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January 10, 2009

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malcomx

We should also stiff the UW System Administration. The administrators are making well over 300,000 a year, President Reilly's salary and still want more. We need to consider termination of the UW System.

Sallie Mae

You are a good and compasionate man. As long as you agree that we should subrogate attorneys and put them behind employee's and banks.

And, as long as you agree that loan contracts can and should be retroactively rewritten by the legislature, then you have the right to your moral high-ground.

You will face a multitude of problems, particularly in federal courts.

While The Bralwer likes to lecture and believes himself to be quite the sage, this unusual legislation ignores how the real world works.

Companies fail gradually.

In these cases, by the time the bank calls a loan or terminates a line-of-credit, the company and it's employees were already living on borrowed time.

In other words, the final dollars have already ended up with the workers.

What this legislation will do is force an earlier closure for companies that are working on a line of credit.

For those companies that are surviving, but not thriving, it will make it difficult to get credit, thus pushing them to failure.

The world is a very risky place. Workers, creditors, shareholders are all taking a risk in any business.

The lowest level of risk is that of the employee. They are paid weekly, bi-montly or monthly.

When an enterprise fails, their exposre to risk and loss is quite minor, in fact there is a good chance that in the final days of the enterprise, the creditors (banks) were the ones who made it possible for the enterprise to pay the employees.

Your logic and reasoning is dubious, particularly if you believe that moving employees to the front of the line will somehow improve their lives.

All this change will do is tighten lending and force earlier business closings.

A case study would be the Illinois Window company that made headlines thanks to the elected-boobs in Illinois.

The Bank of America called the credit line and the plant closed it's doors leaving employees exposed to two-weeks of unpaid wages.

After the protests and the shameless appearance of the Jacksons, both Jr. and Jr., Jr. and Blago, BoA gave the company enough cash to pay the workers.

Not a penny will be repaid to the bank, which to you is some kind of unimportant entity, even though it could fold leaving depositors without their money.... but who cares? Right? They don't matter.

If this law were in place, the company would most likely have closed a month or two earlier because the line of credit would have factored in this "front-of-the-line" provision.

These workers would have lost at leat four to eight weeks of wages more than the two they actually lost.

But, screw logic and reality - this is all about socialist demagoguery for you.

Enjoy. You win, but the workers will lose even more.

Brew City Brawler

"You will face a multitude of problems, particularly in federal courts.

"While The Bralwer likes to lecture and believes himself to be quite the sage, this unusual legislation ignores how the real world works."

The status of workers wages in BK has changed three times in the past decade (1st, behind lenders, 1st but with a $3,000 cap). Changing status hardly unprecedented, let alone "unusual."

Indeed,the last time the status was changed was when the Wis Bankers Assn agreed to put workers first with a $3000 cap as the price for a banking reform bill.The fact they were willing to subordinate themselves then -- when they were in a much stronger position politically --undercuts the argument that giving workers wages priority will kill business lending. Or has business lending dried up since 03 as a result of that provision? (Shoot, WBA chief Harry Argue said the bill would "help grow the state's economy and make Wisconsin's financial institutions even stronger" even with that provision.)

Enacting the bill (and I think in the end we would just see an elevated cap that bankers may grumble about but can live with) may make banks more cautious in how they lend/dole out money to businesses,work with struggling companies and reserve. But that doesn't mean business credit will dry up. Banks are in the business of lending to business. Given crash in CRE,they'll likely be more focused on business lending/C&I loans. Associated Bank has said as much.

The Republic Windows situation is vastly more complicated than you let on, given its demise involves (beyond its business problems) the majority owner seeking to walk away to create a new business in Iowa (to which he was moving some machinery). I don't think BofA was under any obligation to pay the workers, though they were in a ticklish spot. The amount BofA spent ($6,000 per worker) was worth every dollar from a PR perspective and I'm fairly sure they won't fold as a result. And if they did, depositors would be covered up to $250 K by the FDIC, which may or may not qualify as socialism in your eyes.

jobseeker

It's bizarre that anyone would seriously suggest that soon to be unemployed workers get stiffed on their remaining wages. It also raises the question of whether workers would become eligible for unemployment benefits when they received a layoff notice or when they first get ripped off for a paycheck that they're owed.

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