What about the Car Dealers? Or Hedge Funds?

Mack McClarty writes about the risk of bankruptcy by GM and Chrylser to the car dealerships in today's Washington Post.

Sorry Mack, but perhaps the time for dealerships has passed. The franchise system was, in part, a way to shift product risk from the manufacturers to small business and part to prevent their sales and maintenance forces from unionizing. Neither strategy seems to be good at this juncture.

Perhaps it would be better for the dealers to sell out to the manufacturers, trading inventory and assets for stock and allowing the employees to join the UAW. In Chrysler, this would make them owners as well. It is telling that these workers were not mentioned in your piece at all.

The AP is reporting the the President will announce at noon that Chrysler is going into a short period of bankruptcy, which will allow them to deal with much of the outstanding debt held by Hedge Fund operators who refused to accept the deal proferred by Chrysler and the Administration.

Do they think that they are going to get a better deal from the bankruptcy judge? It does not seem likely. Do they seriously think that the Obama Administration is going to bail them out when they have to write these assets off when they did not play ball on Chrylser? I think not. Luckily, none of my assets have any holdings in these funds, because they are about to go south. They fought off any type of regulation in the 1990s and that decision is about to bite them hard. My advice to hedge fund managers is to leave the Lamborghini at home when going to court, because the judge may seize it as an asset for your investors. Given that the Administration is working to go after tax, and presumably asset, havens in the Caymens, et al, it doesn't take a fortune teller to see that the end is near.

The Chrysler Deal

Chrysler is about to be reorganized, going from an essentially privately owned firm to a firm owned by a combination of private firms, its employees and the federal government, with the UAW controling 55% of the pie. The actual compensation of the ownership has not yet been released and will be interesting. The last obstacle to the deal seems to be a ratification vote and an agreement by all bondholders to take less than face value (as compared to the zero they would get if the company failed).

This was actually the easy part. The hard part is how this new firm will getting people to buy cars again and as importantly how the firm will be managed. The new firm will learn about quality and participative management from Fiat, which is a good sign from my anarcho-synidicalist viewpoint, since European participative management will impact the day to day functioning of Chrysler in a way that will reduce both cost and increase human dignity. The impact of that may well be less of a need for governmental regulation. The anarcho part of me likes that a lot.

The acid test will be how profit, wages and positions are divied up. If Chrysler is run the way United is run, the experiment will be a flop. If it is run along different social assumptions, however, it may well make it, although it is a hard row to hoe. it is not easy to move from a top-down hierarchy locked in a death match with a top-down union to a more economic and egalitarian model. I have a few ideas along this line. Anyone in either management or the Union who is interested in these is free to contact me. They are laid out on my Iowa Center for Fiscal Equity web page at www.geocities.com/iowaequity/governance.html and the companion piece at www.geocities.com/iowaequity/payequity.html.

Gay Marriage in Iowa

Equal protection is equal protection. When legislating against an identifiable group, such as homosexuals, one must have a rational basis for doing so. This is true in state and federal law (and a portent for things to come). As Justice Scalia pointed out in his dissent in Lawrence v. Texas, as soon as private consenual sodomy is regarded as essentially private and beyond the reach of legislation, there is not rational basis for denying gays the right to marry a same sex partner.

While religious leaders talk about the role of procreation in marriage, the ability to procreate is not a requirement in either civil law or canon law to marry - (Canon law requires only the ability to function - although it still regards sodomy as disordered). Of course, the very concept of disorder requires that there be a natural order outside of human experience to damage (since God cannot be damaged). If the natural order is considered a sophistry then the disorder argument carries no weight, especially given the biological evidence that homosexuality is simply a natural variation in the species.

If inability to procreate is not a bar to marriage among heterosexuals, it cannot be so for homosexuals. Additionally, marriage is not required for procreation, although it is helpful in providing a stable environment for children. Of course, the stable environment argument favors gay marriage, given that gay parents often have custody of their children.

The key role of marriage is to separate individuals from their families of origin, creating a new family. As Jesus said, when someone is married, they leave their families and cling to their spouse, and the two will become one flesh. Practically, that means that they are legally the same person, excluding the family of origin from any power formerly held, including the right to inherit property, make decisions in illness and make funereal arrangements.

The question of marriage did not come up when there were no end of life decisions to be made. People got sick and either died or got better. Now they may or may not linger and may or may not recover. There is visitation to be decided - often with estranged families excluding a person who is essentially a spouse. While civil unions are an attempt to rectify this, they are but an act of political correctness designed not to offend the sensibilities of the religious (who have not conducted themselves toward homosexuals in anyway so as to deserve an opinion on the matter).

The key legal question is this: what compelling right do families of homosexuals have in maintain an interest in the lives of their gay family members vis a vis the member's spouse when compared to those of heterosexual family members vis a vis their spouses? In other words, why do gay spouses deserve less respect than straight spouses?Unless you can find an overwhelming rational basis for a difference, the Iowa Supreme Court ruled correctly - as will the U.S. Supreme Court when they finally see this issue.

Ultimately, Churches will see that they must celebrate gay weddings. There are two reasons. The first is that it gives them a platform to preach monogamy - a platform they do not have now by declaring all homosexual activity sinful. The second is because the wedding ceremony is a comfort for the family, not just the couple. When the famillies are rightly seen as the beneficiaries of these rites, they will begin demanding that they occur and they will be performed.

Selling Carbon (and other Sin) Taxes

Carbon Taxes, like any pollution or sin tax, are an attempt to capture the externalities associated with a transcation that are not captured in the price. Put more briefly, carbon taxes make customers who buy products which cause global warming pay for the environmental damage caused by their use of these products. The goal behind these taxes is to lessen consumption of these products and reimburse society for the harm done. The significant danger behind such levies is that they become a cash cow, which gives society an interest in setting the tax low enough that the behavior goes on. This is called codepenency in the recovery community - and it is not good. The way out of such codependent relationships is to designate all funds collected from carbon taxes (and other sin taxes) toward government spending designed to reduce or eliminate the undesireable behavior. That way, when the behavior is eliminated, the program to counteract the behavior is eliminated too.

For tobacco taxes, instead of using these funds as a cash cow, it would be better to fund smoking cessation and heart disease, cancer and COPD (formerly emphysema) treatment and research, as well as programs to help tobacco farmers find an alternate crop (such as fish farming). If taxes are not high enough to adequately fund all the consequences, the tax would be raised. If all programs are well funded and there is money left over, the taxes would be decreased.

Alcohol taxes would fund both addiction prevention and treatment and the criminal justice systems, since alcohol is the most likely gateway drug to other substances and because it is also responsible for the vast majority of violent and property crimes. If marijuana and other drugs were made legal, they could be taxed as well - although other drugs such as meth, heroin and crack cocaine would still be considered dangerous and use considered grounds for mandatory inpatient treatment (rather than incarceration). If taxes on alcohol and drugs are too low to fund needed treatment and incarceration activities, they would be raised. While most people who imbibe do not cause negative consequences to society, a minority of users who are alcoholic or addicted consume most of the alcohol and drugs sold, so these consumers would pay most of the taxes and use most of the required services. Of course, taxes should not be so high that black market sources of supply are encouraged.

Carbon taxes hold the most promise for identifying offsetting spending programs. The way to sell these taxes is to link already popular spending programs to the tax, rather than to the general fund. Gas taxes should become a carbon tax and be allocated for both advanced transportation research as well as road building and mass transit, including Amtrack. Reforestation would also be funded by carbon taxes. All hydro-electric projects performed by the Corps of Engineers should be funded by Carbon Taxes, as well as new nuclear power plants and the Office of Fusion Energy. Indeed, carbon taxes should be increased enough to accelerate this research beyond the current timetable, since Helium-3 Fusion reactors are both absolutely save and emissions free. Once the technology is fully developed, it will be commercially viable on its own and will eliminate the need for almost all mechanical emissions of carbon gasses for power, industry and transportation. Putting the pork barrel lobby behind the carbon tax cannot but help hurry the day where this is possible.