The New Clarion

The New Clarion header image 2

Meet “The Club”

December 10th, 2008 by Bill Brown · No Comments · Politics

Here comes the payoff of the bailout: it can be used as an entrée into whatever company “accepts” money from it for whatever purpose. First it was limits on executive compensation, now it’s being used to second-guess routine business practices:

Showing solidarity and stressing the importance of protecting workers’ rights, Governor Rod R. Blagojevich today met with laid-off employees at the shuttered Republic Windows & Doors in Chicago. Governor Blagojevich told workers, who have been peacefully protesting at the plant since it closed on Friday, that the State would suspend business with Republic Windows & Doors and Bank of America, its lender, and the Illinois Department of Labor would file a complaint if negotiations are not quickly concluded.

(As an aside, one wonders if there are other—more “direct”—negotiations going on between Blagojevich and Bank of America.)

This whole episode leaves me queasy. First, Bank of America closed off Republic Windows and Doors’ line of credit since it was “overcollateralized”. It became that way due to falling sales from the housing downturn but also because it was mismanaged and running at a loss for the last five years. Next, the company announced that it was shutting down last Friday. This brought the unionized workers out to Bank of America’s headquarters to protest the closure, which apparently ran counter to Illinois law requiring a 60-day notice to workers before any layoffs. Finally, the workers occupied the factory and refused to leave, allowing only Jesse Jackson and other politicians to enter.

It would just be yet another reprehensible incident in labor history were it not for Barack Obama’s statement of support and Blagojevich’s browbeating, which quickly resulted in Bank of America’s capitulation.

Given that Bank of America’s “acceptance” of bailout money was at the point of a gun (CEO Ken Lewis is noted to have “pushed back” even though he later called taking the money “patriotic”), this is real-deal fascism. The “investment” the bailout money represents is just a legitimizing cover for outright control. Bank of America had no responsibility for a borrower’s compliance with state laws, yet it is now being coerced into lending money to a company it deems unfit (and has for nearly a year).

As the bailout expands into new territories, these intrusions will become less unprecedented and more prevalent. Those who say we’re not socialist yet because the means of production aren’t publicly owned might want to re-appraise that notion: the federal government is buying stakes in public companies and exercising considerable control through that ownership.

No Comments so far ↓

Comments are closed.