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January 30, 2006

Airway Robbery

Ben Stein, in yesterday's NYT.

So here it is in a nutshell: employees are goaded into investing a big chunk of their wages and benefits in UAL stock. They lose that. Then they lose big parts of their pay and pensions. They become peons of UAL. Management gets $480 million, more or less. "Creative destruction?" Or looting?

Wait, Mr. Tilton and Mr. Bankruptcy Judge. The employees were the owners of UAL. They were the trustors, and Mr. Tilton and his pals were trustees for them. How were the trustors wiped out while the trustees, the fiduciaries, became fantastically rich? Is this the way capitalism is supposed to work? Trustors save up, and their agents just take their savings away from them?

Posted by tree hugging sister at January 30, 2006 07:38 AM

Comments

This is disgusting, disgraceful and appalling. The execs shouldn't get one red cent before the employee-shareholders see at least a large part of their equity restored.

Now then, however, like Enron, this should also serve as an object lesson to employees that whenever someone's offering you a sweetheart deal on your own company's stock, something odd and most likely dangerous is going on.

Posted by: Dave J at January 30, 2006 11:26 PM