THE Global Justice Movement Website

THE Global Justice Movement Website
This is the "Global Justice Movement" (dot org) we refer to in the title of this blog.

Tuesday, November 25, 2008

Bailout or Buyout?

A short time ago we got an e-mail from one of our loyal readers. He asked, "Why cannot shares of the companies be issued to all citizens for the government bailouts? Banks can do all administrative matters as part of the bailout."

This is an excellent idea — which is why we've been pushing that idea all along, from the Conrail situation that helped bring the ESOP into existence in the early 1970s down to the current situation with the automakers.

The mechanisms are already in place, legally, to link the bailouts of individual companies to something like an ESOP (or an ESOP). We think priority in ownership ought to go to the workers, then suppliers and customers, and then the general public. This is what Capital Homesteading is designed to do. Banks and other financial institutions could handle the administration of each individual's Capital Homestead Account, but before the enactment of a Capital Homestead Act, it might be feasible with what we have in law already to set up S-Corp ESOPs that pass through full voting and dividend rights to the beneficial shareholders, and combine it with a supplier and consumer co-op. It might still require some additional enabling legislation for members of the general public to get shares on credit, tax deferred, but the bones of the proposal already exist.

All it takes is for the powers-that-be to listen to us and take us seriously, instead of trying to bloat up the amount and number of bailouts so that corporate executives can continue to fly to hearings in their private jets.

Donations to CESJ support our Capital Homesteading projects and Just Third Way initiatives, and are tax deductible in the United States under IRC § 501(c)(3).