This Will Ruin Your Friday
Bankruptcy is not for the faint of heart. Everyone loses money, explains economist Greg Palast, except pensioners — at least, according to that quaint concept we call the law:
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But that's not what's happening with GM's pensioners and its bank creditors (emphasis mine):
Here's the scheme: [Obama administration "Car Czar" Steven] Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replaced by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock.
Yet [creditors] Citibank and Morgan, says Rattner, should get their whole enchilada — $6 billion right now and in cash — from a company that can't pay for auto parts or worker eye exams.
Robbing Peter to pay fat bankers 100% on the dollar? Is that legal? Says Palast:
If you ran a business and played fast and loose with your workers' funds, you could land in prison. Stevie the Rat's plan is nothing less than Grand Theft Auto Pension.
It doesn't make it any less of a crime if the President drives the getaway car.
