This week U.S. investigators accused Full Tilt, the online gambling website, which was shut down during the black Friday raids of being a “Ponzi scheme.” While it is true that the Full Tilt management team lied to their customers and certainly mismanaged company funds, they are not a Ponzi scheme. Furthermore, it is important to remember that one poorly managed company should not condemn an entire industry just as one bad person is no reason to condemn an entire group of people.
Full Tilt promised players that their accounts were segregated from the money used to operate the business and pay investors and executives.
Unfortunately, it appears that the company lied about that fact. Yet, all was fine until the U.S. government passed the Unlawful Internet Gambling Enforcement Act. When payment processing companies stopped processing deposits from American players Full Tilt did not stop allowing Americans to play on their site. Money was never taken out of Americans’ accounts because no bank would process the payments they thought might be deemed illegal by U.S. authorities. Instead of banning U.S. customers Full Tilt essentially created “phantom money” for American players to gamble with. The money that the players lost or won was paid out by the deposits from players in other countries who payments were actually put into the Full Tilt accounts. It appears that Full Tilt executives hoped they’d eventually find a bank to make the transaction of the American players’ deposits. Unfortunately they ran out of time when the Department of Justice shut them down, caused a global panic among their players and a subsequent mass attempt to withdrawal accounts. Of course, that is when everyone learned that the company did not, as they said, have funds equal to player deposits on hand. Oops.
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Today’s National Review Online editorial looks at the so-called Employee Free Choice Act’s arbitration provision, which would subject newly unionized companies to having a contract imposed on them by a federally appointed arbitrator.
The worst provision — worse, in fact, than the card-check gambit itself — would allow the National Labor Relations Board to impose contracts on businesses that cannot come to an agreement with a union. If a union enters the picture and the owners of a business are unable to negotiate a satisfactory contract, then the NLRB is empowered to impose “binding arbitration,” meaning that the government will write the contract and force the firm to abide by its terms. This amounts to extortion.
EFCA’s card check provision, which would allow unions to circumvent secret ballots in organizing elections, met considerable public opposition. But organized labor is not giving up on binding arbitration, which would allow unions bosses to corral more companies into paying into some severely underfunded pension funds.
For more on EFCA’s binding arbitration provision, see here and here.
The Teamsters union is threatening a strike that could cripple the Minneapolis Star-Tribune. Reports AP:
The Teamsters union is threatening a strike it says would likely shut down the Star Tribune if the newspaper, which is in bankruptcy protection, is allowed to scrap its contract with unionized drivers.
Teamsters Local 638 filed its opposition Monday to the newspaper’s proposal to reject the contract.
The newspaper wants to pull out of what it calls a “critically unfunded” multi-employer pension plan that was costing it more than $1 million a year in plan contributions.
It’s no wonder the Teamsters are desperate. The pension plan in questions, the Teamsters Central States Pension Fund, has been in critical financial condition for a long time, and cannot afford to lose any payments. Rank-and-file union members should be asking how the fund got so underfunded in the first place. Union chiefs have been using pension funds as political weapons to advance agendas that add nothing to shareholder value.
For more on the politicization of pension funds, see here.
Your hosts Richard Morrison and Cord Blomquist bring you Episode 32 of the LibertyWeek podcast with special guest Sam Kazman and surprise guest co-host Jeremy Lott. We start by looking into the possible future of the Federal Communications Commission with nominee Julius Genachowski about to ascend to the chairmanship, and then take another stroll through the New Great Depression with high-level financial talks between unpopular British Prime Minister Gordon Brown and über-popular President Barack Obama. Oregonian brewers fight a proposed fifteen cents a pint tax in Beer News, and the Lady Madoff tries to stash away tens of millions from the feds in this edition of Scandal Watch. We hit our stride with an interview with CEI General Counsel Sam Kazman and his tales of the icy global warming rally staged earlier this week here in Washington, D.C. Finally, a little belt-tightening Olympic News from the USOC.
Listen here!
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