JP Morgan Chase and Bank of America Bow to Extortion Threats
CHICAGO (Reuters) – JPMorgan Chase & Co offered $400,000 on Wednesday to help pay severance to laid-off workers occupying a Chicago factory, whose protest symbolizes resentment over the federal bailout of big banks while workers suffer.
JPMorgan Chase’s offer, announced by Rep. Luis Gutierrez, who has been mediating the dispute, follows on Bank of America Corp’s pledge to make an unspecified, limited loan to Republic Windows & Doors on behalf of the 250 workers.
Both banks are creditors of Republic, a family-owned window and door manufacturer that fell victim to the housing downturn and shut down on Friday.
I want to be clear about what happened. Republic folded owing both financial institutions and its employees money. The employees gained the ear of their Governor who, before he was locked up, threatened to withdraw all state business from Bank of America unless they ponied up even more money to a company that already owed then quite a bit and had no visible was of paying it back.
Under pressure from the Governor and popular opinion ginned up by the employees’ union, the banks, who are every much the “victims” here as the employees, put themselves in a worse financial situation to appease the mob.
That’s wrong. Neither bank shuold have been expected to throw another dime of their money away. The banks did not owe the employees anything and they should never have been pressured into covering an obligation that in no way belonged to them.
Other Posts of Interest:
- The Roots of the Subprime Mortgage Mess Have Clinton All Over Them
- I Think Chris Dodd has Some ‘Splaining To Do
- Can We Use the Threat of Insolvency to Goad Banks into Making Their Own Deals?
Category: Our New Democratic Overlords, The Economy and Your Money
