MEANWHILE JOE AND MAYORKAS HAVE FLOODED AMERICA WITH 7 MILLION ILLEGALSS TO FIX THE JOBS AND HOUSING CRISIS!
CA HAS THE LARGEST AND MOST EXPENSIVE PRISON SYSTEM IN THE NATION. HALF THE INMATES ARE MEX. CA ALSO HAVE THE LARGEST MEXICN WELFARE STATE AS WELL AS THE LARGEST NUMBER OF HOMELESS LEGALS.
California's Homelessness Policy Is a Disaster. Biden Wants to Replicate It.
Dem admin invests $3 billion into programs that pursue Golden State's failed 'Housing First' policies
California's homeless population has skyrocketed since the state adopted housing policies that critics say enable drug users and fail to treat the mentally ill. Now, the Biden administration is spending more than $3 billion to replicate those policies.
President Joe Biden's Department of Housing and Urban Development in July announced its investment in so-called Housing First programs, which subsidize rent costs for those living on the street but do not impose drug or mental health treatment requirements. California adopted those programs in 2016 and has since seen its homeless population steadily grow. Last year, for example, California was home to 30 percent of the nation's homeless people, despite Californians making up less than 12 percent of the U.S. population. From 2020 to 2022, California's homeless population increased by roughly 6 percent, a rate 15 times higher than the rest of the country.
Biden, during his 2020 campaign, presented himself as a run-of-the-mill Democrat who would restore "normalcy" to America. After taking office, however, Biden has in many cases mirrored California—perhaps the nation's most liberal state—on policy. After California banned the sale of new gas-powered cars by 2035, for example, Energy Secretary Jennifer Granholm credited the state for inspiring her to "move faster and further" toward a green energy transition. The Biden administration went on to introduce environmental proposals that effectively force automakers to sell electric cars over their gas-powered counterparts.
Housing First programs have failed the Golden State, experts told the Washington Free Beacon, because they exclude treatment requirements for issues that commonly plague the homeless, such as substance abuse and mental illness. As a result, homeless people who receive housing subsidies often continue using drugs and fail to become independent, Manhattan Institute senior fellow Stephen Eide argued.
"Other problems are left as sort of afterthoughts, and nothing much ends up being done about them at all," Eide told the Free Beacon. "In practice, actually, this looks a lot more like 'Housing Only' than 'Housing First.'"
The Department of Housing and Urban Development did not return a request for comment.
Californians have soured on Housing First since it formally became the state's strategy to combat homelessness in 2016, Eide said. After the strategy's adoption, the number of unsheltered homeless people in California grew, prompting Eide to call Housing First a "failed strategy."
"The communities that were most passionate about Housing First invested the most money into it—California most notably—and the results were not very impressive," he said.
American Enterprise Institute senior fellow Howard Husock echoed Eide, saying Housing First is "built on false premises."
"If you put people with substance abuse problems and mental health problems into their own four walls without necessarily providing treatment of some kind, including withdrawal from drug addiction, what's the case for this being the best approach?" he told the Free Beacon. "It's just self-evident."
Beyond its adoption of California's homelessness policies, the Biden administration has embraced so-called harm reduction, a public health theory that argues governments should minimize the hazards associated with drug use instead of eradicating it. Biden's Department of Health and Human Services has funneled tens of millions of dollars to harm reduction facilities to fund "smoking kits" and other materials meant to help addicts get high without overdosing. The White House earlier this year also made naloxone, a drug used to reverse opioid overdoses, available over the counter.
California has also worked to advance harm reduction, investing $61 billion in such programs in July. Months earlier, in April, liberal California lawmakers blocked bills to strengthen punishments for fentanyl dealers, arguing that the state should pursue harm reduction instead.
Joe Biden is gaslighting again on the economy; economists show how full of hot air he is
Joe Biden it at it again, gaslighting about the economy, telling an audience of workers in Maine about what a great job he's doing to boost the economy, with catchy turns of phrase like this:
Bidenomics is just another way of saying restoring the American Dream.
He's yapping this:
We’ve created over 13 million new jobs — more than before the pandemic. Nearly 28,700 here in Maine. (Applause.) Eight — eight hundred thousand new manufacturing jobs nationwide. We’ve attracted almost a half a billion dollar- — half a trillion dollars in outside private investment to grow the economy, because they know it’s available now.
And extolling that:
Now one reason he have inflation fall by two thirds without losing jobs is that we’re seeing corporate profits start to fall as well. We have more to do, but I like what I said: Inflation is now at the lowest point it’s been in over two years.
In fact, we have the lowest rate of inflation among the world’s major economies. Every major economy in the world, our inflation rate is lower. We’re growing faster. We’re economically more advanced than every other major country in the world. It’s down from 9 percent to 3 percent, and it’s going to continue to go down.
While there is more work ahead, earlier this week, the Washington Post suggested Republicans may have to find something else to criticize me for — (laughter) — now that inflation is coming down. Maybe they’ll decide to impeach me because it’s coming down. I don’t know. I love that one. Well, anyway, that’s another story.
So a good economist who understands economics has come forward and written an essay to show why Joe has no idea what he's talking about.
According to Alvaro Vargas Llosa, who wrote a column in Fortune magazine, jobs are not what he says they are:
President Biden is understandably elated at the job figures. His administration keeps bragging that it has “created” some 13.4 million jobs since he took office. The truth told by the Bureau of Labor Statistics, however, is that only slightly more than 2 million more people are employed today than on the eve of the pandemic, meaning that more than 11 million of the 13.4 million weren’t “created,” but simply came back after the pandemic shutdowns were ended.
Which is miserable stuff, given that he's had three years to do it.
Biden's proud claims about falling corporate profits sounds like a stock market nightmare -- and all by itself sounds like a job killer, given where jobs come from. No wonder there are so few new jobs being created.
And as for inflation, Vargas Llosa brooks no fools, which is bad news for Joe:
Recent data on the inflation rate, GDP growth, and jobs from the U.S. Bureau of Labor Statistics have given the Biden administration reason to brag about the economy. One ardently hopes this is purely political grandstanding rather than a real assessment of where things stand. If not, it means the administration doesn’t understand the true state of the American economy–and, more importantly, the fact that it’s been declining now for decades and urgently needs to be overhauled.
Vargas Llosa then gets down to brass tacks on inflation:
To begin with, the Consumer Price Index figure showing the year-over-year inflation rate declining to 3% was greatly influenced by a 16% drop in energy prices. A more realistic picture of inflation, the so-called “trimmed-mean CPI,” which removes high and low outliers, like the energy price drop, shows inflation still running at 5%. This is on top of the 4.7% increase that hit U.S. consumers in 2021 and the 8% price spike in 2022.
If we continue down this path, it will mean a nearly 20% decline in purchasing power in just three years (and that assumes the prices of oil and other commodities will stay low, which, given the ongoing war in Europe and the fundamentals of supply and demand, seems unlikely).
Real average hourly earnings, meanwhile, have declined since March 2020, when the pandemic closures began.
That jibes with the TIPP CPI, or, Bidenflation index, which carefully tracks inflation's progress from the start of the Biden administration to the most recent figure, piling up inflation figure upon inflation figure dating from the start of the Biden era instead of just reading the rate that was read for one month.
In a recent blog post, TIPP noted this:
Bidenomics is a complete and utter failure that has led to stagflation in the United States. No amount of sugarcoating can hide the truth. Americans are struggling with high prices. You need $1,000 in earnings today to buy what $862 could buy when Biden took office. Alternatively, if you needed $50K yearly for household expenses before Biden took office, you now need $58K.
The Washington Times reports that inflation remains very much with us:
While the liberal media paints the picture of a Biden-led economic resurgence, the cost of food is still up nearly 6% year-over-year. The price of baby food and formula is still up 7.5%. Fruit and vegetable costs are up almost 9%, and 11.5% for bread. The price of pet food, meanwhile, has jumped over 12%.
How about monthly rent? Up 8.3%.
And while Biden allies such as New York Times columnist Paul Krugman have been ruminating about why people don't appreciate Biden's great economic achievements, Johns Hopkins economist Steve Hanke came up with an annual misery index which demonstrated exactly why they don't.
I wrote this about it awhile back:
That's unemployment times two, then inflation, then bank lending rates, then subtract the annual percentage change in real GDP per capita.
Every element in it is geared to the little guy, not the big random macroeconomic numbers that are befuddling Krugman. Notice that Hanke says 'bank lending rates' instead of interest rates from the Fed or something, which to the little guy is abstract nonsense, while the cost of taking out a home loan or a gander at the old credit card bill is not. Notice that Hanke uses GDP per capita rather than the broader averages in GDP that don't quite describe how the individual is affected. So it's a good system, and in his piece, Hanke describes how he came to develop this system, polishing it with this deet or that tweak, in response to other distinguished economists' research.
So how does the U.S. look on this year's misery index?
It ranks 134 out of 157 countries with a misery score of 16.882, driven by unemployment, which is a big one if you are unemployed. It's hard to compare this number to previous year based on the changing number of countries ranked and slight changes in methodology (you can if you want, 2021, 2020), but suffice to say, that 16.882 score for 2022 is quite a bit lousier than 2018's figure released in 2019 during the Trump years, which clocked in at 8.7 with the driving misery factor interest rates, or now, bank lending rates.
It's all ugly stuff, and Biden himself continues to attribute inflation to Russia and oil prices, blithely ignoring that inflation is always and everywhere a monetary phenomenon, as economist Milton Friedman put it, and the Fed has been cutting rates.
Hanke has directly debunked Biden's claims about inflation, too, which I wrote about a couple weeks ago to highlight a few videos he had made:
Hanke correctly forecast the rise of inflation with Joe Biden's big government spendathon.
Now he says inflation is over, of all things, which sounds like good news -- and is news to most of us, mired as we are in high prices at the grocery and the pump.
But actually, it isn't.
The extreme tightening of rates done swiftly and in big bites pretty well foretells a recession even with prices no longer skyrocketing. As I wrote here:
But .... that doesn't mean the higher prices we see now are gone, they're still high as a kite, as we all know. They're just not getting higher, but they still remain bad in the absence of income and wage gains.
However, that doesn't mean all is hunky dory and Joe Biden can go back to spending taxpayer money.
The 'how' of how this happened matters, too. Based on how much the money supply was expanded (26% at its peak in 2022) and how swiftly and harshly that was reversed (we are at -4% now) recession by 2024 is "baked into the cake," he said. Economies can't take that kind of whiplash, which seems more like something you see in a banana republic.
Meanwhile, Vargas Llosa points to GDP growth as another area worth looking at, and says Joe Biden has nothing to brag about there, either:
Between 1964 and 2000, productivity grew 2.2% per year on average, compared to 1.78% since then.
No economy can truly prosper with a declining level of productivity. Among the most important factors behind this grim reality is the declining level of private domestic investment, which under the current administration has increased by just one-half of 1% (0.53%) per year, about one-fourth the rate of growth between 2016 and the beginning of the Biden period (and that was already low by the standards of previous decades).
And as Joe Biden bragged about cutting the national debt, which he didn't, Vargas Llosa warned that debt too was dragging the U.S. down:
The amount of debt that has accumulated in recent years is staggering. Household debt is nearing $18 trillion, almost one-third higher than on the eve of the Great Recession of 2007-2008. Government debt now amounts to $32 trillion, a figure that will be dwarfed by the $50 trillion the government will likely owe well before this decade is over.
He warned that there was no evidence Biden understood any of the toxic effects on the economy of debt, and he was concerned that even the GOP's top candidates didn't seem to understand much about this either.
Reversing the course of an over-indebted, overregulated economy burdened by years of too much spending and political manipulation is a monumental affair. Nothing indicates that the current administration understands the economic mess the U.S. is in, and it’s still unclear, judging by what the candidates are saying, whether the GOP does either.
Vargas Llosa's family is from Peru -- they know how bad this kind of Biden-style mismanagement can get and how low it can take an economy if the course is not corrected. Joe Biden has no knowledge of any of this, just a certain kind of arrogance that since he "runs" America, he's as exempt from the laws of economics as he is from the laws of government.
It won't end well. At a minimum, he needs to be called out at every turn on his gaslightings.
Image: Screen shot from a camera aimed at a television set during a live broadcast
Prescription for Pink Slips: CVS Health to Cut 5,000 Jobs
CVS Health said Monday it is cutting approximately 5,000 jobs to focus more on healthcare services for its customers.
The move, which is supposed to help the company save money, will affect workers primarily in corporate jobs, the Wall Street Journal reported.
The decision is not expected to affect workers in the company’s stores, pharmacies, and clinics.
“Due to the findings, the company planned to cut back on store density in certain locations and close approximately 300 stores each year over the coming three years, beginning in spring 2022,” according to Breitbart News.
The Journal report continued:
Chief Executive Karen Lynch said the changes would enable CVS to “be at the forefront of a once-in-a-generation transformation in health care,” according to a staff memo reviewed by The Wall Street Journal.
The company is cutting down on travel expenses and its use of consultants and vendors, the memo said. It is also stopping certain business initiatives and using technology to increase productivity. Employees affected will receive severance pay, benefits and help with landing a new job elsewhere.
News of the layoffs comes as CVS is scheduled to share its quarterly earnings report soon.
“We’re committed to supporting our impacted colleagues, and they will receive severance pay and benefits, including access to outplacement services,” CVS Health Executive Director of Corporate Communications Mike Deangelis said, according to WPRI.
Overall, layoffs in the United States have stayed low despite widespread predictions of a recession. In June, the number of layoffs and discharges changed little at 1.5 million, the Department of Labor said Tuesday. That figure is low by historical standards. In February of 2020, just prior to the onset of the pandemic, there were 1.8 million layoffs.
In addition, job openings remained fairly unchanged at the close of June compared with May, Breitbart News reported Tuesday, adding it was “a sign that the labor market is still tight.”
“The Labor Department said Tuesday that job listings came in at 9.6 million on the last day in June, just where they were in the downwardly revised figure for the end of May,” the article reads.
Yellow Freight and an economy on the margin
Yellow Freight, a massive, almost century-old LTL carrier, has gone out of business, and the “spin” of the business world will likely rival the spin of the political world in covering this news.
First, some background. LTL refers to “less than truckload freight,” so an LTL carrier is one that picks up relatively small loads, usually 1 to 5 pallets’ worth, and consolidates them at terminals with other such freight with similar destinations, in what is called a “cross-dock” operation. Through a network of base terminals across a metro area, a region, or even the entire country, the nation’s thousands of LTL carriers consolidate such loads and deliver goods so that shippers don’t have the unbearable expense of hiring an entire truck for a small order.
Many such LTL companies have a truckload division and other divisions as well, such as logistics management consultancies, international freight forwarders, and project cargo subsidiaries, as did Yellow, but at Yellow, the LTL aspect has always been the driving force.
Yellow was a union carrier, so, both members of the transportation industry and the general public at large have been treated to very public battles between the company and the Teamsters for generations.
As with any business closure, there will be debates over fault for years to come. Was it because the union was too vicious in fighting management? Was it because management made bad decisions or was unable to fulfill promises it made to the union? Was it because either side consciously cheated the other?
Or was it because at some point, Yellow Freight just chose a direction for itself that became ever more challenging as the economy changed over the decades?
Yellow has had multiple restructurings and acquisitions since the 1970s, each time hoping to emerge stronger, while arguably digging itself a deeper hole. Gradually, Yellow had to lower its prices to keep business, reducing opportunities for profits, bleeding cash year after year as a result.
By the end, Yellow was just an enormous, low-cost carrier, with a reputation for unacceptably slow transit times, attracting only the most cost-conscious of customers.
Could others have managed the company better? We will never know, but the business pages will be full of discussions for the next few weeks, and some will go so far as to say that just because it was expected, it’s not a big deal. “Yellow’s failure was already baked into our outlooks,” they will say. Odd, isn’t it, how many talking heads say that the worst problems in the world are not a big deal, just because they were expected.
Here’s what we know for sure:
Approximately 30,000 people are now unemployed, who had a job last week. That’s 30,000 experienced people - truck drivers, dock workers, mechanics, bookkeepers, sales reps, IT experts, customer service reps, and other employees in all levels of management and back-office clerical services.
They will now be competing with the millions of other jobseekers already in the marketplace. Hopefully they will find something better; they could hardly do worse.
But in the meantime, while they hunt, they will be filing for unemployment and/or other benefits, and/or burning up their savings, putting further strain on an already struggling economy.
This gives us an opportunity to analyze one of the painful misconceptions that leftist economists like to parrot when discussing tax policy: that corporations should pay more income taxes, because if a corporation doesn’t directly pay income taxes itself, then it’s not contributing anything to the economy.
Well, Yellow has been losing money for years, so it has rarely made a profit, and therefore hasn’t paid much in income taxes for its size.
But in the past, Yellow bought millions of dollars’ worth of diesel fuel every week, and half of that spend was in fuel taxes and fees.
While it was operating, Yellow owned or leased thousands of offices, terminals and truckyards, in every state of the union, all of which paid property taxes.
Until last week, Yellow contributed to the workmen’s comp and unemployment insurance programs of every state in which it operated. Yellow paid the employer’s matching amount of every employee’s FICA collection - that’s about 7 1/2% of all of those 30,000 salaries - paid to the federal government every week. That’s not chump change.
Until last week, Yellow employed an array of other local services and businesses, which both armchair economists and the ones on television never think about. Their sales reps took customers to lunch or dinner on sales calls. Their terminals hired local maid services, painters, parking lot repavers and landscapers. Their offices contracted with local utilities, buying cellphone service, internet coverage and land lines, and contributing to all the many other shared local expenses that utilities provide to a community.
It doesn’t end there. A company of 30,000 employees buys cars for its sales reps, and siding and roofing for terminal construction, and carpeting for its offices. It constantly invests in new trucks, new trailers, and new forklifts. When that company of 30,000 goes out of business, this steady spend in the local economy ends as well.
All the beneficiaries of those expenditures pay taxes. Even if Yellow itself wasn’t paying federal and state income taxes, because of its many years of losses, its employees paid income taxes, and its corporate spend enabled everyone else in the economy to pay income taxes.
You will see armchair economists report confidently that other trucking companies will pick up Yellow’s business, and Yellow’s equipment, and Yellow’s facilities. All true.
But with one less sales rep calling on customers, that’s one less automobile for the market to buy from Detroit, and one less sales lunch or dinner at local restaurants each day. With Saia, XPO or ABF buying Yellow’s used trucks, that’s that many fewer new trucks for Detroit to sell. This closure means less business for all of the service industries surrounding each terminal.
There’s more. We could go on for days, listing the multitude of other successful businesses that depend in part upon every other business. When one giant closes, everyone suffers.
We should all shed a tear today for those affected most directly by the closure of this iconic brand. Should they not have bought USF a decade ago? Should they not have bought Roadway 20 years ago? Should Yellow employees have tried going nonunion, years ago, to free up the company to do what it needed to do? Should the federal government not have lit a match to $700 million in 2020 by purchasing 30% of an effectively bankrupt entity in a moment of wild desperation?
These questions are all worth asking. The history of Yellow Freight provides us with plenty of worthy material for studying management.
But it also provides us with a valuable opportunity to look at outside forces, beyond Yellow’s control, and imagine how things might have been different. Some years, the difference between profitability and unprofitability at Yellow was just a couple percent of revenues.
What if the government didn’t demand that 7 1/2% matching FICA contribution of all American employers? What if diesel fuel could be purchased for a fair price, instead of being doubled by this array of taxes? What if the government didn’t make their every truck cost ten or twenty percent more by loading it up with environmental-extremist technology? What if the Department of Transportation’s Hours of Service regulations didn’t meddle with dispatchers’ ability to staff up and serve their customers efficiently?
As we are seeing today, and as we will see in the months to come, as the ripples of this bankruptcy have their effects upon the economy at large, the Yellow Freight bankruptcy also provides us with a valuable lesson in the interconnectedness of a capitalist economy, and the dependence we all have on the enduring stability of a free market.
Perhaps, someday, we will learn the lesson that a crushing tax and regulatory burden doesn’t just hurt some unknown CEO in a Manhattan office somewhere. This burden makes everything harder for everyone, especially companies on the margin of survival.
If there was ever a time to learn that lesson, it’s now.
John F. Di Leo is a Chicagoland-based international transportation professional and consultant. A onetime Milwaukee County Republican Party chairman, he has been writing a regular column for Illinois Review since 2009. His book on vote fraud (The Tales of Little Pavel) and his political satires on the current administration (Evening Soup with Basement Joe, Volumes I and II) are available on Amazon.
Photo credit: Mark Collins CC BY 2.0 license
Economy Continues to Crash (And Why We’re Next)
The Yellow Corp. bankruptcy: A brutal attack on the working class
Yellow Corp., the fifth-largest trucking firm in the United States, has shut down its operations and laid off 30,000 drivers, yard workers and office staff across the US. The firm is expected to file for bankruptcy protection in federal court this week.
The Yellow bankruptcy and mass layoffs are intended as a ruthless act of intimidation against all workers. Confronting an increasingly militant movement of the working class, the Biden administration has decided to allow the company to go into bankruptcy as a warning, aimed particularly at the 340,000 United Parcel Service (UPS) workers who will begin voting on a sellout agreement backed by the Teamsters union apparatus this week.
While Teamsters General President Sean O’Brien has hailed the UPS agreement as “historic,” it has provoked a firestorm of rank-and-file opposition for maintaining the poverty wages of part-time workers, who make up two-thirds of the workforce, and including a de facto freeze in real wages for package delivery drivers, plus reduced pension payments in Western states.
More than 22,000 Yellow workers were prepared to strike on July 24 after the company reneged on its pension payments earlier this month. The Teamsters bureaucracy suddenly called off the strike, however, claiming it had reached a deal with Yellow to pay its $50 million pension obligation within two weeks.
It is now clear that the Teamsters leadership had no intention of calling a strike at Yellow, and its announcement justifying the decision was based on lies. The union bureaucracy was well aware that the company was headed towards bankruptcy, but was determined to prevent a strike lest it embolden UPS workers and other sections of the working class. Making clear the union bureaucracy would not conduct even the pretense of a fight against mass layoffs, Teamsters President O’Brien said over the weekend, “Today’s news is unfortunate but not surprising.”
In fact, the company has used the breathing room granted to it by the Teamsters to move freight off its docks and position its trucks and other equipment for auction. The bankruptcy courts will be used to allow Yellow’s owners to slash their liabilities to employees, smash up the company, and buy up the remaining assets at rock-bottom prices.
Tens of thousands of workers at Yellow are being abruptly thrown into joblessness, with devastating consequences. At the company’s headquarters in Overland Park, Kansas, where more than 4,000 office workers are being laid off, KCTV reported that employees with nine years or less will only get two weeks pay as a severance package. “It’s very tough” an office worker said, “there’s a lot of us here and we’re flooding the [job] market.”
Teamsters officials are still engaged in closed-door discussions with the corporation about further concessions. However, the overriding concern of Teamsters President O’Brien and the rest of the bureaucracy is to prevent any strike that would strengthen the position of 340,000 Teamsters members at UPS. Just two days after announcing the Yellow agreement, O’Brien announced that he had reached a deal with UPS, thus averting a strike set to begin at 11:59 Monday night.
The UPS deal was no doubt brokered by the Biden administration. Biden has relied on the trade union bureaucracy to keep wage increases below the rate of inflation and prevent strikes that would disrupt the prosecution of the US proxy war against Russia and plans for an even bigger war against China. While the White House and Congress are prepared to use anti-strike laws against workers in key industries—as they did against the rail workers last year—they prefer to use the services of the union bureaucracy to avoid a direct political clash with ever more militant sections of the working class.
The American ruling class and its servants in the labor bureaucracy are using the shutdown of Yellow and the prospect of mass unemployment to beat back the demands of workers for major increases in wages to counter the impact of inflation and decades of declining real wages. Just two days before Yellow shut its doors, the US Federal Reserve raised interest rates to the highest level in two decades as part of a deliberate policy of driving up unemployment and countering the “tight labor market,” which the Wall Street Journal complained “allows workers to bargain for high pay, making it harder to get inflation down.”
It also coincides with threats by auto executives, including Stellantis CEO Carlos Tavares, that workers must accept deep wage and benefit concessions or face more plant closures and mass layoffs. With contracts expiring for 150,000 autoworkers in the US and another 20,000 in Canada in mid-September, Tavares said the number of plants and workers the company will retain in the US “relies on the total production costs that we can achieve in the US with our suppliers and within our own plants.”
The liquidation of Yellow is being driven by the most parasitic Wall Street interests. In 2019, private equity firm Apollo Global Management essentially took over control of the debt-ridden company by extending Yellow a $600 million line of credit. It then leveraged its connections with the Trump administration to obtain a $700 million pandemic aid loan from the United States Treasury on the dubious grounds that the company was essential for “national security.”
With nearly $600 billion in managed assets, Apollo has a long history of loading up struggling companies with even more debt and collaborating with the unions to attack workers’ jobs, wages and pensions before selling or liquidating the asset-stripped companies. In one of the most notorious cases, Apollo joined other private equity firms in squeezing massive concessions from Warrior Met coal miners in Alabama, who waged a heroic two-year strike until it was betrayed by the United Mine Workers.
Over the last four decades, the US bankruptcy courts have been used to strip workers of their livelihoods and ensure the continued enrichment of the financial oligarchy. The list of employers that have filed for bankruptcy includes Continental, Eastern, United, American and other airlines; countless steel, auto parts and coal companies; major auto firms such as GM, Chrysler, Delphi and Visteon; and the city of Detroit, where the pensions and retiree health benefits of city workers were gutted and public assets were sold off in the largest municipal bankruptcy in US history a decade ago.
The attack on Yellow workers can and must be stopped! But to do so, workers must take the struggle out of the hands of the Teamsters bureaucracy by organizing rank-and-file committees that will transfer decision-making power to the drivers and yard workers. These committees must establish direct lines of communication with workers in other trucking companies and at UPS to prepare joint strike action to demand secure and good-paying jobs for all workers.
These committees should advance demands to open Yellow’s financial books to public scrutiny, including full disclosure of all of the company’s assets and all of its payments to creditors, including the US Treasury Department. Securing the jobs, wages and pensions of all workers must take priority, and all resources wasted on the vast salaries and fees to corporate executives, Wall Street investors and union bureaucrats must be exposed and fully recovered.
Above all, private capitalist ownership of the trucking industry has proven to be a disaster for consumers and workers: from the massive loss of jobs after deregulation, to the recent trucking bloodbath that has seen thousands of companies disappear, to the ruthless cost-cutting and downward pressure on rates exerted by Amazon, to the unhealthy and exhausting schedules facing all drivers, including owner-operators. The trucking industry must be transformed into a public enterprise, collectively owned and democratically controlled by the working class as part of the socialist reorganization of economic life.
VIDEO: Yellow Trucking Company Shutdown Kills 30K American Jobs
The trucking company known as Yellow Corp. shut down on Sunday after 99 years, a move that has deeply affected tens of thousands of American workers.
The decision left 30,000 people across the nation jobless, KMBC reported Monday, noting operations stopped after the company’s dispute with a union.
“The shutdown comes after a federal judge denied Yellow’s attempt to block a unionized strike. The company had warned that a strike could cause it to plunge into bankruptcy,” the outlet said.
Yellow has been struggling financially and customers have been leaving in droves, the Associated Press (AP) reported Monday, adding non-union workers were laid off on Friday.
The Teamster’s Union said Monday it had received legal notice of the situation.
“Today’s news is unfortunate but not surprising. Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” Teamsters general president Sean O’Brien commented.
A sign placed outside a lot where Yellow trucks were parked informed customers and employees operations were halted Sunday:
It is possible Yellow may file for bankruptcy, the KMBC article said, adding, “In addition to the union disputes, a $700 million pandemic-era loan from the government and other bills have racked up over time for the company.”
Analysts predict the shutdown may mean higher delivery prices will trickle down to consumers as other companies grapple with the extra work coming their way, according to ABC News.
Yellow’s government loan came during the Chinese coronavirus pandemic when its role in the nation’s supply chain was deemed “essential to national security,” the outlet said.
The outlet also noted the trucking industry and civilian drivers are still struggling with high gas prices in President Joe Biden’s (D) America.
Yellow reportedly handled 49,000 daily shipments in 2022, but “That number was 15,000 daily shipments in its final week of handling freight,” the KMBC article stated.
