Crony Capitalism

We. Shall. Overspend.

OWS and Hezbollah have less in common than you think

Say what you will about the Occupy Wallstreet protesters, but when you do, be sure to project rhythmically and stop every few syllables to allow for a minionish echo, as is their customary way of interacting with the 75% of Americans who do not support the 99%. “We. (We). Are. (Are). The 99% (The 99%).” You might rebut with a chant about how the 20% of US households are making the 75% of their money from the federal government. But here at Occupy McPherson Square in DC – home to the nation’s highest percentage of 25-34 year-olds making more than $100,000 a year – the 99 percenters (38% of whom are 25-34) would counter with some give-us-government-money-when?-now!-why?-because! chant, destroying $400,000 worth of stimulus landscaping in the process and  reminding you why 100% of the 99% generation’s children will be born into debt, the precise amount of which cannot be quantified in an echo chant due to its having increased by $400,000 in the time it takes to repeat it.

Of course, everyone likes a good revolution.  Perhaps that’s why a stroll through Occupy McPherson leaves one feeling so defrauded, wondering why all the proverbial ragamuffins-of-the-nation have set their sights on so slight a target this time.  “Yeah ok,” a percentage of the 99 percenters will concede, “there are some things more corrupt and reprehensible than the bagger 1% -- such as the Bureau of Alcohol, Tobacco, and Firearms deciding that a great way to improve a gun-tracing scheme that gives guns to Mexican druglords is to scrap the ‘tracing’ requirement.”  Then again, perhaps OWS pundit Mark Ames (the Matt “wallstreet-is-a-vampire-squid-on-the-face-of-humanity” Taibbi bash-brother) put it all in its proper context with his recent article entitled, “Historical graph shows perfect correlation between austerity programs and mass violence.”

Indeed, supposing the reason the ATF agents were making their own gun-tracing beacons from personal Radio Shack purchases was because the ATF was too austerely penny-pinched to fork it over itself, Ames has a point regarding the mass violence in Mexico. But the tears of the Italian Welfare Minister earlier this month suggest that Mexicans can find solidarity with an Italian people confronting the horrors of raising the female minimum pension age to 66…by 2018. “We had to… and it cost us a lot psychologically… ask for a…” We are all 66 year-old pensioning doñas now.

One Occupy Portland woman was so pyshologically accosted, for example, that she resorted to placing her 4 year-old daughter on train tracks. “I don’t think that any person driving a train is going to plow through a bunch of peaceful people with children,” she assured the 1%. Yet a contrarian might note that she failed to consider the contingency of it being an Amtrak train, in which case a mother might reevaluate betting her child’s life on the conductor’s mile-out stopping competence, even if that mother already sold the child’s life out in favor of American Recovery and Reinvestment Act-funded Amtrak pensions.

But more than a protest against the cold borscht of austerity, mock-heroic evidence suggests the Occupiers might be fighting against occupation itself: Israeli occupation, that is. Ames’ friend Max Blumenthal wrote earlier this month in a pro-Hezbollah paper of the “Israelification of America’s security apparatus,” claiming that the pepper-spraying police of UC Berkley had been trained in their dark arts by an Israeli-Bahraini assassination squad. When Atlantic columnist Jeffrey Goldberg pointed out that Blumenthal misquoted his key source, Blumenthal noted that the retort by “Ex-detension camp guard Cpl. Goldberg” (he served in the IDF) was something reminiscient of “Putin’s Russia.”

As the take-your-kid to OWS echo chant went last week: “Not every police officer. Is bad. Just like. In school. Not every student. Is bad. But. One person. Can ruin it.” Or, just one extrajudicial international police strike force.  In footage reminiscient of  a “Nasha Youth meets brain-washed Hezbollah toddlers in camoflage pull-ups” rally, the teaching moment escalated into the placing of the kids’ finger-painted hearts on police property. The Israelified police responded with the covert Yehudakhat rip-down technique, resulting in lots of kids crying like an Italian Welfare Minister.

 It would be interesting to know how the Hezbollahs – who, as Lebanese journalists can attest, know a little about extra-judicial hits – interpreted the contrived desperation of Blumenthal’s article. Perhaps in the way one reads a Wikipedia please-look-at-me “personal appeal.” For even Hezbollah, basking in the glory of announcing the capture of nine CIA agents this month, felt fit to advertise as one of its top ensuing findings a tea-partyish indightment of the excesses of an overstretched federal bureaucracy. In a brooding animation video set to shrill music, a narrator reveals: “The CIA’s financial system with agents is corrupt…The officer requests the agents’ signature on a receipt that confirms the agent received the money. However what that agent receives is less than the number inked on the receipt.”

Silly Hezbollahs. This is post-America America: we signed up for signing for more than we receive (unless of course you were lucky enough to get in on, say, the $98 billion in erroneous Medicare payments in 2009). OWS sees a higher calling: “What do we want? No, really, like, what do we want, because this is getting lame and my tent is like, caked in waxy mold.” 

Unfortunately, nothing about government largesse fits the name "1 percent." Until OWS gets that, This. Is. What. Fatuousness. Looks. Like.

Mexican Standoff: Labor Union Style

Another unfortunate industry icon has recently fallen into bankruptcy. AMR Corporation, parent of American Airlines, has sought shelter under Chapter 11 provisions. There are two primary reasons behind what’s troubling AA’s performance: labor and energy costs are too high.

Bankruptcy for the Company is the latest development in an ongoing struggle between the airline and its labor union to agree on adequate cost structure. It’s a familiar story: labor unions demand higher wages and more benefits, margins get compressed, profits wither, investors balk, and down goes the whole firm.

The labor unions kept their prices so high it drove costs out of control. As airline usage curtailed over the past decade (thanks DHS, keep up the good fondling… or work, or uhhh, never mind) major air carriers were forced to find ways to cut costs and preserve profitability.

In this particular case, AA management swallowed a poison pill: declare Chapter 11 bankruptcy, take the lumps, but in the end, hopefully able to negotiate new labor contracts. So instead of having “fair wages”, potential layoffs may likely mean “no wages” for the many members of the labor union. A reasonable person might ask: “why would the labor union ask for wages so high that it would force their employer—the source of said wages—into bankruptcy?” Seems counterproductive, right? Wrong. Perennial cash cow for left-wing politicians, labor unions have a lot less to lose by forcing Chapter 11 than one might think.


This Mexican standoff between corporations and labor unions has played out before (most notably in GM). It’s not a pretty picture. GM’s bondholders, contractual obligations ignored and violated, were forced to eat pennies on the dollar for what they were owed. But the labor union made out much better, shielded and defended by friends in politically influential administrative jobs.

And to all my 99% friends out there, don’t think this is a sweet deal for the 1%. Exiting CEO Gerard Aprey has no golden parachute. In fact, he has no severance. And with AMR shares trading down 95.49%, his stock is negligible at best. That’s the length the 1% guys are willing to go to get costs under control, and get the job done. If we spread his success and everyone gets their fair share, what’s OWS’s fair share of his failure? I digress.

To further exacerbate AA’s problems, fuel prices ate away at margins. Thanks to the Obama Administration and its respective Dept. of Energy for that one: stifled drilling, grossly inadequate refining capacity, threats of taxes, and burdensome regulations have driven energy costs to unmanageable prices. And this is one problem Obama’s DOE can’t solve by handing out corporate welfare to industries building fancy electric powered vehicles. With the current problems GM is facing with the Volt, I think we’re a few decades away from electric powered airliners.

On one hand, we have a President and Administration that passes favors to labor unions in return for campaign contributions. On the other, we have a DOE that stifled growth in domestic cheap energy to satiate the bloodlust of the enviro-jihad. It’s becoming more and more remarkable that airliners are able to survive much less thrive.