Friday, January 04, 2008

Change for American Workers

If we really wanted change for American workers, we would structure things so that they owned a greater portion of production.

The best shot we had at this in ages was the private accounts provision of Bush's Social Security Reform bill. Regulating business into non-existence doesn't solve the ownership problem. It simply creates a world where neither owners nor workers own companies. John Edwards methodology produces world class poverty.

The Edwards campaign does a great job of rising fear, wealth envy and even out right hatred. His primary campaign promise is to tax, sue and regulate any US company that makes a profit until the company collapses in submission.

For a preview of the world Edward envisions, one might take a gander at Ford and GM. Ford seems to have fallen from a high flying $40 per share a few years back to just $6/share today. Ford Motor Company is now but a $12.7B company. The analysts seem to be predicting that the stock will fall to $4 in the near future. However, when you look at the balance sheet and future liabilities, both Form and GM really are bankrupt. I wouldn't buy at $4.

Their problem, of course, is that instead of taking the organic route where employees share ownership. The UAW demanded that Ford take the fool's route of promising fixed pensions and health care. Fixed pensions are a bad idea, because you really can't predict the economy out far enough to make intelligent decisions. Guessing too high or too low has consequences for the pensioner.

The real killer is health care. In a third party health care scheme, prices aren't fixed. The cost of health care will simply rise until something breaks ... like our economy.

BTW, further socializing medicine wouldn't make health care more affordable.

Looking at the world oil supply, you would notice that a greater percentage of the supply is coming from nationalized oil fields that an any time since the fall of the Berlin Wall. The profits of politically connected companies skyrocket as governments get bigger, and ownership becomes more distant from the people.

Contrary to what the Democratic candidates contend. The solution isn't to make ownership infinitely distance from the people. It is to find ways to transfer ownership back to people.

1 comment:

Reach Upward said...

Don't blame all of Ford and GM's problems on the unions. Yes, the unions made stupid demands. But lazy executives and board members went along with those requests, even though, the long-term results must have been obvious. They traded short-term gain for long-term pain. There was definitely some lousy corporate governance going on.