Mentork

Here's the way i see it...

The Biggest argument a conservative can make against socialized health care is that to pay for it we would have to raise taxes.

That's also why conservatives say we should have private schools, ect. Because big taxes are bad.

Well what if we could socialize medicine, raise it to the level of England, France, or even better; and keep taxes just the way they are?

How?

We socialize big oil

Think about it, if socializing something that costs money raises taxes, wouldn't socializing something that makes money lower taxes?

Explain to me why this would be a bad idea.

donsutherland1

Mentork

I don't understand, you are saying that the government makes a bad business man because they care about the poor? I'm not saying politicians should run it, i am just saying that the government should get most of the profits. If we pay the people running the operation based on how much profit is made then I'm sure it will be just as efficient as before.

Nether am i saying we should deny investors there share. It would be run just like a normal business, only the government would be profiting, not David J. Lesar.

donsutherland1

I'm saying that government decisions and business decisions are of a different nature. Business decisions concern profitability. Government decisions seek to enhance the public welfare. Sometimes the decisions needed for business success e.g., closing a money-losing plant, are at odds with those that concern the public welfare e.g., seeking to maximize employment.

Profits can be reinvested in the firm so as to develop/strengthen/sustain its competitive advantages or paid as dividends to shareholders. When the profits available for either function are reduced, that would translate into reduced investment in growth by the firm and reduced funds for the payment of dividends. Share price appreciation would be harmed. In turn, incentives for investment in such firms would be reduced by the lower returns on investment. Private capital would flow elsewhere e.g., overseas where there are more hospitable business climates.

Such a development would also have adverse social consequences. In the long-run, it would translate into fewer jobs and lower incomes than might otherwise have been available. In sum, despite the good intentions of raising living standards that would lie behind the policies, the effect of transforming the private sector into a giant cash cow whose profits would be harvested by the government would be a degraded standard of living and fewer opportunities for the nation's residents.

SouthernDemocrat

Many, but not all, nations that have nationalized their oil industries end up under investing in new technologies and infrastructure, and thus have production problems once they start to tap out their "easy oil" reserves. This is the problem in Mexico and to a lesser extent in Russia.

Where this is not the case is usually in nations with totalitarian governments. In generally, in a democracy its usually only a good idea to nationalize an industry when that industry is not governed by traditional market forces, yet provides a service that most if not all the citizens of that country need.

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Charles Krauthammer describing Obama:

"He's got both a first-class intellect and a first-class temperament."

Mentork

Witch is why it should be run by a business man, not a politician.



And they would not lose the ability to do so.

So there'd be no problem if the goverment held some shares?

I agree

So what if the government just bought 50% of the shares?

Mentork

But there is nothing that makes that automatically so, as in, we probably will do it right because we're America and we're awesome like that.

Also, do you think big oil is going to invest in new technology? that's a laugh.

Like Gasoline.

donsutherland1

In theory, no. In practice, yes, as you wrote, "i am just saying that the government should get most of the profits." That would mean businesses would have far less profits to reinvest and/or pay as dividends.

Government pension funds i.e., states, local governments, etc., invest in shares. However, were government shareholdings to increase, the temptation for government entities to use their voting power as stockholders to pursue political interests e.g., bring about a firm's locating a plant in a given city or refraining from closing such a plant, would increase. There would be the risk that political interests crowd out economic considerations in the managerial decisionmaking process.

Iriemon

Or you could do it by the Republican approved method: Slap a 22% tax on oil production.

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Matthew 5:9

Scucca

You're on a particularly sticky wicket here as the arguments based on private sector innovation are based on either neoclassical theory of competition (i.e. the need to innovate in order to survive in a competitive environment) or creative destruction (i.e. the incentive to innovate in order to acquire temporary monopoly, given the low rate of technical diffusion). We have neither here. We have long term market power.

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