Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
economix.blogs.nytimes.com
Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
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Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#2There have been a whole run of nytimes stories that have the same second half of the text about "the obama administration" and goldman sachs getting access to cheap government money.
With a different - what they have done this time - first paragraph. It seems like somebody at the NYT doesn't like either GS or the Obama adminsitration.
In this case GS are doing something naughty - but they aren't borrowing government money to do it, and since they aren't even investing their own money it's hard to see why they would need to
Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#3Subsidizing the social networking bubble? Email was totally monetized by companies like RIM and now large hardware firms that sell the email server stuff. However social network is being monetized in the direction of at the very least advertising, putting real money behind the valuations of these companies like Facebook. Sure advertising is a fickle beast, but the majority of companies(i.e. everyone but Twitter) have more than vaporware making up their business models.
Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#4Subsidizing the social networking bubble? Email was totally monetized by companies like RIM and now large hardware firms that sell the email server stuff. However social network is being monetized in the direction of at the very least advertising, putting real money behind the valuations of these companies like Facebook. Sure advertising is a fickle beast, but the majority of companies(i.e. everyone but Twitter) have…
whereas Twitter has... ??
Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#5There have been a whole run of nytimes stories that have the same second half of the text about "the obama administration" and goldman sachs getting access to cheap government money. With a different - what they have done this time - first paragraph. It seems like somebody at the NYT doesn't like either GS or the Obama adminsitration. In this case GS are doing something naughty - but they aren't borrowing government…
I don't think it is a matter of Obama, Paulson had a huge moral hazard during TARP as an ex-GS leader. I think there's a general anti-GS sentiment from the Paulson induced 100% bailout of AIG counter-parties.
Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#6There have been a whole run of nytimes stories that have the same second half of the text about "the obama administration" and goldman sachs getting access to cheap government money. With a different - what they have done this time - first paragraph. It seems like somebody at the NYT doesn't like either GS or the Obama adminsitration. In this case GS are doing something naughty - but they aren't borrowing government…
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Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#7There have been a whole run of nytimes stories that have the same second half of the text about "the obama administration" and goldman sachs getting access to cheap government money. With a different - what they have done this time - first paragraph. It seems like somebody at the NYT doesn't like either GS or the Obama adminsitration. In this case GS are doing something naughty - but they aren't borrowing government…
GS (and other favored companies) doesn't need to actually borrow - they gain advantage by having access as needed to 'government money', better defined as coercively (you know - prison if you don't give it) acquired taxpayer money. Merely having that access is the advantage - they can take greater risks - and reap greater rewards - than others because of it.
Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#8Even if Facebook's valuation isn't a bubble valuation (as I've argued previously) it is certainly the case that money lent at excessively low interest rates will create bubble valuations.
What can you do about it? You could stop accepting dollars, I suppose.
Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#9Short version: Anything Goldman invests in is being subsidized, so Facebook is being subsidized. Yawn
Re: Why Are Taxpayers Subsidizing Facebook, and the Next Bubble?
#10There have been a whole run of nytimes stories that have the same second half of the text about "the obama administration" and goldman sachs getting access to cheap government money. With a different - what they have done this time - first paragraph. It seems like somebody at the NYT doesn't like either GS or the Obama adminsitration. In this case GS are doing something naughty - but they aren't borrowing government…
GS (and other favored companies) doesn't need to actually borrow - they gain advantage by having access as needed to 'government money', better defined as coercively (you know - prison if you don't give it) acquired taxpayer money. Merely having that access is the advantage - they can take greater risks - and reap greater rewards - than others because of it.
Laissez-faire capitalism at work! No really, can somebody explain why institutions like this are allowed to have such advantages over their competition? This seems like it would be an easy political target FROM ALL SIDES of the aisle. "Big government" messes with the "free market" and the "rich get richer".
::EDIT::
Since I can't respond to my sub comments at this point, the first sentence, is, in fact, sarcasm.