Aug 4, 2014
After hundreds of volunteers gathered petition signatures to raise the minimum wage in Michigan, the State Board of Canvassers found a loophole to keep it off the November ballot. Even that meager raise to $10.10 an hour was too much for the one Democrat and two Republicans who voted against it.
Needing 258,000 signatures, the petition organizers, a group called “Raise Michigan,” had turned in more than 300,000. The State Board first accepted a preliminary analysis of the petitions. Even after invalid signatures were discounted, the proposal still had nearly 2,000 more than necessary to put it on the ballot.
But then the misnamed “People Protecting Michigan Jobs” group stepped in. This billionaire-created group scanned all the petitions with OCR software, a process taking lots of human hours AND money. And after all that searching, and nearly two weeks beyond the deadline, they presented the State Board with . . . 42 duplicate signatures.
This should have been a no-brainer: The deadline was past. Forty-two signatures were forty-two signatures. Instead, the Board accepted the challenge, along with the challengers’ reasoning that 42 signatures was a “random sample” representing potentially 4,000 duplicate signatures that should not be counted. The Board ruled that the proposal had too few signatures to make it on the ballot.
A random sample? This was clearly no random sample – it was a fishing expedition funded by billionaires, to override the will of hundreds of thousands of people.
It shows the truth about the “democracy” that supposedly exists in this country. It shows how “democracy” works. The billionaires didn’t want people to have a chance to vote on the minimum wage.
Examples like this abound in every state of the country, and at the national level because “democracy” in this country is democracy for the ruling class only. It is “democracy” of the rich, by the rich, and for the rich. And attempts by the working population to express themselves – as in this petition drive – are attacked by the apparatus set up to preserve “democracy” for the capitalist class only.
Regularly, the choices presented in elections express the will and the desires of this capitalist class. Their referendums are the ones that make it on the ballot. Infrequently do popular measures appear there.
As for candidates, Democrats and Republicans dominate the ballot: the same two parties that have led the attacks on the population. And big money supports them, both of them. The banking industry, for example, gave large sums to both parties in the last presidential election.
That is why so many working people don’t vote. It’s why so many are cynical about elections, about the government.
It will remain that way until the working class begins to develop its own political voice, its own political candidates, its own political organization – a working class party organized around a working class program, a program that proposes to the workers they and they alone, through their own fights, have the means to protect themselves.
For a working class policy, a working class fight!
Aug 4, 2014
Corinthian Colleges Inc., with 70,000 students, one of the largest for-profit college operators in the U.S., has collapsed overnight. In a settlement with federal regulators, Corinthian agreed to sell 85 of its campuses and online programs, and shut down the remaining 12.
In June, while investigating Corinthian for falsifying data such as job placement figures, federal regulators put a 21-day hold on Corinthian’s access to federal aid and loans. And that was enough for this huge company to run out of cash and collapse.
The way Corinthian did business is typical for the whole “for-profit college industry.” In addition to federal student aid and loans, for-profit colleges take in 37 percent of all veteran education benefits and nearly 50 percent of all Department of Defense tuition assistance program funds.
That’s 32 billion dollars the federal government funnels to the “for-profit college industry” every year! In fact, these companies are nothing but conduits, passing those billions straight on to Wall Street “investors.”
Those billions of government dollars the for-profit colleges got year after year could have been used to extend and improve the existing public college and university systems in the U.S. Instead the politicians at the federal and the state levels starved public colleges of funds, forcing them to cut classes and turn away students. That’s how thousands and thousands of working-class students, including laid-off workers, fell prey to scam joints posing as “educational institutions.”
Today, thousands of students across the country are sitting on huge debts – some of which are to private banks at high rates, because federal loans don’t always cover the high tuition of for-profit colleges.
Corinthian and others of these for-profit colleges may go out of business in the face of this bad publicity. But their “investors” have long made their way to the bank, while thousands of working-class people are saddled with huge debts that will haunt them for the rest of their lives.
Aug 4, 2014
Baltimore Mayor Stephanie Rawlings-Blake boasts of spending three million dollars to rebuild the Clifton Park rec center. But one new rec center doesn’t make up for all the cuts.
Thirty years ago the city had 130 rec centers. The parks and recreation department employed more than 1,300 workers. But one city government after another said there was not enough money for the rec centers and their budget had to be cut. Politicians closed most of the rec centers and let the others fall apart. A few years ago only 55 remained, and now only 38. The department employs fewer than 400 workers, many part time.
In the push to give tax breaks and subsidize parking garages for downtown developers like John Paterakis, the Baltimore political establishment pushed young people onto the streets and deprived older people of decent recreation facilities.
Aug 4, 2014
Nestle Waters North America is drawing water for its Arrowhead brand bottled water from a desert aquifer in Morongo Indian Reservation, California. Water is a rare and very crucial resource, particularly in the desert basin. It has a much higher environmental value than the same amount of water somewhere else. But Nestle exploits this precious resource for a quick profit.
The State of California recently issued mandatory water use restrictions because of severe drought in California. The state now imposes substantial penalties for those violating these restrictions. Plundering a rare water resource only for profit during the drought should be an important violation of such restrictions. But, because Nestle is a company, it is not subjected to them.
Like any other company under capitalism, Nestle’s main concern is profits and it is not bothered with social issues like drought and control of precious resources like water, issues that affect everybody. Companies like Nestle are ready to suck everybody dry with the government offering no impediment.
Aug 4, 2014
When it was time last week to renew funding for highway projects, Congress did it through “pension smoothing.” In plain English, it means allowing companies to put less money into their pension plans. In other words, this law allows bosses to break their promise to their employees.
And don’t fall for all that b.s. about Democrats and Republicans disagreeing. Democrats, who say they oppose pension smoothing now, used it themselves in the Senate to fund unemployment benefits in April.
And how is this thing even supposed to generate money for the federal government? Well, this way, the politicians say, companies will show more profit, and they’ll pay more taxes. Maybe. IF the bosses don’t find other ways to reduce their taxes.
But one thing is certain. Companies WILL put less money into their pension plans. As they have been doing already for decades – with or without politicians passing laws about it.
And the bosses sure found ways to avoid being held accountable for it, when pensions were cut later as a result. Declaring bankruptcy, for example. And when retirees sued, companies found a judge that sided with them. Workers lost at least part of their pensions they had worked for, and paid into, for years.
If working people had any say in this country, all these crooked politicians and bosses would have been “smoothed out” themselves a long time ago.
Aug 4, 2014
A rupture of the main water pipe sent a geyser shooting 30 feet at the University of California Los Angeles (UCLA) last week. The university and a very rich neighborhood surrounding it were flooded with about ten million gallons of water before the pipe was shut off. The city officials pretended that they didn’t know why the pipe ruptured. But, it was not that hard to guess the reason: the pipe was 93 years old.
There are more than 7200 miles of pipe that provide water to Los Angeles residents. The average age of these pipes is around 47 years. The city replaces around 20 miles of pipe every year. At this rate, it will take 360 years to replace all pipes.
This is ridiculous. Pipe replacement is basic work and people need jobs. And the money for this work is available: we pay 9% sales tax in addition to many other taxes. But, the city hands over the tax money it collects to the rich through inflated contracts and business tax breaks.
Such water pipe bursts are usually expected to happen in working class districts. This time, the pipe burst flooded a rich neighborhood. Now, the media and the politicians are talking about quicker pipe replacements funded by hikes to city water rates. That is, once again the working class is supposed to pay for rich people’s comfort and easy life.
Aug 4, 2014
In 2012, the FBI and the Justice Department started reviewing criminal cases that included forensic testimony. This is the kind of testimony you can see on shows like CSI: hair analysis, fingerprints, and the like. They found that nearly every single case included flawed testimony. But instead of releasing people from prison who were convicted based on these lies, the FBI stopped the investigation because it was too “troubling!”
This is not the first time this has happened: in the 1990s, three people were executed and a fourth died on death row while the FBI stalled in re-examining the same type of forensic testimony, from supposed “expert” witnesses.
The FBI and Department of Justice admit that 2,600 convictions are under question, including 28 death-penalty cases. But the reality is much bigger than even that atrocious number, given how common this type of unreliable forensic testimony has been throughout the country.
By their actions, the FBI has proven that their “experts” are only really “expert” at one thing: lying and twisting the truth in order to get convictions, and the truth be damned.
Aug 4, 2014
Three librarians approached Chicago’s school board last month. They were there to point out the sorry state of libraries within Chicago Public Schools.
More than 160 public schools in Chicago did not have libraries before the strike in 2012 – a fact pointed up by the struggle of the mothers at Whittier Elementary.
In the last contract settlement, Mayor Rahm Emanuel agreed to hire almost 600 teachers – including librarians. Instead cuts eliminated almost all of those teachers and 50 librarians.
Of the 50 schools that took students from the schools Emanuel closed last year, 31 do not have libraries. Librarians estimate that only about 300 of the city’s more than 600 schools have functioning libraries at this point.
They don’t even pretend to be providing Chicago students a good education.
Aug 4, 2014
More than three weeks after the Israeli army began to wage war against the population of Gaza, Israeli Prime Minister Netanyahu announced on July 28 that Israel must be ready for a “long military campaign.”
The Israeli army justifies the carnage it has been inflicting on the Gaza Strip by claiming it wants to neutralize Hamas’s tunnels and rockets, but in fact it has been carrying out an indiscriminate and bloody war against 1.8 million Palestinians. Some neighborhoods in Gaza are now nothing but ruins. The Israeli military destroyed Gaza’s only power plant. Without electricity, without sanitized water, Palestinians face an emerging health disaster. More than 1500 have already died, including dozens of children, nearly 6500 have been wounded, and 215,000 people have fled their homes. Eighty per cent of the victims are civilians.
In a recent interview with the newspaper Le Monde, an emergency worker with Doctors Without Borders, the only NGO present in Gaza, explained that at Gaza’s Al-Shifa hospital, “half the patients that arrive are already dead .... Most of the patients we receive are women and children. The children are completely shocked, traumatized. It is reassuring to us to hear a child crying in pain, rather than a child completely silent.”
Why are Israeli rulers carrying out such a massacre? How far are they willing to go? Why are they crushing the Palestinian population like this? There is only one answer: Israeli leaders have made massacres a permanent part of their policy because the Israeli state was built on the dispossession of Palestinians, on the theft of their land, and on their expulsion. This was true when Israel was created, and continues today with the Israeli construction of settlements in East Jerusalem and the West Bank.
The Israeli army found it impossible to control Gaza, so it withdrew and turned Gaza into an open-air prison by sealing its borders, and controlling its air space and all the goods going in and out of it. And when the Israeli army brass thought it had to bomb, sometimes indiscriminately, or assassinate certain Palestinian leaders, it still treated Gaza like a conquered territory even though it no longer occupies the Gaza Strip.
The Israeli military has carried out four big offensives in the Gaza Strip since it withdrew along with the settlers in 2005: “Summer Rains” in 2006; “Cast Lead” in 2008-09, which resulted in more than 1400 deaths on the Palestinian side; “Pillar of Defense” in 2012; and the ongoing one, “Protective Edge,” since July 8, 2014. This means, among other things, that children in Gaza who are ten years old today have already experienced four wars.
Gaza is formally independent, but its people have no rights, no freedom, and live in a minuscule area that they are not allowed to leave, imprisoned by a blockade that has continued for more than eight years.
The Israeli leaders claim they are only responding to the terrorists of Hamas. Their Western protectors justify the terror carried out by Israel as its right to protect its population. This is yet another lie. If the Israeli leaders wanted an agreement with the Palestinians, they could have made one long ago by accepting the demands of the Palestinian Authority. Not only did the Palestinian Authority recognize Israel, it signed the Oslo Accords and agreed to help control the Palestinian population as the Israeli leaders demanded, becoming in some cases just another arm of the occupation army.
The Israeli government has blocked every step toward the recognition of the national rights of the Palestinians. This policy has been carried out by both left-wing and right-wing governments. The Israelis have consistently extended their settlements in the occupied territory. And this policy has reinforced the Israeli extreme right, both religious and secular, which claims that the natural borders of the Israeli state extend from the Mediterranean Sea to the Jordan River.
Today, the increase of settlements in the West Bank has turned this territory into a “leopard’s skin,” divided into regions controlled more or less by Palestinian authorities and those overseen by Israeli authorities. Just like the “Bantustans” during the time of apartheid in South Africa, the autonomous Palestinian enclaves don’t constitute a continuous geographic entity, making the existence of a viable Palestinian state very difficult. This, in fact, is the goal of the Israeli government, even if the majority of Israeli leaders don’t admit it.
By refusing to grant promised rights to Palestinians, the Israelis have provoked many Intifadas (Palestinian uprisings). And every time it’s the same scenario. In response to the outrage of Palestinian resistance, the Israeli leaders always take more land, raise the barriers higher and make them more insurmountable, and restrain the Palestinians’ freedom of movement.
All the big powers support the war waged by the Israeli government, starting with the U.S. Since 1967, the U.N. has passed numerous resolutions demanding the withdrawal of Israeli troops from the occupied territories. But the U.S. has never threatened the Israeli state, its main ally in the region, with any consequences for violating these resolutions, nor has any other big power. They have not prosecuted the Israeli leaders for war crimes after indiscriminate bombings of civilian neighborhoods, nor for using weapons banned by “international law.”
While Europe and the U.S. quickly impose sanctions against Russia, for example, the Israeli state remains protected, even pampered. For instance, Europe doesn’t apply customs to Israeli products, with the sole exception, since 2013, of products from “occupied territories” – a prohibition Israel can circumvent easily. Europe and the U.S., its main financial backers, obviously have the means to pressure Israel, but they won’t consider using them against a loyal ally in the Middle East.
The leaders of the Israeli state cannot attain the peace and security that they have promised the Israeli population for nearly 70 years through their policies. Proponents of Jewish nationalism, known as Zionism, have always regarded the Palestinians as a population to conquer in order to obtain the so-called “promised land;” they have always treated the Arab populations as enemies. By becoming the jailer of the Palestinian people, the Israeli population has deprived itself of its own freedom as well, forced as it is into a state of endless war.
This policy has ended up throwing a part of the Palestinian population into the arms of Hamas. But Hamas does not have a real perspective to offer either. Its program, based on Islamic law, the Sharia, and another exhausted nationalism, cannot by itself change the relationship of forces. Without the sympathy and support of an important part of the Israeli population for their demands, the Palestinians find themselves in a position of weakness. They cannot obtain the national rights and the end of the blockade that they demand without having many Israelis on their side.
But these objectives cannot be realized until the ditches dug by religion and nationalism are overcome, until the poor and the workers of both countries first proclaim all the interests they have in common.
Aug 4, 2014
The Bolivian government is lowering the legal age for child labor to ten years of age. This says a lot about social reality in one of the poorest countries of Latin America. According to a United Nations standard, child labor is supposed to be prohibited for children under age 14, and Bolivia will be the first country in the world to authorize it from age ten.
The Bolivian government says it is simply legalizing what already occurs, and it’s going to reduce extreme poverty by 2025. Plus, this law is supposed to protect the child workers: they mustn’t be prevented from going to school, the work can’t be dangerous, and the children have to consent and have the approval of their parents. But first of all, this proves that the Morales Administration is powerless to fight child labor. And how do they expect to enforce these rules, when up to now child labor has been widespread despite being illegal?
The main problem is the extreme poverty of the big majority of the Bolivian population. Today, 35% of Bolivians live on less than $2 a day, and the average annual income of $2,550 per person ranks among the lowest in Latin America. According to the United Nations Children’s Fund, 850,000 children from ages seven to fifteen are already working in dangerous conditions. Legalizing this work won’t change the situation, nor the fact that parents need their children’s labor to survive.
Bolivia has wealth. Spanish aristocrats got extremely rich by using the Indian population as slaves in the silver mines of Potosi. Since that time, the country has continuously been bled of its resources: natural gas, copper, precious wood – but none of these riches have benefitted the Bolivian workers. While this area used to be one of the most populous in Latin America, today Bolivia is the poorest country with the fewest people. It has only 10 million people for a country a bit bigger than Texas.
Some child workers have rejoiced at the law that just recognized them. “We aren’t thieves, we are workers and we must have the same rights as others,” said the sister of one. But first and foremost children should have the right to a decent education and a real childhood.
Aug 4, 2014
On Saturday, July 26, Israelis organized the biggest demonstration in Tel Aviv against the war in Gaza since the bombing began. Jewish and Arab Israelis demonstrated together with banners exclaiming, “No more Deaths! Peace Now between Israel and Palestine!” Some even carried signs saying, “Jews and Arabs refuse to be enemies.”
The anti-war movement in Israel does not yet have the depth that brought together tens of thousands of Israelis during the 1982 war with Lebanon, but it is growing. At each demo there are soldiers who refuse to play the role of permanent executioners, to which the Israeli leaders want to condemn them. The Israeli Communist Party, Gush Shalom, unionists, and members of Kibbutzim also demonstrated to show their support for peace.
Whole families came to express their anger about a “war that for two years has threatened our children just as it threatens Palestinian children.” Some signs read, “There is another way besides war”; “Liberate Gaza now – Let it Live”; “Stop the war and the Occupation.”
Some Israelis claim that nobody’s in favor of peace. But it is actually the Israeli leaders who don’t want to see an independent Palestinian state. That’s what Mrs. Ben Kfir says, from the organization “Parents for Peace,” whose daughter was killed by a suicide bomber from Hamas in 2003. She spoke out to Prime Minister Netanyahu, saying: “Don’t tell us that you make war in our names. We must now let it be known there is another voice in Israel than that of war, racism and hatred.”
Another participant said, “We must put an end to war.... What a terrible price the residents of southern Israel have paid, others in Israel, those in the Gaza Strip and now people in Jordan! Together Jews and Arabs can overcome this war, hatred, occupation and offer another road to life and hope.”
It took a good deal of determination to demonstrate right now, to demand the immediate cessation of the bombing. Using the pretext of rockets shot from Gaza into Israel, the authorities forbade the demonstration two hours before it was due to begin. The police tried to turn back cars coming from all over the country. Nonetheless, the demonstrators marched. But the police were much less aggressive with the hundreds of extreme-right Zionists who marched in a counter-demonstration and shouted insults at the demonstrators like, “Dirty reds, communists who sold out to the Arabs”!
The atmosphere of hysterical chauvinism, the pressure that the nation needs complete unity, and the racists of the extreme right could not discourage the demonstrators. They continued to protest war and fight for the recognition of Palestinian rights.
In Palestine, in Israel, the only way out is a politics that distinguishes the interests of the exploited from those of the exploiters. It’s that kind of class opposition that Netanyahu, Hamas and Fatah want to make disappear in the name of nationalism.
Aug 4, 2014
This September marks the 100th birthday of an interesting self-taught painter, the little known Ralph Fasanella. The American Art Museum in Washington, D.C. is just ending a show of Fasanella’s work, seldom seen in art museums.
Fasanella was born to an Italian immigrant family in Queens, New York. He helped his father from an early age, to deliver ice in the era before refrigerators. Fasanella worked in garment factories and later as a machinist, becoming an organizer for the UE, electrical workers. He was influenced by the radical activists of the 1930s to go fight the fascist government of Franco in Spain.
Fasanella did not begin painting until the 1940s, and both his style and subject matter were unusual. He painted people in a cartoon-like style, because it was the subject that interested him, not imitating the old masters of art. He took the experience of working people as his subject matter, such as the Lawrence textile strike of 1912, later purchased by the union confederation, AFL-CIO. He painted riders on the subway and fans at a baseball game. He depicted his father, the iceman, as Christ on the cross. Fasanella understood the difficulties workers had in making a living.
Fasanella couldn’t gain an audience for his art in the McCarthy era of the 1950s, due to the radical ideas and subject matter in his art. He was on the blacklist for art dealers. But in the 1970s, his reputation took off. At that point he was able to give up his gas station in the Bronx and sell his paintings.
The show at American Art has an interesting canvas of the “death” of the Soviet Union, showing the many people who supported the idea of a revolutionary state, starting with Marx, and including labor leaders and left-wing artists.
Today one of his works is on permanent display at the Ellis Island immigration museum and another is in the Flint Michigan Labor Museum. His painting of the 1912 Lawrence textile strike is on the cover of a book about that strike. That must have pleased him.
Fasanella hoped his art would reach out to ordinary people. As he put it, “I didn’t paint my paintings to hang in some rich guy’s living room.”
Aug 4, 2014
Prices of new drugs are way beyond our imagination and reach. For example, most of the new cancer drugs approved by the FDA have a price tag above $100,000 per year. Today, even well-insured patients usually have a 20 to 30 percent co-pay. So ordinary people cannot afford these drugs.
Certainly the manufacturing cost of these drugs cannot be the reason for these crazy prices. It costs only pennies per pill to manufacture synthetic drugs like ibuprofen. Manufacturing costs of biologic drugs like vaccines and insulin are less than $10 per dose.
“But,” argues the medical industry, “our spending on discovery and development of these drugs is very high.” This is another lie. Most of the new drugs are discovered in universities or non-profit entities like the National Institutes of Health after decades of hard work on basic science.
The pharmaceutical industry is also increasing generic drug prices. The prices of many essential generics grew by 600 percent or even 1000% in just a few years, according to the National Community Pharmacists Association.
So-called “brand drugs” are new drugs that one company monopolizes through a patent. For example, Pfizer used to be the only company manufacturing Lipitor, the cholesterol drug. So Pfizer charged sky-high prices for Lipitor, ripping off its patients. After Pfizer’s patent expired, the price of Lipitor dropped. In 2012, the generic version of Lipitor was on sale for about 50 cents per pill at Costco, while Pfizer priced it at $4.28 per pill. These pills cost pennies to manufacture, so at 50 cents, the generic Lipitor also yields huge profits to its manufacturer.
Millions of patients, mostly the elderly, had long paid pennies a pill for digoxin, used to treat a heart problem. The new version of this drug now costs $1.08 per pill.
Working people cannot avoid shockingly high drug prices by buying generics as alternatives. The average is now $50 to $100 a month for drugs. The simplest drugs have become unaffordable. Meanwhile, the gross profits of companies like Pfizer easily reach 50 percent, and their net profits are above 15 percent.
Aug 4, 2014
Got to do your business? Not if the bosses at WaterSaver Faucet Company of Chicago have anything to say about it. They started an electronic tracking system, giving their work force 60 minutes over 10 days to go to the bathroom. Really? Six minutes per 8 hours of work to go to the bathroom?
And they have already disciplined 19 workers for “excessive use” of the bathroom.
But not to worry! For “good” employees, there is a silver lining. A “reward” system to give a gift card of $20 per month if workers don’t use the bathroom AT ALL during work time.
Unbelievable, but true!
Aug 4, 2014
The government gave Citigroup a seven billion dollar fine for selling rotten mortgage-backed securities that tanked the economy in 2008. Sounds like a lot of money, right?
Investors know otherwise. The day the fine was announced, Citi’s stock went up by 4%. After all, no one went to jail, even though the bank stole billions of dollars through these scams – much more than the fine. Compare this to the penalty a poor person gets for stealing $1500!
The investors who drove Citigroup’s shares up recognized this fine for what it was: a green light for the banks to keep using any scam they can think of.
Aug 4, 2014
A big financial company called Elliott Management Company is trying to force the government of Argentina to pay it 1.7 billion dollars for Argentine bonds that it bought in 2008 for about 49 million dollars. So this company wants to collect about 35 TIMES the amount it paid for the bonds! As outrageous as that sounds, in 2013 Elliott Management got a U.S. federal appeals court in New York, where a lot of Argentine debt was issued, to rule in its favor. Last month, the U.S. Supreme Court upheld the ruling.
According to the U.S. courts, if the Argentine government does not pay Elliott management in full, it cannot make interest payments to the rest of its other creditors. The U.S. ruling effectively puts the Argentine government in default. If the Argentine government does go into default, it risks that the entire Argentine economy would be cut off from world financial markets, as well as international trade. At the same time, it would also further destabilize an already fragile and shaky global financial system.
All so that one company, Elliott Management, run by multi-billionaire Paul Singer, gets its way. Elliott Management is known as a vulture fund because it runs a racket in order to bleed taxpayers and workers, just like the worst loan sharks and gangsters do.
For Singer’s vulture fund, the Argentine government was ripe for the picking. The Argentine economy had been mired in depression and crisis since the previous international financial crisis hit in 2001. With a huge overhang of debt that it could not pay the interest on, the Argentine government offered its big debtors a deal: it would drastically reduce the principal on their holdings – but it would make it up to them by paying very, very high interest rates, so that in the end those financial companies would still make a big profit.
Of course, the Argentine government tried to play the nationalist card, making it seem like it was standing up to foreign companies and financiers. But the reality was that between 2003 and 2012 the Argentine government dutifully paid out close to 200 billion dollars to its foreign creditors – an enormous drain on the Argentine economy that effectively smashed down the living standards of the working class and poor.
After it had bought Argentine bonds at a steep discount, Singer’s vulture fund wasn’t satisfied with making “only” 300 per cent or more on its original investment, which was what the Argentine government was offering. Instead, along with a handful of creditors, these vultures refused the deal – and then got the U.S. courts to put the hammer down on Argentina.
Singer’s vulture fund has done the same in this country as well. In 2008, while Delphi Auto Parts was in bankruptcy, Singer’s vulture fund bought, for twenty cents on the dollar, Delphi bonds – lots of them. With Delphi under Singer’s control, he threatened to shut it down unless taxpayers bailed it out. Singer was holding big U.S. automakers like GM and Chrysler hostage, because if Delphi shut down, the companies would lack essential parts to assemble their cars. After getting 7.3 billion dollars in bailout money from the federal government, Singer then closed several Delphi plants and laid off 25,000 workers, while making a 3,000 per cent profit!
This illustrates how much governments and courts in this country and around the world dance to these vulture funds’ tune, enabling vultures to reap untold riches, by plundering taxpayer money and destroying jobs and working people’s living standards from Argentina to Michigan and Ohio.
Aug 4, 2014
A number of hedge funds recently snatched up more than 750 million dollars of Detroit’s bond debt from European banks.
The hedge funds paid the banks 50 to 60 cents on the dollar for the value of the bonds. That’s up from just a year ago, when some of the same debt was selling for only 30 cents on the dollar.
Their willingness to pay that much proves it’s a lie when the city says the big financial creditors will take a big hit. Clearly, these hedge funds plan to make a profit. Besides, the big financial interests already received huge sums of money over several decades in interest and fees for the sale of the bonds.
The hedge funds are relatively small players on the scene. The biggest of the remaining creditors are the bond insurers, and they already made more than they are owed on the insurance they sold to cover possible bond losses. They’re insurance companies, that’s how they make profits!
All of these vultures still plan to use every opportunity to squeeze every penny they can out of the city’s “bankruptcy.” These hedge funds saw their chance to get in and out quickly and make a few bucks off “distressed” investors needing to get out of the game now.
Detroit may be “bankrupt,” but clearly these vultures still see some scraps worth swooping in for.
Aug 4, 2014
The judge in charge of Detroit’s bankruptcy hired an “expert witness” to determine if the restructuring plan will work.
This “expert” found that Emergency Financial Dictator Kevyn Orr may have missed an opportunity to pursue sharper changes to the city’s collective bargaining agreements. Her report mentioned a “cultural malady” – by which she meant that city employees don’t grasp their job is to provide a service to the taxpayers. She said the problem is that overpaid city workers don’t feel an obligation to serve!
And for this jewel of a report, this expert witness billed at a rate of $595 an hour. Her pay rate would mean a $24,000 paycheck for a week. Now who’s greedy?!