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What is fair and just in this case?

Trump commanded General Motors to create ventilators for the pandemic. I hold that the federal government should generously compensate GM for this order. I define “generous compensation” as a monetary sum so high that GM would be fools not to make the ventilators if they were offered a contract to make ventilators voluntarily. For example, the federal government could pay double or even triple the price of the ventilators, and on top of that, pay GM for all the money that they would’ve made by making and selling cars that they’re unable to make due to the government’s order.

My lawyer dad thinks that it’s fair for the federal government to pay GM the regular price for ventilators because GM is obligated to help out if called upon by the government during a national emergency. I am defining “regular price” as the price that GM would charge if they were making and selling ventilators voluntarily.

How much should the government pay GM for the ventilators?

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tenslein 6 Oct 7
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Your dad is being generous. We shouldn't pay GM a penny more than what they cost to make. Let's remember the government is the only reason GM still exists. The taxpayers suffered a net loss of 11.2 billion dollars as a result of the bailout. I think GM owes us one.

I wasn’t aware of the bailout. I suppose that would justify the government bossing around GM since, in a way, the government owns GM after giving them 11.2 billion.

Well suppose that bailout never happened. What would be a fair price for ventilators?

@tenslein Actually, the government did more or less own GM for a while, as it had a 61% stake in the company after the bailout. The govt eventually sold their shares in the company. To answer your question, though, if we were hypothetically starting with a clean slate, I think it's reasonable for a company to realize a profit on what they do. How much of a profit is negotiable, as always.

I want to extend my analogy of imminent domain. If the government wants to take someone's house for some bit of infrastructure that is in the public interest but that person is on social security should their payment not include the additional punitive compensation that someone not on social security would receive?

We tend to view the world through our instinct for fairness but the law as a practical matter is blind for the most part to extraneous circumstances.

@wolfhnd We're teetering on the edge of what's fair and what's possible, aren't we?. Imminent domain can be harsh. I don't know how the Defense Production Act compares to Imminent Domain, but my guess is neither offers fair compensation.

@wolfhnd why would someone on social security be entitled to less compensation for an eminent domain seizure?

@tenslein

They wouldn't be, that's the point. Past government compensation for something unrelated is irrelevant.

@wolfhnd Oh, I see your point now.

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The principal that applies here would be how imminent domain is generally handled. In imminent domain you are compensated for your property based on sales of similar properties plus the cost of temporary rental and other expenses. In addition to a percentage above value and expenses there is compensation for punitive damages (emotional attachment and stress).

I agree with this. What if you were a lawyer for GM and you were fighting the federal government on how much your company should be paid. How would you make the argument that GM should be generously compensated? Imagine that the state’s lawyer is arguing that it’s GM’s responsibility to help the country in times of crisis, so therefore the government can order GM to do things as long as they pay the regular amount.

For me, I would try to equivocate the government’s demands with imposing temporary slavery onto GM since slavery is something that all judges would recognize as evil.

@tenslein

I'm not familiar with the applicable law. I'm also too lazy to research it 🙂

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