Erich Stauffer

Tag: Economy

  • Economy 3.0: Employees as Owners

    As we start to climb out of the recession we were in and enter into what some are calling Economy 3.0, a new trend is emerging. More and more bankrupt companies are being bought or given to their employees.

    The Times of Northwest Indiana reported on June 26, 2009 that unionized workers at the Gary Post-Tribune want to purchase the newspaper from the bankrupt Sun-Times Media Group. The Gary Newspaper Guild has the support of its national union and a Massachusetts consulting firm that helped an employee group purchase some of Maine’s largest papers from the Seattle Times Co. The Sun-Times Media Group filed for Chapter 11 bankruptcy protection in March of 2009.

    The UAW, a union of automobile manufacturing employees, now owns 55% of Chrysler/Fiat and 39% of General Motors, according to USA Today. Both car companies underwent bankruptcies in the Spring of 2009, both helped along by the Obama administration. So is this trend one of the people or are the people following the government’s example?

    Maybe the government learned it from the people. In 2007 a group of former employees in Culver City, California bought their employer Small World Toys Inc. out of bankruptcy for $12.5 million.

    It would be hard under normal circumstances to get enough employees together to do anything singular with thier money, but having their employer go bankrupt seems to have a rallying effect amoung the people. If this trend turns out to be good for the employees over time, maybe more employees will band together before their employer goes bankrupt and have a larger stake in their employers future – as part owners.

  • Waxman-Markey Climate Change Bill as Stimulus Package

    The climate bill currently under consideration in the U.S. House of Representatives tackles global warming with new limits on pollution and a market-based approach to encourage more environmentally-friendly business practices. With all the new rules and reallocation of money, this bill essentially equates to a stimulus package for businesses involved with energy creation or preservation.

    The legislation is intended to reduce the gases linked to global warming and to force sources of energy to shift away from fossil fuels, which when burned, release heat-trapping gases, and toward cleaner sources of energy such as wind, solar and geothermal. This means that any company currently producing solar panels, wind mills, or geothermal pumps will surely get a boost in revenue if this bill passes.

    The idea is to try to reduce the overall level of pollution, regardless of whether a particular factory reduces emissions or not using a cap and trade system. This system is another way for included businesses to make money because if one business already does not pollute, they can sell credits to a business that does. Eventually all polluting businesses will have to reduce their pollution and the market will reach an equilibrium, but before then, there will be a market for capping and trading.

    In addition to energy producers, businesses that help with energy efficiency will also see a boost with the Waxman-Markey bill. In fact, these companies will probably see it first as measures to boost energy efficiency in buildings and appliances are the low-hanging fruit that does not require major infrastructure changes or new technologies. Other changes are decades off and probably will come when the cap gets more stringent and permits get more expensive.

    Even if this law does not pass another one like it may pass before the end of the 2009 calendar year. The Obama administration clearly thinks something has to be done about preventing pollution and reducing our dependencies on foreign sources of of energy. While this plan ignores nuclear energy, a future bill may include this as a more comprehensive way to look at our country’s energy policy. Regardless, there are clear winners here in the energy sector.