Friday, April 17, 2009

Abitibi severance scams

I really feel for the laid-off Abitibi mill workers, though I know none of them. Don't forget the woods workers contract didn't include severance either. It seems AbitibiBowater doesn't recognize much of its responsibility, including to the province and the environment.

Something similar happened to me when I was laid off in late 2002, but not as bad. I collected severance required by provincial law, but my contract specified additional severance which the company refused to pay. They used delay tactics to avoid the courts until their bankruptcy months later, and never paid the additional severance. But at least I got something, more than the Abitibi workers.

I thought employees were considered first-in-line among creditors, but I guess I was wrong. I think perhaps they should be. Pay the severance before the bondholders get anything. I know the bondholders would scream, and in general future bond yields would have to go up to put the finances back into equilibrium, but so be it. They aren't fairly priced now to reflect the risk (of loss by paying severance ahead). Or place the required severance money in escrow somewhere, as employees are hired and as obligations grow.

Employees are different from businesses (e.g. suppliers and contractors), and don't enjoy the same tax benefits (not necessarily tax rates but more deductions, e.g. home office, vehicle, travel, insurance, loan interest, etc.). B
usinesses enjoy those benefits because they assume more risk than employees - at least I thought so.

Contractors often charge more than the equivalent salary or wages of an employee to compensate; employees accept lower pay in return for lower exposure to risk - at least I thought so.

I think the trade-off between risk and reward needs to be re-examined. Businesses have become much better at "delegating risk" to others - isn't that what a "Credit Default Swap" is all about? It seems the share of risk assumed by employees has risen, and it's time to push that back to those who claim the reward.

Those who claim the most reward must bear the most risk. It's only rational.

Friday, April 3, 2009

Afghanistan thought experiment

I've been hearing some about the recent controversial legislation in Afghanistan with regards to women's rights, and I preface this with the admission that I haven't thoroughly investigated this matter. On the face of it, it does sound like legally codified rape within marriage, but I'm also not sure this didn't already exist anyway (not that it should).

But it occurred to me the western world might have bigger expectations than it could justify. What realistic expectations should we have over a foreign nation (and culture) in return for our financial and military aid?

Remember, Canada has long promoted multiculturalism. I personally believe in the concept.

As a thought experiment, consider the following questions:
  • Should an aid-providing nation influence the election of one party in a foreign government over another? Think about Hamas vs. Fatah. Remember, western nations would deny Hamas' right to exist as they would deny Israel. All that said, I'm definintely against violence and war.
  • If the U.S.A. would offer financial aid to Canada (with respect to the current crisis), but demand that we recind our socialist medical system, what would you choose? What would be your price, sir or madam (monsieur, madam, mlle.)?
  • If the world court ordered a stay of execution for a foriegner (for reasons of procedure, say), should the executing nation obey that treaty? Follow up here. OK, this is just a per peve of mine, not directly related to this line of thought. But it is irrational, IMHO.
I find these questions difficult and worth arguing. If you find them easy, I suggest we have different political orientations.

My starting point for rational thinking, is that ending violence should be independent from rationalizing political, religious or cultural views and policies. STOP VIOLENCE NOW, worry about formalisms later. And yes, I understand rape is also violence; read the preceeding paragraph to see I admit these are difficult questions.

Please keep in mind, I'm not advocating one decision over another; I'm comparing the decision methods and criteria. I am advocating the decision methods and criteria should be kept constant across other nations (cultures, groups, etc.) as much as possible.

Short answer: IMHO, you can't enforce laws (either based in religion or not) as long as prisons are blowing up. What judge would defy that?