Ron Amundson’s Political Blog

AFP: Laid-off workers furious as bank pulls Chicago plant’s credit.

Federal law mandates that workers get paid for unused vacation time and are either given 60 days notice of a mass layoff or paid for that time.

But company officials said they could not make those payments because the bank was “basically controlling all expenditures at this point… and was not allowing it,” said United Electrical union representative Leah Fried.

“There’s a whole other level of shamefulness given the bailout (of financial institutions) and that Bank of America didn’t extend credit as they were supposed to,” Fried told AFP.

This is a sad deal indeed, makes me almost wonder if BoA will add insult to injury by snagging the payroll taxes due as well. That could leave some poor employee on the hook for them personally. Of course its likely they will file bankruptcy, and a judge will force the hand of BoA anyhow, or at least hopefully that will be the case.

Sadly, this type of situation is likely to repeat many times over the upcoming months, as banks continue to play fast and loose with the TARP funds. Hopefully govt will take a Biblical approach, and clawback the TARP funds, followed by throwing execs in prison left and right, but I sort of doubt that will happen. Banks should have been allowed to fail, others would have stepped up to the plate once asset valuations were made known in bankruptcy, but alas, thats water over the dam at this time. Things will likely continue to spiral downhill, and the point of no return is fast approaching, or perhaps it has already passed, only time will tell.

The good thing is, folks are getting to see real valuations, and real trust. The days of Citi doing well, and Paulson saying things are working have long passed. In a little while, there will be so little trust in institutions, companies and employees will start utilizing historical practices, and TARP funds or not, the US will rebuild based upon a real economy, and real value commerce. Its whats truely needed for long term productivity and sustainability. The only question is how long it will take to get there.