Questions for our American friends

[deepsepia]

Originally Posted by xyzde69

Could you believe that the fact in France and Switzerland?

I don't know if it's the fact in other European countries.

In France, you have substantial State ownership of many private companies, in that context it’s reasonable. I can’t think of a US company with substantial government ownership. I can’t think of anything in the US like France’s stake in Air France.

During the financial crisis, the Federal Reserve invested in US banks, but did not get Board seats. Probably the closest we got to government officials acting like board members was the restructuring of companies like General Motors and Chrysler.

[Roubignol]

Originally Posted by deepsepia

During the financial crisis, the Federal Reserve invested in US banks, but did not get Board seats. Probably the closest we got to government officials acting like board members was the restructuring of companies like General Motors and Chrysler.

I remember having read, that the Lehman Brothers' bank was not saved, because Henry Paulson, the ex-director of a private bank, who was the secretary of the Treasury, didn't like the boss of the Lehman Brothers' bank.

But he helped other private banks.

That's borderline...

[Arturo2nd]

Originally Posted by deepsepia

In France, you have substantial State ownership of many private companies, in that context it’s reasonable. I can’t think of a US company with substantial government ownership. I can’t think of anything in the US like France’s stake in Air France.

During the financial crisis, the Federal Reserve invested in US banks, but did not get Board seats. Probably the closest we got to government officials acting like board members was the restructuring of companies like General Motors and Chrysler.

The CIA may still own an airfreight company. Amtrak is owned by the U.S. government. In the past, the U.S. government took over the Dollar Steamship Company during the Depression, renamed it American President Lines, and operated the line until selling it to private owners in the 1950s.

In general the U.S. government prefers to contract with the the private sector. I seem to recall that the government has some other owned companies which serve agencies involved in sensitive or classified work. Naturally, this information would not be well publicized.

[Roubignol]

How are your taxes in the USA?

As citizen, do you pay a city, a state and a goverment taxes?

or do you pay a city taxes and then the administration of the city redistributes a part of your taxes to the state and to the government?

[Rogerbh]

Taxes vary from city to city, state to state and of course all residents have the Federal Income Tax to contend with.

https://www.aol.com/2012/04/03/tax-f...pril-17-wages/

I recall someone complaining about living in NY City because of the city income tax,

https://smartasset.com/taxes/new-york-tax-calculator

I know some retired people chose to live in Washington state right near the border with Oregon. There is no state income tax in Washington State and they shop in Oregon where there is no sales tax. That tax freedom day link seems to disagree about how tax cheap it is to live in Washington, I do not know if they assume you shop there with its high sales tax.

I unfortunately live in California, state income tax and a sales tax, but my family refuses to move to another state.

[deepsepia]

Originally Posted by xyzde69

I remember having read, that the Lehman Brothers' bank was not saved, because Henry Paulson, the ex-director of a private bank, who was the secretary of the Treasury, didn't like the boss of the Lehman Brothers' bank.

But he helped other private banks.

That's borderline...

Well, the story goes that it was payback because Lehman had been unwilling to help with Bear Stearns, but there’s no sign it was that petty.

With Lehman, it was a mix of things. Lehman went bad fast, this all was a matter of a few day. One of the reasons was that there was substantial hostility to the idea of bailing out banks, another was that they didn’t realize how bad it could get.

Our system is built on the idea that private companies that fail should restructure in bankruptcy, not that they’re so important that they can’t be permitted to fail, a lot of people were hostile to the idea.

Something that can’t be permitted to fail should be . . . a regulated public utility.

[Arturo2nd]

I read Paulsen's "On the Brink." Basically Lehman Brothers was insolvent, Treasury lacked enough funds to inject enough capital to save them, and they couldn't find a buyer. Lehman had retained too many securities backed by mortgage bonds that had gone into default. Because these "assets" were worthless, Lehman could not make good on the derivatives it had sold. The central banks of China, Japan, and the U.K. turned them down and Bank of America preferred grabbing off Merrill Lynch. Goldman Sachs and Morgan Stanley were the only survivors of the pure investment banks, and survival of the latter was a very close call.

Paulsen is a good read, but never does explain how he overlooked the massive fraud perpetrated while he was CEO of Goldman Sachs. A lot Wall Street bastards should be rotting in prison, having destroyed way more lives than any street level crack dealer, but we all know how that turned out.

[deepsepia]

Originally Posted by Rogerbh

I know some retired people chose to live in Washington state right near the border with Oregon. There is no state income tax in Washington State and they shop in Oregon where there is no sales tax. That tax freedom day link seems to disagree about how tax cheap it is to live in Washington, I do not know if they assume you shop there with its high sales tax.
.

Well that would be me. The Washington/Oregon/California tax this is quite peculiar

Washington: No income tax, high sales and property taxes
Oregon: No sales tax, high income and property taxes
California: High sales & income taxes -- and Prop 13 limited property taxes.

Quite inefficiently, each state has decided that one particular tax should be restricted. It creates some odd preferences at the border. You definitely would prefer to be a Washington taxpayer and buy your stuff in Oregon (in theory, you should be paying Washington "use tax" for doing so-- this only happens with big ticket items, a car or a boat for example).

Originally Posted by Brian249x

Paulsen is a good read, but never does explain how he overlooked the massive fraud perpetrated while he was CEO of Goldman Sachs. A lot Wall Street bastards should be rotting in prison, having destroyed way more lives than any street level crack dealer, but we all know how that turned out.

Its not clear to me what massive fraud he overlooked.

I haven't seen evidence of massive fraud in the financial crisis. The best explanation is the simplest: some systemically important firms were vastly over-leveraged. Lehman, for example, was leveraged roughly 44 to 1. That's not fraud, not illegal, but its reckless and dangerous.

If you were to borrow $440,000 with only $10,000 in equity-- well, sooner or later you'd blow up too.

You can point to loans that shouldn't have been made, some bad faith transactions-- but that's not the source of the crisis.

It appears to have been something quite simple: far too much leverage.

Its a bit like a heart attack. You can sometimes identify some insult that pushed the system over the edge, but the system has to be on edge in the first place in order for something like a bee sting to cause a heart attack.

[Arturo2nd]

Originally Posted by deepsepia

Its not clear to me what massive fraud he overlooked.

Subprime mortgage loans were bundled together into securities that were then rated 'AAA' by the bond rating agencies and sold by the banks as investment grade securities. Folks like Goldman Sachs then sold derivitavites backed by the phony "investment grade securities."

He and the other CEOs didn't overlook a damn thing. They knowingly sold bonds as equivalent to U.S. Treasury bonds, high class corporate bonds or mortgages made to folks with very high credit ratings and substantial equity in their homes. In fact those bonds were backed by adjustable rate mortgages made to people with poor credit ratings and no equity in homes that were sold at prices inflated by a real estate bubble. The bankers made a ton of money in commissions on these sales. The mortgage companies committed fraud, the home buyers committed fraud, and the bankers who sold these junk bonds mismarked as investment grade securities committed fraud. Then to make it all worse the investment banks sold derivatives based on the turds to make sure that enormous houses of cards were leveraged on top of guaranteed to fail mortgage bonds.

Please read The Big Short by Michael Lewis where the whole Ponzi scheme is reported by the former investment banker in terms even laymen can grasp.

[Decadence]

Originally Posted by Rogerbh

Taxes vary from city to city, state to state and of course all residents have the Federal Income Tax to contend with.

Yes.. aside from income tax at all levels (Fed, State, Local) there's all the other kinds of consumption taxes where they can get cute. Social security and medicare get a cut, too.

For example, in my state, A dome stadium was constructed in the mid 80s. To help offset the cost, another 1% was added to every restaurant check and bar tab's state sales tax amount.

Nine years ago, they tore it down and built a new stadium. Again, the sales tax on restaurants and bars went up another 1%.

We got the new stadium. But all these years later, we're still paying that extra point on the sales tax for a structure that doesn't even exist any more. They paved it over, and it's something else now.

Most of the time, for me, it seems government's sole purpose is to "liberate" dollars from those that earned them.