Friday, November 21, 2008
The state of Pennsylvania, plus the cities of Wilkes-Barre and Scranton are coming to the aid of Boscov's department store chain. The three are part of a loan package that will help Boscov's emerge from chapter 11 bankruptcy protection.
Boscov's is a Pennsylvania company that employs Pennsylvania people, and if it goes under, at least a few Pennsylvania malls and downtowns would become ghost towns.
The financing plan leaves more questions than answers.
Wilkes-Barre can't afford a pool for its kids. Yet, the city has entered into the department store bail out business. Maybe it has some money left after losing that lawsuit for trampling on the first amendment rights of one of its citizens.
Can the money Scranton is kicking in be put to better use? I'll let you decide.
The Boscov's loan money does not come out of the Scranton or Wilkes-Barre operating budgets. It comes from a federal program. But, how did the money get to the federal government? The answer: your taxes.
Where do you draw the line? If "Fred's Widgets" is in danger of going out of business, will we see a similar charge of the big cash cavalry? I think not.
The cities have watched some good business go bankrupt and close. The state has done the same thing.
I read newspapers from around the state this morning. I didn't see evidence of Reading, Allentown, Bethlehem, Pottsville, Harrisburg or Philadelphia contributing money. Boscov's has stores in or near those cities. Why are Scranton and Wilkes-Barre the only ones involved?
At least, they're not investing in a movie like Lackawanna County did a few years ago.
A dangerous door has been opened here. The success rate of companies that had been in chapter 11 is not very good. Retail industry analyists predict Boscov's survival is a long shot. A lot of YOUR money is at stake. I pray it's been used wisely. There is no room for error.