I have long felt that Unions in America are not only hurting the companies, but they hurt the workers too. In short, Unions are damaging to the economy as a whole.The current exhibit in this long list of such exhibits? The bond market.
Reuters reported last week that the bond market has turned. What once was a very well understood relation between companies, unions and bond holders has suddenly been turned upside down. Or, if not upside down, it’s at least been turned to the point that no one knows which way is up. See, the point of buying a bond is that the bond is considered “secure”. This term, in legalize, is meant to convey certain rights in the event of bankruptcy. As it is now being played out, this right is being denied, or attempted to be denied to the bond holders of the auto makers; Chrysler and GM.
See, Mr. Obama is trying to put the bond holders behind other, more politically advantageous groups, in this case, the Unions.
…the Obama administration is offering most of the recovery value of those companies to “a favored political class, in this case the United Auto Workers…
What does this mean? It means that people buying bonds are no longer going to do so with the secure knowledge that they are going to “get theirs” in the event the company has to declare. And, you may ask, what does THAT mean? It means, for companies with bargained for employees, that they are going to have a harder time selling their bonds and raising the money they need to conduct business. And that, my friends, is BAD for business.
The whole concept is a strange one. Politically attractive, sure, but strange. See, on one hand, almost ALL of America is upset right now with “investors”, “speculators” and other groups of people that might have been making money when the banking crisis hit. Most people feel that somehow it wasn’t the individual home buyers or the government that caused this problem, but that it was the folks trying to make money by floating that money. So, Obama has a huge lever in the court of public opinion.
Then, of course, those bondholders are not united or organized. While they may trend to act as a group, there is not formal organization and certainly they don’t have “members”. So, by helpin the unions out, you have helkped out a very organized outfit complete with mind numbing numbers of people who just wait to be told what to do.
The other area that this is so concerning is that we seem to have people who actually believe that money just flows. From somewhere. Just waiting to be picked up. And that if I don’t have enough of it, well then, by gawd, someone must have my share of it. So I am going to go take it back. Sigh. I get so tired of that mentality, so so tired.
However, in the end, I really think that it is this movement toward the support of the Union that is going to be the largest threat to NC. I just wonder if anyone else sees it.