Calling a Duck a Duck
by tgirschNovember 19th, 2008
In the debate about whether to bail out the Big Three automakers or let them go into Chapter 11 (an issue about which I’m still genuinely on the fence), one of the commonly-repeated talking points I keep hearing from the anti-bailout crowd is that Chapter 11 would allow the automakers to “dispose of legacy costs.” It’s pretty clear what that actually means, however, and why the Chapter 11 proponents don’t want to call it what it is: Screwing the pensioners.
Now some will doubtless object that the federal pension insurance will cover the pensioners, but there are two problems with this. First, this insurance will only pay a fraction of what the pensioners are currently receiving, and secondly, it makes those payments on the taxpayer dime, which means that from that perspective, we’re screwing both the pensioners and the taxpayers.
Now maybe this is unavoidable at this point — maybe the pensioners can’t fully be saved. I don’t know. But when we’re talking about real people, real benefits, and real jobs, we should at least be honest about what it is we’re talking about doing.
Categories: Economics, News & Current Events, Things That Suck |
I don’t know this for sure but I’m guessing the pensions are unfunded - wait while I google - not unfunded completely but under funded. And if the company goes tits up, the pensioners are screwed. If they can’t operate they can’t pay pensions. So, save operations or save pensions. If you can’t pay your bills, who do do you screw over? Damned if you do, yada yada.
Kinda like social security.
Actually, not at all like Social Security because Social Security is in no danger of going belly up, the fear-mongering be damned.
But the point regarding “damned if you do” is a big reason why I say that any bailout should first be aimed at protecting those who are relying on promises already made. Workers (including retirees) first.
So I suppose that, at least in a sense, I’m also on the fence regarding a bailout because for me it would depend on what form it took and how it was organized.