The Breakfast Club: Finance capital and Labor officials

Ross will pick up Northern real cheap

Wilbur Ross is one of those parasitic individuals who have accumulated billions of dollars off the backs of working people.  He is a Private Equity investor with his own firm.  He describes himself as, “A guy who likes to run in to burning buildings.”  He uses this term as he is what the capitalist class calls a “bottom feeder”, picking up the remains of destroyed companies. He is a “vulture, writes Bloomberg Business Week, “albeit, a well dressed one”.

The difference between Ross, and firefighters, or regular human beings running in to a burning building to save the residents, is that Ross would run in to pick the pockets of the dead or those incapacitated by smoke inhalation.  In the aftermath of the 2007 crash and subsequent bailout by workers and the middle class, Ross, and those like him look for opportunities to make some money out of the ashes and destroyed lives of a bankrupt economic system.

Ross is worth some $2 billion, stolen from workers in the course of his activities. Much of this is due to his contacts of course.  It’s not what you know but who you know as they say and Ross, like all of them, takes that to heart.  Him and another waster, Richard Branson of Virgin Airways fame, have bought Northern Rock, the failed British bank that was nationalized by the government.  His class comrades in the British Conservative Party have offered him a great deal enabling him to buy the bank very cheaply and at a loss to the British government. But hey, it’s taxpayers money so what the hell.

Ross has scooped up some good deals in the smoldering ashes of the Irish economy that was once the pride of the capitalist world, the Celtic Tiger. With four other coupon clippers Ross bought a 35% stake in the Bank of Ireland at 36% of book value.  Ross considers this a “steal”.   Ross just loves Ireland and “Applauds its citizens for supporting the austerity without taking to the streets.”, adds Business Week. “There have been no riots, no picketing, no car burning, no nothing.” Says an ecstatic Ross.

Ross made a lot of money, some $2 billion buying up steel producers in the recession that followed the 2000 tech bubble bust.  Ross bought Bethlehem Steel that went in to bankruptcy.  As an aside, the Bureau of Labor Statistics points out that “Over the past 25-30 years, steel producers have, in some cases, reduced the number of work-hours required to produce a ton of steel by 90 percent.” This is an incredible increase in the productivity of Labor which shows how easily it would be to reduce the working hours were those of us that do the work actually in control of the Labor process and the collective owners of the means of production.

This time it was not friends in a British capitalist party that helped him out but the trade Union leadership who are the agents of the capitalist class in the workers’ organizations.  Ross was able to “snatch up“ the beleaguered steel companies and able to cut costs “by working closely with union leaders.” Says Business Week.  Ross, “Had an open mind…he recognized that workers had more to contribute than just their backs and arms”, says Leo Gerard, the international president of the United Steelworkers. At the time of Ross' venture in to the steel industry, Gerard said of him that “Wilbur and his people actually cared about what we had to say” (Business Week, 22 December 2003). The chairman of Ross’ firm pocketed $300 million.

After the Great Recession of 2007 Ross and other coupon clippers went after failed US banks with the help this time of their political representatives in Washington.  They bought BankUnited which had been taken over by the government and got a great deal.  The taxpayer picked up 80% of the bank’s losses. This was almost too good to be true and Ross and others “were scooping up banks taking advantage of the FDIC’s safeguards” says BW.  But the hatred of the bankers in the aftermath of the crash was too intense and as the pressure mounted, politicians had to take some steps to curb their rapacious appetite for thievery. 

They threw a bone to the taxpayer in the form of new FDIC rules requiring that buyout firms like Ross’s or the Carlyle Group that invested in banks keep them for at least three years before flipping them as well as requiring them to maintain what Business Week refers to as “profit crimping” amounts of capital. They do not like any restriction on their ability to move capital at will.  All this meant was that Ross and the others went round scooping up failed banks quicker than the FDIC could.

Through his close relationship with the Union hierarchy Ross invested money in Amalgamated Bank which is Union owned.  Even the staff at Amalgamated is Union. According to Business Week, Amalgamated and other small banks have increased their business as workers, disgusted with the big banks and their role in the crash and as recipients of the bailout, have pulled their money out in favor of the little guys. Amalgamated has become known as the guardian of the deposits of Occupy Wall Street apparently and that doesn’t bother Ross as servicing the OWS crowd brings an increase in customers with “no marketing” says the banks manager.

The Labor leadership at the highest levels have become fully integrated with Ross and the lords of finance capital.  With the ongoing crisis of capitalism there is little room for them to maneuver, they can’t pretend anymore.  They cooperate openly with the employers in their efforts to drive down the wages and conditions of US workers in order to help US capitalists compete in the global marketplace.

Edward Grebow, the president of the Union owned Bank welcomed Ross as the bank’s savior.  “Grebow knew Ross had good relationships with labor leaders representing steel and textile workers” says Business Week. 

Ross is proud of his record with the heads of organized Labor; “We never had a strike at any of our facilities” he says, adding, “For us there is nothing strange about having breakfast with a labor leader.  We do it all the time.” The top bourgeois and their breakfasts with the heads of organized Labor is a good investment for the Labor bureaucracy and the unelected rulers of society.

There’s our problem right there.  The crisis of the working class is a crisis of leadership as the Russian revolutionary leader Leon Trotsky once pointed out some 70 years ago.