I thought the government can't own a business...?

[Sheesh!]

Someone told me years ago that the government can't own a business because it would create a conflict of interest. Is this true? If it is, then why does the US government own GM now? What other businesses does the government own and when did the government start owning these businesses?

If it's not true, would it be possible then that it would create a conflict of interest?

 

[wiser than sotomayer]

You're a moron, the government doesn't own GM, please go get an education like I did.

 

[Comrade Otto]

Its only a conflict of interest to greedy capitalists who cause depressions. Government run companies tend to offer cheaper goods, better service and for those who work for them decent wages and conditions and job security

 

[Planet]

The government doesn't own GM. They have roughly 60% of its stock to hold until such time as it can be sold on the stock market again. They will have a representative on the board of directors until such time to protect the tax payers' interest but they do not OWN GM.

 

[wiser than sotomayer]

You're a moron, the government doesn't own GM, please go get an education like I did.

 

[northernhick]

Certain government officials are restricted in being able to *personally* own businesses. The conflict is that, to the extent they have the power to enact laws to benefit their businesses, their mandate to act for the people is in conflict with their own self-interest.

However, government ownership and operation of businesses is quite common. Not so much in the United States, perhaps, but it still exists there. There isn't a problem.

 

[robert_dod]

Whoever told you that the government cannot own a business is, quite simply wrong. There is no legal prohibition against the government owning a business.

There would not be a conflict of interest. However, at least arguably, there is an unfair advantage to that business. If the government owns a business, it can charge lower prices than the competition (with any deficit funded by the taxpayer). It also gets other advantage (like infusions of cash when necessary).

But these are all policy issues. There is nothing in the Constitution, or the law, that prohibits the government from owning a business. Perhaps it is a bad idea, but not against any law.


As for those who say that the US Government does not own GM, they are ... well ... wrong. Anybody who owns a share in a corporation is a part owner. Generally, a person with even 20 percent of a large, publicly traded company has effective control over it. In this case, the US government has limited voice on the Board of Directors. But, owning 60 percent of the stock, the U.S. Government has the RIGHT to call a meeting of shareholders and, since they own more than 50 percent of the shares, could name the entire board of directors, who, in turn, elect the officers of the corporation. The United States has a "controlling interest" in General Motors.

It is true that the government hopes to sell its shares. When it does, it will no longer own that portion of the corporation that it curently does. But, like any shareholder, it has the right to vote at shareholder meetings, etc.


Good luck.