Just in the past 25 years alone, there were over $2.22 trillion in corporate bankruptcies --- and that's just for U.S. corporations filing for $10 billion or more (If you care to peruse the data at www.bankruptcydata.com, you can come up with a more accurate total. There are a lot more with bankruptcies of $1 billion and more).
But when compared to past U.S. corporate bankruptcies, Solyndra is barely a blip on the radar; but yet, it has garnered a lot of publicity. But why? Compared to the bank "bailouts" ($700 billion TARP + $187 billion for Fannie Mae and Freddie Mac), a ½ billion dollar loss from Solyndra should be nothing more than an annoying fly. In the entire scheme of things, compared to the $691 billion Lehman Brothers bankruptcy, Solyndra is a pittance.
U.S. Bankruptcy law changed dramatically in 2005 with the passage of BAPCPA, which made it more difficult for consumer debtors to file bankruptcy. Corporate lobbyists pushing for BAPCPA claimed that its passage would reduce losses to creditors such as credit card companies, and that those creditors would then "pass on the savings to other borrowers in the form of lower interest rates".
Consumer advocates, on the other hand, assert that these claims turned out to be false by observing that, while although credit card company losses decreased after passage of the Act, the prices they charged to their customers increased --- and credit card company profits have since soared.
According to a study by Harvard researchers, as of 2007, medical problems caused 62% of all personal bankruptcies filed in the U.S. (0% for corporate bankruptcies) --- but even despite the recession, according to a BABCPA report, from 2010 to 2011 there has been an 11% drop in personal bankruptcy filings; and bankruptcy filings for the 12-month period ending June 30, 2012 was down 14% than those filed in the previous 12-month period.
But what about corporate bankruptcies?
Let's just look at Solyndra first. According to Bloomberg, the private equity firms of Argonaut Ventures I LLC and Madrone Capital Partners LP owns a company called 360 Degree Solar Holdings Inc. (which is the parent company of Solyndra) and recently exited bankruptcy court with a $975 million "net operating loss for carry-forwards" (which it may use against any future income). The potential tax breaks may be as much as $341 million. The Wall Street Journal confirms that these two venture capital firms could actually profit from Solyndra losses.
Just by adding up corporate bankruptcies (of $10 billon or more per company) for U.S. corporations and financial companies over the last 25 years (from 1987 to 2012), corporate American has had over $2.22 trillion in bankruptcies (Chart below with link to source. Many firms such as Kodak and Blockbuster with $1 billion aren't even on the list.)
But unlike corporations that have "limited liability" protections for their corporate executives, the CEOs and their board of directors aren't being forced to sell their personal property because of mismanagement, reckless gambling or greed. They aren't being forced to sell their home to pay off a medical bill. No banker even has to go on trial for breaking the law.
So what is it about "free markets" and "crony capitalism" that's supposed to make our country "exceptional", because it is well beyond my understanding of free enterprise. When I hear the Republicans complain of Obama's "socialism" or hear the Tea Party espouse the virtues of "free markets", or hear U.S. manufacturers speak about "emerging markets", it makes me wonder --- just exactly whose economy are they referring to? Surely not mine.
Today I received an email from Occupy Wall Street with the subject line "Learn how to occupy your workplace". While I have no workplace (I've been unemployed since 2008), I did read their notice and it mentioned "syndicalist union".
Besides "free enterprise", I have no idea what syndicalism is either. Wiki says, "Syndicalism is a type of economic system proposed as a replacement for capitalism and an alternative to state socialism, which uses Confederations of collectivized trade unions or industrial unions."
The way I see it, anything else might be better than our current economic system of free enterprise. Our democracy is corrupted and capitalism has failed too many people.
50% of the U.S. workforce earns $27,000 a year or less --- 30 million Americans are unemployed --- 8 million want full-time work but only work part-time --- 4.4 million Americans currently earn the federal minimum wage of $7.25 or less. (The minimum wage has not kept up with the cost of living. After adjusting for inflation, the minimum wage is lower today than it was in 1956. But Congress won't change this.)
Many who might otherwise qualify for disability are being denied for budget concerns. Those who are retired or can no longer work are having their Social Security incomes cut with chained-CPI. The GOP wants to raise eligibility for Medicare and Social Security to age 70, saying Americans are living longer, when it's the rich who are mostly living longer. But the GOP would rather eliminate those programs all together.
With increasing technological advances and robotics, their won't be enough jobs for a growing population. This year alone over 3 million more jobs will be needed for high school graduates. Out-sourcing and in- sourcing for cheaper labor further decimates the ranks of the unemployed.
While although our American patriots continually say that our system is the best in the world..."lifting millions out of poverty and creating a middle-class" --- that was then, this is now. It doesn't necessarily mean that our system of government and economics was ever the best that it could ever be, or that it could never break down, or that it could never become corrupt and/or obsolete like it might now be.
Our country hasn't properly evolved and economically adjusted for globalization. The multi-nationals did well (even if they go bankrupt), but not the American workers. I think it's time for a major change, and not just an Obama-style "change" --- as in just a change of faces in the White House --- but a drastic change, from the top down.
Let's try something new (syndicalism?). Capitalism was good for a while, but nothing ever lasts forever. The current system needs some major tweaks, but with our corrupt election system, The People can't get ever congress to make ANY changes at all --- changing anything that the majority of The People have been asking for a very long time. (I would list the American people's demands here, but the list is far too lengthily.)
But if Congress won't ever change anything, what is left for The People do? Just continue to let things get worse? Voting doesn't seem to help much. Petitions don't help much. Calls and letters to Congress are literally ignored. To have real "change", first Congress will have to reform itself. Which means, it's going to be a very long wait --- and it certainly won't be in my lifetime.
GM is supposed to be the number one automaker again. But why did they need a bailout...again?
Before the outbreak of World War II General Motors produced vast quantities of armaments, vehicles, and aircraft for both the Allied and Axis customers. By the spring of 1939, the German government had assumed day-to-day control of American owned factories in Germany, but decided against nationalizing them.
During World War II the U.S. auto companies were still concerned that Nazi Germany would nationalize American-owned factories, so GM later declared it had abandoned its Nazi subsidiary, and took a complete tax write-off, of which they received a tax reduction from U.S. taxes of approximately $22.7 million.
After the war GM collected another $33 million in "war reparations" because the Allies had bombed its German facilities for which they had earlier declared a complete tax write-off, and had received tax a reduction (GM's total bail out back then was worth about $285 billion in today's money.)
While General Motors has claimed its German (Opel) operations were outside its control during World War II, this assertion appears to be contradicted by available evidence. General Motors was not just a car company that happened to have factories in Germany; GM management from the top down had extensive connections with the Nazi Party.
So what do we have now (or still)? Capitalism? Crony capitalism? Free markets? Free enterprise? Socialism? We tax people, so isn't taxation just another form of "re-distributing the wealth"? How many corporations are subsidized every year while hoarding over $2 trillion in offshore banks?
And taxpayers pay for corporate losses and bailed- out banks; even though analysts predict that breaking up the big banks might actually increase their profitability. And technically speaking, aren't many U.S. corporations and banks already "nationalized?
So let's not do things halfway, let's also nationalize the oil companies as well. After all, it's The People's oil --- a natural resource that's under our federal lands. And besides, I doubt ExxonMobil will ever file for bankruptcy.
* See my post: Murder and Betrayal of the Rich and Famous and scroll down to "Typical Wall Street Greed and Betrayal" for a partial list of the financial Ponzi Schemers.
Corporate bankruptcy filings of $10 billion or more in U.S. from 1987 to 2012
|Lehman Brothers Holdings, Inc.||9/15/2008||691.06|
|Pacific Gas and Electric Co.||4/06/2001||36.15|
|Financial Corp. of America||9/9/1988||33.86|
|IndyMac Bancorp, Inc.||7/31/2008||32.73|
|Global Crossing Ltd.||1/28/2002||30.18|
|Bank of New England Corp.||1/7/1991||29.77|
|New Century Financial Corp.||4/2/2007||26.14|
|Delta Air Lines, Inc.||9/14/2005||21.80|
|American Home Mortgage Investment Corp.||8/6/2007||18.82|
|General Growth Properties||4/16/2009||29.6|
|Lyondell Chemical Co.||1/6/2009||27.4|
|Colonial BancGroup, Inc.||8/25/2009||25.8|
|Capmark Financial Group, Inc.||10/25/2009||20.6|
|Guaranty Financial Group, Inc.||8/27/2009||16.8|
|Bank United Financial Corp.||5/21/2009||15.0|
|Charter Communications, Inc.||3/27/2009||13.9|
|UCBH Holdings, Inc.||11/24/2009||13.5|
|R.H. Donnelley Corp.||5/28/2009||11.9|
|AmTrust Financial Corp.||5/28/2009||11.7|
|Ambac Financial Group||11/08/2010||18.9|
|American Airlines (AMR)||11/29/2011||25.1|
|Residential Capital, LLC||5/14/2012||15.7|
|Total - Over $10
billion or more per company from 1987 to the
present --- and doesn't include all bankruptcies or any bank
* Source: http://www.bankruptcydata.com/ (Right column of page)
Bankruptcy in the United States is governed under the United States Constitution (Article 1, Section 8, Clause 4) which authorizes Congress to enact "uniform Laws on the subject of Bankruptcies throughout the United States."
Congress has exercised this authority several times since 1801. The first modern Bankruptcy Act in America, sometimes called the "Nelson Act", was initially entered into force in 1898.
The Chandler Act of 1938 gave unprecedented authority to the Securities and Exchange Commission in the administration of bankruptcy filings.
The current Bankruptcy Code was enacted in 1978 by § 101 of the Bankruptcy Reform Act of 1978, and generally became effective on October 1, 1979. The current Code completely replaced the Chandler Act.
The current Code has been amended numerous times since 1978. (See the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.)