As promised over the weekend before I realized I had forgotten my Toobz, I wanted to compare the behavior of two bailout recipients, the UAW and the banksters.
A number of people have pointed to this intriguing interview about the Korea Trade deal with the UAW’s President Bob King. In addition to confirming my math showing that the most the UAW could reasonably expect to get out of his deal is 75,000 additional exports–or 800 extra jobs for the UAW–King also had this to say:
It was important to endorse in order to reward the administration for its good behavior of including labor in negotiations.
While not directly an admission that UAW endorsed this NAFTA-style trade deal in thanks for the US bailout of the auto industry, it does seem to support that overall sentiment. The UAW capitulated further when it endorsed the Obama-McConnell tax deal giving 2 years of relief to the very rich, 1 year to the medium-term unemployed, and nothing to the 99ers whose Unemployment Insurance has expired (many of whom used to work for the auto companies).
Compare that to the behavior of JP Morgan Chase Vice Chairman Jimmy Lee during negotiations under the Chrysler bailout. According to Steven Rattner, Lee,
demanded to know why, if the government thought banks important enough to give them tens of billions in TARP money, it wanted to squeeze them on [the Chrysler] deal.
Mind you, JPMC wasn’t getting squeezed. Timmeh Geithner had specifically instructed Rattner not to ask for any special favors because the government had also bailed out JPMC (Timmeh apparently didn’t mention the additional support JPMC got from the Fed).
Tim had instructed me not to be taken in [by Lee’s complaints] but to maintain strict neutrality. I was not to demand anything of JPMorgan just because it had received an infusion of TARP money; nor was I to show it favor because of Bear Stearns or anything else.
And as Rattner calculates, Lee was asking for full value on their debt even while it was only worth about $.15 on the dollar.
In our phone calls, he also relentlessly reminded me that creditors deserve to be paid. “When you lend somebody $6.9 billion,” he would say, “you expect to get $6.9 billion back. And not a penny less.” I listened knowing that Jimmy’s position was patently ridiculous. Chrysler debt was trading at around 15 cents on the dollar (admittedly, infrequently), and according to Chrysler’s own analysis, the liquidation value of the company was perhaps as low as $1 billion. Clearly, Jimmy didn’t believe that the Obama administration would be willing to push back and let the banks take over Chrysler rather than cave in to their demands.
So unlike the UAW–which endorsed the kind of trade deal it has spent the last decade railing against–JP Morgan Chase responded to getting bailed out by asking for more special deals.