Note that in the “bailout” of GM, the stockholders were wiped out and got nothing and the creditors, as a group depending on priority class, averaged about being provisionally credited for around 15 percent, All of the general creditors, like the stockholders, were wiped out. That’s how capitalism is supposed to work. The so-called bail out of GM returned a handsome profit after the government, under the aegis of the Fdicc disposed of its 85 percent share. Agricultural subsidies, on the other hand, are pure welfare,
Originally Posted by greenbook
Here's the deal. While I strongly agree with some of the economic policies of our president, his trade wars were a fiasco. We placed large tariffs on Chinese imports. So the Chinese stopped importing our farm products, and bought from places like Brazil and Australia instead. Many of our farmers would have gone bankrupt. Therefore we increased our generous subsidies to farmers so they became massive. At one point I read that the government's incremental subsidies to agribusiness exceeded its income from the tariffs. The tariffs by the way are not paid by the Chinese. They're paid by companies like Walmart and Target which import goods, and passed on to consumers in the form of higher prices.
Another stupid thing we did was withdraw from the Trans Pacific Partnership (TPP), which was in large part created so that the USA, Australia, Japan, Mexico, Chile, Peru and various places in Southeast Asia could form a trading block to compete more effectively against China. The TPP went ahead with a watered down version compared to what was proposed before the USA withdrew.
So now the Chinese have an alternative to the TPP, a treaty that will create a mega-trade bloc with Australia, Japan, South Korea, and the southeast Asian countries, in addition to China. They'll buy from each other, and we'll be frozen out.
Instead of combining with the rest of the world to put pressure on China, it's looking more like the Chinese are combining with the rest of the world to put pressure on us.