The U.S. Post Service was established in 1775. You have had 234 years to get it right and it is broke.
Social Security was established in 1935. You have had 74 years to get it right and it is broke.
Fannie Mae was established in 1938. You have had 71 years to get it right and it is broke.
War on Poverty started in 1964. You have had 45 years to get it right; $1 trillion of our money is confiscated each year and transferred to “the poor” and they only want more.
Medicare and Medicaid were established in 1965. You have had 44 years to get it right and they are broke.
Freddie Mac was established in 1970. You have had 39 years to get it right and it is broke.
The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before. You had 32 years to get it right and it is an abysmal failure.
Excellent video –
I have a friend whose mother was living her retirement from coupons on GM bonds. When the government “restructured” GM, she was put in line AFTER the unions, and lost her income.
According to THE LAW, bondholders are entitled to the first dibs when a company collapses. But if you donate millions to the BHO election campaign, you might get paid back in BILLIONS, and little old ladies living on a pension are screwed.
Rodney Johnson at HS DENT has posted an excellent review at the Dent Financial Blog.
I’ll quote the article here:
Not every loser chosen by the government is a fat cat banker making millions of dollars, or a perceived corporate bad actor such as Lehman. Many are just ordinary people, which is what makes some of the choices of the US government over the last year so much more difficult to fathom. At issue is the results of the auto industry bankruptcies earlier in the year and how the pension mess has fallen out. We have written on this subject numerous times, and today the NYT has a feature on it (NYT, B1, 10/27/09). The example “loser” is a woman who took early retirement at Delphi as the company encouraged, received a pension of $2,925 monthly since retirement, but after the end of the bankruptcy she will receive $390 monthly. That’s correct – from $3k a month to $400. I’d say that qualifies as losing.
So what was makes her a loser? Not being in a union is the short answer, but it’s not the full answer. When GM spun off Delphi in the late 1990s, the Delphi United Auto Workers were given a promise that if their pensions were underfunded by Delphi that GM would “top-up” the payments. So far, so good, as these are the dealings of private companies with their labor.
Then Delphi does indeed go bankrupt in the mid 2000s. The company quits making full contributions to their pension plans for all workers – UAW, United Steel Workers, white collar workers, etc. In fact, they make tiny fractional payments. Just as you would expect, four years and one heck of a bear market later, the pensions are all dramatically underfunded. So Delphi does what is expected of a company in bankruptcy, they kick their pension obligations to the PBGC, which pays according to a very un-generous schedule, NOT according to what your pension benefits were at the company. This is where the Delphi UAW workers hold up their trump card, the one that says GM has to “top-up” their pension payments in the event of underfunding. Still, so far so good. Except, GM is now bankrupt too.
This is where the winners and losers are sorted.
GM now agrees to make those payments. But there’s more. The steel workers, electrical workers, and other unions cry foul because only the UAW is covered. So GM graciously agrees to top up all union payments. White collar payments? No. Nada. Zip.
Where did GM get the funds to make such payments, since they were bankrupt? From taxpayers, who infused the company with $53 billion.
This is the same convoluted scheme that allowed unsecured creditors (union health trust) to jump ahead of secured creditors (bond holders).
There are real consequences to these actions. Those that control capital, both investors and corporate officers, will long remember these actions and include them in their decision-making in the years to come. To pretend that such things have no consequence is disingenuous. To treat these situations lightly, when they have such a devastating and unequal affect on people, is callous.
The Lou Dobbs radio show pointed out yesterday that the Health and Human Services web site had a button on it that asked for “Support for Health Reform This Year”, I couldn’t believe it.
Believe it!
On the right column, there is a link to healthreform.gov, clearly an advocacy site. When you navigate there, we are told:
This is an official U.S. Government Web site managed by the U.S. Department of Health & Human Services.
How can the US government be involved in unofficial advocacy?
Is this legal? I thought our government (unlike the elected politicians) had to be neutral to politicking?
I found this YouTube video on C3 headlines.
