| ▲ | jacquesm a day ago |
| It's not smart, it's extortion by someone connected to the state and self dealing. If you think this is smart then you may as well go around clubbing old ladies over their heads, as long as you don't get caught it's like free money right? The alternative is not to forbid companies from selling those rights, the alternative is to undo this deal and pay the whole amount back to those that originally forked it over and who needed to sell these 'rights' in order to keep their companies alive. |
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| ▲ | koolba a day ago | parent | next [-] |
| How is it extortion? They could have gotten a different deal from anybody else or no deal at all. Nobody was twisting there arm or forcing them to deal with this one company to sell their tariff claims. |
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| ▲ | matthewdgreen a day ago | parent | next [-] | | If two companies come to you with an offer to sell the refunds, and one has strong ties to a central figure in the administration — which can, in the future, subject or exempt you from new tariffs and otherwise use the Federal government’s powers to mess with you - are you truly free to choose either offer? Or is there a risk and a benefit to taking the one that’s tied to the administration? (And frankly, can you even be certain either way?) This kind of conflict (even the appearance of this kind of conflict) is why we generally don’t want government officials or their families to be profiting directly off the policies they oversee. It is at best unseemly, and that’s being kind. | | |
| ▲ | eszed a day ago | parent | next [-] | | Thank you. Yes, this is the reason to be concerned. Not because it's extortion, or anything else like that, but because having to evaluate a counterparty's degree of connection to the State before doing a deal is not the way that free enterprise or open markets are supposed to work. Lutnik Jr's involvement puts every other bidder for these contracts at a disadvantage (even if it's illusory, and he's not personally acting badly), and distorts pricing signals. It's unfair not (or not primarily / directly) to customers, but to the rest of the legitimate players within an industry. Yes, I know this isn't the first time this has happened, and that people likewise benefit from connections to governments led by other political parties. Those instances are also bad! | |
| ▲ | koolba a day ago | parent | prev [-] | | > If two companies come to you with an offer to sell the refunds, and one has strong ties to a central figure in the administration — which can, in the future, subject or exempt you from new tariffs and otherwise use the Federal government’s powers to mess with you - are you truly free to choose either offer? Yes, because tariffs, like all taxes in the USA, are not imposed on individual people or entities. They’re on industries and specific materials. If a company truly thought the chance of winning was low and needed the money now, they would pick the best offer. Regardless of who is making it. | | |
| ▲ | matthewdgreen a day ago | parent [-] | | This is naive. For larger firms, targeted product and industry-specific tariffs can be a game-changer. For example, Trump created a set of exemptions related to smartphones built in China that weren't officially aimed at Apple, but since Apple sells approximately 50% of US smartphones (for a much larger slice of profit) and 80% are made in China, this disproportionately affected a single company. But there are other areas where the administration can also use Federal power: see, for example, Trump's use of Federal approval to block the Netflix/WB merger as one example. |
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| ▲ | krsw a day ago | parent | prev [-] | | This is basically the government doing a protection racket. I swear, the amount of neoliberals in here lauding the move is a recession indicator. Did we all forget what corruption is? | | |
| ▲ | jacquesm a day ago | parent [-] | | Corruption is so endemic now that people stop seeing it. This was the same in the former USSR, when I was there I would be utterly amazed by the degree to which everybody had normalized corruption, it was not considered anything wrong or special at all, it was just the way business was done. You could effectively buy your way into or out of anything. |
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| ▲ | gruez a day ago | parent | prev | next [-] |
| >It's not smart, it's extortion by someone connected to the state and self dealing. Where's the extortion? The "it's a nice shop you got there..." racket only works if you can strongly influence whether the damages occur (ie. you tell your goons to attack the shop, or not). So far as I can tell however, that's not the case, because Trump wanted the tariffs to stay, and was sad that they got revoked. Going back to the mob analogy, it would be like if the mob boss asked for protection money, the goons didn't damage the shop, the mob boss was sad that the shop didn't get damaged, and then went to to find some other way to damage the shop (ie. section 122 tariffs). |
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| ▲ | hedora a day ago | parent | next [-] | | Extortion rackets come in many forms. For example, NCR (National Cash Register) used to have their sales people "accidentally" break competitive machines (dropping them on the floor was common -- these were old precision mechanical adders), then offer an NCR machine as a "free" replacement. You could argue this wasn't extortion. What are the damages? The replacement machine was higher value, so the shop was "made whole", and was only temporarily without a cash register. Of course, the competitor got screwed out of support contracts + renewal, and it was made very clear to the stores they had to play ball. (Unless they wanted to buy a replacement, and watch it also get smashed.) It's the same with the tariffs: Adopt a bunch of Trump dictated policies, or they steal your money (the mechanism is not providing exemptions). Later, they "refund" the payments (so, no further court action), but somehow the money does not go back to the people that it came from. Ignoring the businesses that sold their rights to collect, all sorts of prices have skyrocketed in the last year. The consumers that are paying the increased amounts at retail are not going to see a cent of this settlement. Where is my check? Also, it's unclear how many Supreme Court justices changed their votes because of the sold rights to collect refunds. The company involved gave a lot of money to Trump and conservative campaigns, and many of the justices are in his pocket. It's also unclear if they bribed the justices directly, since that's not public data. On top of that, when these "securities" were sold, it could have been made clear that they would come with favoritism in the future. Did businesses that paid up get special exemptions? Were they threatened with intimidation that then didn't happen because they sold the rights? All of the above is standard practice with this administration. They had the benefit of the doubt, but burned through it years ago. | |
| ▲ | jacquesm a day ago | parent | prev [-] | | You think businesses as a rule can all survive a 15 to 100% surcharge on their products without running into liquidity issues? | | |
| ▲ | gruez a day ago | parent | next [-] | | The stocks of major retailers haven't cratered, so maybe? You're going to have to present some figures rather than just asking rhetorical questions. | | |
| ▲ | jacquesm a day ago | parent [-] | | You have to present figures when you're arguing the hard-to-prove side of something not when it's plain obvious that business are not in a position to deal with such shocks in the market without having to reach for capital. This is not normal. Typical operating margins of business is anywhere from 5 to 20% with outliers in the digital domain but that's not the part that we are talking about here. Anyway, you want figures, well, here are some figures: https://marketrealist.com/why-did-700-bu/ I'm sure there are other sources, better ones, worse ones but they all tell roughly the same story: willy nilly tarrifs have a negative effect on one's ability to operate a business. Businesses like predictable, stable climates to operate in. | | |
| ▲ | NetMageSCW a day ago | parent [-] | | There’s a long way from businesses like predictable stable climates (and that ship has long sailed) and business won’t survive. There’s no reason to believe the latter is true. | | |
| ▲ | jacquesm a day ago | parent [-] | | At a guess you are not operating a business that adds value to real goods subject to overnight surprise tariffs then. |
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| ▲ | bluGill a day ago | parent | prev [-] | | Those are a sunk cost at this point though. The business likely is better off having sold and got the money now - vs risking they will never get a refund. |
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| ▲ | AnimalMuppet a day ago | parent | prev [-] |
| Self-dealing by someone connected to the state, yes. Extortion, no. It takes a fair amount of money to take a court case to the Supreme Court. You can pay it all (and still maybe lose), or you can let the law firm have part of what you win. This happens all the time in the US legal system. It's not extortion; it's essentially venture funding by the law firm. (Yes, I'm aware of the pattern in the previous sentence, but I'm in fact a human, and not even LLM-assisted.) If the company doesn't want to play that way, they don't have to. They can pay the full cost of the lawsuit themselves. |
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