This is an example of why a bailout, any bailout, is fundamentally a no-win situation for the taxpayer.
You may have heard news that workers at the Republic Windows and Doors factory in Chicago occupied the building and began a sit-in after the factory shut down Friday on three days' notice. Last time I checked, they're still there.
The workers say the factory was closed in violation of a law that requires a 60-day notice for a shutdown. They say they won't leave without assurances that they'll get severance and vacation pay.
What you may not have heard is the reason for the abrupt shutdown. The company's creditor, Bank of America, canceled Republic's line of credit. Republic's sales have tumbled in the sour economy, and with no line of credit, CEO Rich Gillman said the company had "no choice but to shut our doors," The Associated Press reported.
This is the same Bank of America that got $25 billion of the federal government's $700 billion financial bailout. That's over 3.5% of the total package. And they can't afford to extend a line of credit so that 250 mostly Hispanic wage earners in Chicago can keep their jobs?
SOCIALISM FOR THE RICH, "FREE" MARKET BUGGERY OF THE POOR
The Associated Press also reported that Bank of America, in a statement Saturday, said that it isn't responsible for Republic's financial obligations to its employees.
Exactly for whom, and to whom, is Bank of America, sucking at the federal tit to the tune of $25 billion, responsible and accountable?
It's in the public interest that people can get and hold jobs. These people can't pay taxes when they're in the unemployment line. Since this largess is coming from the taxpayers, we've got a perverse situation of collectivist capitalism for the bankers, and the icy sidewalk for the faceless mass of suckers who put up money for the bailout.
WHITHER THE BAILOUTS?
Along with many other people, I held my nose and voiced support for the bailout as a necessary evil. But this case illustrates why taxpayer-funded bailouts end up being no-win situations. It's a sort of blackmail -- the national economy would fall into a downward spiral of Depression proportions if financial institutions the size of Bank of America were allowed to go under. They seem to know this, and their behavior is commensurately unaccountable.
Chicago will easily survive a loss of 250 jobs at Republic. But multiply that scenario across the country, with many hundreds of struggling companies and overextended creditors, and you get a mental picture of what the U.S. economy is
facing.
This is an example of why bailouts need to have many strings attached to them, and very sturdy ones. In exchange for that $25 billion, the federal government ought to have pretty much leverage over what Bank of America uses it for. Republic operates at the level of a few million dollars per month, not in the billions like BOA. This is a microcosm of the kind of abuse that the many have endured, at the hands of the few, for decades.
A UNION SUNRISE?
A bright spot is that this incident may become a rallying point for the revival of a union movement in America. Here's more from the AP report:
"Across cultures, religions, union and nonunion, we all say this bailout was a shame," said Richard Berg, president of Teamsters Local 743. "If this bailout should go to anything, it should go to the workers of this country."
Outside the plant, protesters wore stickers and carried signs that said, "You got bailed out, we got sold out."
Leah Fried, an organizer with United Electrical Workers, obliquely compared the sit-in to the landmark 1936-37 General Motors sit-down strike in Flint, Mich., which helped unionize the auto industry. (Yeah, I know, there's the automakers bailout. That's another post.)
"We're doing something we haven't done since the 1930s, so we're trying to make it work," AP quoted Fried as saying. She pointed out that the occupying workers have been shoveling snow and cleaning the building during the sit-in.
Realistically, the financial bailout is a bitter concoction we're going to have to gulp down. But that doesn't mean we have to like it. And, for a dramatic change from '80s and '90s stupor, a lot of Americans seem to be waking up from virtual date-rape drugs and realizing who's been carrying out the assault on working people for many years.
I hope the 53-46% mandate for Barack Obama was only the beginning. Republic should trigger a reborn union movement in this country. Against the kinds of monolithic entities we now face, like Bank of America, lots of people getting together again is the only chance we have.
Crossposted at Manifesto Joe.
There's more: "Workers Take Over Chicago Factory, Blame Company's Bailed-Out Creditor" >>
