Right-to-Work vs. Forced Unionism States in 2009
The Bureau of Economic Analysis just released state-level GDP data for 2009, and the chart above shows how individual states were affected by the economic downturn. Real GDP declined in 38 states in 2009, and overall GDP for all states declined by -2.14%.
Here's a comparison of right-to-work states vs. forced unionism states for real economic growth in 2009:
Right-to-work states: -1.66%
Forced unionism states: -2.42%
All states: -2.14%
In other words, the decline in economic growth in forced unionism states (-2.42%) was 0.76% worse in 2009 than the decline in right-to-work states (-1.66%). Further, of the ten states that experienced positive growth in 2009, only two were forced unionism states (Alaska and W. Virginia) and eight were right-to-work states (Nebraska, N. Dakota, S. Dakota, Arkansas, Louisiana, Virginia, Oklahoma and Wyoming). The three top states with the highest growth in 2009 were all right-to-work states: Oklahoma (6.6%), Wyoming (5.4%) and North Dakota (3.9%).
69 Comments:
"The largest contributor to growth in Oklahoma was mining. Mining was also the leading contributor to growth in Wyoming and Louisiana. Agriculture, forestry, fishing, and hunting was the leading contributor to growth in North Dakota and Nebraska, and was the second largest contributor to growth in South Dakota." (Source: BEA)
Possibly this posting is showing the correlation/causation association problem that is often discussed in statistics classes. It's a lot easier and more popular to jump on labor unions than to see the real problems today and dig deeper and find all the problems even if they are not so easy to find.
I don't doubt that capital will seek out states that are considered more business friendly, but I don't think labor unions are the major problem. I will agree, though, that labor unions will have to add value to be relevant in the 21st century, and the NLRA needs work. Integration of labor and business has been done and is highly successful in other manufacturing countries (see Germany for one example).
I'm kind of surprised that no postings were here on GM's IPO this week. Was that because the topic was not newsworthy enough, or because the topic is not popular enough for this blog's audience? I am sure that will be a flame-worthy remark for the usual posters :) I will state for the record I am now a GM stockholder who has a stake in the company as a stockholder, worker, soon-to-be pensioner, and a taxpaying citizen with a stake in the U.S. Treasury’s GM ownership. I guess GM and I are joined at the hip no matter what happens.
Quote from Walt G.: "I'm kind of surprised that no postings were here on GM's IPO this week."
What's to post? It's just another example of those connected with government manipulation of the market making more money at the expense of the general population.
Granted, those buying GM stock now are doing so of their own free will, but they are buying it from the preferred customers who were given the privilege of buying at the initial price. The price has already been remarkable flat, and most predict it will fall.
Nothing of substance has changed at GM since they went bankrupt, because nothing has had to change. Propped up by government (tax payer) money, they are the same disfunctional company they were two years ago. They might pay the loaned money back someday, but I never seem to hear anything about interest on the loan. Even if they pay the money back, there was a massive cost to the tax payers, which will never be recouped.
Ag, and Energy.
Exports: Corn, Beans, Ethanol, Wind Energy, Coal, Oil
It's Good to be an Exporter. The U.S. should try it sometime.
geoih,
Ford was saved, too. Do you think that is a good thing? Ford is the darling now of the industry, but even they admit they could not have survived losing their mutual supplier base with GM and Chrysler in the short run, so there would have been no long run for them. Most analysts believe Toyota would have been deeply financially hurt but probably would not have had to liquidate.
Direct costs are always easy to estimate; however, benefits are a bit trickier to determine. Companies are usually judged by their balance sheet, and GM's looks pretty good now thanks to the taxpayers and the hard-working employees at GM. Thanks.
The combined GDP of Nebraska, N. Dakota, S. Dakota, Arkansas, Louisiana, Oklahoma and Wyoming is probably less than the City of Los Angeles.
Did you notice that the two largest right-to-work states, Texas and Florida, lost ground in the per capita GDP rankings though? Slipping to the 21st and 37th positions. Forced-unionism California remained in the 8th position.
Well marmico that indeed is a very interesting find you made and thanks for posting it...
Now there isn't a 'day date' on the following but the way its written leads me to believe its might have been a late in the year posting in 2008: Gross Domestic Product: 40 Percent of the United States GDP comes from 5 States; California, Texas, New York, Florida, and Illinois
walt-
your argument about ford is a non sequitor. that's like saying freddie mac had to be bailed out so don't be mad about fannie mae.
it's also a more than a bit disingenuous. if gm went bankrupt, it could still operate under DIP while it was parted out and sold to new owners who could make better use of the assets. that is clearly what a company that needs a massive new bailout every 20 years deserves and is the efficient solution, especially for taxpayers.
the arguments about the supply chain are based on GM disappearing, which is almost never the case in BK. lots of stores and businesses have continued to operate through a BK often for years.
if the government was going to get involved, i would much rather have seen them provide loan guarantees or subsidies to a new owner than to provide a wholesale union bailout that violated so many legal and ethical rules.
morganovich,
The U.S. Treasury was the DIP. That's why it went down the way it did. When the government owns you, they play a different game with different rules: Some good--some bad.
I think we agree that in the long run everything would have worked out in a straight Chapter 11 liquidation. The decision, however, was made with over a 1 1/2 - 2 million job loss in a recession and between $383 billion to $586 billion three-year income and tax receipt loss for a bit less than $100 billion altogether. The task force used the CAR research analysis where I got those figures from to aid their decision. I think those numbers look like a pretty good investment if you keep all the other factors out. None of the losses above include health care or any pension loss cost (PBGC), which would have been substantial.
There's a good chance this will turn out to be a good deal when viewed in the short run and long run when everything is said and done. Everyone says change is inevitable, so I guess bankruptcy laws got their turn to find out. I admit it was like nothing ever seen before, but it is not every day that an icon like GM declares bankruptcy, so we knew there would be new legal ground plowed.
If you can ignore GM's huge pension funding obligation and CEO turnover, their balance sheet looks pretty impressive even measured against Ford's, and GM kicks Ford's ass in China, too.
I'm know I am hopeful for GM's viability. I bought GM stock :)
no walt, the government did not behave like a DIP at all and what's more has absolutely no business doing so. they gave the company to a politically connected special interest in contravention of bankruptcy law and good governance by forcing creditors into a "deal" they would never have willingly participated in. then they piled a whole bunch of other goodies on top like having the huge NOL survive bankruptcy, a particularly disgusting piece of financial legerdemain as it means taxpayers are paying to pay themselves back.
again, your job loss figure is just a trumped up bugbear used to scare the taxpayers purse strings open. the fair and legal thing to do would have been to keep the lights on while they solicited bids. i suspect that you know this, but are too partisan to admit it, particularly in light of the sort of "might makes right" ethics you have exhibited in other threads. you seem to be all for rule of law when it comes to honoring the UAW contract, but perfectly willing to ignore it when it comes time for the UAW to grab someone else's assets.
then you argue that GM looks impressive if we wipe out all their debt, let them keep their assets, and ignore the pensions?
is that a sick joke?
that's like saying that a guy who was making $50k a year and bought 3 million dollar houses on zero interest neg am loans has a great balance sheet because we wiped out all his mortgages.
some had to pay that money. the only reason GM "looks good" is that they used their political connections to wipe out all their liabilities.
anyone can make money if you give them a free factory. that is not a viable economic model.
i would be willing to bet you that if you add up both bailouts and the negative equity (from huge losses) generated in the last 20 years, GM will NEVER get out of that hole and actually generate value.
also:
you seem to love to point out that ford was saved too. that's total nonsense.
ford now has to compete against GM, who is not paying for their factories. ford is still paying for theirs. that's a highly asymmetric competitive playing field.
ford would be MUCH better off if GM had been broken up and sold. not only would that likely have taken some capacity out of an overcapacity situation, but they would also be competing fairly against someone who had actually paid for their physical plant.
even with a free business, i'll bet you GM is in BK again in 15 years. i certainly have never seen any signs that anyone over there knows how to run a business. this is your second mulligan. it's time to admit that GM is a failed company and give the assets to someone else.
morganovich,
I agree with a lot of what you are saying, but I have a 1 gig flash drive chocked full of primary source material that shows the decision was not made using the information you provide. There were no other current DIP bids, and none were expected in the future according to the bankruptcy filing.
As most political decisions are, this was a decision made for the short run without using long-run planning. Hopefully, that will change, but I don't expect to see that in my lifetime. I have yet to find a legitimate financial long-run analysis from a primary source anywhere. Do you have one to add to my research material? I would appreciate it.
Nobody (including President Bush) wanted to see GM go down after what happened with using a no action political alternative for Lehman Brothers, so the only question was how much help the Treasury would provide. There will always be different viewpoints on how that was handled, and a lot of that depends on what someone subjectively thought about GM/UAW before any of this happened.
Ford's own analysis does not support what you say. How can Ford be so smart now, but too dumb to know what was best for them back then? Ford and Toyota both had lobbyists trying to get the GM and Chrysler deals done, and I can't find any information that states otherwise. This is not just me pointing it out. This testimony is part of the official task force and Congressional records.
I hope you are wrong about a GM bankruptcy in 15 years. I also hope I don't have to declare bankruptcy in 15 years, but I would still consider that 15 years of not having to do so. I can deal with what I am given, and I will figure out a way to support myself and my family no matter what happens in the future.
Thanks for the civil discussion, morganovich. I realize my supporting the UAW and GM is not a popular position, and I expect criticism.
morganovich,
Did you know that Ford did not own anything during the bankruptcy period because they mortgaged everything they owned a couple years earlier? They could not have qualified for the same deal that GM received because they had no equity to offer the U.S. Treasury (taxpayers). In addition, the decision to mortgage the company 100% was made by the 2% super voting Ford family shares partially to keep the family jewels (talk about a minority making a decision for the majority!).
A lot of what turned out to be an astute financial and publicity move was luck and a bit of selfishness on the Ford family's part. It sure helps to be in the right place at the right time.
"Did you know that Ford did not own anything during the bankruptcy period because they mortgaged everything they owned a couple years earlier?"...
Hmmm, I had rumors of such morganovich, do you have something to link to that's credible to show that was the case with Ford?
walt-
there were no bids?
they didn't even solicit them in any meaningful way.
i know people who tried to bid and were told that in order to do so they had to take care of the union. 2 different PE firms (just that i know directly) said this.
that's not bidding, that's farce. if you make an asset totally unattractive by encumbering it with an unfunded union pension and require that the ruinous contracts that drove GM under in the first place have to survive BK, is it any wonder the bidders walked away? it was a rigged deal and BK was not going to be allowed to take it prescribed course.
ford had to support the bailout given that they knew the government would not allow any actual bidders in to take up GM's assets.
that fact unlocks you riddle about them being smart vs stupid.
they knew that would have been better off in an asset sale, but they also knew that one would not be allowed, so they had to be pragmatic.
their only other option was to get up on a soap box and declaim against coercive special interest government, a position that was untenable for them as they had previously taken bailout money and one they would have lost on anyway as the experience of the debtholders clearly demonstrates.
once the feds made their choice, ford made the best of a bad situation.
i'm not sure why you raise the issue of ford's finances. they are irrelevant. ford didn't need a bailout. they can do whatever they want within the dictates of securities law. i never claimed ford was a good investment, just a better one than GM was.
you are also making a terribly unfair comparison. those mortgages may have reduced ford's net physical asset position, but GM had much more negative equity.
it's just that their debt was corporate and buried in GMAC. unlike ford, the company as a whole was worth far less than zero.
if they had mortgaged their plants and used it to pay down debt, they would not have been able to get into a position anywhere near as good as ford's.
the fact that they didn't even try just shows you how irresponsible they are. doing so would certainly have reduced the bill to taxpayers.
so i think your ford argument boomerangs on you. ford did the responsible thing and bit the bullet. they fixed their own problems privately. GM did the greedy thing and died into the governments arms knowing they (and the UAW) would be protected.
are you really sure you want to be trying to make ford out as the weak sister/bad guy here.
that's like a crow calling a cardinal black.
Actually, I think Ford did good, but what they did would not have been allowed by GM's board members or bankers. In fact, Ford took a lot of heat from mainstream financial analysts for their move at the time, which was deemed unusually risky. The gamble worked mostly because the Ford family members did not want to lose their company and brought in a bankruptcy-tested CEO. and they voted what need to be done to see that their name stayed on the blue oval in Dearborn.
What you are saying about Ford is not what they were saying on record. Were they lying in their support for the loans?
If there were any DIPs bids for GM, could you provide who they were? All my information shows two possibilities: 1) straight Chapter 11 liquidation, and 2) a U.S. Treasury DIP. And the people who held the most power were not going to go the liquidation route.
I don't doubt that a five or more likely ten-year analysis would have shown a minimal effect from the GM bankruptcy because the U.S. economy is huge and able to adjust to anything. I just can't find supporting documentation of a financial analysis that shows that in any quantifiable detail. The short-term analysis that was available was used and it was ugly.
When people go into survival mode, strange things happen. People have even been known to pull people underwater when someone was trying to save them from drowning. I never thought a GM bankruptcy would follow the same path as a bankruptcy of Sears or a K-Mart. Something that huge isn't going to follow a normal path, no offense meant, but it is probably a bit naive to think it would.
Hopefully, we will see a strong GM in the future because I don't believe the opposite scenario is in anyone's best interest. I understand why others might not see it that way.
"When people go into survival mode, strange things happen. People have even been known to pull people underwater when someone was trying to save them from drowning."
Walt G.,
Is this your assessment of the actions of the UAW in this case? If so, it appears to be the most succinct summary of your position to date. Do whatever it takes to protect your interests no matter who else is hurt. The ends justify the means.
I've often heard the expression "too big to fail", but perhaps GM is "too big to succeed".
It appears that economy of scale doesn't help beyond a certain size.
Ron H.,
Yes, I'll admit a lot of decisions were made in self-interest on all sides, and that includes the UAW and those who they support such as a bunch of people who used to work there and the taxpayers who do not have to directly pay the unemployment, pensions, or pre-65 health care for them now.
The fall-out from a GM liquidation would have been huge, and it would have affected and hurt people who did not even know they had a vested interest in GM. I'm sure that includes you, too.
I have seen the analysis that was used to make the decisions that were made, but I still have not seen any documentation/financial analysis that a liquidated GM/UAW would have been more beneficial than the GM/UAW we have now. I guess we will have to let the future determine that.
I don't think it is so much economy of size as failure to fund future liabilities when the cost to produce the product is supplied according to GAAP. My deferred compensation for making 1975 fenders (pension and retiree health care) should have been put aside in 1975 and not 2011 or whenever I collect it. I had to look ahead to my retirement years ahead of time and save for it, so why do companies and the U.S. government (S.S. and Medicare) think a pay-as-you-go system will work?
Overall, I think long-term planning by the U.S. government, corporations, and individuals usually sucks. I find most people can't think much more than five years or so down the road. Most people, I find, spend more time researching the purchase of a big-screen TV or laptop computer than their retirement or long-term financial stability.
walt-
i think you are misunderstanding my point on ford.
they supported it because they knew they could not get a fair outcome. the US government was not going to let GM get new owners unless the new guys kept the UAW contract and paid the pension.
that knocked all the private equity/foreign carmaker players out of the bidding by making the asset totally unattractive.
the government made it clear that protecting the union was their number one concern.
what else could ford have done? if no on could buy GM they had to support to government or, as you have said, the supply chain would have been threatened.
your notion that because it was big, it could "go its own way" strikes me as absurd. it is contrary to the most basic tenets of rule of law. that's mob thinking. there have been lots of big BK's, and nothing ever went anything like GM.
if you take predictability out of law you undermine it entirely.
i could not disagree more strenuously with your contention that it is to be expected that big things need not follow law. big things in particular are important to do properly.
you seem to be making the "kill one man and it's murder but kill 100,000 and it's politics" argument, which is irretrievably flawed.
"I still have not seen any documentation/financial analysis that a liquidated GM/UAW would have been more beneficial than the GM/UAW we have now. I guess we will have to let the future determine that."
this is a flawed argument. it matters whose money it is and whether the participants are willing.
to say, well, this is as well as we could have done in terms of jobs etc is not the correct analysis. who pays matters. whether the outcome is fair, legal, and consensual matters.
it was none of those things.
you don't care because you were the cash recipient, but i do because i was the one who paid it despite having no interest in doing so.
i would much rather have seen the UAW such up the results of their driving the company into BK. i would happily have fewer of you employed and fewer cars made if it was done through willing asset purchases by uncoerced private actors.
this is more than just a macroeconomics optimization game. laws and rights exist for a reason. if we must trample them to reach some purported "optimum" then we should not do so. there are prices denominated in things other than money.
"My deferred compensation for making 1975 fenders (pension and retiree health care) should have been put aside in 1975 and not 2011 or whenever I collect it."
YOU are talking about what "should have been"? That's rich. Why do you believe money wasn't set aside for you in 1975?
Who is responsible if the UAW pension fund was under funded? Wasn't /isn't it managed by a Board of Trustees that includes representatives of UAW? They must have been asleep at the wheel.
Here's more on who lost out in the GM BK. These people are also union members, but they aren't UAW, so screw them, right Walt?
morganovich,
Usually quantitative analysis will override qualitative analysis when making decisions. I know better than to write a grant without using dollar signs and other outcome measurements because I will not win the grant away from those who do. The "No" camp never countered the "Yes" camp's data of negative U.S. GDP growth, high unemployment, high income loss, high tax loss, high pension costs, and high health care costs in the short term. Instead the No camp countered with statements such as unfair and that’s not how capitalism works in the U.S. I agree those are very important considerations, but they make for a rather weak argument if they can't refute the Yes's data with some of their own.
Important decisions are usually made using data, and that means numbers. The only ones I saw were ugly, so if you wanted the decision to go the other way, show us some prettier ones for that side.
Ron H.,
I am not aware of any union representation on the pension board. Could be. But that does not change how U.S. corporations (and SS. and Medicare) generally fund accounts anyway. Ponzi schemes will fail by design. The pensions are owed as deferred compensation according to current law, but as we have seen, laws can change.
The Chrysler case was decided by a Federal judge who was appointed by President Bush I and a bankruptcy judge who was appointed by President Bush II. I'm not sure how you would get any UAW collusion from them. I have quite an extensive mutual fund and bond portfolio myself. I imagine a lot of my loss was from GM and Chrysler stocks and bonds; however, I never really looked into what they were holding because the entire market was tanking anyway. I hope my fund managers were smart enough to diversify and spread the risk around because that is what I pay them for.
walt-
that's an absolutely abhorrent argument about quantitative vs qualitative. the logic is flawed and the ethics are despicable.
you could justify absolutely anything with it.
the whole point of rights and rule of law is to prevent tyranny of the majority and mob rule.
by your logic, it's fine to torture people on TV if it generates GDP and benefits "the country". if we could pay down the deficit by having "torture TV" there's a big decision made by the numbers. if anyone complains, add distribution and get more money to make your case. are you still sure that's such a good method?
alternately, it would be fine to rob a bank because it increases the velocity of money. hey, let's all do it and the spending will end the recession. in the short term it might, but such abrogation of property law
stop and think about it. theses are the precise arguments you are making.
you can't just ignore the law when you want an outcome. that's what ideas like rights, private property, and rule of law are all about. it is those things that make our economy vibrant and our society worth living in. to cast them aside in an asset grab while arguing "national interest" is farcical. if we undermine faith in rights and law, the damage will far exceed (even just economically) whatever near term good you create for some special interest (at the expense of someone else).
this is exactly the kind of might makes right my ends justify any means thinking to which i was referring before. it seems to be your constant justification for what was done because i suspect you know full well there is no other ethical basis for it and just don't care.
that is the philosophy of hugo chavez, not the US.
one of the simplest tests of ethics and economics is to ask "what if everyone did this?" try that with GM. you would destroy the entire US economy and notions of freedom and property. arguments of "it's just one time" are irrelevant to ethics. you might as well say "we just tortured one kid".
i really don't think you have a leg to stand on here.
not everything is premissable just because it provides economic gain.
morganovich,
Make a solid business case for or against the loans using your pick of either one or both. I don't think you will find the factors you just stated in there. They probably should be, but I don’t think they are. I realize the decision was unpopular, but it looks good on paper, and not too bad now. Even Senator Corker (R) of Tennessee has a current statement on his official Website that the loans and IPO worked out fine because he was so insistent on the terms, and he was one of the biggest critics at the time.
I am not going to disagree with anything you subjectively say or have said. I usually find when someone's strongest argument is "it's not fair," I win. You have to assume a fair world to use that argument, and it isn’t. I will let the philosophers deal with ethics, and I will use a business approach to my analysis.
The last time I checked, bank robbery was illegal, but if they change the law, I might just rob one if I think it will be a good investment. I think you are mistaking changing the laws with breaking them, and I will agree with you that laws were changed for the bankruptcy (using Lionel precedent). That’s what courts do. But we were the ones who were told we were dinosaurs and had to be adaptable to change, so I guess it cuts both ways.
walt-
you seem to be willfully blind to morality.
not only does it not look good on paper so far (big losses on the sale at IPO, corker is a fool) + another huge giveaway in tax assets) but it was an ethical atrocity and weakens out entire legal system.
theft and rights violations to "promote growth and save jobs" are not acceptable. this is about justice and the fundamental tenets upon which our society is founded and from which it has drawn its success: rights, rule of law, and predictable economic outcomes.
what was done to the GM debt holders was illegal too. so is the NOL treatment they got and the huge union payoff.
everything about the handling of the BK from ensuring that no one would want to bid on the assets to ignoring the precedence of claims in the capital structure was the ethical and legal equivalent of a bank robbery.
the ONLY difference is that the robbery was performed by the government, so they can get away with it.
you continue to argue that ends justify the means, which is a clearly bankrupt philosophy from an ethical standpoint. such views are not compatible with a free society.
can you really not see that?
walt-
answer me this:
what if everyone behaved as GM and the UAW did? what if every BK worked that way?
is it worth using a solution so legally and ethically bankruptcy that it would take down our entire body of business law and replace it with federal fiat just to get paid?
there is always an excellent business case for theft if you can get away with it.
that's basically all you are saying over and over is that theft is OK if it benefits us. complicit failure to prosecute does not mean a crime was not committed.
"I will let the philosophers deal with ethics, and I will use a business approach to my analysis."
~Walt G, but might also have been said by Sammy "the bull" Gravano.
Indeed. Basic "ethics" are so arcane, so relative. No need to wrestle with the concept when union campaign contributions are reaping such benefits.
Morality and ethics are fine ideas. I think the people who had to make the difficult and unpopular decisions in this financial mess had to weight those with ALL the factors. That's not a bit unusual. We can let someone else sprinkle the holy water on the whole deal. You guys seem to be doing that just fine.
I started do a graduate thesis on corporate social responsibility (CSR) a few years ago, but I could not find enough information that would support that business decisions could be made using that concept. I see the same exact concepts at work here. I still have all the research material if anyone wants to follow that up, but I see it as a dead end?
morganovich, I don't know how everything would work using the GM bankruptcy case. All situations are different and need to be judged on their own merits (demerits?). That's basically why we have courts because a one-size-fits-all concept doesn't always work. Did you really think a GM bankruptcy and its huge ramifications would be handled the same as Joe's Plumbing that files for bankruptcy? You aren't really that naive, are you?
Morganovich, if you feel a crime such as theft has been committed by GM/UAW, isn't it your moral duty to press charges as a grieved party with standing as a taxpayer? Wouldn’t it be unethical to just let it slide? Have you even written your Congressman to complain?
Walt G.
Here is some info about your pension plan.
"Most auto industry pension plans have a board of trustees, in which labor and management are represented. This board manages the pension fund. The board is responsible for making sure that the benefits promised match up with expected investment returns of the plan."
I know the article I linked was about Chrysler, but it was a similar section 363 sale. I'm not sure that it matters who appointed the judge, so I don't know why you mentioned it.
I'll quote Indiana Treasurer Richard Mourdock from that article. His statements include the sort of quantitative information you prefer:
""In the past, to be 'secured' meant an investor was 'first in line' in the event of a bankruptcy and 'non-secured' creditors would receive value after secured-creditors were paid," Mr. Mourdock says. "In the Chrysler bankruptcy, however, secured creditors received $.29 on the dollar even as non-secured creditors received higher values and ended up with a 55% ownership of the new company, which is fundamentally wrong and a dangerous precedent to the capital markets."
walt-
you are still missing this argument entirely.
this is not about CSR, this is about rule of law, without which none of our corporate entities would be able to continue to exist and fund.
i am not making some nicey nice warm and fuzzy social responsibility argument.
i am arguing for the bedrock of rights and laws that makes our economic system possible.
if we break laws because "it's important" or "i really want to" then we have no laws. it's even more important to follow the rules in the big cases. they are the ones that set precedent. it is not me that is naive, it is you who are immoral, hypocritical, and self serving.
you are being incredibly hypocritical by demanding that UAW contracts and pensions be honored while simultaneously being fine with breaking the contracts to the lenders. why are yours so special?
you never answer any of the substantive arguments here, just veer into non sequitor and might makes right justification.
without understandable, predictable BK, lending to corporations will falter.
the irony is that the GM BK will make it much more difficult and expensive for any unionized company to borrow money from now on and will hasten their long overdue demise. you are just too short sighted and self centered to realize that you are burning the house to stay warm.
your notion of my bringing a suit is just stupid walt. that's a ridiculous argument. i have no standing and you know it. taxpayers cannot sue the government for what it buys. you are just grandstanding. i have certainly spoken of this issue with a number of federal politicians, but alas, living in SF my congresswoman in nancy pelosi, so no help there.
so walt-
how about the federal government seizes the pension assets of the UAW and uses it to hire out of work home builders? there are more of them than of you. it promotes growth. it saves the taxpayers money. there's a great business case for it! how will you feel about property law being flexible around macro need then?
this is precisely what you did to the GM debt holders.
how will you feel when it is done to you?
I was curious how well the eight right-to-work states listed on this post did on getting money back from the federal government, so here's a list using Tax Foundation information from the U.S. Census Bureau (2005, latest year available). For every dollar sent to Washington D.C. the following states received: WY $1.11, OK $1.36, VA $1.51, LA $1.78, AR $1.41, NE $1.10, N.D. $1.68, S.D. $1.53.
And here are eight unionized states that represent the Midwest and both coasts: MI $0.92, OH $1.05, Wi $0.86, IN $1.05, IL $0.75. CA $0.78, NY $0.79, NJ $0.61
Is it just me, or do the unionized states seem to be subsidizing the non-union states' success through the federal tax system? Could lower non-union pay result in the non-union states needing more federal dollars to support themselves?
morganovich,
I do not expect to receive all the pension or Social Security that I earned. That's life. I planned for such an occasion and worked 3,000 to 4,000 hours a year for almost 40 years. I don't feel. I plan. I've lived in my car before, and I can do it again.
There is no rule of law that can't be changed by the next one law. If the laws change, I will adapt.
morganovich said: "why are yours so special?" [Speaking of the UAW pension and credit holder priority]
Because the courts said they were. How can you discredit the decision of the courts that are upholding the very laws that you say are so important? These decisions, for the most part, were made by Republican appointed judges who are not partisan or beholden to the Democratic Party, GM, or the UAW and operate independently from the Executive and Legislative branches of the government. Are you saying that two U.S. Presidents, the Senate, the House, the Fifth District Court, the Appeals Court, and the Supreme Court don't know or can uphold U.S. laws? That's a hell of a conspiracy theory. Maybe they should make a movie about that.
"There is no rule of law that can't be changed by the next one law. If the laws change, I will adapt."
Uh huh.
Anyone having trouble believing Walt would be so nonchalant if Morganovich's hypothetical scenario came to pass? I'm pretty sure he'd be ringing up his union bosses asking what the hell they were getting for their hundreds of millions in donations to Democrats.
Morganovich,
"you are still missing this argument entirely."
Walt's arguments call to mind the old Upton Sinclair quote: "It is difficult to make a man understand something when his salary depends upon him not understanding it"
"if laws change i will adapt"
that's a BS answer and a total dodge and you know it. again, you could justify anything with such a philosophy. so you are OK with any changes at all no matter what they are? you'll just adapt? BS walt. you are just flat out lying.
worse, the laws did not change around GM. they were just not followed. that is a very different situation.
so, you're fine with the seizure of your pension fund assets under those conditions? we'll just not follow the law because we want a different outcome. why do i suspect you'd be the first to cry foul under such a scenario?
the courts upheld a deal that was not entered into voluntarily.
the debtors were coerced into signing it by the federal government and kept silent about it out of fear of reprisals.
if jimmy the loanshark makes you sign over your car to him via a "legal" document by threatening to burn your house down, that's not legal. you are just too afraid to seek remedy at court, just like the GM bond holders were. when jimmy the loanshark is the federal government, the fear is magnified enormously.
you have the ethics of a mobster. "hey it's just business" when i extort and steal. "adapt". sure, i break the law, but it's best for me, so i have no problem with it from the organization that would have GM in court if someone missed a coffee break.
your hypocrisy is breathtaking.
you try to hide behind cheap moral relativism as a way to skirt notions of law and rights, but your position is not even internally consistent. you flout the laws whose protection you demand. you organize into a union to prevent GM from exerting too much power over you, but then cheer when the federal government does the same thing to lenders.
your position is totally indefensible.
“I'm pretty sure he'd be ringing up his union bosses asking what the hell they were getting for their hundreds of millions in donations to Democrats."
Of course I would. And I would hope you would do the same if you saw things differently. We both can present our viewpoints and see which one wins or we might see a mutual compromise between the two positions. That’s the American way. I would not use the "it's not fair" or a crying-towel argument if you want to persuade or convince your representative of anything. Bitching won’t work either. Clearly stating one problem and a sensible solution works much better (with data or supporting materials if possible).
morganovich,
They can take whatever they can claw away from me :)
walt-
regarding your silly conspiracy theory claims -
i know some of the larger debt holders personally. i have had discussions with them about what happened. you find it difficult to believe that the executive branch could ram that through in an election year? get a grip.
they were threatened with extinction. they signed under fear of being audited endlessly and having all their investors audited as well. they just decided to cut their losses and save their businesses (the rational choice). but they should never have been placed in the position in the first place.
remember all the initial public dissent? what do you think happened? they just changed their minds?
"your position is totally indefensible."
Maybe not, but it was winnable, and that's what counts. Might lose next time though. Can’t win ‘em all.
morganovich,
I find it difficult to believe that you know more about the law than the U.S. Supreme Court. They make the law.
Professor Perry,
I agree that right-to-work states should outperform forced unionism states, all else being equal. But all else is not generaly equal, and I believe a number of factors besides right-to-work laws account for state GDP growth.
Would a longer term analysis of GDP growth perhaps better serve our discussion of the relative performance of states? I didn't look at individual states, but rather at the BEA's defined regions in this analysis of real average GDP growth over the past ten years:
New England....2.00%
Mideast........1.91%
Great Lakes....0.80%
Plains.........2.05%
Southeast......2.09%
Southwest......2.76%
Rocky Mountain.3.21%
Far West.......2.92%
What stands out to me is that all the western regions outperformed those of the Plains and the East. Further, the Great Lakes (IL, IN, WI, MI, and OH) had the smallest average GDP gain by a large margin.
Walt,
"Clearly stating one problem and a sensible solution works much better (with data or supporting materials if possible)."
So in the hypothetical that runs counter to your well being, you are apparently able to grasp the concept of "sensible." In the real world example of the GM/UAW shakedown that you benefited from, you are at a loss to grasp the meaning of "ethics."
Paul,
Ethics is kind of like love. A bit fuzzy around the edges, and different things to different people. You need more than that to propose real solutions to real problems.
I'll use a dollar cost/benefit analysis over your ethics, fairness, and morality analysis and beat you most of the time. People who make decisions like the substance such a concrete analysis provides because they can get their head around something like that and think they are making the correct choice whether they are or not. It's the option you use if you want to win instead of lose.
Is it just me, or do the unionized states seem to be subsidizing the non-union states' success through the federal tax system?
Shush. Don't tell Perry. Otherwise, he would stop posting the same crapola that the K-Street lobbyist doofus from the organization of let's all move to Florida because average incomes are lower than New Jersey because California is unionized bs. The unionized states subsidize the non-union states because that's where the moolah is. It hasn't changed since the Civil War.
"You need more than that to propose real solutions to real problems."
Sure, and it always helps to have a Democrat politician in your back pocket in case you need to swindle the taxpayers and roll over the bondholders.
walt-
the US supreme court makes the law? um, no, they don't. they interpret constitutional aspects of law made by legislators. and what do they have to do with this?
this is just another of the pointless and illogical non sequitors you throw out when you get backed into a corner and cannot answer my arguments.
so if i rob you at gunpoint and tell you i'll shoot you if you report it, that's not a crime unless a court says so? so long as i have you too scared to report it, you're fine with that being no crime? i'll bet that's not the case at all. this is why you are a hypocrite. whatever your ethics, to claim it's ok to do to others what you will not accept for yourself is hypocrisy.
your notions of ethics are a disgrace. i really mean that. i'm absolutely stunned not only that you think as you do but that you are actually proud of it. you clearly believe only in might makes right. you repeat it (we won) over and over as though it's something to aspire to.
i'm not some bleeding heart hippie ethicist. i'm a pretty hard core libertarian and free markets guy and as dedicated a capitalist as you are likely to meet. but to underpin such things, you need rule of law, a concept you explicitly reject when you want something but demand when you want protection.
you have the mindset of a mobster. you are a free rider on the ethics of others. if everyone thought as you do, there would be no us law, nor any real us economy. we'd be another banana republic mired in corruption, nepotism, and graft with no investment and little growth.
the worst part of all this is i think you know it. i had been assuming that you just didn't understand, but i have come to the conclusion that you do in fact understand but are just amoral and incapable of abstract thought in any real sense. you are unable to argue or justify any of your points, so you resort to cheap rhetorical dodges, gross fallacies, and non sequitor.
if you position can be justified, then answer my previous question:
how about the federal government seizes the pension assets of the UAW and uses it to hire out of work home builders? there are more of them than of you. it promotes growth. it saves the taxpayers money. there's a great business case for it! how will you feel about property law being flexible around macro need then?
this is precisely what you did to the GM debt holders.
how will you feel when it is done to you?
walt-
"I'll use a dollar cost/benefit analysis over your ethics, fairness, and morality analysis and beat you most of the time. "
apart from being ethically disgusting, this is a completely flawed argument. you are not a cost benefit guy, you are a thug and a thief.
you are engaging in a tragedy of the commons fallacy. sure, it benefits you to be the one guy thinking that way, just as being the one farmer to overgraze on the common is very attractive.
but if everyone acts as you do, the whole system fails. we wind up with no laws, no rights, and no sanctity of private property. a system that fails if everyone adopts it is not a viable structure.
this is precisely why our society, economy, and property rights need to be so vigorously defended from thugs like you. once people can ignore the rules for personal gain and get away with it, we are on the slippery slope to economic ruin.
do you really want to live and work in a system that works like russia?
i doubt it.
"...let's all move to Florida because average incomes are lower than New Jersey because California is unionized bs. The unionized states subsidize the non-union states because that's where the moolah is. It hasn't changed since the Civil War"...
Really?!?! On what planet marmico?
I'm sure you're not talking about planet Earth
morganovich, "the US supreme court makes the law? um, no, they don't. they interpret constitutional aspects of law made by legislators. and what do they have to do with this?"
The strongest argument about the loan package was made by Chrysler's secured creditors and the Supreme Court upheld the lower court's decision against them citing the precedence of Lionel. GM paid their secured creditors in full, so the only claim was by the unsecured creditors. Past practice has been to treat all unsecured creditors equally, but that is not a legal requirement under the 363 bankruptcy law, which is designed primarily to protect the host corporation over the creditors. Therefore, no laws were broken.
Most agree that everything would have been fine in the long run; however, there was a three to ten- year short-term pain to get that gain that people were not prepared to pay. It was not politically or socially feasible to take a no-action solution, and economics works using those factors, too.
How ethical or moral is it to throw 2 million people out of work and spend $1 trillion (worst case scenarios) because you don't want to make an unpopular decision and spend $100 billion that many expert people think most will be paid back?
If you don't like those numbers you need to come up with your own and/or find an alternative solution to the short-term problems besides doing nothing. Doing nothing simply was not acceptable.
They can take my pension today if they want, and I will use the law of the PBGC to have you pay for the amount over what GM has to put into it. Whatever I am short after that, I can make up with my skills and training. I'll be fine.
Morganovich,
"you are not a cost benefit guy, you are a thug and a thief."
I've been saying this about Walt for a long time. He's obviously educated, but at heart he's just a common, selfish, union thug. Remember in another recent thread he asked why we despised unions? This is why.
walt-
the whole 363 was a sham. it was never intended for use in a situation like GM.
363 is there to streamline the sale of non core corporate assets, not the corporation entire. not only was the code misused, but the "agreement" to the sale was reached under duress. the only reason the bond holders that were ahead of the UAW in the capital structure acceded was because they were threatened with extinction by the federal government.
this is the louie the loanshark argument again. he can force you to sign a "legal" document, but breaks the law by doing so. contracts under duress are not valid. you are arguing that because the victim was too afraid to report it, no crime was committed.
even the mob has better ethics than that. at least they admit they are breaking the law.
then you co back to collectivist thinking. they are not being "thrown out of work". they wrecked their own company. it's not like the government is coming and shutting down a perfectly good company. welcome to capitalism big guy. you wrecked your company and ran it into the ground through gross incompetence. this was the second time you had done it.
you cannot blame them for "throwing you out of work". you did that to yourselves. you seem to big a big fan of hard nosed business ideas right up until you have to face the results of your own actions.
taking the augment you are making to it's logical conclusion, no company should ever be allowed to go out of business, which is how you destroy a country and capitalist system. failure is a vital part of capitalism. GM had already had one more chance than most companies get. you learned nothing. you deserved to be broken up and sold.
you are also still resorting to collectivist thinking like somehow saving GM jobs and pensions is something i should care about and that my money and that stolen from creditors ought to be spent upon. that's not how private property works. we've already been over this ground as well. i note you still have no answer to my idea about looting the UAW pension fund to pay out of work contractors. there are millions of them too. don;t you claim it's unethical to "throw them out of work" when the money is right there in the UAW pensions?
if you have no respect for the property of others, why should we respect yours?
reciprocity is a key issue in an ethical and legal system not based on force.
the fact that you continually fail to see this is why i keep calling you a thug.
past practice has been to treat all unsecured creditor equally?
that is completely untrue.
not all unsecured creditors are equal.
decades and decades of settled law is to treat classes of unsecured creditors equally.
but the classes themselves are paid out in order of seniority.
until the senior debt gets paid, the subordinated debt holders get NOTHING.
until all debt holders are paid, equity gets NOTHING.
bond holders had clear precedence over the pension fund. there is absolutely nothing ambiguous about that. they should have been paid in full before the UAW saw even a penny.
instead, the UAW, paid architects of the disaster, got the lion's share by using their political clout to induce the federal government to FORCE bondholders into an inappropriate 363 situation in order to flout the letter and the spirit of bankruptcy law.
you seem to like to pretend to understand bankruptcy, but it's clear that you don't. you've read and misunderstood a few documents, but comments like that make it clear that you have no basic understanding of the system, how it works, and what it is supposed to accomplish.
our BK system is probably the best in the world. it allows for risk taking and growth by providing a well understood and equitable process for winding down failure and getting assets back into play.
watching guys like you demolish that for personal gain disturbs me. you are burning down the house we all live in because you are cold.
morganovich,
Here are the relevant portions of the Chrysler case that was the precedent for GM's bankruptcy in case you did not get a chance to read it (see below). Should be illegal as you say? Maybe, but this says it is not. If you have anything that shows unsecured creditors legally have to be treated equally, I would be happy to see it and add it to my research sources. Thanks.
IN THE
Supreme Court of the United States
In re CHRYSLER LLC, Debtor,
____________________
INDIANA STATE POLICE PENSION TRUST, et al.,
Petitioners,
v.
CHRYSLER LLC, et al.,
Respondents.
____________________________________
Petition for Writ of Certiorari to the
United States Court of Appeals
for the Second Circuit
____________________________________
PETITION FOR WRIT OF CERTIORARI
The Second Circuit, in In re Lionel Corp., 722
F.2d 1063 (2d Cir. 1983), was the first circuit to
address the tension between a debtor’s ability to sell
substantially all of its assets under section 363 and
the due process protections provided by the chapter
11 confirmation process. The Lionel court
acknowledged that, although section 363(b) does not
necessarily require an “emergency,” “perishability”
or a showing of “cause” as a predicate for an asset
sale, it does “require[] notice and a hearing”—and,
most importantly, “Chapter 11’s safeguards” must
not be “swallow[ed] up[.]” Id. at 1069. Accordingly,
the test adopted by the Second Circuit (and applied
in this case) is that section 363 sales of all or
substantially all of a debtor’s assets must be
supported by a “good business reason.” Id. at 1071;
see also In re Iridium Operating LLC, 478 F.3d 452,
466 & n.21 (2d Cir. 2007).
Here, the Debtors have established a good
business reason for the sale of their assets at the
early stages of these cases. Notwithstanding the
highly publicized and extensive efforts that have
been expended in the last two years to seek various
alliances for Chrysler, the Fiat Transaction is the
only option that is currently viable. The only other
alternative is the immediate liquidation of the
company. Further, the whole enterprise may be
worth more than the sum of its parts because of the
synergy between Chrysler, which provides its
network of dealerships, its productions of larger cars,
and Fiat, which provides the smaller car technology,
and the access to certain international markets.
morganovich,
Here are the relevant portions of the Chrysler case that was the precedent for GM's bankruptcy in case you did not get a chance to read it (see below). Should be illegal as you say? Maybe, but this says it is not. If you have anything that shows unsecured creditors legally have to be treated equally, I would be happy to see it and add it to my research sources. Thanks.
IN THE
Supreme Court of the United States
In re CHRYSLER LLC, Debtor,
____________________
INDIANA STATE POLICE PENSION TRUST, et al.,
Petitioners,
v.
CHRYSLER LLC, et al.,
Respondents.
____________________________________
Petition for Writ of Certiorari to the
United States Court of Appeals
for the Second Circuit
____________________________________
PETITION FOR WRIT OF CERTIORARI
The Second Circuit, in In re Lionel Corp., 722
F.2d 1063 (2d Cir. 1983), was the first circuit to
address the tension between a debtor’s ability to sell
substantially all of its assets under section 363 and
the due process protections provided by the chapter
11 confirmation process. The Lionel court
acknowledged that, although section 363(b) does not
necessarily require an “emergency,” “perishability”
or a showing of “cause” as a predicate for an asset
sale, it does “require[] notice and a hearing”—and,
most importantly, “Chapter 11’s safeguards” must
not be “swallow[ed] up[.]” Id. at 1069. Accordingly,
the test adopted by the Second Circuit (and applied
in this case) is that section 363 sales of all or
substantially all of a debtor’s assets must be
supported by a “good business reason.” Id. at 1071;
see also In re Iridium Operating LLC, 478 F.3d 452,
466 & n.21 (2d Cir. 2007).
Here, the Debtors have established a good
business reason for the sale of their assets at the
early stages of these cases. Notwithstanding the
highly publicized and extensive efforts that have
been expended in the last two years to seek various
alliances for Chrysler, the Fiat Transaction is the
only option that is currently viable. The only other
alternative is the immediate liquidation of the
company. Further, the whole enterprise may be
worth more than the sum of its parts because of the
synergy between Chrysler, which provides its
network of dealerships, its productions of larger cars,
and Fiat, which provides the smaller car technology,
and the access to certain international markets.
morganovich,
You need to read the Chrysler/Indiana Pensioner Supreme Court case if you want to discuss the legal aspects of the $100 billion loan package. You simply can't understand what happened without understanding that ruling. Understanding and agreeing is not the same thing (and I know you don't agree). I tried to post excerpts of the case twice and received errors.
If you have something that shows a legal pecking order for unsecured creditors I would be happy to look at it and add it as a source for my research. Thanks.
It must have taken Blogger a while to digest my earlier posts and spit them out. Sorry about the double entry.
walt-
you keep making the same flawed argument over and over.
363 is only valid if the stakeholders agree.
if they were forced into it by federal threats, that is illegal.
the fact that the bond holders were too intimidated to cry foul does not mean that a crime was not committed.
there is no legal basis under BK law for the UAW to recover at all, much less at a higher rate until the bond holders were paid.
that was inherent in the capital structure. this is BK 101 stuff walt. all cap structures have orders of precedence in terms of claim on assets. this is clearly laid out by law.
the reason the deal was shoehorned into 363 was that it was the only way to pay the unions instead of those who were entitled to the money. in 363, you do not have to pay senior claims first. that is why the feds chose it.
but 363 is supposed to be agreed upon by all parties. if you threaten one side to compel them to accept a deal they don;t want or lose their entire business, you have utterly flouted the law and are acting like a mobster.
also:
your legal notes are a complete non sequitor. did you even read them?
that's chysler selling a division to maximize pre BK value. that is precisely what 363 is supposed to be for.
that should have just put more cash into the pool to satisfy creditors according to their place in the capital structure.
it has nothing at all to do with what happened at GM or with the whole of chrysler. it was just a piece of the equation
what 363 is not for is disposing of the whole of a company, as was done later.
your example, if it proves anything, actually proves the case against you.
morganovich,
I can't see how a U.S. Supreme Court decision is not valid (for a 363 BK or anything else). The U.S. Supreme Court is not known to be bullied by the Executive or Legislative branches, and, in fact, they are known to be contrarian to them quite often. If you have evidence that is not true, you need to show it.
Now you need to read GM's bankruptcy case, and you will see clearly how the Chrysler and GM cases neatly and legally fits into legal precedence. You keep calling me names and telling anecdotes, but you are not providing anything of real substance to the discourse here. I get that you wish the loan package were not legal, but wishing it were so and being the case is not the same thing.
"your example, if it proves anything, actually proves the case against you." No, the decision was quite clear that Chrysler and not the Indiana pensioners prevailed.
walt-
the reason it is not valid is that the subject matter it covers has nothing to do with what was done at GM.
this just covers the disposal of an asset to a third party.
it says nothing about who gets the money.
The 363 is not about money or creditors like a straight Chapter 11. It is about primarily protecting the asset so it retains value to be an ongoing concern even if any and all creditors get financially hurt. The ruling was that Chrysler's secured creditors could not stop a 363 plan approved by a bankruptcy judge unless they could prove liquidation would result in the asset being worth more in pieces than as a whole. The secured creditors could not prove that, and the Supreme Court disallowed the secured creditors' lawsuit that was designed to hurt everyone, including themselves, if they did not get their way.
They bluffed, and they lost. The task force initially offered the secured creditors more money than they ended up getting after the lawsuit. I guess that's what happens when you get into a pissing contest with the U.S. Treasury and the Executive branch. A lot of power there.
After seeing how the legal process worked, it is obvious the Chrysler lawsuit was a test case for the much larger General Motor's bankruptcy and their unsecured creditors. And, yes I can see where people would be angry about how that turned out, but I think time will show everything will be fine on that front.
As most outliers go, and this is an outlier, I don't think I would expect to be a company smaller than GM and get the same treatment in bankruptcy as GM received. Big company. Big bucks. Big attention.
"The U.S. Supreme Court is not known to be bullied by the Executive or Legislative branches, and, in fact, they are known to be contrarian to them quite often. If you have evidence that is not true, you need to show it."
Walt,
I can help with that: the most egregious example I can think of was FDR's threat to pack the SCOTUS with appointees who would rule in his favor after asking Congress to authorized an increase the number of judges.
Prior to this, many of FDR's New Deal laws were declared unconstitutional by the SCOTUS, but after this threat, none were.
I'm surprised you aren't more familiar with the actions of a fellow thug like FDR.
they bluffed and lost?
no.
they were threatened and caved in.
it is actually illegal (breach of fiduciary duty) for a fund not to maximize profits in a bond sale.
the 363 deal that was rammed down the throats of the creditors and they were railroaded through the "breakup price" comparison by not being allowed to have enough time to solicit bids and having the feds poison the well for those who did want to bid on the assets.
if you think that's a good application of law, i really don't know what to say to you.
then you make this comment:
"I don't think I would expect to be a company smaller than GM and get the same treatment in bankruptcy as GM received. Big company. Big bucks. Big attention."
can you not see that that is a clear abrogation of the whole concept of rule of law. "fine for me but not for thee" is not law, it's fiat. you are just arguing that GM gets "special law" because they are politically connected. can you honestly believe that that is a fair, rational, or successful system?
that's russia, not the US.
"if you think that's a good application of law, i really don't know what to say to you."
morganovich, I don't know what good law or rules are because they change and it is just my job to comply. You simply adapt. If OSHA says we need 4" kick plates instead of 3" on platforms, we change them. Same with asbestos particulates or lead content in the air. You have to understand the process is obtuse. If you want to fight the government, go right ahead. I have mellowed in my older age, but I will try to work within their confusing and corrupt system and use it to my advantage the best that I can whenever I can. We all need a bit of Darwinism in us.
I expect outliers in any sample. I attempt to explain them, but I don't dwell on them because that is what makes them outliers. You have to admit, a GM bankruptcy does not happen every day.
I don't expect us to attack North Korea for what they did to South Korea today, but I would expect a different proportional reaction if they attacked Michigan. Same thing with a bankruptcy between GM and Joe's Plumbing. GM huge deal. Joe's Plumbing not.
The laws are not clear or rational and they are often unfair. They are just the laws. I don't try to figure women out either :)
Ron H.,
I am designing an online college American government class to teach in the winter. I'll make sure to include FDR's court packing attempt. Thanks. I would not consider that the normal relationship between the Executive and Judicial branches in the last forty or fifty years though.
In my opinion, SCOTUS has been especially active and independent since Nixon and Watergate in the modern era. For example, if you look at the corporate/union campaign contribution ruling this year, they especially seem to want to show their independence from the Legislative and Executive branches.
"For example, if you look at the corporate/union campaign contribution ruling this year, they especially seem to want to show their independence from the Legislative and Executive branches."
I don't know about showing their independence, but they actually got that one right; a defense of the 1st amendment right to free speech whether as individuals, or as a group of individuals - a corporation.
However, the sometimes poor track record of the SCOTUS in upholding the Constitution, and recent overreaches by the executive and legislative branches, has caused renewed interest in the concept of State Nullification, the ultimate decider of constitutionality.
Ron H.,
I was referring to recent Supreme Court cases with Presidents' names specifically on them. President Clinton lost Clinton v. Jones that a sitting U.S. President has immunity and President Bush II lost Rasul v. Bush that Gitmo prisoners do not have U.S. Constitutional rights. President Nixon basically lost the Presidency over Supreme Court decisions.
I tend to agree that all governmental units have too much power, but I am also a realist who believes that we have to adapt and thrive regardless of the cards we are dealt. If it’s raining, take an umbrella. Find a way to make any situation work for you. I realize that can be seen as unethical by others, but I tend to think of it as survival for me and those who I represent. If we can’t take care of ourselves, we can’t take care of others. Hey, it can be a cruel world out there.
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