People getting nervous about Barack Obama’s plans to rescue the financial system got a kernel of good news they probably did not recognize. Ron Bloom of the United Steelworkers Union, a brainy veteran of investment banking, has been asked to join the insiders–advising Treasury officials on the auto industry bailout. If Geithner and Summers will listen to Bloom on that and other matters, he might steer them away from disastrous errors.
Ron Bloom has the sophistication of a Wall Street financier, but the head and heart of a labor guy. He knows how to “run the numbers” and do deals, techniques he learned years ago at Lazard Frères. When he left the world of capital, however, he went to work for organized labor. Bloom steers capital strategies for the steelworkers and advises Leo Gerard, the union’s heads-up president. The steelworkers have been in the vanguard of unions aggressively using their financial power–the invested capital of pension funds–to force reform and worker-friendly policies on the corporate world. These are always tough fights. It takes smart strategies and hard-nosed negotiating to prevail. Bloom and Gerard have developed a “rep” for both.
In the current financial fiasco, Bloom has been among the outsiders bombarding government with closely-reasoned critiques–not bleeding-heart laments, but accusations based on cool analysis. When now-departed Treasury Secretary Henry Paulson was handing out tens of billions to troubled banks and investment houses, Bloom ran the numbers and called him on it. The terms of these deals were so lopsided, he explained, they amounted to a great gift from the taxpayers. The Treasury ostensibly purchased bank stocks in the largest financial firms, but at prices deliberately inflated. We, the people, paid $125 billion for shares that a private investor could have purchased for $62.5 billion [See Paulson’s Swindle Revealed, October 29, 2008.] The steelworkers’ accusation was subsequently confirmed by others, though the precise numbers varied.
The public needs someone like this on the inside, sitting at the table with Treasury and White House officials, armed with a calculator and an independent mind. Let’s hope they listen to Bloom. Let’s hope they don’t toss him out of the room.