In the early 1980s, the third largest US company Chrysler was in crisis . At that time, its Chairman, Lee Iococca went to the Congress and pleaded for a modest government loan of a few billion dollars. Such a request from a private company to the Congress for a bail-out loan and the governments bail out was unprecedented. The Reagan Adminisration did give the few billions of dollars that Iococca requested in a very impassioned and most rational submission that he made to the Congress. He said, "if the government did not give the loan, Chrysler would go bankrupt and then tens of thousands of workers would be thrown out of jobs. But then the government has a responsibility to give them doles. He worked out the cost of the doles for the period by the end of which Chrysler promised to repay the loan . He proved that the cost to the government by giving a loan to Chrysler would be less than what it would spend upon the doles. Besides this purely, financial argument, he said that people thrown out of jobs would loose morale and self-respect and that would bring about incalculable damage to their psychology and their self -worth. That was a great argument. President Reagan and his Congers accepted Iococca's request for a government loan (as no bank was willing to risk Chrysler's rescue). Iococca was competent and and sincere. He turned the company around and returned the loan before it was to be finally paid off. Int his case, the state bail -out was an excellent financial as well as moral transaction. One would indeed be a Saint if he can say that the trillion dollar bail out by the State failed SU to the companies that have failed in the US, is as meritorious as bailing out Chrysler in the early 1980s . Unlike Lee Iococca, the CEOs and Presidents and Directors of the scores of companies had helped themselves with fabulousness salaries and perks . They served themselves well when the companies has been well . Their business decisions and business practices were obviously faulty. They have resulted in the companies is going bankrupt. Nationalising the losses of such companies appears to be a colourable action. Of course this is justified, just like in the case of Chrysler; namely that cost of being loans and loss of moral and self esteem of the people thrown out of the jobs is less than the cost of doles board and other welfare measures that government will have to incur for the millions of people thrown out of work. Whether the management of bailed-out companies are as competent and ideas-rich as Iococca is a moot point.
In India, in the 1990s a number of state- owned banks accumulated lakhs of crores of rupees worth non-performing assets (MPAs). Many of these banks would have collapsed but the Government of India pumped lot of money into these banks to bring them back to health. That money was from the taxes paid by the people. So, the nationalized banks were managed politically, they benefited the men in power and preyed upon the public. This is a case of nationalising the losses. The various write- offs of debts like for the farmers, minorities, BCs etc., are all in the nature of robbing Peter to pay for Paul; a Robbin-hood type of action. In the process, the men in power have been serving themselves very well.
Now let us see, the case of privatising profits . A number of PSUs, not only those who are sick but also those who are sound are also being disinvested in favour of the public. That is, their capital is being privatized . In the case of the loss- making PSUs (like Hindustan Teleprinters (HTL)) which was privatised , the purchaser made a lot of profit by closing down the company and selling the real estate of the right in the center of Chennai. Why could the government itself not think of this act ? It could not because the leftists and trade unions controlled by them were dead against closure of the loss making companies and sale of their lands. Russia, post -USSR privatised a large number of state-owned companies ( every company in every communist country is always state-owned). Party leaders manged to buy those companies for a song and immediately sold them at huge gains. This is crony capitalism, politicians in power giving away publicly created assets which were formerly being badly manged to private companies at very low prices. The former party bosses were very shrewed, they could not only turn over the companies but knew how to make a kill by buying cheap and selling them dear. This is privatisation of profits.
In our country there is now an unbreakable nexus between traditional type of criminals including smuggles and drug -peddlers and the New Class of criminals whose only profession can be politics because they have no qualifications to get any job or become entrepreneurs. The recent elections have brought out the fact that hundreds of people offering themselves for election as MLAs and MPs are billionaires and multi-millionaires. All of them have no inherited wealth to start with; they accumulated wealth through the profession of politics, ostensibly for " public service ".
Milovan Djilas, a collaborating great leader of Marsal Broz Tito, the builder of communist Yugoslovia was a decent person who was horrified at the degeneration of the communists when they got power. The communist party abolished the old bourgeoise class, property -owning capitalists as exploiters. Instead, it brought into being a New Class. That is of party members. In India this is now what is happening, the way riches are made through "public service", though politics especially those which revolve round a dynasty. In the years of yore we had family- held companies and dynastic zamindars and billionaires. We are now turning out a new class of hereditary politician billionaires instead of hereditary industrialists and capitalists. In the French language there is a beautiful saying, more it changes, to the effect, the more it remains the same.