Politics, popular culture and Reagan conservatism spewed maybe once a week...or less
Wednesday, November 30, 2011
What happened to American Airlines will happen to America
It took a while, but it finally happened. American Airlines, with its crushing cost structure, finally declared bankruptcy. Driving this decision was the inflexibility of its greedy unions and their crazy wages and benefits that have saddled American Airlines with unsustainable debt.
Pensions take the lion's share of the blame, and then comes out of control union wages and benefits. Pensions are in the red to the tune of about $8 Billion dollars in unfunded checks to geezers who no longer load a single bag, check a single ticket or replace a single rivet on a single plane. In the long run, the pensions that were coerced out of American Airlines have run the ship into the reef. In reality now, American Airlines is paying three baggage handlers for every one that actually handles baggage. The other two are retired and collecting pensions. No business can run like this indefinitely, and American Airlines finally has hit bottom.
They can thank their greedy, selfish unions for wrecking their company. When you pay a baggage handler, who flunked out of high school, a wage that is wildly beyond the actual value of his service (such is the nature of unions), in time the costs of doing business will disadvantage that company in the market place to such an extent that in the long run, the chickens will come home to roost. The company simply cannot compete against leaner, meaner competitors. And in the long run they go broke, just like American Airlines. And United Airlines before them. And TWA before them, and Pan AM before them, and on and on.
The United States of America is heading down this exact same path: paying three teachers for every one teacher that stands in front of students: one teaches, and two more are retired, but the school district is on the hook for all of the teachers salary, and the pensioners pensions. Ditto policemen: for every one cop on the beat, there are two more drawing pensions. And ditto for firemen: for every firefighter fighting fires, there are two more watching the Bears game in their Lay-Z-Boy, sucking down Molsons and collecting pensions.
All on the county, state and federal dime. We are not so unlike American Airlines, the U.S. as a whole. When only 47% of Americans pay federal taxes, where are we headed in the long run? Into bankruptcy, just like American Airlines.
We better wake up and smell the coffee before it's too late.