Joe Biden recently tried to explain the meaning of “Bidenomics,” but the word salad offered by our half-coherent president on his economic philosophy was hard to decipher. Good thing you don’t have to listen to Sleepy Joe to understand the concept; you can just talk to some average Americans.
They see Bidenomics as something more sinister — taxes, spending, business-strangulating regulations; stuff that causes sticky inflation. Despite Fed rate hikes, it won’t go away and it makes seemingly strong top-line economic numbers feel recessionary. Biden polls terribly on economic issues for the simple reason that people hate the fact that they have to work harder to put food on the table and fill up their cars with gas.
Bidenomics is also about picking winners and losers in the economy — and putting possibly 30,000 average Americans out of work for the sake of cozying up with the president’s union buddies at the International Brotherhood of Teamsters. If you don’t believe me, consider the sorry spectacle surrounding a trucking company named Yellow, and its slow walk into oblivion because Sleepy Joe doesn’t want to piss off a union whose support he needs to shore up as the 2024 election approaches.
The Teamsters and its lefty president, Sean O’Brien, are in battle mode. They’re threatening to go to war with UPS, the unionized package-shipping giant, unless the company makes significant concessions for a new contract. That means 340,000 unionized workers who help deliver 20 million pieces a day could go on strike this month.
Talk about supply-chain problems.
O’Brien is waging a similar and, for my money, more dangerous battle with Yellow. O’Brien is now literally threatening Yellow with extinction by blocking a much-needed restructuring plan that doesn’t eliminate jobs, but does force union drivers to do stuff like load trucks. This trivial concession, the Teamsters are saying, will somehow cannibalize the company’s union workforce, which seems insane unless you consider the union’s and the White House’s broader aims.
Yellow has been around in one form or another since 1924. Its core business is known as the Less Than Truckload, or LTL, which involves transporting multiple smaller loads to different customers. It’s a niche business, about $60 billion in size. It’s also hyper-competitive and, without modernization, an impossible one to compete at.
This is one big reason why Yellow is on the verge of going out of business. It’s been losing money, lots of it. The company will likely be liquidated — tens of thousands of jobs up in smoke — in the coming weeks unless some deal is reached with the Teamsters to reduce costs and modernize its operations.
Yellow believes it can achieve these cost savings without layoffs but it needs the Teamsters to buy into the deal. Again, without a deal the company is toast. Don’t take the company’s word for it; the market is saying as much. Amid the impasse (Yellow just sued the Teamsters to pressure them to the table), shares trade at what’s known as distressed levels — 86 cents and probably heading lower.
Yellow has almost gone out of business several times over the years, most recently during the COVID lockdowns when it received a bailout from the Trump administration to stay afloat. Some people believe it’s just crying wolf to force the union to give back stuff like wage increases it extracted during previous dustups.
Proxy war
But the numbers suggest the company’s bankruptcy fears are real. Meanwhile, evidence is growing that O’Brien is using Yellow as a proxy in his war with a bigger, more lucrative foe, UPS. If he can prove to UPS he is willing to play hardball with Yellow — even killing the company — UPS might cave and agree to union demands on salary and more, industry observers say. A work stoppage won’t put UPS out of business, but the threat of a long strike from a proven, determined enemy would certainly be bad for business given the uncertain economy.
Insiders believe Sleepy Joe & Co. are partners in O’Brien’s plan. Consider: As a result of the Trump bailout, the Biden Treasury now holds about 30% of the company’s stock and it is owed hundreds of millions in debt. Yellow employs more unionized truckers than any company other than UPS, a key voting demo for Democrats.
Logically, it makes sense for Sleepy Joe and his peeps to tell the Teamsters they need to cut some deal. But after making some half-ass efforts at facilitating a truce, Yellow says it’s been radio silence from the White House on this matter.
It’s easy to see how the political types around Sleepy Joe are in cahoots with the Teamsters because they both have bigger union business to do by crushing the much larger foe in UPS.
It’s all very cynical if true — Yellow isn’t exactly small-fry. If it imploded, 30,000 jobs, 22,000 of which are unionized, would evaporate. These are good, blue-collar jobs, paying $39.95 an hour in salary and benefits, the company tells me.
If that does happen, you can chalk it up to Bidenomics — the one that Sleepy Joe won’t fess up to while stumbling through one of his half-coherent teleprompter-read speeches touting an economy that continues to strangle middle America.
Reps for the Teamsters and the Treasury didn’t return calls for comment.