Originally published at: https://boingboing.net/2018/06/03/are-there-no-workhouses-6.html
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This includes my cousin, who busted her ass as a store manager at a Toys-R-Us for years. She would often travel around to other stores in the region, staying there for weeks at a time to help out in one capacity or another.
This is bullshit of course. She worked hard and deserves something for her years of hard work.
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Nothing like taking the worker’s pension contributions and giving them away, less your cut.
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I wonder how people can have the gaping hole in their human soul necessary to do this, but I’ve stopped asking why.
Now all I’m asking is, why is this legal?
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Obligatory 1-minute explanation of private equity/vulture capitalist business model:
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and anyone is surprised??
when? when do the people rise up with torches and pitchforks?
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They did but due to extreme stupidity and racist circle-jerking they were chanting “Jews will not replace us”
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Because it’s very difficult to pass laws that can’t be gamed.
For example, I held a job for 15 years, lots of sacrifices to help the company, but it eventually folded and I got no severance.
Was a wrong done? No. When it became clear that the company was no longer sustainable, I calculated the minimum legal notice period (in lieu of severance), and the company was wound down on that basis so as to try and provide the least dislocation to the customers while not costing the owner his house.
But from the law’s perspective, the two situations would not look all that dissimilar.
Codifying common sense (and even worse, codifying basic ethics) is notoriously difficult.
I suspect that if there’s a tiny bit justice, it will be in the form of the creditors who loaned them money suing the owners so that at least the owners don’t profit on the deal. I fear the workers will get nothing.
And to be honest, this form of gaming is only possible because of the stupidity of the banks. I’d hope that whoever approved the loans gets fired, acting as a cautionary tale the next time a vulture firm is sniffing around to steal their profit from the bank (while incidentally destroying the livelihood of thousands of workers).
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As I noted elsewhere, because history tells us that revolutions generally need people who can afford (in all senses) to take time out of their lives to organise. These are usually middle-class folk who have been affected in some manner. Capitalism evolves to ensure that these people are either kept out of the way (currently, I would argue, in “bullshit jobs”) or are pushed to the point that they can no longer afford to give up the time (cf. the wage slavery article also today.)
The new media doesn’t seem to help much either. Whilst it is good at organising “flash mobs”, it doesn’t seem too hot on the on-going support needed to maintain a real effect.
Oh, and extreme ideology is also a good defence - persuade your “base” that all the problems are the fault of “them” and the culprits get away scot-free. Again.
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It seems, at a minimum, that being able to put the debt you took on to buy a company on that company’s books is something that one should strive to make impossible. There just don’t seem to be any non-perverse incentives there.
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Agreed.
What I don’t have an answer for is why someone thought that lending the money for that purpose would make sense. I think anyone looking seriously at regulation needs to have a serious answer to that (outside of “because they’re evil and stoopid”).
If we don’t understand the root of how this happened (and why a for-profit institution just gave away hundreds of millions of dollars to another for-profit institution), any regulation is likely to be of the “feel good, but not terribly effective” variety.
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The America of today is one where making a fast profit at the expense of workers is lauded as “good business sense”, ironically by a lot of the same people who bemoan the erosion of morality in the U.S.
It may very well be good business sense, but it’s not moral in terms of how it impacts society. But then capitalism was never about morality, ever.
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I’m with you in the confusion department. I guess I understand why the vultures themselves do it, but what’s the ecosystem that encourages the growth a parasite like this to develop? what’s their niche? more concretely, what is even the service they claim to offer? Surely not just corporation dismembering. Who hires their services? Or is this somekind of hostile incursion?
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I have seen cases where a big restructuring has allowed remaining “value” to survive, so vulture funds can occasionally make sense (it’s sad when you see a completely viable section die because it’s affiliated with a non-viable parent).
So, I can see the “service” they offer.
But that only works if you’re buying for pennies on the dollar, and more to the point, nobody is going to be financing your takeover. Which means I’m probably missing a vital portion of the story that makes the actions of the bank make sense (even if it was a massive mistake on their part).
I’m not really interested enough to do the ground work for it. By I certainly hope anyone proposing regulation is :-).
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I presume that the banks are happy to play along because they get bonuses for making lots of loans, and, if those loans turn bad, they sell it on another bank, and, if it all goes pear-shaped, they don’t care, because they are “too bit to fail” and the tax payer will foot the bill. Late Stage Capitalism? Not late enough.
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In this case, I suspect that the return on the loan was not compelling(unless some lenders were ahead of others, in which case they might well have done just fine); but at 400m/year since 2005 Toys R Us managed to repay the original loan amount and was presumably slated to keep paying off interest approximately forever; so, while this wasn’t a winning bet, it’s not as though it falls into the territory of ‘blatant con against the lenders’, given that loans in general get defaulted on from time to time.
It is hard to imagine what ‘service’ they offer if you look at it from the perspective of the target company; but from the perspective of a lender that needs customers the case seems a lot more evident:
Effectively the maneuver of borrowing to take the company over and then having it foot the bill created 5 billion dollars in debt, that Toys R Us would have been very unlikely to take out on its own. Obviously some debtors are just too implausible to be seen as good targets; but for pretty much any entity that seems adequately likely to survive long enough to repay(or to be worth enough when chopped up at bankruptcy) the service of “compel company to take on debt it would otherwise have no reason to” is one that would be of obvious interest to lenders.
“Help the financial services sector more efficiently devour the real economy” isn’t exactly a good service; but it seems like one where the target of the con isn’t the lenders.
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Amazon is predatory, says the blog that routinely links to merchandise available on purchase on Amazon. Everybody likes convenience, guys. Toys R Us has nobody to blame but themselves for their closure. I’m sad that so many of their former employees are paying the price, but the blame lays solely on the people who ran the company, not Jeff Bezos.
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