Tuesday, November 11, 2008

Pigs at the trough

The market is down big again today, and I’m sitting here waiting to hear how many of my friends will be among the 600 people losing their jobs at Time this week. I know a few of the names already; they are young family men with a couple of kids who will now be out of work, cast-off from an industry that is contracting, sitting at home in a house they can’t afford and can’t sell, with depleted savings and little chance of finding a decent job in the near term.

Their fate is due primarily to the failures of the company’s management to adjust to changes in the market that have taken place over nearly a decade. Senior management has rewarded themselves with new, more powerful jobs and contracts.

Meanwhile, the government is pumping tens of billions more into AIG and the other weak sisters of Wall Street like they were force feeding ducks to make a cash pâté. In gratitude, the recipients sit on the dough rather than taking the risk of making loans to either businesses or consumers. That was some deal Paulson and Congress cut.

Fannie Mae reported a $29 billion loss today, wiping out all of their previously reported profits for the decade.

American Express is turning itself into a bank holding company so that it can find a place at the Federal feeding trough, because, God knows, they deserve some of that money, too, after lowering their decades-long conservative standards the past few years to grab some of the easy money in substandard credit.

The GM, Ford and Chrysler managements are threatening the loss of tens of thousands more jobs if they don’t get their share of the pork – billions more. They ended free health care for their white collar retirees this week and would do the same in a heartbeat for the union retirees if there weren’t contracts in place to prevent them. We spent most of the last 25-30 years blaming the unions for the auto industry’s problems, but every time there was a choice to be made management made the wrong one: wrong vehicles, wrong styling, too many brands, bad union contracts, and on and on.

The leaders of these companies made millions in undeserved bonuses, wrote books, became statesmen and retired to Arizona to play some golf. The people they led lost their jobs and their homes.

No plutocrat actually exploded like the Python man above, but they were all just so many pigs at the trough. Shame on them.

18 comments:

Anonymous said...

The damage of all this job loss is not only to families but also to communities. Out here in Ohio, DHL goes out of business in the US and presto - the little town of Wilmington lost 10,000 jobs. They say its the single highest job loss from a company in Ohio history. The town is about to go out of business. I've noticed that in recent weeks it seems like every day has a newstory about some big company laying off people in the thousands. It's staggering.

Anonymous said...

There was no bailouts of steel mills. Look back at the business headlines from 79-to early 83. We use DHL for courrier service for over 1000 drug screens a month. The company gets the specimans to their destination but their invoice /billing is a mess and has been that way for years.The stock market is still up over 400% since the crash of 1987. It's going to get worse before it gets better. i have a brother in law who did new housing HVAC around the suburbs of Cleveland /Akron. In 1997 he stated to me the housing boom has been a dozen years. Who is buying these houses/what do these people do? Obviously we found out the answers to both over the last 6-9 months.

Anonymous said...

We are a failed society. Ralph Nader remains vilified, even though he remains prophetic. It used to be that a third world person could survive eating out of our trash cans. Now the suffering will go through the system like a bad oyster. Children will go hungry. The aged will live without heat.

The new mantra is "Capitalism for profits: Socialism for loss."

With fundamentalists on our case without doubts and our leaders without a clue, the GOP about to take on a reactionary purge and Democrats inheriting a lame horse, we can expect to see realignment of politics.

Sad, but if we live to see this all played out, we will be old and grey and history relived as both tragedy and farce.

Anonymous said...

I saw the Wilmington story yesterday. Actually this is the second time this town has been hammered. The first is when the air force base closed in the early '70's. It's always places like this that are dependent on one company or industry that get screwed in tough times.

This isn't going to turn around for quite some time.

kgwhit said...

If we give the big three billions, what does that do for them? Does it mean people are going to buy cars...I read that October car sales were the same as 1945.

If you give them billions then they can stay open, but without buyers it is just a matter of time until there back there again asking for more. Who knows if we can save them.

Anonymous said...

wow. so true. so sad. I had a dream last night about these layoffs. It was sort of a holocaust type thing where, randomly, you went through one door or another.

Anonymous said...

Even as AIG was pleading for billions more, they sent top executives to a secret gathering at a luxury resort in Phoenix last week -- making sure there were no AIG logos or signs anywhere on the property.

Why is Liddy still running AIG??!!

Why are we even considering to bail out the automotive industry with the same Board members and CEO's at the helm??!!!

kgwhit said...

My non-profit clients are all hurting because of the fall off in charitable giving. One organization, that also gets quite a bit from foundations, has heard the refrain, we are reassessing our contribution for 2009. A drop off from individual donors and foundations does not bode well for charities. We handle a holiday catalog for one big non-profit. The response is over double this time last year. The items are relatively inexpensive and we a seeing a huge surge in people doing xmas shopping now. The real fear is how this will effect the PGA tour. As companies cut back will somebody win a golf tournement and not make a million dollars. Now we are talking a recession of tragic proportions.

Anonymous said...

As of this minute I have moved way beyond meltdown over the Detroit bailout. There's nothing to say about it. It is an abomination! Go ahead, call me a republican. I dare you.

d'blank said...

Warrenout – while there wasn’t a steel bailout per se, the taxpayers did pick up billions in unfunded pension obligations as the mills went under.

Hankster – sometimes I don’t understand how you can get up in the morning, your worldview is so bleak; but I do agree with you on Ralph. He is the only guy saying (now that George Carlin is dead) that corporations are running the country and treating the treasury like their own private piggybank. That’s hard to argue with now.

Fenway – you are a Republican.

Anonymous said...

D'blank, at which point do you admit to yourself that there won't be a Santa Claus at this economic crisis. The stock market is rip sawing as it loses capital. The shake down has only just begun. On all levels spending is being cut back. An association takes a loss in its equities position. This will result in cuts in the present budget: fiscal responsibility. However, the current slide may very well and most probably will continue. Those services which have been cut will come up short for the year. They will have to readjust and it just ripples down the line. I really do not like to dwell on hardship. There has to be a place for empathy.

When this finally stabilizes, those overseeing the economy will have to understand the concepts of sustainable growth and limited resources if we are to break these cycles of boom and bust.

Anonymous said...

I believe we all can help to get through this. Lets pick a day & everyone assassinate their own states senators. This may sound abit crimminal but allowing the pigs to keep feeding hurts alot more people. And it would send the message we'd had enough. It's not as bizzare as it sounds considering thats just how this country started. Keep the "we'r an advanced society" arguement to yourself. That society still allows,children to go hungry,homeless to die in the street and grandmothers to go without health care. Thats criminal.

kgwhit said...

Is there something wrong with the tax dollars of those without health insurance and a 401k going to salvage those auto workers that do?

d'blank said...

Hankster - i don't disagree, but i do think the sun will continue to rise. this isn't the end of the world (i don't think)

Gaga -- put your dentures back in and put your slingshot back in the holster. democracy ain't dead yet.

KG -- yes, i think there is something wrong with that, although using that money to bail out American Express is much, much worse.

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