing. Seems like an externality of price regulation, no?
edit: wouldn’t let me reply, I know they regulate existing product prices and that new products need to be filed and that states have different laws regarding coverage limits and litigation details
What country do you live in?
Tell me why this is stupid.
In other words, we already have “soft” price-fixing.
Higher profits from gouging is what motivates people to increase the supply. Altruism only goes so far. Profit motive to provide needed supplies is far more effective.
Remove the profit motive, relying on the government and altruism, is a very poor substitute.
* 100 rolls of toilet paper sold to whoever comes first
* 100 rolls of toiler paper sold to whoever bids highest
The point is, gouging creates MORE availability. Remember those hurricanes? People outside the devastated zones promptly filled jerry cans with gas, drove into the disaster area, and sold gas out of the back of their pickup trucks for high prices.
That is, until the government made it illegal to do that. The next disaster meant people had no gas until the government got around (days later) to bringing some in and rationing it.
TP is not quite the inelastic situation you posit it is. For example, there's been a boom in sales of bidet toilet attachments. High prices for tp make it very attractive to switch, thus making tp available for others. High prices mean people who already have more tp than they need will be tempted to sell it. High prices mean TP makers will ramp up production as fast as possible. High prices mean people will be motivated to make & sell TP alternatives. High prices mean people have no reason to hoard TP.
Anti-gouge laws lead directly to hoarding and no TP available.
Hoarding resources that we aren't globally in short of, actually makes the situation far worse. The demand spike is solely caused by hoarders and price gougers, to the detriment of everybody else.
Anti-gouging laws mean that you'll either do without or pay even higher prices for black market goods. The more you punish black marketeers, the higher go the prices you'll have to pay.
There are when a bunch of people buy up the entire supply, and try to resell it at 5x the rate.
> Gouging disincentivizes hoarding.
Only after the gougers have hoarded everything they can.
The gougers in this case aren't making any more toilet paper appear in the world. The factories aren't making more of it, just because a few people bought it out, because the global demand for it is constant. They simply created an artificial shortage, and introduced themselves as a parasitic middleman.
Things don't happen in a vacuum. If the gougers create an artificial shortage, then there is money to be made by increasing the supply. In fact, there'll be plenty of money to be made selling to the would-be gougers. The supply is not fixed and gouging will increase the supply.
1. The absolute supply of toilet paper on a long-term timescale will not increase.
2. The cost of increasing manufacturing capacity may not be worth the increased revenues from selling into a two-week shortage.
3. There's a lag time. By the time you increasing manufacturing capacity, and get paper into groceries, the demand curve would have flattened out.
4. There isn't an actual shortage, there are some very localized shortages, which will get smoothed out once supplies sitting in warehouses get to store shelves. Nobody in Mexico increases toilet paper manufacturing capacity because the corner store across my apartment is out. Nobody working in grocery logistics is going to be calling people in to work overtime to deal with this, either.
Countering misinformation is good, but please don’t call it misinformation if you don’t understand what the text you link says.
Prices need to be able to increase beyond just any cost increases from the TP manufacturer. Without freedom to set prices as desired, we will continue to have shortages.
I certainly don't since America has bailed out companies many times in the past and is considering bailing them again this time.
I think pg was wrong to endorse "down-vote for disagreement"; downvotes should be for poorly made arguments, ad hominems, memes [on this site] and other low value comments.
My ideal is something akin to what slashdot has, multi-axis voting that allows users to select to their preferences.
I'm ashamed on behalf of HN that your comment hasn't been flagged or downvoted into oblivion on that characteristic alone.
Actually I'm accusing them of having their brains poisoned by American free market dogma.
I'm all for market efficiency, but the real world works differently than text books.
The US extending massive credit to businesses, bailing out the airlines (coming), bailing out Boeing (coming), and the 407 other bailouts yet to come, are all variations of immense state intervention into the economy, due to a force of nature event. They're also necessary, as the alternative is a much harder reboot with dramatically more damage. You can let a few companies fail in a normal recession, if we let everything go here, the unnecessary economic damage will be measured in the $10 trillion type range. And some of it we may never get back (eg letting Boeing fall down now, they might never get back up, given China is absolutely coming online in the next 10-20 years with competitive planes).
You need to ensure they now get their reward for that choice, otherwise you're rewarding taking the wrong decisions (for resilience) and then you're paying more to have a less optimal system. In a way, the companies making essentials that aren't struggling right now are the ones you should be supporting .. but we have to address the crises at hand first.
The economy restructures itself to be more resilient to such events? The coronavirus is not even close to the smallpox which has been circulating for much of humans history. Companies/Economy should be able to withstand such events.
That's the kind of stuff that only exists in textbooks. In the real world you just get important parts of your economy be controlled by foreign corporations.
> The coronavirus is not even close to the smallpox
That's entirely irrelevant. We're talking about a disruptive event to an economy. It makes absolutely no difference if you can imagine worse events or diseases if we're discussing stuff regarding the economy.
You might argue that he is mostly a good politican but considering it's pretty hard to do better as a student in France (ENS, received first at aggregation, ENA), I might hazard that he is probably not a complete idiot either.
And I'm telling you that despite completely disagreeing with the political opinion of the man.
I don't know about that. What I know is that they sent all the production to China and Iran a month ago and now that we critically need masks there are none to be found even for medical professionals deemed 'not essentials'.
We're talking about a government that allowed elections to happen 3 days ago then quarantined the whole country today ...
That may wind up being the right call. China's ramping up production dramatically; the goodwill engendered may be to France's benefit.
Distributed supply means distributed failure (here and there). Central supply, means failure on the national level.
People footing the bill? Hell no. If we (taxpayers) are footing the entirety of the risk than we're also be taking the entirety of the profits (if any). Why do you expect the public to NOT play by the capitalist rules?
Low-term ownership of non-critical companies by government is usually a bad idea. Sure.
But isn't it better to nationalize, save and then, when the market is good, sell it for a profit (or break even) than just ... give out high-risk money hoping you get it back? Besides ... if a company was going to collapse without government intervention that means it's irrelevant to the current owners anyway since they have already failed and lost everything. The fact society managed to stop that from happening with extraordinary measures is irrelevant to that fact.
Don't get me wrong: I'm all for private enterprise. But I hate people who turn from "no government handouts for the poor" to "Companies need government handouts!" the second it's convenient.
There are a few bad posts, simply calling someone an idiot, etc. Good: downvote.
But a lot are being downvoted because they express arguments that are disagreed with.
In my experience, that's always going to happen with voting mechanisms on comment sections. I tend to have disagreeable or extreme views on most subjects, and while I try to be considerate and not show any rudeness in my comments, I still get a lot of downvotes from time to time.
Still, the mindset of "I downvote good comments I disagree with" also generally leads to "I upvote bad comments I agree with" and that's not much better.
When I downvote something, I usually write a comment explaining why I think it's not useful, although I don't always have time to do so.
I feel like the admins and moderators do a decent job generally but they're not proactive enough IMO. I remember how we had a temporary moratorium on political stories around the time Trump was elected for instance (or was it just before? I don't remember exactly). The karma threshold for enabling downvotes should probably be increased given the "karma inflation" over the past few years. Users caught disagree-downvoting should lose their downvote privileges, at least temporarily.
Of course the natural process of any such forum is to eventually turn into Reddit but we don't have to sit idly by and watch it happen.
Of course it's not like that always. But I do see a lot more reasonable comments that aren't inherently inane/flame-wary get downvotes for no apparent reason. Perhaps there should be a mechanism in place to reduce its use eg having to pay downvotes with your own karma.
As a longtime forum user I generally assume many people are simply trolling. If I see a controversial and poorly supported argument I will sometimes downvote for this reason even if I agree with what their saying. I will also upvote an usually well supported arguments I disagree with.
However, I admit my personal bias makes me harsher on people I disagree with.
Privatization done right can work. But you need to break up the big national companies into smaller regional companies that should be incentivized to expand into each others regions, thus providing competition.
Regional companies encouraged to lay duplicate fibre cables, duplicate power delivery or duplicate water or sewer systems, are not efficient.
By your reasoning the government is always becoming more inefficient by nature. Odd because the standard of life keeps going up and the % GDP taken in taxes remains steady(ish).
That’s never the case. Power is separated into producers, transmitters and retailers (you only deal with retailers who compete in service and negotiate with producers.
Telco’s lease line from national company, negotiate peering and retail to you.
Exception is cell telcos... these pay so much in spectrum auctions that almost undoubtedly few millions end up in polichickens pockets.
As I understood they took example on what Germany did in 2008, and learned from what worked over there. Whether all countries do the same is another story altogether, but at least in France they might save a good number of jobs (by inflating the public debt, but that's a separate issue).
If a business loses 2-3 quarters of revenue/profit due to COVID-19, how will they "make it back" to payback their previously postponed taxes (from the quarter they made little to no money in)?
You filed the tax return in May 2019. your tax gets calculated and you have to pay 84k. You will have to pay only in 2020. But here‘s the catch. Finanzamt will assume you operate throughout 2019 at the same level as 2018. so they take 2*84k as a pre-payment for 2019 from you AND every quarter of 2020 they ask you to pay a quarter of 84k as a pre-payment for 2020.
I assume they will not ask for those pre-payments. That will help a lot.
- If you need to suspend your workers contracts, they are covered by the state. No need to fire them.
- all tax collections have been suspended
- your credit lines with commercial banks are covered by the state, so you can suspend payments or increase them if needed
- The BPI (Public Investment Bank) has an emergency loan available for companies that could run out of cash due to the situation.
They are not talking about the aftermath yet but these efforts cost a huge amount of money. My guess is that they will recover money by raising taxes for several years.