What is the thinking behind bailouts of large coprorations?

[Nathonas]

So I looked at this list http://projects.propublica.org/bailout/list  and it looks pretty insane - 611 billion dollars total in bailout money for large corporations in the US. I'm assuming most of that is taxpayer money.

All I really know about the bailouts is that everyone seems to be very upset about them. And on the surface level I agree, why would failing companies be kept afloat by taxpayer money? The whole point of capitalism is that competition will make the best companies survive, and the ones that aren't up to the task are cut. But I'm not an economist and I don't know enough about this. What is the explanation behind the bailouts? Are they actually a good thing for the public and the economy? Why or why not?

[trader001]

It is not just taxpayer money. It is also money from creditor nations by inflating the money supply and devaluing the debt.

And since most countries pegged their own currencies on USD, it is also money from the citizen from those country.


All in all, average American and taxpayers are getting net benefit from the bailout and the wealth fare system.

[hilariousandco]

As with most corrupt governments their primary purpose is to transfer tax-payers money into private pockets. It's not fair that when companies or banks fuck up by themselves that they get bailed straight back out again, but that's how the system works.

[Beyondo]

The thinking is that the person who does the bail-out using the people's money will have his pockets lined nicely by the shady and stupid company that failed.

[cryptasm]

The bailouts were corporate welfare, dirty rich benefit scroungers of the highest order.

"All in all, average American and taxpayers are getting net benefit from the bailout and the wealth fare system"

lol do you honestly believe that? Would love to see how you figured that out.

[beetcoin]

like others have said, it's corporate welfare. banks have a very strong relationship with washing, since they make so much money that they could funnel a small percentage of it to the politicians and regulators.

banks form these relationships so that they can come out in a win/win scenario. they can take the risk, and if it turns out well.. they end up making out like the thieves they are. and if it doesn't work out? ask your buddies for a bail out as insurance, and you still end up making money.

[TheFootMan]

So I looked at this list http://projects.propublica.org/bailout/list  and it looks pretty insane - 611 billion dollars total in bailout money for large corporations in the US. I'm assuming most of that is taxpayer money.

All I really know about the bailouts is that everyone seems to be very upset about them. And on the surface level I agree, why would failing companies be kept afloat by taxpayer money? The whole point of capitalism is that competition will make the best companies survive, and the ones that aren't up to the task are cut. But I'm not an economist and I don't know enough about this. What is the explanation behind the bailouts? Are they actually a good thing for the public and the economy? Why or why not?

I think that the US, like most other countries are really run by an elitist group of people with a lot of money and influence, and they have connections in most business sectors, and they cover for each other. That's the answer in my view.

It's a bit like: My nephew fucked it up quite badly, but I'm from a really rich family, but this time we can't help him, so we need to get help from our super rich uncle, which will help the family put everything together. The bailouts are just on a much larger scale.

The reason that everyone is upset about it, but why nothing happens, is because those upset are not those in power to change anything.

On a mini level, if 10000 people are really upset about something, but only 5 of those really has a say in what happens, what those 5 says is what happens. The other 9995 really do have absolute power, if they acted in concert, but they never will, and so the current system continues, and will probably continue forever.

In the real world you have a diverse group of people. You have those elitist people in charge, and you have a whole lot of people who're angry on the current system, but they're not big in numbers, and then you have the large mass of people who are completely swayed by marketing campaigns, mass media, and are mostly concerned about finishing their workday so they can get home and watch sports on TV while drinking beer.

So in reality it's all about power and money.