Friday, December 5, 2008

Do I Detect Collusion?

We all know about the CEOs of the Big Three auto companies flying on their corporate jets to Washington, DC to beg Congress for a bailout of $25 billion. Congress sent them back empty-handed. So what did they do next? They came back (driving hybrid cars) with a plan and asked for more -- now they want $34 billion!

I object. For one thing, it seems to me that the three companies are colluding, which strikes me as bordering on a violation of the Sherman Anti-Trust Act (1890) and other laws that outlaw conspiracies in restraint of trade. Second, they messed up.

Here's a link to a New York Times editorial with a list of recommendations:

... For starters, [Congress] must demand that the three companies’ top executives resign. Only new management can enforce the deep cultural change needed to overhaul the industry. And, it must impose real, enforceable environmental rules. The European Union is aiming for a fleetwide fuel-economy of 50 miles per gallon in 2015. In the United States, Congress last year enacted a target of 35 miles per gallon by 2020.

Experts say that Detroit’s automakers could achieve 43 m.p.g. by then even without technological breakthroughs. If the companies were willing to make smaller cars, they could achieve 50 m.p.g. Congress could consider demanding that Detroit simply phase out S.U.V.’s and vans by a certain date. ...

But I hardly think this New York Times editorial is going far enough. The auto companies have failed to adjust to realities of peak oil, global climate change, war for oil, and habitat destruction. They have failed to start producing more environmentally sound products (like buses and bikes). Any "bailout" plan should actually be part of a much larger plan -- a New Deal for Economic Recovery and the Environmental Health of the Planet -- that addresses the destructiveness of our current way of life. Such a plan would include revenue for the construction of affordable and appealing housing in whole, livable communities near transit, complete with parks, schools, retail, services, community gardens, and jobs. It would also include funds for nearby farmers to cultivate homegrown healthy produce. (Sorry, small farmers just can't do this on their own right now -- the competition from big agribusiness is too fierce.)

And the term "bailout"? Personally, I agree with the calls for the nationalization of the transportation industry at the same time that we nationalize the health care industry and move to a single payer system (hey, if you want to maintain your own, private health insurance, no one will stop you).

Here's Democracy Now! coverage of the bailout matter from December 5, 2008.

Here's a Common Dreams story on bailing out of the fossil fuel economy from December 3, 2008.

How do we give people incentives to stop driving and get on board with the changes that are necessary? Here's an idea from a Sierra Club activist: tax everyone at the gas pump steeply (like 10 percent for starters and then go up) and then give everyone (even people who do not have cars) something like a $600 annual rebate. This rewards people for not driving.

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