Bankrupt Bandleader

You were warned. And here it comes.

A Path Is Sought for States to Escape Their Debt Burdens

”Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.”

If you think Federal workers won’t be far behind, you’re nuts. You’d better start fighting now, while you still have time. You need to take the time to read this article because you need to know who you’re up against.

”House Republicans, and Senators from both parties, have taken an interest in the issue, with nudging from bankruptcy lawyers and a former House speaker, Newt Gingrich, who could be a Republican presidential candidate.”

You don’t have to take The New York Times' word for it, you can get it from the silver-tongued devil himself.

”Former House Speaker and possible GOP presidential contender Newt Gingrich is pushing for federal legislation giving financially strapped states the right to file for bankruptcy and renege on pension and other benefit promises made to state employees.”

Back to the NYT article:

”A few weeks later, David A. Skeel, a law professor at the University of Pennsylvania, published an article, “Give States a Way to Go Bankrupt,” in The Weekly Standard”.

Do you know who owns The Weekly Standard?

”The Weekly Standard is an American neoconservative opinion magazine published 48 times per year. Its founding publisher, News Corporation...”

...The Washington Examiner reports that the Examiner's parent company, the Anschutz-owned Clarity Media Group, has since purchased the Standard.

For those not keeping up, that’s Rupert Murdoch to Phillip Anschutz.

I had never heard of David A. Skeel. Imagine my surprise (not) when I found another paper of his at The American -- The Journal of the American Enterprise Institute. How many times do I have to warn you about these guys? When are you going to see that the Republican Party is actively working against your best interests? I think it is all against your country’s best interest.

How will we have a dynamic economy with uneducated workers? Do you really think we’ll be able to find good teachers without paying for benefits and a pension? Government employees never have been paid a high salary. Of course, now that the Republicans have managed to create the conditions where working people make less, the term “high salary” is relative.

Let’s check on relativity.

Goldman Pay Still Tops JPMorgan's as Bonus Season Begins

The four New York-based banks will spend a combined $84.4 billion, or an average of $141,192 apiece, on their 598,073 workers, according to financial reports released since Jan. 14.”

But here’s the important part that says it all.

”That figure is pulled down by the average at Citigroup -- $93,962 last year -- because the bank has 260,000 employees, many of them tellers, commercial bankers and transaction processors, who earn lower pay. Citigroup doesn’t break out pay for its investment-banking and trading division, where workers get multiples of what most retail banking employees receive.

(Emphasis added)

Everybody remembers Citigroup’s history, right?

”The remaining provisions of the Glass-Steagall Act – enacted following the Great Depression – forbade banks to merge with insurance underwriters, and meant Citigroup had between two and five years to divest any prohibited assets. However, Weill stated at the time of the merger that they believed "that over that time the legislation will change...we have had enough discussions to believe this will not be a problem". Indeed, the passing of the Gramm-Leach-Bliley Act in November 1999 vindicated Reed and Weill's views, opening the door to financial services conglomerates offering a mix of commercial banking, investment banking, insurance underwriting and brokerage”

”Citigroup suffered huge losses during the global financial crisis of 2008 and was rescued in November 2008 in a massive bailout by the U.S. government.”

In case your don’t remember the three Republicans: Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia), the co-sponsors of the Gramm–Leach–Bliley Act.

It’s probably just a coincidence that Newt Gingrich was the Speaker of the House when that Bill was hatched and he’s the leader of the bankruptcy band now.

Don Brown
January 21, 2011