Years ago, a wizened and bearded fellow who was always on the courthouse steps in Fairmont identified himself as a “full-time observer of the scene.” I suppose that qualifies me as a “part-time observer of the scene.”
This morning, my buddy Dave and I were having coffee as is our occasional habit. Son Tim joined us as he was coming off midnight shift. As we were solving some few of the world’s problems, tour buses started trickling by the window. Over 45 min., there must have been 15 or 20 of them, all full of older gentleman who fit the term “working men.”
I had to take a look at the newspaper to see what’s what. As it turned out they were on buses engaged by the United Mine Workers of America to attend a rally on the football field at Fairmont State University.
The subject of the rally was the Patriot Coal bankruptcy debacle.
The press reported later today that about 5000 people attended the rally.
Here is a ultrashort sketch of the Patriot Coal case. One of the big coal producers in West Virginia over the years was Eastern Associated Coal Corporation. While it was still operating lots of mines, it’s sold out operations to Peabody Coal, later Peabody Energy.
Over the years, miners have made a fair living to a pretty decent living mining coal. Let me note at the outset that there is no amount of money that would get me to work in a coal mine. Part of the miners’ contract was that upon retirement they would receive certain pension benefits based on their longevity and also fairly decent healthcare coverage. This was to be paid by the company from future revenue. That is, the company was betting that it was going to continue to make money, and based upon that made a solemn promise to its employees.
Peabody went through a corporate reorganization and a separate company, Patriot Coal, was spun off as an independent company. The obligation to pay pensions and health benefits went with Patriot.
Another large coal producer, Arch Minerals, spun off some of their coal business into Magnum Coal Company, and Patriot Coal bought Magnum Coal. So the obligation to pay the pensions and health benefits for a great many retired miners went with Patriot.
In 2012, Patriot Coal Company filed for bankruptcy in the Eastern District of Missouri. Part of its bankruptcy plan was to reduce drastically wages of miners working under contract and also cut the pension and healthcare benefits of many retirees. Patriot said that it needed to save $150 million a year in labor costs to stay in business. Patriot had $1.6 billion in pension and health-care liabilities that it proposed to slash by about 75%.
Patriot Coal said that all this was necessitated by poor market conditions and by the increasing environmental regulation of coal. To be sure, the coal business has taken a slide – recall that a couple of weeks ago, Pres. Obama declared war on the coal industry by directing the EPA to adopt emissions regulations that will make it virtually impossible to burn coal in power plants.
(The President said he was this was not a war on coal. Bullshit. If someone’s going to be a pirate, by all means fly the Jolly Roger. Hypocrisy is unbecoming.)
The UMWA says that the Patriot spin off was a put up job designed to isolate pension and health care responsibilities in a company that was destined to fail. Then, those obligations could be wiped off the slate in a bankruptcy, saving the parent company a great gob of money, to the detriment of retired miners.
A United States Bankruptcy Judge granted Patriot Coal’s request to void its union contracts and to cut the pensions and health care of some tens of thousands of retired miners. The Bankruptcy Judge directly addressed the Union’s allegation of fraud: “Maybe not. Maybe.”
She then applied what she saw as the clear requirements of the law to permit Patriot Coal to abandon these obligations.
The Union has declared that it is going to appeal the bankruptcy decision in Federal Court, which it has every right to do.
Today, I have a few observations which are likely to piss everybody off.
Right, like that’s going to stop me.
The Right to Rally:
Any group of citizens, whether they call themselves a union or just a bunch of folks who all showed up at the same place at the same time, have an absolute right to petition the government for the redress of grievances. That right is protected by the First Amendment.
At such a rally, people attending it can say pretty much whatever they please. It’s a grade school civics mantra that there are few places on earth where citizens can do this, but it’s still true. In lots and lots of other places, people attending such a rally would be met by riot police, German shepherds, teargas and water cannons. At today’s Fairmont rally, there were about 15 police officers for the 5000 people, and mostly they were directing traffic.
Several speakers went on to cajole, shout, scream, rant, rave, and commit what would in most sovereign nations be sedition. Quite properly there was no negative governmental reaction. These are citizens. This is America.
Moreover, citizens acting collectively (as in a union) can sponsor and pay for such a rally and no one can stop them. For that matter, after the Citizens United case before the Supreme Court of the United States, even a corporation can have a political rally and write the cost of it off on their taxes.
The Ineffectiveness of a Rally:
Whether it was wise to have the rally, whether it accomplished anything except enrich bus companies, depends on what the goal was. If the Union’s goal was to get the Bankruptcy Court to change its order, then this rally was just a big bloody waste of time and money.
We have an independent judiciary. Judges are not supposed to care what a majority (or minority for that matter) thinks about an issue before the Court. That’s really rather annoying to the citizens because the government is supposed to be us and the Courts are a part of government. For a Court to ignore the People seems damned highhanded.
That is, it’s annoying until we happen to be in a minority on the short end of the stick. If you are charged with a crime and everybody thinks you’re guilty and that what you did was the worst offense since Pilate ruled, you still have a right to a trial. If the State does not prove your guilt beyond a reasonable doubt, you have a right to a judgment of acquittal. As I write this, the George Zimmerman trial is stumbling along in Florida. Nearly everyone has an opinion about what the verdict should be. There is some positive correlation with the race of the person having the opinion.
(No, it’s nowhere near a 1:1 correlation, thanks be to God. There are still lots of people who have a passing familiarity with and respect for the Constitution.)
(Incidentally, I don’t have an opinion about Zimmerman. I’m not a juror there.)
No matter what anybody believes is “obvious,” or what they “just know” happened, the public is not deciding that case. A jury which hears evidence directly from the people involved will make a decision and if that is something contrary to the majority view, that’s just too bad.
If the UMWA had brought this Bankruptcy Judge to the rally and given her a comfortable chair on the dais to listen to everything, the law requires that she not be swayed one bit by anything said. No matter how strongly people believe their position, a strength of this Republic is that we follow the law whether we like it or not.
So in terms of affecting the result of the pending Bankruptcy case, the Union would have been better off to take the bus money and put it toward the legal challenge in the bankruptcy case. How might it be shown that the Patriot reorganization was a put up job? Well, that needs to be done in court and can only be done by lawyers doing the case the old-fashioned way: working hard at it. I can envision a course of action using the discovery process which could prove (or disprove) the bad intent of the people who planned the reorganization and bankruptcy. But that won’t happen with wishful thinking, it will take work.
So from the immediate and direct cause standpoint, this rally was a waste of time.
On the other hand, if indeed the Union has an actual political strategy, perhaps such rallies are useful. Personally, I think that one on one jawboning and media work better but I will admit the last political rally I attended (2004) was quite invigorating.
“Having a political strategy” sounds rather cynical. I can live with that. It is. It’s cynical as hell. But it seems to work. Peabody, Arch and Patriot Coal all spent great gobs of money on lobbying and other political activities. I doubt if they have had one damn rally.
So far, who’s winning?
And here’s a problem with anything on behalf of real people. “The people” often are represented by ideologues who may or may not have a clue how to be politically effective. “Non-people” are driven by money and the meritocracy of making money puts effective people in decision-making positions.
No wonder The People are getting beaten like a drum.
Who is Paying for Patriot’s Failure?:
When people invest in something, their rate of return – the money they get for their investment – depends on a lot of things. It depends on how smart they were and what business they selected, the relative probability of the business failing versus succeeding and what unpredictable factors intervene. The latter is commonly called “luck.”
If investors make a bad investment, they lose money. It happens all the time.
Here, even if you absolutely accept Patriot Coal Company’s contention that the bankruptcy was brought on by unpredictable conditions, there still is a darn good argument to be made that the people who made bad investments should the ones that lose. Investors invested. Miners had a contract. There is a difference.
Another argument can be made that the bankruptcy law was intended to protect people from non-people like individual debtors from banks when their luck (there’s that word again) goes bad.
The retired miners made a bargain and they fulfilled their end of the deal. In doing so, they worked in conditions that few workers would tolerate. In doing that job, they made it possible for the American economy to work. Historically, the great majority of electricity (and ALL steel) has been made with coal. Even today, 50% of electricity comes from coal-fired generation. In some mines even today, miners work in knee-deep in water all day, every day. In all mines, they work in an atmosphere full of hazardous dust. In the safest mine, they work with significant dangers of injury from moving equipment, electricity, lifting, fire and explosion. These retired miners did this dangerous and difficult work to take care of their families by earning money. That’s why most of us have jobs. And that’s why they had a contract which would provide significant benefits.
So this Bankruptcy Judge has decreed that the law requires that these miners will pay for the losses of unlucky investors. And perhaps the law requires just that.
In many other places where people are not attuned to this particular industry, that sounds okay. I’ve heard unions called greedy (and some of them are) and industrial workers called greedy (some of them are). Ditto for lawyers, doctors, banks, car companies, and the guy who charges $4 to launder a dress shirt. So if you think that this is all a tempest in a teapot and the people who took it in the shorts need to suck it up and soldier on, well, this is America and you can have whatever opinion you like.
Um, as long as you pay your taxes. Because you are paying for a share of the Patriot debacle.
These retired miners are going to have healthcare needs and other financial needs which are going to be filled somehow. To a large extent, that cost is going to be directly upon the miners and their families. They will have less money to spend on other things, including necessities.
Particularly with healthcare, you are also footing the bill.
Healthcare costs which are not paid by the now-gutted healthcare plan have to be soaked up somewhere. Not many individuals can afford to pay the full price of healthcare. If those costs are not paid by insurance, a great deal of them will be paid by Medicare and Medicaid. That is, by you. And where healthcare costs are not paid by the failed plan, the hospitals are not going to absorb the entire loss. They have to pay their own employees and power bill. So they will shift the costs to government, other patients and other insurance companies. Again, to you.
I’m neither conservative nor liberal as those terms are used today. Hell, I’m not even sure what the terms mean, and I doubt that any two political loudmouths use the same definition. On one of my jackets, I have a 1912 Progressive Party pin. If you’re looking for some canned political philosophy that I can endorse, I suppose that TR came closer than anybody. And a part of that philosophy is that the entire nation is interconnected. When we permit one person to harm another, the harm is done to us all.
And when we say that this sort of issue doesn’t affect us, well, we’re not being very bright.