Tag: bankruptcy

Making Sense of the Puerto Rican Debt Crisis

Puerto Rico is broke and in debt to the tune of $73 billion. It needs to be able to declare bankruptcy which can’t do unless the US Congress lets them. There is a bill (pdf) in the works that will do that and provide financial assistance but there are a group of people who don’t …

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Good Bye, RadioShack

The 94 year old company known to all as RadioShack, where many found the cables to hook up their Nintendo to the TV, has filed for bankruptcy. In his farewell to the company, HBO’s “This Week Tonight” host John Oliver wondered what RadioShack would say to its customers, so John and his crew created a farewell massage for them. The segment may not be safe for viewing in the work place or around young children due to strong language.

Anti-Capitalist Meetup: Fagor Goes Bankrupt – Trouble in Camelot by Geminijen

No one should be surprised these days when yet another company goes belly-up in these difficult financial times, especially in devastated economies such as Spain.  Yet the bankruptcy of Fagor, the flagship cooperative in the Mondragon Cooperative Corporation (MCC) has shaken many anti-capitalists around the world as akin to witnessing the ending of Camelot. The fact that at least two of the other largest cooperatives in the Mondragon network, Caja Laboral (the bank and financial center of the corporation) and Eroski (a chain of retail stores throughout Europe)  are in dire financial straits has only added to the ominous threat.

Fagor, with its 5,600 workers, is a relatively small part of the whole. Even so, Trevino (Fagor’s CEO) warns that its fall “will have an uncontrollable domino effect on the rest of the group with major social implications.” He believes Fagor’s liquidation would create a €480m hole at Mondragon, including inter-group loans and payments the group’s insurance arm would have to make on Fagor workers’ unemployment policies.

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Mondragon has promised to find new jobs or offer early-retirement terms for as many as it can of Fagor’s Spanish workers, but this is a tall order in a country with 27% unemployment. Besides their jobs, workers stand to lose the money they had invested in the co-op if it is liquidated.

Demystifying the Mondragon Myth

For the last 50 some years, the growth of what is now the Mondragon Cooperative Corporation has given many anarchists, socialists and other progressives in the cooperative movement the hope that yes, Virginia, there really is a viable alternative to Capitalism or, at the very least, an economic system that could provide a transition to socialism. Moreover, although many socialists won’t easily admit it, there is often the underlying hope that somehow this transition could occur “peacefully”, without a real class struggle ending in state ownership; that somehow, within the belly of the beast of capitalism, the cooperative model could “out compete” the capitalist multinationals at their own game and become the dominant economic paradigm.

Yet, as one blogger commented in Alternatives to Capitalism,

“There is no escaping the need to challenge Wall Street and the other big financial centers across the world for political and economic power which requires a well-organized and intense class struggle […] something the promoters of these cooperative schemes try to evade as they try to convince workers there are ways around bringing mines, mills and factories under public ownership which is going to require the nationalization of entire industries.”

Detroit a Capitalist Failure

Cross posted from The Stars Hollow Gazette

Detroit’s decline is a distinctively capitalist failure

by Richard Wolff, The Guardian

The auto industry Big Three were loyal only to shareholders, not the people of Detroit. The city was gutted by that social choice

Capitalism as a system ought to be judged by its failures as well as its successes.

The automobile-driven economic growth of the 1950s and 1960s made Detroit a globally recognized symbol of successful capitalist renewal after the great depression and the war (1929-1945). High-wage auto industry jobs with real security and exemplary benefits were said to prove capitalism’s ability to generate and sustain a large “middle class”, one that could include African Americans, too. Auto-industry jobs became inspirations and models for what workers across America might seek and acquire – those middle-class components of a modern “American Dream”.

True, quality jobs in Detroit were forced from the automobile capitalists by long and hard union struggles, especially across the 1930s. Once defeated in those struggles, auto capitalists quickly arranged to rewrite the history so that good wages and working conditions became something they “gave” to their workers. In any case, Detroit became a vibrant, world-class city in the 1950s and 1960s; its distinctive culture and sound shaped the world’s music much as its cars shaped the world’s industries.

Over the past 40 years, capitalism turned that success into the abject failure culminating now in the largest municipal bankruptcy in US history.

Richard Wolff: Detroit a “Spectacular Failure” of System that Redistributes Pay from Bottom to Top

Kicking off a series of speeches about the economy, President Obama told a crowd in Illinois on Wednesday that reversing growing inequality and rejuvenating the middle class “has to be Washington’s highest priority.” During his remarks, Obama failed to mention the bankruptcy filing by Detroit, where thousands of public workers are now fighting to protect their pensions and medical benefits as the city threatens massive cuts to overcome an estimated $18 billion in debt. Detroit’s bankruptcy “is an example of a failed economic system,” says economist Richard Wolff, professor emeritus of economics at University of Massachusetts

Transcript can be read here.

Don’t buy the right-wing myth about Detroit

by David Sirota, Salon

Conservatives want you to think high taxes drove people away. The real truth is much worse for their radical agenda

In the wake of Detroit’s bankruptcy, you may be wondering: How could anyone be surprised that a city so tied to manufacturing faces crippling problems in an era that has seen such an intense public policy assault on domestic American manufacturing? You may also be wondering: How could Michigan officials possibly talk about cutting the average $19,000-a-year pension benefit for municipal workers while reaffirming their pledge of $283 million in taxpayer money to a professional hockey stadium?

These are fair questions – and the answers to them can be found in the political mythology that distorts America’s economic policymaking.

As mythology goes, the specific story being crafted about Detroit’s bankruptcy is truly biblical – more specifically, just like the fact-free mythology around the Greek financial collapse, it is copied right from the chapter in the conservative movement’s bible about how to distort crises for maximum political effect.


Medical Bankruptcy in the US Even With Insurance

Cross posted at The Stars Hollow Gazette

In the United States, 62% of all bankruptcies in the United States are due to medical bills. It is not among who you would think but most often effects middle aged, middle class, college educated homeowners. 80% of those people had health insurance, so why are they filing for bankruptcy? No other industrial country has this problem.

Our fellow blogger, lambert, writing for naked capitalism, featured this video from Real News Network:

Paul Jay of the Real News Network interviews Dr. Margaret Flowers, a pediatrician from Baltimore who advocates for a national single payer health system, Medicare for all, and Kevin Zeese, co-director of It’s Our Economy, an organization that advocates for democratizing the economy.

At his blog, Corrente, lambert continues to document the atrocities of the Obamacare ClusterFuck.

United States of Bankruptcy

Since when is the TBTF JP Morgan Chase, Bank of America, Citi, Morgan Stanley, Goldman Sachs more important to the United States of America than anyone of forty four states now facing a budget crises? The amount of bailout money that was afforded the banking cartel is more than 10 times all the US State deficits ‘combined’.

Oct. 2010 Economic Report

October 2010 Economic Report

The Forever War implodes.

I have long maintained that the only thing that will stop America’s Forever War is the exhaustion of the US Treasury. Some view the removal of McChrystal as the unexpected consequence of a careless interview, but if one considers the deteriorating situation in Afghanistan it is more logically seen as a meltdown of a defeated leader. McChrystal grasped that he would never have enough resources to achieve what he had promised: a sweeping counter-insurgency victory that would make Afghanistan a tractable ally. I believe that this realization fueled the rage that led to his intemperate outbursts.

America is now in the terminal phase of its addiction to war. It is spending its last available (borrowed) resources on two hugely expensive and futile crusades to control strategic nations. When our unsustainable budget deficits force budget cuts, the military will not be spared, and these brutal wars will end. Never in the history of our nation have we squandered so much wealth to such little effect. We have wrecked Iraq, one of the most ancient civilizations of the world, and we have made Afghanistan a failed state, at a cost of over a trillion dollars. Fortunately there is no more money where that came from.

What decency and shame could not achieve, our pending bankruptcy (moral and financial) will necessitate: the end of America’s Forever War.

Sign Alan Grayson’s Petition!!!

Here’s something that we can all do.

Sign the petition for Alan Grayson’s new The War is Making YOU Poor Act.

See Alan Grayson: http://www.TheWarIsMakingYouPoor.com

Sign The Petition!!

Coroner’s report on Lehman: Terrifying fraud.

Dylan Ratigan & Eliot Spitzer plainly explain the fraud that occurred at Lehman.  Ratigan hands Spitzer collateral (a trash can), and Spitzer hands Ratigan cash.  Lehman “pawned” its garbage in exchange for short-term loans to spruce up the quarterly books with “more cash, less trash.”  This is the “repo 105” fraud everyone is talking about since the release of the bankruptcy examiner’s report.  Please watch:

CEO Dick Fuld alone made half a billion bucks off this fraud.  He remains a free man today.  As Spitzer said, the accounting firm Ernst & Young, the Fed, and the Treasury were also involved in this fraud.

Ratigan: “This report comes just short of suggesting this is by no means an accident but instead one of the greatest crimes ever perpetrated by a group of people, and enabled by the US government.”

And Spitzer concludes: “there is no doubt civil cases will be brought. We had a failure of CEO, the CFO, the accountants, and indeed the regulators, the Fed and the Treasury, that were inside these banks, and the question has to be asked: where were they?”


This guy has some balls…

Man confronts George H. W. Bush At Houston Restaurant

Getting those who can’t pay to pay, and the health insurance industry

All right.  Anastasia P requested that I repost an earlier diary detailing my hopes and suspicions about “health care reform.”  I don’t do reposts; however, I am interested in an investigation of the central theme of that earlier diary, which was to look at health care in the context of a (these days) booming industry: “getting those who can’t pay to pay.”  In this stage of capitalism, it would seem, the big growth industry is in “squeezing blood from turnips,” in which it is imagined that the poor and indebted will pay their creditors whatever is owed them if only the laws requiring them to do so are tough enough, and if the collection agencies are firm and resolute enough in their intentions.

Health insurance reform enters into it.  More below.

(crossposted at Big Orange)

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