Obama Isn't Working: Labor

Labor’s new strategy: Intimidation for dummies

by F. Vincent Vernuccio

In the past decade, unions have become increasingly desperate to obtain new dues-paying members. An example of how desperate can be found in a 70-plus-page intimidation manual from the Service Employees International Union (SEIU), which only recently came to light in a pending court case.

The new union tactic is to use pressure on corporate boardrooms as a means of organizing entire companies nationwide rather than recruiting workers on a site-by-site basis; in short, to organize employers rather than employees. To create this pressure, unions attempt to push businesses to the edge of bankruptcy, with little regard for the welfare of employer and employee. They attempt to strong-arm businesses into agreeing to take away the secret ballot for employees in union-organizing elections via card check. They also try to force employers to restrict their own speech on union issues so that workers will not get both sides of the story on unionization. Among the SEIU’s demands is that employers agree to bargain only with it, to the exclusion of all other unions, regardless of what workers want.

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Taxpayers Face Multibillion Dollar Loss from Auto Bailouts

by David Skeel

President Obama's visit to a Chrysler plant in Toledo, Ohio, on Friday was the culmination of a campaign to portray the auto bailouts as a brilliant success with no unpleasant side effects. "The industry is back on its feet," the president said, "repaying its debt, gaining ground."

If the government hadn't stepped in and dictated the terms of the restructuring, the story goes, General Motors and Chrysler would have collapsed, and at least a million jobs would have been lost. The bailouts averted disaster, and they did so at remarkably little cost.

The problem with this happy story is that neither of its parts is accurate. Commandeering the bankruptcy process was not, as apologists for the bailouts claim, the only hope for GM and Chrysler. And the long-term costs of the bailouts will be enormous.

In late 2008, then-Treasury Secretary Henry Paulson tapped the $700 billion Troubled Asset Relief Fund to lend more than $17 billion to General Motors and Chrysler. With the fate of the car companies still uncertain at the outset of the Obama administration in 2009, Mr. Obama set up an auto task force headed by "car czar" Steve Rattner.

Under the strategy that was chosen, each of the companies was required to file for bankruptcy as a condition of receiving additional funding. Rather than undergo a restructuring under ordinary bankruptcy rules, however, each corporation pretended to "sell" its assets to a new entity that was set up for the purposes of the sale.

With Chrysler, the new entity paid $2 billion, which went to Chrysler's senior lenders, giving them a small portion of the $6.9 billion they were owed. (Fiat was given a large stake in the new entity, although it did not contribute any money). But the "sale" also ensured that Chrysler's unionized retirees would receive a big recovery on their $10 billion claim—a $4.6 billion promissory note and 55% of Chrysler's stock—even though they were lower priority creditors.

If other bidders were given a legitimate opportunity to top the $2 billion of government money on offer, this might have been a legitimate transaction. But they weren't. A bid wouldn't count as "qualified" unless it had the same strings as the government bid—a sizeable payment to union retirees and full payment of trade debt. If a bidder wanted to offer $2.5 billion for Chrysler's Jeep division, he was out of luck. With General Motors, senior creditors didn't get trampled in the same way. But the "sale," which left the government with 61% of GM's stock, was even more of a sham.

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Government Extortion: All Texas Flights Will Be Canceled...

by Connor Boyack, with Brian Roberts and Michael Boldin

Yesterday, the U.S. Department of Justice upped the ante in a high-stakes political game of chicken. Lobbying against pending legislation in the Texas legislature which would criminalize any searches conducted without probable cause, U.S. Attorney John E. Murphy sent a letter to a few high-ranking members of Texas’ government warning against promoting the bill and threatening a complete closure of all flights to and from the state.

“If HR [sic] 1937 were enacted, the federal government would likely seek an emergency stay of the statute,” Murphy wrote. “Unless or until such a stay were granted, TSA would likely be required to cancel any flight or series of flights for which it could not ensure the safety of passengers and crew.”

No doubt written with the threatening intent one reads into it, Murphy added: “We urge that you consider the ramifications of this bill before casting your vote.”

Previous to the federal government’s threat, the Texas legislature had considered the ramifications of the bill. More importantly, they were responding to a clear need to uphold the Fourth Amendment and ensure that each person enjoys the right “to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures” — a right which the U.S. Constitution mandates “shall not be violated.”

Repeated TSA violations of the Fourth Amendment

That need has demonstrated itself in great abundance in past months, as the TSA has aggressively pursued its new policy of invasive searches and seizures at the nation’s airports. The “ramifications” to which the U.S. Attorney refers are evidently an easily dismissed matter of little importance to the federal government; to those affected by these policies, the ramifications of a bill seeking to prevent further occurrences is no doubt a welcome development.

It was less than a month ago at the Dallas, TX airport where former Miss USA Susie Castillo tearfully produced a viral video describing the molestation she had just then endured at the hands of a TSA agent. “I mean, she actually… touched my vagina,” Castillo said through her tears. “They’re making me… choose to either get molested… or go through this machine that’s completely unhealthy and dangerous. I don’t want to go through it, and here I am crying.”

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