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Tuesday, May 5, 2009

Unions vs The Law

For some reason, the Obama administration seems to really like the unions. Two situations that seem to show this:

The "Employee Free Choice Act", also known as "Card Check".
This act, which Obama sponsored last year in the Senate, will eliminate the secret ballot for unionizing a business. Whether a business will be unionized used to be determined by secret ballot. The "Employee Free Choice Act" will remove this, instead requiring employees to sign a card while being observed by a union official.

In the past, the pressure step, signing while being watched, was only a petition of intent; it only allowed the organization to proceed with the secret ballot. With the "Employee Free Choice Act", unions can return to early 1900's tactics of pressuring a person to vote for the union or else suffer some kind of punishment.

The Chrysler bankruptcy.
Bankruptcy law requires that secured lenders, those who have some kind of collateral with the company, like a home loan that has the house for collateral, or a car loan which has the house for collateral, get their money before those who have unsecured debt, those who lent the money just on the credit of the company, like a credit card.

In this case, the main secured debt is corporate bonds. The biggest investors in bonds are the fund companies; these in turn wind up with our retirement accounts and such. The main unsecured debt is common stock. The major unsecured investor is the union. According to the law, the bond holders should get all their money before the stock holders get anything.

Well, Obama doesn't like that idea. He, and those who work for him, call the investment funds things like "greedy", "speculators", and "refusing to sacrifice like everyone else". Instead, he wants the unions to get all their money, and the bond holders to settle for 35% of theirs. Excuse me, but it's not just "greed" or "speculation". It's called "the law".

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