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Robert Kuttner: The Age of Double Standards
from The American Prospect:
The Age of Double Standards
Robert Kuttner
March 19, 2012
American Airlines can declare bankruptcy and wipe away debt. But you cantand thats just the beginning.
But, Yossarian, suppose everyone felt that way.
Then, said Yossarian, Id certainly be a damned fool to feel any other way, wouldnt I? Joseph Heller, Catch-22
Then, said Yossarian, Id certainly be a damned fool to feel any other way, wouldnt I? Joseph Heller, Catch-22
Last November 29, American Airlines declared bankruptcy under Chapter 11, the provision of the bankruptcy code that allows a corporation to stiff its creditors, break contracts, and keep operating under the supervision of a judge. This maneuver, politely termed a reorganization, ends with the corporation exiting bankruptcy cleansed of old debts. In opting for Chapter 11, American joined every other major airline, including Delta, Northwest, United, and US Airways, which has been in and out of Chapter 11 twice since 2002. No fewer than 189 airlines have declared bankruptcy since 1990. As the sole large carrier that had not gone bankrupt, American missed out on savings available to its rivals and thus was increasingly uncompetitive.
Bankruptcy is intended to give a fresh start to persons and enterprises overwhelmed by creditors. In the case of American (like other airlines before it), the main creditors are its employees. The costs of Americans bankruptcy will be borne mainly by its workers and secondarily by taxpayers. The contracts being broken are union contracts and legal promises to honor pension obligations. American is laying off 13,000 workers, slashing wages, and reducing its annual pension contribution from $97 million to $6.5 million. The airline hopes to stick the federal Pension Benefit Guaranty Corporation with liability for much of the $6.5 billion that it owes its workers and retirees.
This national indulgence for corporate bankruptcy has a certain logic. The Wall Street Journal editorial page recently termed bankruptcy one of the better ways in which American capitalism encourages risk-taking, and that is the prevailing view. Thanks to Chapter 11, a potentially viable insolvent enterprise is given a fresh start as a going concern, rather than being cannibalized for the benefit of its creditors.
However, whats good for corporate capitalism is evidently too good for the rest of us. Suppose everyone felt that way? .........................(more)
The complete piece is at: http://prospect.org/article/age-double-standards
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Robert Kuttner: The Age of Double Standards (Original Post)
marmar
Mar 2012
OP
Another ironic outcome of the 2000 election: Ralph Nader, champion of the consumer, indirectly
libinnyandia
Mar 2012
#2
What happened in 2000 should not be forgotten. If somone divides the progressives then much
libinnyandia
Mar 2012
#4
Compost enriches the soil by decay. The evil done by the Bush administration will not
libinnyandia
Mar 2012
#6
xchrom
(108,903 posts)1. du rec. nt
libinnyandia
(1,374 posts)2. Another ironic outcome of the 2000 election: Ralph Nader, champion of the consumer, indirectly
helped to hurt the consumer.
saras
(6,670 posts)3. Boy, some people can ride a dead horse until it's compost - YEE HAH!
libinnyandia
(1,374 posts)4. What happened in 2000 should not be forgotten. If somone divides the progressives then much
evil is possible. Can anyone tell me one positive result of Naders's campaign in 2000, or 2004 or 2008?
roody
(10,849 posts)5. It is compost! Toss it in the garden.
libinnyandia
(1,374 posts)6. Compost enriches the soil by decay. The evil done by the Bush administration will not
decompose. We must remember history in order not to repeat mistakes.