Skip to comments.on FNC: Chicago plant closing & BoA bailout
Posted on 12/08/2008 9:01:38 AM PST by Zeddicus
Just heard on FNC an update on the Chicago plant closing where union workers are protesting.
The main complaint is that the plant's bank, Bank of America, received federal bailout money but did not extend the company's credit line, resulting in the plant closing.
Now we have the Governor of Illinois saying that the State is going to suspend all business with BoA, essentially blackmailing the bank into lending to the company with the expectation that the plant will reopen and reemploy the protestors.
My question is this: do we know that BoA did not have a legitimate financial reason for closing the company's credit line? I have to assume the bank made the decision because the company was a bad credit risk. It's entirely possible that BoA is simply being responsible with taxpayers funds.
Think about this. Didn't we get into this whole mess in the first place because banks were taking bad credit risks? Are we now going to force banks to continue bad lending practices with taxpayer money?
What if the company simply has no business to sustain operation? They are a construction-related business - it's not suprising they are broke, and I would not be suprised if BoA had good reason to shut them off.
This is not going anywhere good. The government is now in a position to force banks to lend taxpayer money to insolvent companies, and to force said insolvent companies to remain open solely to keep people employed, gainfully or not.
Free enterprise in this country is dead. I think it's pretty safe to say we're now living in a communist country, no?
Yay, another day, another bailout, another vanity.
jeeze.. the problem with the banking system is the government forcing them to make bad loans, and now the State is pissed because they chose not to give a bad loan to this plant?
If the plant was such a good credit risk, why didn't the state of Illinois lend them the money.
The ACORNing of America’s financial institution continues.
I’m no expert, but forcing banks to make bad loans to people who can’t pay them may cause problems down the road. You could end up with a housing market collapse, banks going out of business, and even the big 3 car companies could go bankrupt. Again, I’m no expert, but it may be a bad idea.
I heard the story earlier on Fox news. And it centered on the issue that the company gave 3 days warning of its closing, and hasn’t paid the employees for all their earnings or what’s owed them under the law. That’s a whole other issue.
I’m with BofA...i’ve been seriously considering going to a small hometown bank. I’m pretty unnerved about these huge dinobanks gobbling up everything in their path and then groaning with the weight.
This is what the slide towards socialism looks like. First banks were pressured to make loans for residential mortgages to people who could not pay them back. Now they are being pressured to make loans to businesses who can’t pay them back. Guess who is going to end up paying for all these bad loans. The taxpayers are going to be forced to pay for them.
FWIW, BofA did not ask for and did not need bailout funds. The bank bailout bill passed by Congress contained provisions that FORCED solvent banks to accept the bailout money.
You are right but OTOH is BOA taking too short term of an outlook on the risk? Demand will eventually turn back up. Is there some compromise (radically downsized operations)?
BoA invited them in by taking the bailout money. Like vampires, they now will have complete access.
This has turned in to a full-blown Democrat political circus, complete with a JESSE JACKSON/Rainbow-PUSH photo op this morning.
I KNEW this was going to happen. It’s been being pushed on the Lib Media Website KOS all weekend, with 20+ diaries on the subject.
And as we know, the KOS kooks now drive all media coverage from the big networks.
And, don’t you DARE ask how the company is supposed to pay these people with NO MONEY...
If there was a print story about this aspect of the Chicago situation (the part about IL suspending business to BoA because of this) to have linked to, I would have.
Is it a "vanity" to discuss a story we heard on TV or radio but cannot find a hard link to?
I'm telling you, this constant whining about "vanities" is really starting to turn me off to FR. I just wanted to discuss this aspect of an interesting story but couldn't find a hard link to it.
I saw this same Presser on FOX.
And I too, have been looking for a print version, but it is nowhere to be found.
Baraq gonna pay their gas and mortgage:
Large industry is now clearly seen as an arm of government, handing out checks and benefits to loyal voters and implementing Federal regulations in return for political protection against competition. How dare some arrogant bank refuse to lend to one of these quasi-governmental entities? ;)
The plant itself has nothing to do with the bailout/government intervention/blackmail. The employees were union members! That is the STORY! And union members must remain employed, if necessary on the government—that is, the taxpayer—dime. Any questions?
Don’t think this qualifies as a vanity. I watched the report on FNC and credit the poster for the heads up.
Nice Kitty, BTW.
Yes I agree, this is a different issue. I did hear in the same story however that there is a loophole in the law which grants extenuating circumstances to companies that close and cannot meet their contractual obligations.
The story is taking an entirely new angle though that appears to go well beyond just giving the employees their severance pay. Now it sounds like the government expects BoA to be required to continue lending to the company, and for the company to be required to remain open and employ the workers, wether they have any business or not.
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