Wednesday, June 01, 2011
Exxon for President?
I have a silly idea that someone with the talent of Mark Twain, Theodore Seuss Geisel, or Sholem Aleichem could make into a great story. In a previous blog I mused about Supreme Court decisions regarding the rights of corporations. In each important decision the Court asserted that the 14th Amendment grants corporations certain rights at law that are generally reserved for persons. In effect, a corporation is a person.
My silly idea was to extrapolate these decisions. If a court is a person, it is entitled to all the rights granted to persons in our constitutions, including the right to participate in elections. (The Court already has allowed a corporation to make unlimited contributions to political candidates under the First Amendment.) Corporations should also have the right to vote as persons and as registered voters and even run for office.
In my story line some corporations test this theory. At first it is an obscure small corporation, such as a law firm, that decides to run for a seat on the Los Angeles City Council. The law firm is elected and chooses a representative to sit on the council. Other corporations quickly notice this development. Soon the Gallo Corporation and Union Oil are competing for the office of Governor of California. A mining corporation becomes Governor of Montana. General Motors barely loses in Michigan to a Farmers' Cooperative. Morgan Chase becomes the Mayor of New York. And so it goes.
It's a silly and juicy idea. I wish I had the talent to make it into a hilariously funny and sarcastic novel.
My silly idea was to extrapolate these decisions. If a court is a person, it is entitled to all the rights granted to persons in our constitutions, including the right to participate in elections. (The Court already has allowed a corporation to make unlimited contributions to political candidates under the First Amendment.) Corporations should also have the right to vote as persons and as registered voters and even run for office.
In my story line some corporations test this theory. At first it is an obscure small corporation, such as a law firm, that decides to run for a seat on the Los Angeles City Council. The law firm is elected and chooses a representative to sit on the council. Other corporations quickly notice this development. Soon the Gallo Corporation and Union Oil are competing for the office of Governor of California. A mining corporation becomes Governor of Montana. General Motors barely loses in Michigan to a Farmers' Cooperative. Morgan Chase becomes the Mayor of New York. And so it goes.
It's a silly and juicy idea. I wish I had the talent to make it into a hilariously funny and sarcastic novel.
Labels: Dr. Seuss, Gallo, General Motors, Mark Twain, Sholem Aleichem, Union Oil
Thursday, June 11, 2009
BIG
Some of my extreme ultra-conservative friends, particularly H, place the blame for the current financial crisis and resulting depression on the Democrats. Some ultra-liberals blame the lax reglation regime put in place by several preceding administrations (Clinton, Bush sr., Reagan, Carter, Ford, Nixon). I don't know whether I should be called an ultra-liberal, a socialist, or a plain liberal, but I think the real fault lies in the nature of the financial and economic system that we have allowed to develop over the past hundred or more years. I think the basic problem is bigness. We have created banks and other financial institutions that are "too big to be allowed to fail." Our automobile manufacturing capability has been consolidated in three big corporations. We have decided that they are not too big to fail but they are too big to be allowed to fail and the manufacturing plants closed and sold for scrap. Consolidation has been concentrated in other fields of manufacturing also. A few large corporations sell such appliances as dishwashers, refrigerators, washing machinens, and clolthes driers. Not only are the manufacturing facilities concentrated in just a few large corporations, but many of these facilities have been moved to China and other places where labor is cheap and compliant.
So much for my view of the situation. What brought it about? I think our system makes it very easy for a sharp operator who wants to make a fortune as fast as possible so that he can retire, like J. Paul Getty, at age 30 as a billionaire. That's the goal.
How does the sharp operator go about achieving this goal of rapid riches? He or she starts a small company, perhaps in a garage. Initial success leads to decisions to enlarge the manufacturing facility. The little company grows and prospers. In a few years it is a very attractive investment for people with money. The founder(s) sell at a very good price. The buyers hire new managers and the company may continue to prosper, or it may fail. If it prospers, the investors can enrich themselves by selling the little company to some giant, like General Electric or Westinghouse or, until recently, General Motors. They get out with nice profits. General Electric, et al., become bigger and bigger and eventually have control of nearly all the manufacturing facilities in the country.
Everything that I have described is perfectly legal. Sharp operators - entrepreneurs who are motivated by the desire to gain wealth quickly - find it easy to start and later sell start-up companies. The process tends toward bigness and concentration. Eventually one of the big firms fails and causes a depression - that is, a situation in which a lot of people are out of work and out of money.
Old-fashioned conservatives - those who aren't looking for political advantage - accept this situation as a consequence of imperfections in our financial and economic system. Being conservative, they are reluctant to make changes. The changes may produce something even worse than what we have now. Some pragmatists want to make a few minor changes in the existing system. Perhaps there should be a smaller incentive to selling out a start-up company by changing the income tax on short-term capital gains. Such a tax could also be applied to the purely financial manoeuvres that are purely speculative; that is, actions which bring sudden increase in wealth to an individual who hasn't done any real work to achieve it. Socialists want to make fundamental changes in the system. If a bank or manufacturing company or service company becomes "too big to fail," it should be taken over and operated by government for the good of the people. Profit should be less important than continuing the service or product, and in particular maintaining the jobs of the workers.
I won't try to solve the problem here and now. I await your comments.
So much for my view of the situation. What brought it about? I think our system makes it very easy for a sharp operator who wants to make a fortune as fast as possible so that he can retire, like J. Paul Getty, at age 30 as a billionaire. That's the goal.
How does the sharp operator go about achieving this goal of rapid riches? He or she starts a small company, perhaps in a garage. Initial success leads to decisions to enlarge the manufacturing facility. The little company grows and prospers. In a few years it is a very attractive investment for people with money. The founder(s) sell at a very good price. The buyers hire new managers and the company may continue to prosper, or it may fail. If it prospers, the investors can enrich themselves by selling the little company to some giant, like General Electric or Westinghouse or, until recently, General Motors. They get out with nice profits. General Electric, et al., become bigger and bigger and eventually have control of nearly all the manufacturing facilities in the country.
Everything that I have described is perfectly legal. Sharp operators - entrepreneurs who are motivated by the desire to gain wealth quickly - find it easy to start and later sell start-up companies. The process tends toward bigness and concentration. Eventually one of the big firms fails and causes a depression - that is, a situation in which a lot of people are out of work and out of money.
Old-fashioned conservatives - those who aren't looking for political advantage - accept this situation as a consequence of imperfections in our financial and economic system. Being conservative, they are reluctant to make changes. The changes may produce something even worse than what we have now. Some pragmatists want to make a few minor changes in the existing system. Perhaps there should be a smaller incentive to selling out a start-up company by changing the income tax on short-term capital gains. Such a tax could also be applied to the purely financial manoeuvres that are purely speculative; that is, actions which bring sudden increase in wealth to an individual who hasn't done any real work to achieve it. Socialists want to make fundamental changes in the system. If a bank or manufacturing company or service company becomes "too big to fail," it should be taken over and operated by government for the good of the people. Profit should be less important than continuing the service or product, and in particular maintaining the jobs of the workers.
I won't try to solve the problem here and now. I await your comments.
Labels: Bank of America, General Electric, General Motors, old-fashioned conservatives, too big to fail
Saturday, December 13, 2008
Republicans as Grinches
We are having a budget crisis in California. Because of the 2/3 vote requirement for passing a budget and for increasing taxes, the Republicans are able to prevent any increase in taxes to provide more revenue to close the budget gap. They insist that the entire gap must be made by reducing the spending on State programs. These are programs that build highways, provide money for hospitals, provide money for schools and universities, provide money to help local governments provide police and fire protection, etc. Some of these programs, like Medi-Cal, provide health care for low-income residents.
As usual in American politics, each political party tries to put the blame for a bad situation on the other party. Republicans hold fast to their "no tax increase" pledge, but do not propose any schedule of program reductions to close the gap between revenue and expenses. Their position is that these cuts shall be made by Democrats, so that the Democratic Party will be blamed for short-changing education, health care for the poor, and other programs that are popular with the public.
One Republican legislator commented that he wasn't going to approve any tax increase that would benefit people who don't pay any taxes - i.e., the poor. The remark made news on an inside page of the Los Angeles Times for one day. Since then no one, no Democrat, has commented on it. In the battle of assigning blame it seems to me that the Democrats have lost a chance to make a point.
If the crisis in California isn't enough, consider the crisis in the domestic automobile industry. In the US Senate Republicans have killed the bill that would have provided a fourteen billion dollar loan to the firms to keep them going until March. I should say, Southern Republicans. Their motive is to punish the auto workers union, UAW. These gentlemen would agree to the loan only if the union would give up all advantages regarding salary, health insurance, and pensions that they have over the non-union workers in the auto plants in the South that are operated by foreign owners and without unions, such as Daimler-Benz, BMW, Toyota, and Honda. In other words, the price of the bail-out was that the UAW would simply cut its own throat. The alternative the Southerners offer is Chapter 11 Bankruptcy.
Bankruptcy of one of the big three auto companies would be different from bankruptcy of, for example, United Air Lines. United continued to fly while undergoing the restructuring of bankruptcy. Americans are willing to fly on bankrupt airlines. I doubt that Americans would continue to buy cars from an bankrupt auto company. An airline trip is a one-time event. A car purchase involves certain guarantees regarding defects in the car, contracts for service for a number of years, and the like. If the company is bankrupt, it can not offer such guarantees and service contracts. A bankrupt General Motors would be shut down and the various properties sold to satisfy the claims of the creditors. The workers would be laid off. The federal government would have to pick up the retirement pensions. Bankruptcy now, during a credit crisis, would undoubtedly lead to another Great Depression. This is what the Southern Senators are willing to risk in slapping down the hated auto workers' union.
As usual in American politics, each political party tries to put the blame for a bad situation on the other party. Republicans hold fast to their "no tax increase" pledge, but do not propose any schedule of program reductions to close the gap between revenue and expenses. Their position is that these cuts shall be made by Democrats, so that the Democratic Party will be blamed for short-changing education, health care for the poor, and other programs that are popular with the public.
One Republican legislator commented that he wasn't going to approve any tax increase that would benefit people who don't pay any taxes - i.e., the poor. The remark made news on an inside page of the Los Angeles Times for one day. Since then no one, no Democrat, has commented on it. In the battle of assigning blame it seems to me that the Democrats have lost a chance to make a point.
If the crisis in California isn't enough, consider the crisis in the domestic automobile industry. In the US Senate Republicans have killed the bill that would have provided a fourteen billion dollar loan to the firms to keep them going until March. I should say, Southern Republicans. Their motive is to punish the auto workers union, UAW. These gentlemen would agree to the loan only if the union would give up all advantages regarding salary, health insurance, and pensions that they have over the non-union workers in the auto plants in the South that are operated by foreign owners and without unions, such as Daimler-Benz, BMW, Toyota, and Honda. In other words, the price of the bail-out was that the UAW would simply cut its own throat. The alternative the Southerners offer is Chapter 11 Bankruptcy.
Bankruptcy of one of the big three auto companies would be different from bankruptcy of, for example, United Air Lines. United continued to fly while undergoing the restructuring of bankruptcy. Americans are willing to fly on bankrupt airlines. I doubt that Americans would continue to buy cars from an bankrupt auto company. An airline trip is a one-time event. A car purchase involves certain guarantees regarding defects in the car, contracts for service for a number of years, and the like. If the company is bankrupt, it can not offer such guarantees and service contracts. A bankrupt General Motors would be shut down and the various properties sold to satisfy the claims of the creditors. The workers would be laid off. The federal government would have to pick up the retirement pensions. Bankruptcy now, during a credit crisis, would undoubtedly lead to another Great Depression. This is what the Southern Senators are willing to risk in slapping down the hated auto workers' union.
Labels: California budget, General Motors, non-union auto plants in Southern States, United Auto Workers
