Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. ASSA and Jet BlueThings may be relatively quiet on the D&S blog for the first week of 2009, as our busiest blogger (yours truly, D&S co-editor Chris Sturr) will be at the annual economics meetings, grandiosely named the Allied Social Sciences Association meetings (as if economists were the only social scientists!) in San Francisco.I am excited to be flying via JetBlue; since they are in the midst of a union drive, with an election coming up soon, maybe I can give the workers some moral support. If you are going to the ASSA meetings, stop by the ICAPE exhibit table (602(B), I think) to say hello--I will be there hawking D&S books. And stop by the panel I'll be speaking on, sponsored by the Union for Radical Political Economics. Info on the panel (note the august company I'll be in): Jan. 3, 12:30 pm Happy New Year! Contours of CrisisWe just posted a great web-only article by Shimshon Bichler and Jonathan Nitzan, co-authors of Capital as Power: A Study of Order and Creorder, RIPE series in Global Political Economy (London and New York: Routledge, forthcoming 2009).Read the article here. Labels: financial crisis, Jonathan Nitzan, Shimshon Bichler 3M CEO on Plant ClosingsThis is via Doug Henwood at lbo-talk, posted under the heading "Capitalist Thought." He says he doesn't know the origin of it, but that it's from a reliable source.
Labels: 3M, closures and layoffs, Doug Henwood, Left Business Observer Left Economics Education Gets a NodEnvironmental activist Tim DeChristopher was in the news (and under arrest) last week after he disrupted a Bureau of Land Management auction of oil and gas leases on large tracts in southern Utah -- by walking into the auction and bidding on multiple leases. He won some leases, of course with no intention of paying up, and succeeded in bidding up the price on others.DeChristopher was interviewed on Democracy Now! on December 22. Turns out he is an econ major at the University of Utah, which is home to one of the very few economics departments in the United States with a significant heterodox/left presence. DeChristopher discussed the importance of his econ courses: The professors, especially, have been really supportive and have joined my team so far. And, you know, they kind of did their job beforehand. They kind of did their job in getting me ready for this and committing me to hold true to my values and in teaching me what was going on. In fact, the final exam that I took on Friday morning, one of the questions was about this oil sale and about, if only the oil companies were bidding on this land, are they actually going to be paying the real price for the production of oil? And, of course, the answer that the professor was expecting is no, they're not, because there's a lot of external costs that all of us have to pay for the production of oil that aren't included in those. So they did their part ahead of time in putting me where I needed to be. (Find out about other left and heterodox economics departments here.) Labels: Democracy Now, economics education, heterodox economics, University of Utah Economics of Immigrant Detention in R.I.This is a pretty horrifying piece from Saturday's Times--excellent reporting. We covered the Rhode Island ICE raids mentioned in the article in ICE Descends on Rhode Island, and our January/February issue will include a feature article by Tom Barry on the economics of immigrant detention.Leaning on Jail, City of Immigrants Fills Cells With Its Own By NINA BERNSTEIN | December 27, 2008 CENTRAL FALLS, R.I.—Few in this threadbare little mill town gave much thought to the Donald W. Wyatt Detention Facility, the maximum-security jail beside the public ball fields at the edge of town. Even when it expanded and added barbed wire, Wyatt was just the backdrop for Little League games, its name stitched on the caps of the team it sponsored. Then people began to disappear: the leader of a prayer group at St. Matthew's Roman Catholic Church; the father of a second grader at the public charter school; a woman who mopped floors in a Providence courthouse. After days of searching, their families found them locked up inside Wyatt—only blocks from home, but in a separate world. In this mostly Latino city, hardly anyone had realized that in addition to detaining the accused drug dealers and mobsters everyone heard about, the jail held hundreds of people charged with no crime—people caught in the nation's crackdown on illegal immigration. Fewer still knew that Wyatt was a portal into an expanding network of other jails, bigger and more remote, all propelling detainees toward deportation with little chance to protest. If anything, the people of Central Falls saw Wyatt as the economic engine that city fathers had promised, a steady source of jobs and federal money to pay for services like police and fire protection. Even that, it turns out, was an illusion. Wyatt offers a rare look into the fastest-growing, least-examined type of incarceration in America, an industry that detains half a million people a year, up from a few thousand just 15 years ago. The system operates without the rules that protect criminal suspects, and has grown up with little oversight, often in the backyards of communities desperate for any source of money and work. Last spring, The New York Times set out to examine this small city of 19,000 and its big detention center as a microcosm of the nation's new relationship with immigration detention, which is now sweeping up not just recent border-jumpers and convicted felons but foreign-born residents with strong ties to places like Central Falls. Wyatt, nationally accredited, clean and modern, seemed like one of the better jails in the system, a patchwork of county lockups, private prisons and federal detention centers where government investigations and the news media have recently documented substandard, sometimes lethal, conditions. But last summer, a detainee died in Wyatt's custody. Immigration authorities investigating the death removed all immigration detainees this month—along with the $101.76 a day the federal government paid the jail for each one. In Central Falls, where many families have members without papers, a state campaign against illegal immigrants spread fear that also took a toll: People went into hiding and businesses lost Latino customers in droves. Slowly, the city awoke to its role in the detention system, and to the pitfalls of the bargain it had struck. Read the rest of the article. Labels: ICE raids, immigrant detention, immigrants, immigration WaMu ReckoningThis is from a series from the New York Times called "The Reckoning" exploring the causes of the financial crisis. Gretchen Morgenson continues to be impressive in her coverage of the crisis.The opening anecdote of the article and the idea that WaMu was "all about saying yes" is interesting: in the new Jim Carrey vehicle, The Yes Man (the reviews have been tepid), Carrey plays a loan officer. My understanding is that some kind of spell is placed on him that forces him to say "yes" to any request. He essentially became a pre-meltdown mortgage broker. Saying Yes, WaMu Built Empire on Shaky Loans By PETER S. GOODMAN and GRETCHEN MORGENSON | December 27, 2008 "We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe's-Home Depot did to their industry. And I think if we've done our job, five years from now you're not going to call us a bank."SAN DIEGO — As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers'. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes. Yet even by WaMu's relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer. Mr. Parsons could not verify the singer's income, so he had him photographed in front of his home dressed in his mariachi outfit. The photo went into a WaMu file. Approved. Read the rest of the article. Labels: financial crisis, housing bubble, mortgage meltdown, Washington Mutual Rebuild the Economy: Invest in PeopleThe New York Times published my letter below December 26, 2008. Meanwhile, Mother Jones has just published (not yet online) a first class piece by David Cay Johnston, "Fiscal Therapy." He details how we can rebuild the economy without increasing the deficit by a dime, simply by reversing the great tax and subsidy machine that pumps wealth from the poor and middle class to the rich. "Louis Uchitelle is absolutely correct that President-elect Barack Obama’s spending plan may fail—or worse, backfire ("Maybe It Can't: A Trap in Obama’s Spending Plan," Week in Review, Dec. 21). Spending on infrastructure, even green infrastructure, is a relatively slow, low-return investment. To rebuild the economy right now, we need fast, high-return investment, public and private. "First, we need public investment in people: health care to keep us productive; education to train us for new jobs or upgrade basic skills; and extended unemployment insurance. "Second, we must unburden the sector that provides the most employment and the highest and fastest return on investment: small business. "Here is how: Rebate the payroll (Social Security) tax on low-wage earners. This tax has become a major killer of small-business jobs. Then reduce deficit spending. Treasury runs a deficit by selling bonds; the more that banks can stock up on safe government bonds, the more they will cut off relatively risky (but high-return) small business. But how to reduce deficit spending? Start by killing military pork." Polly Cleveland Labels: deficit, economic crisis, economic stimulus, financial crisis, recession Judge Finds Starbucks Guilty of Union-BustingSome good news: an NLRB victory for Starbucks workers, organizing with the Industrial Workers of the World, aka the Wobblies. The baristas at the Starbucks on Winter St. seemed unaware when a couple of us stopped in for eggnog lattes, but I am considering heading back to post a copy of this article on their "community" bulletin board. This was also reported in today's New York Times, here.The IWW Scores Big Victory Over Global Coffee Chain New York, NY (Dec. 23, 2008)—Following a lengthy trial here last year, a National Labor Relations Board judge has found Starbucks guilty of extensive violations of federal labor law in its bid to counter the IWW Starbucks Workers Union. In an 88-page decision, Judge Mindy E. Landow found, among other things, that Starbucks maintained multiple policies which interfered with workers' right to communicate about the union and about working conditions; terminated three workers in retaliation for union activity; and repeatedly discriminated against union supporters. The decision comes despite a 2006 New York settlement in which Starbucks pledged to stop illegal anti-union activities and mirrors federal government action against the company for its conduct toward baristas in Minnesota and Michigan. "The judge's decision coupled with previous government findings expose Starbucks for what it is—a union-busting corporation that will go to staggering lengths to interfere with the right to freedom of association," said Daniel Gross, a barista and member of the IWW Starbucks Workers Union found to have been unlawfully terminated by the coffee giant. "In these trying economic times of mass layoffs and slashed work hours, it's more important than ever that Starbucks and every corporation is confronted with a social movement that insists on the right to an independent voice on the job." The Board decision is the latest blow against a company that has experienced a stunning fall from grace. From a precipitous decrease in customer demand to its increasingly tattered socially responsible image, the myriad of challenges facing Starbucks has resulted in the company losing over half its value from just a year ago. The decision also represents a significant victory for the IWW Starbucks Workers Union which continues to grow across the country with baristas taking creative and determined actions to improve the security of work hours and win respect on the job. Starbucks faces another Labor Board trial next month in Grand Rapids, Michigan over illegal union-busting. "For the first time, a judge has confirmed the existence of a nationally coordinated anti-union operation at Starbucks," said Stuart Lichten, the attorney for the IWW Starbucks Workers Union in the case. "This decision conclusively establishes Starbucks' animosity toward labor organizing." The union is confident that Judge Landow's copiously documented and well-reasoned 88-page decision will be upheld by the National Labor Relations Board in Washington, D.C. should Starbucks appeal. The victory is sure to be gratifying for the union's international supporters who conducted spirited global days of action in defense of Isis Saenz, Joe Agins, Jr., and Daniel Gross after their terminations which the Board has now found to be unlawful. The National Labor Relations Board attorneys on the case were Burt Pearlstone and Audrey Eveillard. The union's attorney Stuart Lichten is a partner at Schwartz, Lichten & Bright, a prominent New York City labor law firm. Starbucks was represented by union-avoidance lawyers Daniel Nash, Stacey Eisenstein, and Nicole Morgan at corporate firm Akin Gump. The IWW Starbucks Workers Union is an organization of almost 300 current and former Starbucks employees united for a living wage, secure work hours, and respect on the job. Founded in 2004, the union uses direct action, litigation, and advocacy to both make systemic improvements at Starbucks and take on the company over unfair treatment of individual baristas. The Industrial Workers of the World (iww.org) is a rank and file labor union dedicated to democracy in the workplace and global solidarity. Labels: IWW, National Labor Relations Board, Starbucks, Starbucks Union, unions FT Falls Down on IndyMac FraudThe Financial Times had a rather pithy piece (see below in full) on the fraud at IndyMac, reported in yesterday's New York Times (and re-reported here).A reminder about what this story is all about: apparently, last May the western regional director/senior regular from the Office of Thrift Supervision, Darrel Dochow, allowed IndyMac "to record $18m of a $50m capital infusion from its holding company as first-quarter capital," which made it possible for the bank to retain its "well-capitalized" status. IndyMac failed in July. What is most scandalous about this is that Dochow is a veteran of the S&L crisis, and actually served time for the role he played. Here's what the NYT said yesterday: Mr. Dochow played a central role in the savings-and-loan scandal of the 1980s, overriding a recommendation by federal bank examiners in San Francisco to seize Lincoln Savings, the giant savings and loan owned by Charles Keating. Lincoln became one of the biggest institutions to collapse. Mr. Keating served four and a half years in prison before his fraud and racketeering convictions were overturned. He later pleaded guilty to more limited charges, and was sentenced to the time already served.Um, how did this guy get a job as a banking regulator again? If you got your information about all this from the Financial Times, you wouldn't know a thing about Dochow's back-story. And the FT even appears to downplay the fraud: "Bankers say the practice of backdating capital has been relatively common, but backdating is typically limited to a few days or weeks, not six, as in IndyMac's case." At least they (like the NYT) included the nice quote from Republican Charles Grassley: "The role of the Office of Thrift Supervision, as the name says, is to supervise these banks, not conspire with them." Here is the whole article: IndyMac allowed to backdate its capital Labels: Charles Grassley, Darrel W. Dochow, Financial Times, fraud, IndyMac, New York Times, Office of Thrift Supervision Iceland Gives Christmas Frosty ReceptionA grim story from today's Financial Times (posted to their website yesterday). Best quote, from the end of the article: "Sitting in an old fisherman's cafe by the port, Orn Svavarsson shakes with rage. He sold his health food business three years ago when he was 54 and, like many of his countrymen, put the money into the stock market. It has been wiped out. "The Icelandic people are too lazy, he says. "Why don’t we go to the airport and block it until we get answers? For the first time in my life I have sympathy with the Bolsheviks; with the French revolutionaries who put up the guillotine."By Sarah O'Connor in Reykjavik | Published: December 23 2008 20:14 On the ground floor of one of Reykjavik's gleaming office buildings, a well-dressed crowd shuffles and waits. Tinny Christmas songs blare from a small hi-fi by the door. As numbers are called out one by one, people file into the next room where rudimentary shelves are filled with free tins, fish, clothes, books and wrapping paper. Some 2,500 people have applied for Christmas relief packages from Iceland's three main charities in recent weeks, a 30 per cent rise on last year, as growing numbers of the middle class lose their jobs in the wake of Iceland's banking collapse. Jon Omar Gunnarsson, a pastor at Hallgrimskirkja, Reykjavik's main church, says applications to the Church Aid group have doubled. "It's mostly middle class people who have all these obligations, mortgages that are going up, many are losing their jobs ... they just can't carry the burden alone," he says. Iceland is still reverberating after its economy crumpled in October in the face of global financial turmoil. Inflation and interest rates are both at 18 per cent as the country struggles to shore up its currency, which plunged after its three banks collapsed. It has borrowed $10bn from the International Monetary Fund and others which it needs to repay, meaning taxes are rising even as recession deepens. Read the rest of the article. Labels: Christmas, financial crisis, Iceland, IMF, recession Feldstein: Let the Stimulus Be MilitaryMartin Feldstein, econ professor at Harvard and chairman of the Council of Economic Advisers under President Reagan, reveals in this op-ed from yesterday's WSJ that if he has to be a Keynesian he insists on being a military Keynesian. We are not surprised.Two noteworthy bits: Marty says that if there should be an increase in DoD spending, "The same applies to the Department of Homeland Security, to the FBI, and to other parts of the national intelligence community." Oh goody. And he actually uses the term "surge" to describe what he is proposing. Defense Spending Would Be Great Stimulus All three service branches are in need of upgrade and repair. By MARTIN FELDSTEIN | OPINION | DECEMBER 23, 2008, 10:04 P.M. ET The Department of Defense is preparing budget cuts in response to the decline in national income. The DOD budgeteers and their counterparts in the White House Office of Management and Budget apparently reason that a smaller GDP requires belt-tightening by everyone. That logic is exactly backwards. As President-elect Barack Obama and his economic advisers recognize, countering a deep economic recession requires an increase in government spending to offset the sharp decline in consumer outlays and business investment that is now under way. Without that rise in government spending, the economic downturn would be deeper and longer. Although tax cuts for individuals and businesses can help, government spending will have to do the heavy lifting. That's why the Obama team will propose a package of about $300 billion a year in additional federal government outlays and grants to states and local governments. A temporary rise in DOD spending on supplies, equipment and manpower should be a significant part of that increase in overall government outlays. The same applies to the Department of Homeland Security, to the FBI, and to other parts of the national intelligence community. The increase in government spending needs to be a short-term surge with greater outlays in 2009 and 2010 but then tailing off sharply in 2011 when the economy should be almost back to its prerecession level of activity. Buying military supplies and equipment, including a variety of off-the-shelf dual use items, can easily fit this surge pattern. For the military, the increased spending will require an expanded supplemental budget for 2009 and an increased budget for 2010. A 10% increase in defense outlays for procurement and for research would contribute about $20 billion a year to the overall stimulus budget. A 5% rise in spending on operations and maintenance would add an additional $10 billion. That spending could create about 300,000 additional jobs. And raising the military's annual recruitment goal by 15% would provide jobs for an additional 30,000 young men and women in the first year. An important challenge for those who are designing the overall stimulus package is to avoid wasteful spending. One way to achieve that is to do things during the period of the spending surge that must eventually be done anyway. It is better to do them now when there is excess capacity in the economy than to wait and do them later. Read the rest of the article. Labels: Department of Defense, economic stimulus, Keynesianism, Martin Feldstein, military Keynesianism, military spending, Wall Street Journal O. to Create Loopholes for Venture CapitalistsFrom our friends at the American Small Business League. We posted an earlier press release from them about Obama's appointment of Karen Gordon Mills as head of the Small Business Administration. The worry was that this would signal that the incoming administration would continue the practice of past administrations of channeling contracts set aside for small businesses to larger firms. This proposed change in federal contracting law indicates that those worries were justified.Obama To Create Loopholes for Venture Capitalists Petaluma, Calif. - President-elect Barack Obama is preparing to create significant changes in federal contracting law that will allow some of the nation's wealthiest investors to receive federal contracts earmarked for small businesses. Under the banner of "increasing access to capital" for small businesses, the policies will allow firms controlled by individual venture capitalist and even large venture capital firms to participate in federal small business contracting programs. The Obama Administration's new pro-venture capital policy could virtually repeal the Small Business Act for legitimate American small businesses by modifying the longstanding federal definition of a small business as "independently owned." Under the proposed Obama Administration policy, "independently owned" will be changed to include firms that are not independently owned, but are actually controlled by wealthy investors and possibly some of the nation's largest venture capital firms. Opponents of the new policy say it appears to be designed more to increase wealthy venture capitalist access to billions of dollars in federal small business contracts as opposed to "increasing access to capital" for legitimate small businesses. If the policy is successfully implemented it could force the average American small business to compete head-to-head with firms controlled by wealthy investors for even the smallest government orders for goods and services. Thousands of middle class jobs could be lost as billions of dollars in federal small business contracts are diverted to a small number of venture capitalist controlled firms. The plan will likely include a provision that would exempt the venture capitalist owned firms from capital gains taxes. The Obama-Biden Transition Team website, www.change.gov mentions such a proposal. The appointment of multi-millionaire venture capitalist Karen Mills to head the Small Business Administration (SBA) is the latest indication that President-elect Obama is moving forward with his plans to divert government small business contracts to venture capital controlled firms. The National Venture Capital Association (NVCA) and its members have been lobbying for the new loophole in federal contracting law for more than two years. The NVCA and its members have contributed millions of dollars to Obama and key Democratic leaders in Congress such as Nancy Pelosi, John Kerry, Joe Lieberman and Hillary Clinton. "The easiest and quickest way to stimulate our nation's failing economy is for the government to spend infrastructure funds with America's 27 million small businesses that create all the new jobs and employ most Americans," American Small Business League President Lloyd Chapman said. "This new Obama policy will do just the opposite and will push our economy closer to a depression by diverting billions of dollars in federal funds away from middle class America and into the hands of small number of wealthy investors that backed Obama." Labels: American Small Business League, Barack Obama, National Venture Capital Association, Small Business Administration, small businesses Bill Black on IndyMac/Thrift FraudThe article on the fraud at IndyMac in the business section of today's New York Times quotes UMKC professor and D&S author William K. Black. (Black wrote the cover story for our November/December 2007 issue on banking deregulation.) If you haven't been briefed on the situation with IndyMac yet, here are the basics: an official from the Office of Thrift Supervision, Darrel W. Dochow (he is the west coast director), "allowed IndyMac's parent company to backdate an $18 million contribution to preserve its status as a 'well-capitalized' institution," according to the Times. In particular, he allowed IndyMac "to receive $18 million from its parent company on May 9 but to book the money as having arrived on March 31." IndyMac collapsed in July.Dochow apparently played a role in the S&L scandal of the 1980s. Black was was deputy director of the Federal Savings and Loan Insurance Corporation during that crisis. Here's what he told the Times: William K. Black, a senior bank regulator during the savings and loan crisis and the author of "The Best Way to Rob a Bank is to Own One," said Mr. Dochow’s lenience highlighted the longstanding unwillingness of the Office of Thrift Supervision to take charge. The Times has found Black in its Roladex several times in recent months, most notably in the incendiary article back in February about John McCain's dalliances with a lobbyist (but as we pointed out at the time, the real meat of the article was about McCain's role in the S&L scandal; the Times quoted Black basically saying that McCain shouldn't even still be a senator). In today's article, though, the Times mentions the title of Black's book--The Best Way to Rob a Bank Is to Own One. Read the rest of the article. Labels: bank closures, Darrel W. Dochow, financial crisis, IndyMac, Office of Thrift Supervision, savings and loan crisis, William K. Black Toyota Profits Hit PotholeToyota expects to report its first operating loss in 70 years. The company announced that it will likely post a loss of $1.7 billion for the fiscal year ending March 31. For the previous year, the company reported an operating profit of $28 billion.The company expects next year's outlook to be even grimmer. November U.S. sales plunged 33.9%, still better than GM's 41% decline. The company has seen its sales plummet not only in the United States, its largest market, but also in China and India. With little debt and $18.5 billion in reserves, Toyota is in much better shape than its American rivals. However, the company's decline, as well as those of other carmakers and electronics companies, has shaken Japan's heavily export-dependent economy. Japan's finance minister reported on Monday that the country's exports 26.7% in November, the largest recorded drop since 1980 when statistics were first collected. More from the New York Times here. Labels: auto industry, GM, Toyota National Call-In Day for HR 676From Healthcare-NOW!:Give America a Gift: Single-Payer National Healthcare Dear Healthcare-NOW! Supporter, This is your reminder that Monday, December 22nd, is the National Call-In Day to Support Single-Payer Healthcare, HR 676! With your help for just a few minutes, we can get the message through to Congress that we want to remove corporate greed from our healthcare system and provide a truly equitable, guaranteed healthcare program for everyone. Every call counts! Call to guarantee our representatives hear loud and clear from their constituents to get on board with HR 676: single-payer national health care Here's how: 1) Find out if your representative supports HR 676. 2) Fax or call your federal Representative.* If you don't know your congresspersons' district office phone number, please follow these five easy steps: 1. Go to www.VoteSmart.org. 2. Enter your ZIP code in the top left of the page. 3. Click on a congressperson. 4. Click on "Complete Contact Information" under their photo. 5. Their district office phone number and address are under their photo. 3) Ask for the Chief of Staff or Health Care Aide to leave your message and use these scripts to help shape the message of your call. HR676 Co-sponsor call: Hi, my name is ----------------. I am calling to thank Representative ___________________ for his/her support of HR676, John Conyers' National Health Insurance Act. Rep. Conyers plans to reintroduce HR676 shortly after the Congress is back in session in January, but I want to reaffirm my support for HR676, single payer healthcare legislation and ask Rep. ____________________ to do the same by signing on again as a co-sponsor working for true reform of this terrible healthcare system. I say no to Massachusetts style health care, and yes to single payer health care as proposed in HR 676. Single payer gives more freedom of choice and access to quality care for patients and it is the most economical way to make sure we all can access care when we need it. Now is the time to give the gift of healthcare for all to every American. Happy holidays and thank you. If you have any questions about single payer or about me, please call me at __________________. Non-co-sponsors call: Hi, my name is ----------------. I am calling to urge Representative ___________________ to support of HR676, John Conyers' National Health Insurance Act. Rep. Conyers plans to reintroduce HR676 shortly after the Congress is back in session in January, and I want to reaffirm my support for HR676, single payer healthcare legislation and ask Rep. ____________________ to do the same by signing on as a co-sponsor and working for true reform of this terrible healthcare system. I say no to Massachusetts style health care, and yes to single payer health care as proposed in HR 676. Single payer gives more freedom of choice and access to quality care for patients and it is the most economical way to make sure we all can access care when we need it. Now is the time to give the gift of healthcare for all to every American. Happy holidays and thank you. If you have any questions about single payer or about me, please call me at __________________. 4) Contact Senator Kennedy at his in-district office. Phone: 617-565-3170 / Fax: 617-565-3183. Senator Kennedy is proposing health care legislation early next year, and he needs to know that we want it to be single-payer. Message to Senator Kennedy: Hi, my name is ----------------. I am calling to urge Senator Kennedy to make his proposed legislation for health care reform single-payer. The current reform in Massachusetts is leaving thousands uninsured and is far too expensive to be sustained because it leaves profit in our health care system. In the most recent election, local ballot initiatives supporting single payer and opposing individual mandates passed by landslide margins in all ten legislative districts where they appeared. With almost all precincts tallied, roughly 73 percent of 181,000 voters in the ten districts voted YES in support of a single-payer system. Say no to Massachusetts style health care, and yes to single payer health care as proposed in HR 676. Happy holidays and thank you. If you have any questions about single payer or about me, please call me at __________________. Please forward this message widely and let us know how your calls went. Thanks for making single-payer national healthcare a priority this holiday season. In peace and health, National Staff Healthcare-NOW! P.S. Healthcare-NOW! survives on the generosity of our supporters. Please consider making a donation to support national efforts to pass HR 676. *Emails can also be sent in support of HR 676, but calls and faxes are considered to be the most effective way to get the word out to elected officials today. Labels: health care, Healthcare NOW, Physicians for a National Health Program, single-payer Stampede for 'Bush shoe' creates 100 new jobsOk--this is a bit outside of the mission of our blog (except, uh, job-creation?), but I couldn't resist. From the Guardian; hat-tip to Lois Ahrens.Robert Tait in Istanbul | Monday 22 December 2008 Labels: george bush, jobs, Muntazar al-Zaidi, shoe production, Turkey More Working Parents Can't Afford DaycareA growing number of working parents are unable to pay for daycare, according to a story in the Washington Post. Although the article doesn't specify hard numbers, it that code enforcers, social workers, and others are finding more young kids left home alone. Daycare centers that usually have long waiting lists are cutting staff and scrambling to fill open slots.Daycare costs for preschoolers often rival rent costs, and subsidized slots are only available for families with extremely low income, if they can find providers who are willing to take the vouchers at all. Unlike other industrialized countries, the US does not provide national childcare for pre-school age children. Federal law only mandates that employers provide 12 weeks of unpaid leave during any year. Penn State economist Robert Drago takes an in-depth and comprehensive look at this and other work/life issues in his book Striking a Balance: Work, Family, Life. Labels: childcare, economic crisis, Striking a Balance, work life balance $1.6 Billion of Bailout Went to Pay Top ExecsAccording to a study by the Associated Press, $1.6 billion of the federal bailout funds went into the pockets of top bank executives. Even institutions that have cut the salaries and bonuses of top corporate officers have awarded massive compensation packages, despite having logged billions of dollars in losses.Some highlights: The total amount given to 600 top executives of financial institutions that have received federal bailout money would have covered what many of the 116 banks received in taxpayer funds. Banks that received federal bailout money paid their executives an average of $2.6 million in salary, benefits, and bonuses. The top five executives of Goldman Sachs took home $242 million last year, including $54 million for CEO Lloyd Blankfein. The company has received $10 billion in taxpayer money, and has posted its first quarterly loss since going public in nine years ago. Reacting to public outrage over executive compensation, the executives have decided to forgo their bonuses this year, and live off a mere $600,000 salary (no word yet on any plans to refund last year's bonuses). The rest of the sad story can be found here. Labels: executive pay, Golden Parachutes, Goldman Sachs, TARP program, taxpayer ripoff Venture Capitalist at the SBAOne of the many press releases that crowd the D&S mailbox caught our eye today and seemed worth passing along. (For a detailed look at how large corporations have horned in on small business contracts, check out Christopher Moraff's piece "The Incredible Shrinking Company" from the Jan/Feb 2006 D&S. )Obama Appoints Venture Capital Executive to Head Small Business Administration Labels: American Small Business League, Barack Obama, private equity, venture capital Don't Worry About the DebtA great exchange between LBO Talk's Doug Henwood and Brian Doherty of Reason Magazine on whether we should be worried about the national debt:Why does Washington really need to pay down its overall debt? When does any nonhuman entity ever pay down its debt? Individuals do go through a life cycle of accumulating debts while young and reducing them with age (if circumstances cooperate, of course). But why should a corporation or especially a government, whose life spans are usually presumed to be infinite (not literally, but practically), ever pay down its debt? General Electric, one of the most solid of our large corporations despite recent wobbles, has a debt of almost $550 billion supported by annual revenues of $185 billion. GE's debt is equal to almost 300% of its revenues. Read the rest of Doug's comments, and Doherty's response, at the LA Times. Labels: Doug Henwood, Left Business Observer, national debt Andy Stern's 'Team America'This item is from seiuvoice.org, a reform group within SEIU. Hat-tip to Doug Henwood.December 17th, 2008 Andy Stern was featured this week on the NPR show Talk of the Nation. After refusing to answer several questions about SEIU's connection to the "pay-to-play" corruption scandal involving Illinois Gov. Rod Blagojevich, he spent the rest of the show advocating his vision of a "21st-century," more "American" form of unionism that makes the labor movement a subordinate partner to Corporate America. When confronted by an SEIU member's question about the secret backroom deals he's made with employers like Sodexho, Compass, and Aramark, Stern's defense was that "those workers are trying to find a way to have a partnership with their employer." In fact, most of those workers are completely unaware of Stern's partnership with their employer-one condition of a secret agreement that prohibits union staff from admitting to workers that the agreement exists. In his final comments, Stern admitted that he does not believe in the power of workers' collective action-specifically the right to strike-and that instead union members should rely on the political process to get the job done. "I don't think anymore that the power of unions comes from its ability to strike," he said. "I think it comes from its ability to participate in the political process and to change America in issues that we've been talking about, like health care." Stern's comments echo the position put forth in his book "A Country That Works," which emphasizes the need for labor to "partner" with Corporate America and identify ways that the union can "add value" to employers. This model flies in the face of the history of organized labor and other social justice movements, where collective action has played a pivotal role in making positive change for working people in our country. Just in the last few weeks workers at Republic Windows and Doors beat Bank of America with a sit-down strike, and over the past year healthcare workers in California have won standard setting contracts with the right to organize nonunion workers through worker-led strikes and action. Click here to listen to the show. Click here (and scroll down) to read the transcript. Labels: Andy Stern, SEIU, seiuvoice.org, strikes, unions Closures & Layoffs (Dec. 14-20)The weekly report from Mark Heschmeyer of the CoStar Group. See Mark's note below on looking elsewhere on the CoStar site for holiday cheer--we didn't find much (it is a real-estate site, after all). Actually, the estimate that there are only 116,000 layoffs reported so far for December makes the month look better than November, when there were 533,000 jobs lost. Then again, that was after they were revised upwards by 1/3, as December's numbers surely will be as well.Corporate Downsizings Outpace Expansions 4-to-1 High Job Losses Bode Ill for Commercial Real Estate Absorption By Mark Heschmeyer | December 18, 2008 If you're hoping for a dose of holiday cheer, you may want to skip this for another CoStar News item. This week, we tallied the job cuts announced so far this month and made some back-of-the-envelope estimates on the impact all the cuts could have on the real estate market. Corporations have announced more than 116,270 job cuts so far this month. Assuming each eliminated position represents an average per employee of 250 square feet across all commercial property types, the headcount reductions represent the potential vacancy of 29 million square feet of commercial space. In the same time frame, corporations have announced or transacted just 6.44 million gross square feet of major facility expansions or relocations. The continuing high pace of job losses likely spells big trouble for future absorption this quarter and further dims the outlook for office and industrial space absorption next year. What follows is a list of the major layoff and closure announcements the major corporations have announced since Dec. 1 through close of business Wednesday Dec. 17. Click here for the list. Labels: closures and layoffs, downsizing, jobs, Mark Heschmeyer, US employment Where Have All the Billions Gone?From the Inter-Press Service:
The rest of the article is here. Labels: bailout, Elizabeth Warren, financial crisis, TARP program, Treasury Department Dollar's Slump Erases Months Of GainsFrom today's Washington Post. Keep your eye out for the cover story in our January/February issue, which will address, among other things, whether the dollar will remain the world's reserve currency.By Anthony Faiola Washington Post Staff Writer |Thursday, December 18, 2008 The dollar yesterday staged one of its biggest one-day drops against the euro and fell to a 13-year low against the Japanese yen as near-zero interest rates and the Federal Reserve's plan to print vast sums of cash dilute the value of the greenback. The drops dramatically accelerated the dollar's reversal of fortune over the past three weeks after months of solid gains. The slide underscores the risks the Federal Reserve is taking to jump-start the U.S. economy through aggressive monetary policy. On Monday, the Fed cut its target for the federal funds rate, at which banks lend to each other, from 1 percent to a target range of 0 percent to 0.25 percent, and effectively vowed to print as much money as it needs to try to pull the United States from a worsening recession. While that policy may ultimately aid an economic recovery, it is robbing the dollar of value as investors anticipate less interest on their dollar-denominated investments and more bills in circulation, making each one worth a bit less. In response, investors are dumping the dollar and buying up other currencies. If the dollar's fall is unchecked, it could jeopardize the long-term faith of foreign investors in the value of the American currency and could cause foreign investors to dump U.S. stocks and other assets, whose value would be worth less in euros or yen. The Dow Jones industrial average fell 1.1 percent yesterday. Read the rest of the article. Labels: currencies, dollar, euro The End of Pensions?By Shamus Cooke | December 15, 2008Unless things change fast, human history will show that the phenomenon of "retirement" was limited to one generation. After World War II, when European and Japanese economies stood in tatters, American capitalism could fulfill "the American dream," since there was little foreign competition to speak of. For the first time ever, workers were promised that—after working thirty or so years—they would be able to securely retire. That was largely the case...for one generation. The second generation is having a devastating reality check. 2008 was supposed to be a watershed year for retirement: it was the first year that the baby-boomers turned 62, and the retirement frenzy was to begin (since people could begin to draw on their social security benefits). Early in the year, however, a study was conducted that found one-fourth of these boomers were delaying retirement (only the baby-boomers who were actually able to plan for retirement were studied). The economy has since nosedived, and many more retirements are being delayed. The unfortunate reality is that many who planned on retiring will work until the grave, joining the millions of other baby-boomers who never had such dreams. The experts are calling this the "perfect storm" for retirement. Everything that could go wrong is in fact going wrong. This storm, however, was not created by supernatural forces, but the coordinated effort of big-business and their puppet politicians. The deliberate destruction of the pension and its replacement by the 401(k) was, of course, a giant step towards attacking retirement; but now that the economic crisis has emerged, we're beginning to see just how ruinous the effects are. At the end of September, just as the crisis was beginning to gain steam, it was discovered that in the previous year the value of stocks in 401(k) accounts had fallen by nearly $2 trillion! Much more has been lost since then. This is especially devastating since almost one-third of 401(k) participants in their 60s had 80 percent of their money in stocks (pension funds have been similarly destroyed). The 401(k) was the scheme of the century. Corporations offloaded their "burdensome" pensions and used the combined forces of the media and politicians to sell the ruse to the public, to the great benefit of Wall Street. Workers were told that the boom-slump cycle was over, and that stocks were a sure thing. There were additional factors to invest in stocks: interest rates were so low that investing in bonds and other less-risky instruments offered only tiny returns; and since employers stopped contributing to retirement funds, a bigger return was required. More importantly, corporations have been driving down real wages since the seventies, allowing less money to be saved for retirement, creating a mood of desperation. Every "safe bet" for investing has been proven unsafe; the recession has left nothing untouched. After the dotcom bubble burst—taking with it millions of people's 401(k) savings—the housing market became the place to invest. Now the safest possible investment, too, has turned sour. For millions of people, the home they lived in was their nest egg, which they had planned to sell and move into a smaller place. No more. Rep. Robert Andrews (D-NJ), who chairs the House subcommittee on health, employment, labor and pensions, put it bluntly: "Some will have very little, some will have almost nothing, and some will have nothing when they retire". Of course, people who "have nothing" do not retire. This process is being accelerated by the newest trick of big business: declaring bankruptcy to destroy "pension obligations". These obligations apply with equal weight to workers already retired, many of whom are seeing their pensions slashed in half, forcing them out of retirement. Now even the threat of bankruptcy is constantly used in union contract negotiations to scare workers into concessions, since after achieving bankruptcy, labor agreements are torn up. The threat of closing the company's doors is a very effective form of intimidation. This phenomenon is at the center of the GM debate. The corporate politicians in congress cannot decide whether to appoint a "Car Tsar" to oversee the destruction of the autoworkers pensions, or use the proven method of bankruptcy. Not a day goes by that the corporate media doesn't join hands to assail the pension and health care benefits of the "spoiled" GM workers. The hypocrisy is sickening. This after the UAW had already agreed to the most shameful concessions in 2007. Although concessions are often made in the name of "job security," the result is that corporations become emboldened by such acts. Eventually, every benefit of workers that contradicts company profit will be targeted. The demand for concessions never stops, and soon the point arrives when the benefits of having a union become questioned, since dues money is not paid with concessions in mind. The autoworkers struggle is at the forefront of the pension battle nationwide, since their struggles in the 1930's originally paved the way for pensions. Equally important is the pension struggles emerging with public employees, the last stronghold of workers who receive them. Public employees will find their pensions under immense attack as the economic crisis intensifies, and government budgets are depleted. Fighting the corporate strategy of bankruptcy and business closures is an immediate need of working people. This tactic will increase in number as the crisis deepens and companies strive to "restore profitability" by drastically lowering wages. If a company attempts such a criminal act, the workers should demand a bailout for themselves; the government should take over the plant so that the workers can keep their jobs, such as was done for the banks. Management must be sacked and instead of a government bureaucrat, the workers themselves should run the business. To win this program, new levels of organizing and solidarity are needed, such as the example of the United Electrical Workers, who occupied their factory and organized in a brilliant fashion. They won a stunning victory by utilizing the methods of the original autoworkers struggles from the 1930's. If a fight is to be waged, it must be done seriously and with determination, uniting both retired and active workers. The UEW workers have shown the way forward for the labor movement, which can no longer rely on union concessions or the promises of Democratic politicians, but only their own collective strength. Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action. He can be reached at shamuscook-at-yahoo.com Labels: 401(k), bankruptcy, pensions, Republic Windows and Doors, retirement, Social Security, unions, United Electrical Workers Destroying What the UAW BuiltFrom yesterday's Washington Post:By Harold Meyerson Wednesday, December 17, 2008; A17 In 1949, a pamphlet was published that argued that the American auto industry should pursue a different direction. Titled "A Small Car Named Desire," the pamphlet suggested that Detroit not put all its bets on bigness, that a substantial share of American consumers would welcome smaller cars that cost less and burned fuel more efficiently. The pamphlet's author was the research department of the United Auto Workers. By the standards of the postwar UAW, there was nothing exceptional about "A Small Car Named Desire." In its glory days, under the leadership of Walter Reuther, the UAW was the most farsighted institution—not just the most farsighted union—in America. "We are the architects of America's future," Reuther told the delegates at the union's 1947 convention, where his supporters won control of what was already the nation's leading union. Even before he became UAW president, Reuther and a team of brilliant lieutenants would drive the Big Three's top executives crazy by producing a steady stream of proposals for management. In the immediate aftermath of Pearl Harbor, Reuther, then head of the union's General Motors division, came up with a detailed plan for converting auto plants to defense factories more quickly than the industry's leaders did. At the end of the war, he led a strike at GM with a set of demands that included putting union and public representatives on GM's board. That proved to be a bridge too far. Instead, by the early 1950s, the UAW had secured a number of contractual innovations—annual cost-of-living adjustments, for instance—that set a pattern for the rest of American industry and created the broadly shared prosperity enjoyed by the nation in the 30 years after World War II. The architects did not stop there. During the Reuther years, the UAW also used its resources to incubate every up-and-coming liberal movement in America. It was the UAW that funded the great 1963 March on Washington and provided the first serious financial backing for César Chávez's fledgling farm workers union. The union took a lively interest in the birth of a student movement in the early '60s, providing its conference center in Port Huron, Mich., to a group called Students for a Democratic Society when the group wanted to draft and debate its manifesto. Later that decade, the union provided resources to help the National Organization for Women get off the ground and helped fund the first Earth Day. And for decades after Reuther's death in a 1970 plane crash, the UAW was among the foremost advocates of national health care—a policy that, had it been enacted, would have saved the Big Three tens of billions of dollars in health insurance expenses, but which the Big Three themselves were until recently too ideologically hidebound to support. Narrow? Parochial? The UAW not only built the American middle class but helped engender every movement at the center of American liberalism today—which is one reason that conservatives have always held the union in particular disdain. Over the past several weeks, it has become clear that the Republican right hates the UAW so much that it would prefer to plunge the nation into a depression rather than craft a bridge loan that doesn't single out the auto industry's unionized workers for punishment. (As manufacturing consultant Michael Wessel pointed out, no Republican demanded that Big Three executives have their pay permanently reduced to the relatively spartan levels of Japanese auto executives' pay.) Today, setting the terms of that loan has become the final task of the Bush presidency, which puts the auto workers in the unenviable position of depending, if not on the kindness of strangers, then on the impartiality of the most partisan president of modern times. Republicans complain that labor costs at the Big Three are out of line with those at the non-union transplant factories in the South, factories that Southern governors have subsidized with billions of taxpayer dollars. But the UAW has already agreed to concessions bringing its members' wages to near-Southern levels, and labor costs already comprise less than 10 percent of the cost of a new car. (On Wall Street, employee compensation at the seven largest financial firms in 2007 constituted 60 percent of the firms' expenses, yet reducing overall employee compensation wasn't an issue in the financial bailout.) In a narrow sense, what the Republicans are proposing would gut the benefits of roughly a million retirees. In a broad sense, they want to destroy the institution that did more than any other to raise American living standards, and they want to do it by using the power of government to lower American living standards—in the middle of the most severe recession since the 1930s. The auto workers deserve better, and so does the nation they did so much to build. Labels: auto industry, Big Three, living standards, middle class, pensions, UAW Chrysler Shuts All 30 US Plants For One MonthFrom the Washington Post:Chrysler announced today that it will close all 30 of its auto manufacturing plants for at least a month starting at the end of shifts on Friday as it tries to conserve cash and avoid bankruptcy amid plunging demand for its vehicles. Rest of article. Labels: auto industry, bankruptcy, Chrysler, closures and layoffs Judge Places Madoff Under House ArrestRecently posted to the WSJ website. If you didn't think it was possible for Bernie Madoff's alleged $50bn ponzi scheme to get any juicier, it turns out that U.S. Atty General Michael Mukasey's son, Marc Mukasey will be working for the defense. He works for Bracewell & Giuliani (where Rudi is a partner); one of their specialties is white-collar crime.This is the same SEC that issued a mea culpa a couple of days ago for missing numerous signs that Madoff was engaged in fraud. Cox: No Evidence Yet of Wrongdoing by SEC Staff in Madoff Case[Here's the bit about Mukasey:] Also Wednesday, Attorney General Michael Mukasey recused himself from the Madoff probe, the Justice Department said.Read the full article. Labels: Bernard Madoff, Bracewell and Giuliani, Christopher Cox, Marc Mukasey, |
