Portuguese Transportation Union Leader: Main challenges

Mike Tolochko | PA Editors Blog | July 27, 2009

Privatization Struggle Highlights Union Focus

Amavel Alves is the co-ordinator of National Federation of Transport and Communication Unions [FECTRANS.] He comes from the subway Metro workers union where he was a train operator/an engineer.

He said that main goal of the labor federation over the past few years was to better focus its work under one umbrella: Industrially and Geographically. He said that FECTRANS is the largest federation of its kind; there is another one, which is far smaller. It is affiliated with the CGTP the National Federation in Portugal.

International Solidarity

While FECTRANS is not officially affiliated with any of the two international federations it works strongly on international labor solidarity. He said that FECTRANS believes in class-oriented trade unionism, "Without a Shadow of a Doubt." He said that the union works with the Trade Union International - TUI associated with the World Federation of Trade Unions.

Three Main Challenges

Alves said that there are three main challenges before the union:

A. Fighting Against the Wage of Privatization. We are struggling to keep our work in the public domain. He said that the current financial and economic crisis caught the privateers "red-handed." "They are a bit more cautious these days." He said that unemployment in Portugal is at it's highest since the end of the dictatorship: 1974.

B. Fighting Against Recent Labor Codes. The labor movement is struggling against the anti-union direction of the European Union and also the current Portuguese government.

C. Struggling to Maintain and Improve Working Conditions. The struggle against increasing working hours is crucial, he reported. Also, casual labor is causing troubles. Truck/lorry drivers are facing increasing driving hours.

More to come; stay tuned

Portugal Takes its Ballots and Street Heat Seriously

Mike Tolochko | PA Editors Blog | July 24, 2009

In Portugal: 35 Years Since the Revolution:
BALLOTS AND STREET HEAT AT THE FRONT

Traveling to Portugal and of course Lisbon, or any place that you're not familiar with, you always buy a guide to help to focus your limited time. The "Green Guide" by Michelin gives a good description of Portugal and even mentions the dictatorship of Salazar. You learn that it ended in April, 1974. Foders guide marks that date, but little more.

The Lonely Planet guide is far more political, it is published in England. The town of Peniche was highlighted as a good place to visit. Stating that it was the location of one of Salazar's main prisons.

But, what is missing for more politically minded travelers is that Peniche, the Abu Ghraib and Guantanomo, of its time, and after having Socialist mayor's for many years, elected a Communist Party leader as its Mayor three years ago. They could have also said that this wasn't a fluke. Of the 308 municipalities in Portugal, 33 have Communist Party or over 10%.

Thirty-five years ago, April 25, 1974, the dictatorship, lead by Salazar, came an end. The military and peoples' movement brought democracy to the Portuguese people and ever since the Portuguese Communist Party [PCP] has been in the leadership of keeping the promise of democracy, economic and social rights; and peace a reality for workers' and their families.

Year 2009 Balloting/Elections

In the year 2009, the PCP has won important victories in the European Parliamentary elections; and, is looking forward to the elections for national government offices and municipalities in September and October of 2009. After decades of right wing and dictatorships, they take democracy seriously in Portugal.

While the wave of ultra right wing parties had some success in the large European countries; the Communist Parties of Greece and Portugal out paced them. They were not rubbed out completely, but they did not do very well.

At the same time, the Party leads mass demonstrations throughout the country to make it possible for the thoughts and ideas of workers and communities have a voice. As is explained, every form of expression is needed to pressure the government and the employers.

Ballots

In the 2009 EU Parliamentary elections, the PCP polled 10.67% of the vote, which was higher than achieve in the previous similar election in 2005, or 9.1%. The most recent national elections vote, 2005, of the PCP was 7.8%; which was an increase from the 7.0% four years earlier. Municipal elections found the PCP candidates doing even better in 2005 than in the previous local elections where they were voted into 30 municipalities.

In the EU Parliament and the Portuguese Parliament the PCP representation stayed the same.

Street Heat

Keeping the streets hot with demonstration is a hallmark of the PCP. On May 13, 2009, over 250 trade unionists hit the streets to protest the new Labor Code by the National government. On April 25 the 35th Anniversary of the Revolution, over 50,000 marched. On May 1st, MAY DAY, Lisbon had a demonstration of over 250,000 with demonstrations in 55 other Portuguese cities.

And, then on May 25, a coalition of political parties demonstrated for peoples' rights; about 85,000 strong.

Elections in September

National elections will take place on September 27 this year; with municipal elections two weeks later. The Party hopes to improve upon its 7.8% of four years ago; and improve on its 33 cities with Communists in the municipal elections

The Annual Festival of the PCP will precede these national and local elections, September 3-5, 2009. Each year, the Party attracts over 550,000 people. This festival has the traditional foods and speeches and debates.

The main issues have been:

The directives coming from the European unions of increased privatization; cutbacks on pensions and health benefits; increasing the age to retire and other anti-working class and anti women issues; these demonstrations and elections will keep worker and their families alert to the dangers ahead.

They will also, as reported, voice solidarity with trade unions and workers from other EU countries to stop the assault.

More to come; stay tuned!!!

For a relatively small country with 11 million people and 1 million in Lisbon proper [2.3 great Lisbon] this population is ready to fight. [Sweden has 3 million people.]

Portuguese Railway Workers in Major Struggles Against Privatization

Mike Tolochko | PA Editors Blog | July 25, 2009
Railways in Portugal/European Union: The Union Perspective Against Privatization

As most U. S. railway travelers who look forward to rail travel in Europe and parts of Asia know, similar experiences in the U.S. are rare. The "fast trains" of France, the TGV, are reaching ever corner of the European Union countries. This is both good news and bad news.

Jose Manuel Oliveira, President of the Railway Workers Union [SNTSF], reports this mixed experience.

On the positive side, there are plans to link Lisbon in two ways to the rest of Europe. The "fast train" link would be to France and up to Paris; and the other would be a direct link to Madrid, Spain. These are fully supported by the SNTSF. Another project which does not have their support is to put a similar "fast train" on the cost of Portugal, linking Porto to Lisbon and then South. Oliveira said that the current travel time for that route is already quite short; so the use of valuable resources to reconstruct that line would be a mistake.

There is a problem with the rail gauge between Portugal and the rest of Europe. The Portuguese gauge is narrower; so, it would have to be rebuilt in conformance with the rest of Europe.

The main problem part of these projects is what has not been determined: if these expansion projects would be: fully public; joint ventures with other governments such as the Spanish; or would they be fully private. Regardless of who runs the lines, public money would be main, if not only, financing of the expansion.

After the Dictatorship

The Portuguese system, called the CP system, since the end of the dictatorship in 1974, has been completely public. In a note, Oliveira said that since that same date, all the buses were also made fully public. That meant that there is a fully articulated system between the public trains and buses that needs to be maintained as we go forward, he said.

But, over the past years the public bus lines have been severely cut to the rural areas. This has forced people to buy cars. This has come as a result of EU directives and the government of Portugal going along. It is against all environmental and climate change imperatives.

Suburban train lines are under attack. The new train between Lisbon and the town of Setubal was built with only public moneys but it was turned over to a private company for its running. And, the practices of those running that suburban line are to strongly discourage those workers from joining the union. Security cameras document the activities of the workers and especially if these workers are being engaged by the union.

Wage Growth

From 1993 to the present time the union has been able to win 23 wage increases for the workers; but at the same time the managerial personnel's salaries were increased by 120%.

INTERNATIONAL SOLIDARITY

Olivier said that his work in the World Federation of Trade Union's Trade Union's, Trade Union International [TUI] for the International of Rail and Transport unions is essential to their work. He is the President of that TUI and the General Secretary is from Brazil. With powerful political organizations such as the European Union making decisions that directly affect workers lives, the WFTU-TUI on this issue can help deter those most dangerous attacks on workers rights and solidarity. Of course, the EU is just a part of the G8's efforts to maintain the goals of the neo-liberal agenda.

This TUI is an independent formation whose members come from the WFTU and the more centrist International Trade Union Confederation ITUC.

AFL-CIO NOW BLOG | AFL-CIO Executive Council Calls for Round 2 of Economic Recovery

The nation’s working families and the economy desperately need a second installment on the Obama administration’s economic recovery plan. That plan, says the AFL-CIO Executive Council,

must focus like a laser beam on job creation.

Along with approving an economic policy statement outlining the urgent need for more economic recovery initiatives, the council, convening for a one-day meeting yesterday in Washington, D.C., also welcomed two new members, Letter Carriers (NALC) President Fredric Rolando and AFGE Vice President Rogelio Flores.

The council honored former council members William Young, who recently retired as NALC president, and AFGE Vice President Andrea Brooks, who died in April. To help support the work of the Alliance for Retired Americans, the council proposed the creation of the Preserving Union Values Charitable Foundation.

Although the first round of economic stimulus has made huge strides is shoring up our economy, the council pointed out in its statement that the Bush administration’s economic legacy created such “economic devastation—in finance, housing and jobs,” that

The challenge of fixing this economic mess is enormous—and urgent. Creating good jobs that cannot be outsourced is central to the solution.

Unemployment is expected to hit 10 percent later this year and remain high in 2010. So far 6.6 million jobs have disappeared since the beginning of the recession in 2007, including 1.9 million manufacturing jobs and 1.3 million construction jobs. For those with jobs, wages are stagnant or shrinking and many workers face forced furloughs. As the council statement says:

It is crystal clear that urgent action from the federal government is needed to boost economic growth and jobs, and invest in America’s future.


Among other investments, a second recovery plan should:

Extend unemployment benefits immediately, by at least seven weeks, to help the hundreds of thousands of workers who would otherwise exhaust their benefits in the near term.
Increase food stamp spending as needed to help families cope with the downturn.
Increase aid to state and local governments.
Bolster the financial stability of independent government agencies such as the U.S. Postal Service.
Increase spending for needed infrastructure and clean energy projects, even for those projects with a time horizon longer than two years.
Click here to read the full statement.

New council member Rolando served as the union’s executive vice president before taking over from Young, who retired earlier this month. In its statement honoring Young’s service, the council says Young, who became NALC president in 2002, took the reins at a time when

the NALC—and the entire union movement—were fighting hard to resist a viciously anti-union White House and Congress….Young is widely recognized as a leader not only of the NALC but of the entire union movement.

Flores joined AFGE in 1968 and held various local and district offices until he was elected as a national vice president in 1996. He takes over the council seat that Brooks occupied from 2005 until her death in April.

Brooks began her union career at Ft. Benjamin Harrison in Indianapolis, rising through the ranks of AFGE while working at the Department of Veterans Affairs. She served for 10 years as president of AFGE Local 490 at the Veterans Affairs regional office in Los Angeles; She was also vice president of the California Labor Federation.

In 2000, she was elected as AFGE’s vice president for women and fair practices in 2000. In its statement, the council says:

Brooks’ name became a synonym for the good causes she believed in and fought for: civil rights, human rights, women’s rights. She declared that she wanted to help mobilize a civil rights movement of every race, culture, orientation and gender identity. She did exactly that…we honor the legacy of more justice and fairness and equality she left behind for us.

In the statement proposing the new charitable foundation, the council says many union workers are concerned that their children and grandchildren may not be able to experience and “cherish the richness of a life of involvement with the labor movement.”

The Preserving Union Values Charitable Foundation would allow active and retired union members to make tax-exempt contributions for

the purpose of preserving and carrying forward the proud heritage of the union movement. We believe many people associated with the labor movement would choose to leave a legacy in this way if given the opportunity….The proposed charitable foundation would ensure that current and future generations of Americans have an opportunity to benefit from the values that made the labor movement a defining force in American history.

AFL-CIO President John Sweeney has agreed to head the proposed foundation following his upcoming retirement. Funds raised would be split between the National Labor College (NLC) and the Alliance, which, says the council statement, “has consistently excelled with the quality and effectiveness of its field work.”

CEOs Get One-Third of All Pay; Bank of America Uses Taxpayer $$ for Lobbying

by Tula Connell
AFL-CIO Blog
July 22, 2009


Two news items out today highlight how far the nation needs to go in re-balancing the economy toward working people.

First, Think Progress points to a Wall Street Journal analysis that shows more than one-third of all pay in the U.S. now goes to executives and other highly-paid employees.

Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don't include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.

The Wall Street Journal based its analysis on Social Security Administration data, which doesn't count billions of dollars more in pay that remain off federal radar screens that measure wages and salaries.

Next, it turns out that Bank of America, which received $45 billion in taxpayer-funded bailout support, has spent more than $1.5 million lobbying on Capitol Hill.

The Charlotte, N.C., company wants flexibility on spending the bailout funds and also wants to fend off restrictions on executive compensation, home mortgage lending and credit card fees. The bank also is lobbying on a consumer rights bill, on student lending issues, on a bill that would've allowed bankruptcy judges to alter mortgages and on a proposed federal regulatory oversight agency.

And none of its positions on any of these bills would help working families.

As we noted in April when we released the AFL-CIO Executive PayWatch data, the Bank of America lost nearly $2.4 billion in the fourth quarter of 2008 due to deeper than expected trading and loan losses. Even after receiving billions of dollars in taxpayer money, the bank plans to eliminate up to 35,000 jobs over the next three years-but CEO Kenneth Lewis collected nearly $10
million in 2008, more than 400 times the average amount a bank teller is paid each year. Since becoming CEO in April 2001, Lewis received $134 million in pay, bonuses,
stock awards and pension accruals.

As Think Progress notes, between 1979 and 2006, the inflation-adjusted after-tax income of the richest 1 percent of households increased by 256 percent, compared with 21 percent for families in the middle income quintile.

While U.S. worker productivity has skyrocketed over the past 30 years, wages have not kept pace.

America's working middle class made it clear last November that they wanted change-and reshaping the nation's economic framework to strengthen the middle class and close the wage disparity between the very top and the rest of us, is fundamental to that change.

Autoworkers Letter to Obama

To: President Barack Obama
From: Concerned Autoworkers, Retirees And Supporters
Re: Auto Industry Crisis & Global Climate Change

Date: July 14, 2009


Dear President Obama,

Your administration has reported that 400,000 jobs in the auto industry have been lost during the economic downturn. Though some jobs have been saved, many more will be lost through the bankruptcy restructuring implemented by the Auto Task Force at Chrysler and GM. Economists are predicting a slow recovery at best and, in any event, the market for autos and trucks will remain diminished for years to come. We in Detroit and in the automobile and manufacturing centers throughout the Midwest are faced with a major crisis for which a comprehensive solution is required.

We believe that the economic crisis is interwoven with an environmental one - that, in the words of NASA scientist Jim Hansen, we face an "irreversible tipping point" if we don't act swiftly to reduce our carbon footprint and therefore positively impact global climate change. We believe this fact requires rethinking our country's manufacturing priorities. Instead of laying off workers and devastating working-class communities, we believe the combination of crises demands a bold proposal that can put people back to work and address global climate change. We believe this
can be done, and done creatively.

Until the recent fall in vehicle sales, auto use was contributing 20% of all annual U.S.greenhouse gas emissions (more than four tons per person) and 40% of
all U.S. oil consumption. Yet of the 90% of Americans who drove to work in 2007, 76% drove alone. Fewer than 5% used public transportation. Eighty percent of the total U.S. population lives in metropolitan areas, with 30% in the cities. Yet few cities outside New York City have an adequate system of public transportation.

Clearly we must turn from an energy-inefficient, auto-centered society to one that increasingly uses mass transit along with energy-efficient vehicles. That means prioritizing buses, light rail, high-speed trains and the tracks they run on. Manufacturing also needs to
be geared toward building wind and water turbines as well as solar panels. Instead of attempting to resuscitate automobile companies, we should be building a Transportation and Energy Industry for the 21st century.

Your administration has taken a positive first step by creating two blue ribbon task forces; The White House Task Force on Middle Class Families, called "Promoting American Manufacturing in the 21st Century", chaired by Vice-President Biden, and the "White House Council on Automotive Communities and Workers", under the leadership of Labor Secretary, Hilda Solis and Larry Summers, your Chief Economic Advisor. You have charged them with the tasks of preparing American industry for the future and supporting "manufacturing communities and workers."

We welcome these initiatives and urge you to ensure that the size of the ideas being considered match the size of the problems we face. The problems confronting us must be addressed holistically, the leadership must be visionary in its approach and the solutions must be innovative and far-reaching rather than politically expedient crisis management. To that
end, we offer the following ideas:

First, because, we the people are now major stockholders in GM and Chrysler, we believe that it
would be in the national interest to assume direct ownership of the GM and Chrysler plants that are closed or closing (as interest on our investment) to expedite
the retooling and conversion of these plants for the manufacture of the products that we have mentioned above.

We must start now, so that by 2010 we will be well on our way to creating the jobs of tomorrow. We have the facilities, the equipment, the skilled workers to be able to complete this in record time. All we need is the political will to do so.

We know this is not a pipe dream because it was at the start of U.S. involvement in World War II that a massive conversion of existing auto plants for war-time production was completed in just eight months. The obstacles that had to be overcome were not technical, but political. It behooves you and your administration to take on the threat of global climate change - and
the dislocations in the automobile industry - with the same sense of urgency and gravity that President Franklin Roosevelt acted upon then.

Additionally, it is our understanding that Chrysler and GM own a large number of patents for green technology. We encourage a thorough review of these patents and believe that any technology that GM and Chrysler own that they have no plans on utilizing in the next three years, be appropriated (again, as interest on investment) and uses found for these technologies.

Your administration is in a position at this moment of great peril, to create a new paradigm - for addressing the US role in industrial manufacturing and taking the
lead on combating global warming. We urge that - in this defining moment - you reiterate your pledge that "yes we can!"

Signed,

Bill Alford, former President, UAW Local 235 (AAM),Detroit, MI
Theresa Barber, UAW Local 663, Anderson, IN
Al Benchich, former President, UAW Local 909 (GM), Warren, MI
Edward Blakley, UAW Local 653, Pontiac, MI
Michael Bloom, UAW 549, Mansfield, OH
Tony Browning, UAW Local 1700, Sterling Heights, MI
Brenda Caldwell, retiree, UAW Local 977, Marion, IN. Metal Fabricating Plant
Allen Cholger, Staff Rep., United Steelworkers, District 2
M. Crosby, UAW Local 2209, Ft. Wayne, IN
Connie DeVol, retiree, UAW Local 2151, Coopersville, MI(closed)
Dave Elsila,
Katie Elsila, UAW Local 1981
Dianne Feeley, UAW Local 235 (AAM), Detroit, MI
Bill FletcherJr., Center for Labor Renewal, co-author - SolidarityDivided
Lydia Fischer Ghana Goodwin-Dye, President, UAW Local 909, Warren, MI
David Green, Detroit Democratic Socialists of America,
Frank Hammer, UAW-GM International Representative, retired
Julie Hurwitz, Attorney
Michael Heaton, C.A.W Local 1285 (Chrysler)
Robert Ingalls, UAW (retired)
Barbara Ingalls, ITU/CWA
Glenn Jackson, UAW Local 5960, Lake Orion, MI
Cheryl Jameson, UAW Local 292, Kokomo, IN
Michael S. Japowicz Sr., UAW Local 594, Pontiac, MI
Florence Katroscik, UAW Local 909 Retiree, Warren, MI
John Kavanaugh, UAW Local 235(AAM) Detroit (retired)
Jack Kiedel, UAW Local 686, Lockport, NY
Thomas Lacas, G.M. Unit, CAW Local 199, St. Catharines, Ontario, Canada
Sharon McAlpine, UAW Local 235, AAM, Detroit MI, Toolmaker
Lew Moye, UAW Local 110 Retiree, St Louis, MO
Elly Leary, UAW Local 422, Framingham, MA
Robert E. Niethe, UAW Local 686, Lockport, NY, retired
Hiroko Niethe, UAW Local 686, Lockport, NY, retired
Glenn Brian Reday, GM UAW recently retired, Local 435 Wilmington, DE
Eric V. Reuther, son of UAW pioneers, Victor and Sophie Reuther
John S. Reuther, son of UAW Pioneer, Victor G. Reuther
Alexander "Sasha" Reuther, grandson of UAW Pioneer Victor G. Reuther
Michael Rynca, UAW Local 5960, Pontiac, MI
Joretta Rynca, UAW Local 651, Flint, MI
Paul Schrade, former UAW International Executive Board Member
Clay Smith, UAW Local 2166, Shreveport, LA
Jeffrey Stallman, IUE798, GM Moraine (closed Dec. 23, 2008)
Sam Stark, UAW retiree
Thomas W. Stephens, Policy Analyst, City of DetroitCity Council
James Theisen, UAW Local 212, Sterling Heights, MI
Wendy Thompson, former President UAW Local 235 (AAM) Detroit, MI
Carole Travis, former President,UAW Local 719, LaGrange, IL (retired)
Jerry Tucker, former UAW International Executive Board Member
Brett Ward, UAW Local 1700, Sterling Heights, MI
L. M. Wittek, UAW Local 2151, Retired, Coopersville, MI
Robert M. Woods, UAW Local 699, Saginaw, MI

Please send all correspondence to:

Autoworker Caravan
c/o Frank Hammer
20033 Renfrew
Detroit, MI 48221

Reprinted from Portside
portside.org

Comforting the comfortable while afflicting the afflicted

According to the NY Times (http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html) the government has already actually dispersed $2 trillion, and made commitments of $8.8 trillion in trying to respond to the fiscal crisis.

The way the money was committed:

$4.6 trillion: The Government As Investor
$2.4 trillion: The Government As Lender
$1.8 trillion: The Government As Insurer

Jobs saved=0

A.I.G. alone received commitments of $53 billion.
Bear Stearns alone received commitments of $29 billion.

35% of the new "stimulus" bill passed is tax breaks that will help the rich.

See the Krugman pieces below. Its stark. As Krugman points out:

Will those public-private partnerships end up being a covert way to bail out bankers at taxpayers’ expense? Or will the required “stress test” act as a back-door route to temporary bank nationalization (the solution favored by a growing number of economists, myself included)? Nobody knows.

I don't know. I don't have the stomach yet to read the bill.

Krugman, in Obama on nationalization, the second article below, says:

Nationalization is actually as American as apple pie.

What threatens to be the abject failure of the Obama administration to produce a viable and realistic plan to address the fiscal crisis is at its heart the result of his lack of a class struggle outlook and focus on bipartisanship, which objectively undermines working class interests.

Again, I'll quote Paul Krugman from The Destructive Center, attached below.

All in all, the centrists’ insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.

But how did this happen? Is President Obama’s belief that he can transcend the partisan divide — a belief that results in warping his economic strategy - a sound basis for dealing with the fiscal crisis?

After all, many people expected Mr. Obama to come out with a really strong stimulus plan, reflecting both the economy’s dire straits and his own electoral mandate.

Instead, however, he offered a plan that was clearly both too small and too heavily reliant on tax cuts. Why? Because he wanted the plan to have broad bipartisan support, and believed that it would. Not long ago administration strategists were talking about getting 80 or more votes in the Senate.

We are asked to be grateful that something, anything, was done to address the fiscal crisis. The whole discussion around dealing with the criris, and its focus on the institutions of wage slavery (banks, mortgage vendors, insurers, and other rotten meat clinging to the terminally ill body of the capitalist vulture), is wrong.

We need as a society to focus on the needs of working families. Let the bankers drown in their red ink. Working families have mouths to feed and homes to warm.

To reiterate:

Nationalization is actually as American as apple pie.

There are different types of nationalization. The best reform response to the current fiscal crisis is to nationalize the structures of the economy and bring them under centralized and democratic control of the government. In the end, socialism is the only real solution to this crisis, and the ones that will follow as long as we wallow in the morass of capitalism, a system that is out of tune with its own productive forces and the needs of the people who must survive its inequities.


February 13, 2009
Op-Ed Columnist
Failure to Rise
By PAUL KRUGMAN
By any normal political standards, this week’s Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!

Or maybe not. These aren’t normal times, so normal political standards don’t apply: Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams.

Let’s start with the politics.

One might have expected Republicans to act at least slightly chastened in these early days of the Obama administration, given both their drubbing in the last two elections and the economic debacle of the past eight years.

But it’s now clear that the party’s commitment to deep voodoo — enforced, in part, by pressure groups that stand ready to run primary challengers against heretics — is as strong as ever. In both the House and the Senate, the vast majority of Republicans rallied behind the idea that the appropriate response to the abject failure of the Bush administration’s tax cuts is more Bush-style tax cuts.

And the rhetorical response of conservatives to the stimulus plan — which will, it’s worth bearing in mind, cost substantially less than either the Bush administration’s $2 trillion in tax cuts or the $1 trillion and counting spent in Iraq — has bordered on the deranged.

It’s “generational theft,” said Senator John McCain, just a few days after voting for tax cuts that would, over the next decade, have cost about four times as much.

It’s “destroying my daughters’ future. It is like sitting there watching my house ransacked by a gang of thugs,” said Arnold Kling of the Cato Institute.

And the ugliness of the political debate matters because it raises doubts about the Obama administration’s ability to come back for more if, as seems likely, the stimulus bill proves inadequate.

For while Mr. Obama got more or less what he asked for, he almost certainly didn’t ask for enough. We’re probably facing the worst slump since the Great Depression. The Congressional Budget Office, not usually given to hyperbole, predicts that over the next three years there will be a $2.9 trillion gap between what the economy could produce and what it will actually produce. And $800 billion, while it sounds like a lot of money, isn’t nearly enough to bridge that chasm.

Officially, the administration insists that the plan is adequate to the economy’s need. But few economists agree. And it’s widely believed that political considerations led to a plan that was weaker and contains more tax cuts than it should have — that Mr. Obama compromised in advance in the hope of gaining broad bipartisan support. We’ve just seen how well that worked.

Now, the chances that the fiscal stimulus will prove adequate would be higher if it were accompanied by an effective financial rescue, one that would unfreeze the credit markets and get money moving again. But the long-awaited announcement of the Obama administration’s plans on that front, which also came this week, landed with a dull thud.

The plan sketched out by Tim Geithner, the Treasury secretary, wasn’t bad, exactly. What it was, instead, was vague. It left everyone trying to figure out where the administration was really going. Will those public-private partnerships end up being a covert way to bail out bankers at taxpayers’ expense? Or will the required “stress test” act as a back-door route to temporary bank nationalization (the solution favored by a growing number of economists, myself included)? Nobody knows.

Over all, the effect was to kick the can down the road. And that’s not good enough. So far the Obama administration’s response to the economic crisis is all too reminiscent of Japan in the 1990s: a fiscal expansion large enough to avert the worst, but not enough to kick-start recovery; support for the banking system, but a reluctance to force banks to face up to their losses. It’s early days yet, but we’re falling behind the curve.

And I don’t know about you, but I’ve got a sick feeling in the pit of my stomach — a feeling that America just isn’t rising to the greatest economic challenge in 70 years. The best may not lack all conviction, but they seem alarmingly willing to settle for half-measures. And the worst are, as ever, full of passionate intensity, oblivious to the grotesque failure of their doctrine in practice.

There’s still time to turn this around. But Mr. Obama has to be stronger looking forward. Otherwise, the verdict on this crisis might be that no, we can’t.


http://krugman.blogs.nytimes.com/2009/02/11/obama-on-nationalization/
Obama on nationalization
Paul Krugman
Felix Salmon is impressed by President Obama’s response to a question about nationalization of banks. Me, not so much.

Yes, Obama is impressively articulate and well-informed — and his response shows that he has actually considered the issue. It’s light-years better than what we’ve grown accustomed to in recent years.

But his two main arguments aren’t actually very good. Yes, we have thousands of banks — but the problems are concentrated in a handful of big players. In fact, the Geithner plan, such as it is, already acknowledges this: the “stress test” is to be applied only to banks with assets over $100 billion, of which there are supposed to be around 14.

And the argument that our culture won’t stand for nationalization — well, our culture isn’t too friendly towards bank bailouts of any kind. Yet those bailouts are necessary; and even in America they may be more palatable if taxpayers at least get to throw the bums out.

Oh, and not a week goes by without the FDIC taking several smaller banks into receivership. Nationalization is actually as American as apple pie.

http://www.nytimes.com/2009/02/09/opinion/09krugman.html
February 9, 2009
Op-Ed Columnist
The Destructive Center
By PAUL KRUGMAN
What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

Yet the centrists did their best to make the plan weaker and worse.

One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.

The original plan also included badly needed spending on school construction; $16 billion of that spending was cut. It included aid to the unemployed, especially help in maintaining health care — cut. Food stamps — cut. All in all, more than $80 billion was cut from the plan, with the great bulk of those cuts falling on precisely the measures that would do the most to reduce the depth and pain of this slump.

On the other hand, the centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.

All in all, the centrists’ insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.

But how did this happen? I blame President Obama’s belief that he can transcend the partisan divide — a belief that warped his economic strategy.

After all, many people expected Mr. Obama to come out with a really strong stimulus plan, reflecting both the economy’s dire straits and his own electoral mandate.

Instead, however, he offered a plan that was clearly both too small and too heavily reliant on tax cuts. Why? Because he wanted the plan to have broad bipartisan support, and believed that it would. Not long ago administration strategists were talking about getting 80 or more votes in the Senate.

Mr. Obama’s postpartisan yearnings may also explain why he didn’t do something crucially important: speak forcefully about how government spending can help support the economy. Instead, he let conservatives define the debate, waiting until late last week before finally saying what needed to be said — that increasing spending is the whole point of the plan.

And Mr. Obama got nothing in return for his bipartisan outreach. Not one Republican voted for the House version of the stimulus plan, which was, by the way, better focused than the original administration proposal.

In the Senate, Republicans inveighed against “pork” — although the wasteful spending they claimed to have identified (much of it was fully justified) was a trivial share of the bill’s total. And they decried the bill’s cost — even as 36 out of 41 Republican senators voted to replace the Obama plan with $3 trillion, that’s right, $3 trillion in tax cuts over 10 years.

So Mr. Obama was reduced to bargaining for the votes of those centrists. And the centrists, predictably, extracted a pound of flesh — not, as far as anyone can tell, based on any coherent economic argument, but simply to demonstrate their centrist mojo. They probably would have demanded that $100 billion or so be cut from anything Mr. Obama proposed; by coming in with such a low initial bid, the president guaranteed that the final deal would be much too small.

Such are the perils of negotiating with yourself.

Now, House and Senate negotiators have to reconcile their versions of the stimulus, and it’s possible that the final bill will undo the centrists’ worst. And Mr. Obama may be able to come back for a second round. But this was his best chance to get decisive action, and it fell short.

So has Mr. Obama learned from this experience? Early indications aren’t good.

For rather than acknowledge the failure of his political strategy and the damage to his economic strategy, the president tried to put a postpartisan happy face on the whole thing. “Democrats and Republicans came together in the Senate and responded appropriately to the urgency this moment demands,” he declared on Saturday, and “the scale and scope of this plan is right.”

No, they didn’t, and no, it isn’t.

598,000 Jobs Lost as Jobless Rate Hit 7.6% in January

As a reminder of the urgency of help for working families, the New York Times reports on February 7, 2009 that the

country moved into its second year of uninterrupted job losses last month, with companies shedding another 598,000 jobs — the most since December 1974 — and the unemployment rate moving up to 7.6 percent, the Labor Department reported on Friday.

While the Congress dithers over political gains, the Republicans keep pressing for tax help for the rich, jobs have become an endangered species in the US economic environment.

Economists had forecast a loss of 540,000 jobs and a unemployment rate of 7.5 percent. The jobless rate is at its highest since September 1992.

Job losses were once again spread across both manufacturing and service industries, reinforcing the picture of an economy that is contracting at its fastest pace in decades.

Employers in the United States have shed jobs every month since January 2008, for an aggregate decline in payroll employment of about 3.2 million.

The Labor Department also revised its numbers from December, saying that the economy lost 577,000 jobs compared with an initial reading of a loss of 524,000.

It is not adequate to the challenge to talk about bailouts that don't address the day to day crisis in the lives of working families by halting foreclosures and evictions for any reason, by extending unemployment benefits to all who are unemployed regardless of the reason, by insuring that unemployment benefits provide a living wage, and by stopping businesses from taking bailout funds and using them to protect their own limited interests at the expense of their employees and the communities in they operate and to whom they provide services.

As the NYT reports,

“Businesses are panicked and fighting for survival and slashing their payrolls,” said Mark Zandi, chief economist at Moody’s Economy.com. “I think we’re trapped in a very adverse, self-reinforcing cycle. The downturn is intensifying, and likely to intensify further unless policy makers respond aggressively.”

The idea that this is a self-reinforcing cycle highlights once again the structural nature of the crisis and the demands of the time to think outside the capitalist context and look at nationalization and other mechanisms to address the issues facing working families today.

Even as the concrete realities of the time tend to raise the question of socialism, so the media have hightened their endless ranting against the socialist alternative. As this article is being written NPR is airing a piece on the role of anti-communist Lech Walesa and Solidarity in Poland. The report is interviewing all sorts of anti-communist people from Eastern Europe on how "capitalism" is normal; effectively arguing that its better to starve under capitalism than eat under communism.

This does not address the real situation here in the United States today.

For the last several months, analysts said, the United States has increasingly been trapped in a vicious circle of slumping consumer demand, falling business investment, mounting losses in the banking system, and rising unemployment, which was 7.2 percent in December.

The problems are not going to disappear due to tax cuts or other magic pills that the henchmen of capital might propose; solutions that continue the trend toward the greater and greater disproportionate distribution of wealth that underlies the current crisis.

As a result, the monthly pace of job losses shot up to about 500,000 a month for the last three months of 2008. Economists see no hint that the bottom has been reached.

Most economic forecasters had been expecting a loss of roughly 500,000 jobs in January, at least as bad as in December, because other indicators of the job market had been trending down as well. Last week, the number of Americans filing first-time jobless claims reached a 26-year high, with 626,000 filling out initial applications.
Major retailers, rocked by one of the worst holiday shopping seasons in memory, have been shutting stores and laying of armies of workers in recent weeks. On Thursday, the nation’s retailers reported that sales fell 1.6 percent in January, the fourth consecutive month of steep sales declines.

And in sign that the country’s slowdown continues to reach beyond its borders, Canada, America’s largest trading partner, reported Friday that its unemployment rate jumped to 7.2 percent in January, from 6.7 percent in December.

In Washington, Friday’s gloomy job report put more pressure on Congress to pass an economic stimulus bill. The House passed a bill last week that would provide more than $800 billion in spending and tax cuts. In the Senate, still bogged down by objections from Republicans, lawmakers were hoping to be able to muster enough votes to pass a measure on Friday

For comparison, the unemployment rate was 4.9 percent in January 2008. But some analysts contend that the current unemployment rate understates the labor market’s problems because the percentage of adults participating in the labor force has slumped in recent years, and those people are not listed as “unemployed.”

Peter Morici, an economist at the University of Maryland, estimated that if the labor force participation rate today was as high as it was when President Bush took office, the unemployment rate would be 9.4 percent.

Ian Shepherdson, chief North American economist for High Frequency Economics in Valhalla, N.Y., said the government had become the only source of energy left to break the cycle of slumping demand for goods and falling production.

“The public sector needs to act,” Mr. Shepherdson wrote in a note to clients. “It needs to prevent an endless spiral of attempts to increase saving, leading to reduced spending, leading to reduced incomes, leading to further attempts to raise savings, and so on.”

“We remain firmly of the view that the package now in Congress is the bare minimum required to slow the shrinkage of the economy over the next year.”

Many economists expect that the economy will continue to contract until July at the very least, but at a slowing pace in the second quarter. That would make it the longest recession since the 1930s, outlasting the two record-holders, the mid-1970s and early 1980s downturns. Each of these recessions lasted 16 months. The current recession, which started in December 2007, would reach that milestone in April.

The Federal Reserve continues to pump money into the financial system at a furious pace. Since September, the central bank has more than doubled its reserves, from $900 billion to more than $2 trillion, by literally creating new money.

The Fed has used some of that money to help bail out financial institutions, from Citigroup and Bank of America to the American International Group.

It has been pumping hundreds of billions of dollars into new lending programs, stepping in for banks and other financial institutions to buy up a widening array of corporate debt. Later this month, the Fed will begin a $200 billion program, in conjunction with the Treasury, to finance consumer debt ranging from car loans and credit card debt to student loans.

But analysts say that the big problem is not a shortage of money, but a shortage of demand for products by businesses and consumers. As a result, banks are overloaded with excess reserves, made available by the Fed, which they are often simply parking at the Fed.

Obama Set to Add Republican to Cabinet

As Jeff Zeleny of the New York Times (NYT) mentions in his 2/3 article,

If a new political breeze is blowing in the capital, perhaps the best evidence can be found in this: A Democratic president selects a Republican senator to serve in the cabinet. The Democratic governor with the power to fill the Senate seat signals that he will leave it in Republican hands, depriving his party of a chance to reach 60 votes, a magic number when it comes to passing legislation.

Is bi-partisanship the change that sixty million people voted for? Is the focus on bi-partisanship a calculation based on the vote counts in the last election and designed to ensure support for an Obama second term? Will the Republican members of the Cabinet be effective advocates for the President's agenda. What is the class content of bi-partisanship?

Barack Obama Town Hall at Anderson High in Anderson, IN on April 26, 2008

Certainly Senator Judd Gregg is partisan. He told the Administration that "he would not serve if a Democrat was to fill his seat." Replacing Senator Gregg with an appointed Democrat would have consolidated the power of the Democrats in the Senate.

As Senator Gregg said:

“I have made it clear to the Senate leadership on both sides of the aisle and to the governor that I would not leave the Senate if I felt my departure would cause a change in the makeup of the Senate,” he said. “The Senate leadership, both Democratic and Republican, and the governor understand this concern, and I appreciate their consideration of this position.”

The focus on bipartisanship is evidently an overarching concern for President Obama.

Even when the possibility of putting a Democrat in Mr. Gregg’s Senate seat dimmed, Mr. Obama pressed ahead, telling his advisers that it was more important to build a bipartisan cabinet than increase his Senate majority.

As regards the class content of bipartisanship,

James M. Demers, a New Hampshire Democrat who was a leading supporter of Mr. Obama’s presidential bid, said selecting Mr. Gregg as commerce secretary would send a signal to Republicans that the president was serious about building a bipartisan team with diverse viewpoints. Mr. Demers said it could also ease suspicion among fiscal conservatives about Mr. Obama’s agenda.

The fiscal conservatives are among the folks that created the fiscal crisis. If fiscal conservatism relates to limiting debt or "fiscal responsibility" as a justification for attacking Social Security and Medicare in the current crisis then the class content is clear; these are anti-working class trends.

While the President continues to push for the much needed bailout, and for expanding labor's ability to organize, there are contradictory trends in the Administration. In the face of zero Republican votes in the House for the fiscal stimulus, the President continues to push for bipartisanship. This concern gives voice to a party, the Republicans, that suffered near complete renunciation at the polls in the last election. Rather than allowing the Republicans to water down the initiatives that the President desires to undertake on behalf of working families in the United States, it would be good to push hard to get as much as possible passed to undo the decades of conservative, primarily but not only Republican, financial devestation that has been wrought on working families.

The measure of success in a changed Washington is not how the Administration pursues bipartisanship in the mistaken belief that everyone wants what is best for the country as a whole. The measure of success is whether the needs of working families, those without access to health care, the unemployed, organized labor, the disabled, the immigrant, and the downtrodden, the young, and the oppressed get help in our struggle to live and meet our basic needs.

Class struggle from below in the form of large grass roots movements in support of the needs of working families and our allies is needed as much today as ever to counterbalance the influence of big business and their allies in the policy-making process and help to create space for the President to provide the promised change that goes far beyond bipartisanship, change that provides concrete help to working families.

Indiana's jobless rate is highest U.S. jump

January 28, 2009

Post-Tribune staff and wire report

Indiana's unemployment rate soared to 8.2 percent in December, one of the largest jumps in jobless rates in the nation.

Unemployment in Northwest Indiana increased in line with the rest of the state, where the jobless rate nearly doubled from the same time last year.

The monthly unemployment report, released Tuesday by the Indiana Department of Workforce Development, showed Porter County coming in under the state average at 7.4 percent, but above the national average of 7.2 percent, while Lake County weighed in at 8.6 percent and LaPorte County stood at 9.2 percent.

East Chicago took the biggest hit locally, with unemployment jumping to 12.8 percent, third-highest in the state.

Follow the headline link for the full story

Report: Employee Free Choice Act Needed to Make Economy Work

Posted By Seth Michaels On January 23, 2009

The advocacy organization [1] American Rights at Work has produced a new report, “[2] The Employee Free Choice Act: Ensuring the Economy Works for Everyone,” that clearly explains how restoring the freedom to form unions and bargain can revitalize the U.S. economy.

Follow link for the full story.

Indiana Stalls Jobless Aid
The AP article read "Indiana bolsters jobless aid", but it should have read "Indiana Stalls jobless aid" because that is what they are doing. There is a logjam of 42K unemployment claims. It is well documented that Indiana is out of money and wants more from the government to pay claims even though the governor just won re-election on the platform of a fiscally sound state. Just like a family that has to deal with a loss of income, Indiana is delaying paying their bills in hope that the check that is in the mail gets here. But for the families of people who are unemployed that is of little comfort. I have already heard from people who have been laid off for a month and haven't gotten any money. The state processes about 200K claims a week which is double a year ago. Part of the way they are stalling the claims is to tell people that they made an error in their claim and that keeps the wolves at bay so to speak.

Krugman: Employee Free Choice Key to Economic Recovery

Krugman: Employee Free Choice Key to Economic Recovery

Posted By Seth Michaels On January 22, 2009 @ 10:54 am In Legislation & Politics | 2 Comments

In the latest issue of [1] Rolling Stone, Nobel Prize-winning Princeton economist Paul Krugman has written an open letter to President Obama detailing the steps needed to end our economic crisis and turn the country around.

Krugman’s prescription includes quick and large-scale actions to save jobs, rebuild infrastructure and protect those whose health care, housing and retirement have been put at risk—but it also includes longer-term strategies to make sure America is “a more just and secure society.” High on Krugman’s list? In addition to health care reform and an economic recovery package, he stresses restoring workers’ freedom to form unions and bargain for a better life by passing the [2] Employee Free Choice Act.

…you can do a lot to enhance workers’ rights. One is to start laying the groundwork to pass the Employee Free Choice Act, which would make it much harder for employers to intimidate workers who want to join a union…the legislation will enable America to take a huge step toward recapturing the middle-class society we’ve lost.

Bailout Is a Windfall to Banks, if Not to Borrowers

In a New York Times article of January 18, 2009 entitled Bailout Is a Windfall to Banks, if Not to Borrowers, Mike McIntire reports on the fact that the banks that received federal bailouts have not used the money to make loans.

The chairman of one bank, the Whitney National Bank in New Orleans, in explaining how his bank was going to use the $300 million it received of bailout funds, said

“Make more loans? We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans.”

Highlighting the systemic nature of the financial crisis, despite over a trillion dollars being distributed in various forms of bailout and supports to the financial industry, things continue getting worse.

[A]s mounting losses at major banks like Citigroup and Bank of America in the last week have underscored, regulators are still searching for ways to stabilize the banking system.

According to the New York Times,

[T]he Obama administration could be forced early on to come up with a systemic solution....

The capitalist economic system in which the banks function incorporates no sense of commitment to the needs of working families or the larger society. This is reflected in the behavior of the people in the banking institutions.

An overwhelming majority saw the bailout program as a no-strings-attached windfall that could be used to pay down debt, acquire other businesses or invest for the future.

Most financial institutions don't see increased lending as a responsibility associated with the acceptance of the bailout funds, in part because the law authorizing the bailout funds did not stipulate that usage. At least on banker, Walter M. Pressey of Boston Private Wealth Management, sees the bailout money as a cash cushion.

“With that capital in hand, not only do we feel comfortable that we can ride out the recession,” he said, “but we also feel that we’ll be in a position to take advantage of opportunities that present themselves once this recession is sorted out.”

In the initial discussion about the bailout, the funds were expected to be used to buy up bad mortgages. Then the focus shifted after the money was allocated and the funds were used instead to "direct investments in individual banks in return for preferred shares of stock".

But a Congressional oversight panel reported on Jan. 9 that it found no evidence the bailout program had been used to prevent foreclosures, raising questions about whether the Treasury has complied with the law’s requirement that it develop a “plan that seeks to maximize assistance for homeowners.”

The report concluded that the Treasury’s top priority seemed to be to “stabilize financial markets” by simply giving healthy banks more money and letting them decide how best to use it. The report also said it was not clear how giving billions to banks “advances both the goal of financial stability and the well-being of taxpayers, including homeowners threatened by foreclosure, people losing their jobs, and families unable to pay their credit cards.”

Mark Fitzgibbon, research director at Sandler O’Neill & Partners, which sponsored the Palm Beach conference, said banks seemed to be allocating the bailout money for four general purposes: increased lending, absorbing losses, bolstering capital and “opportunistic acquisitions.” He said those approaches made sense from a business perspective, even though they might not conform to popular expectations that the money would be immediately lent to consumers.

The bankers take different approaches, but in the end many of them

“...see TARP as an insurance policy,” he said. “That when all this stuff is finally over, no matter how bad it gets, we’re going to be one of the remaining banks.”

The priority of the banks for self-preservation by hoarding the federal bailout funds, or to use the money for opportunistic acquistions and expansion, directly contravenes the focus of the efforts to make the economy functional. However, the banks are acting totally logically from their own perspective. Here we have an example of the social contradictions built into capitalism that highlights the divergence between the needs of the great masses of the people in this country, the working families that include you and I, and the systemic needs of the financial institutions and the capitalists these institutions serve.

At a time when there is a growing acknowledgement that a restructuring of our economic system is required, it is important to present the socialist alternative. For example, rather than buying non-voting "preferred" stock in financial institutions, and thus effectively denying the Federal government a voice in the operation of the institution, it would save money for the society and bring the institutions under democratic control if they were bought at current market prices and absorbed into a single national bank under direct Congressional control. An alternative would be to seize the banks without restititution and create a national bank. Whatever the mechanism, and whatever the structure that emerged, the main structural differences that socialism would advocate would result in the financial institutions being under more public, democratic, control and having as a priority the needs of the vast majority of the people of this nation, the working families that actually keep our economy afloat.

To participate in a discussion on the question of structural change and meeting the economic challenges of our time, please join the Socialist Economics group at http://groups.google.com/group/socialist-economics/.

Obama Pledges Entitlement Reform; Moving Away from Employee Free Choice Act

What is going to be the cost of the economic recovery plan to working families?

The President-elect is reportedly positioning the economic recovery in opposition to the "entitlement" programs, Social Security and Medicare.

As Michael D. Shear reported in the January 16, 2009 Washington Post,

President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare "bargain" with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.

What the President-elect means by getting control over these programs remains to be seen. However, just the fact that this discussion is being advanced must raise very serious concerns for anyone interested in the well being of our elderly, poor, and disabled family and friends in this country.

The article reported the President-elect as saying

"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further. We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's."

At the same time, the President-elect is signaling a move away from support for the Employee Free Choice Act.

The president-elect also gave his support for legislation that would make it easier for workers to unionize, but he said there may be other ways to achieve the same goal without angering businesses. And while many Democrats on Capitol Hill are eager to see a quick vote on that bill, he indicated no desire to rush into the contentious issue.

"If we're losing half a million jobs a month, then there are no jobs to unionize, so my focus first is on those key economic priority items I just mentioned," he said. "Let's see what the legislative docket looks like."

The President-elect reportedly

framed the economic recovery efforts more broadly, saying it is impossible to separate the country's financial ills from the long-term need to rein in health-care costs, stabilize Social Security and prevent the Medicare program from bankrupting the government.

The president-elect said

"Social Security, we can solve. The big problem is Medicare, which is unsustainable. . . . We can't solve Medicare in isolation from the broader problems of the health-care system."

These statements raise more questions than they answer. It is too early to know what direction the President-elect intends to take these efforts to address fundamental problems in important programs that help everyone in the United States. The important thing for working families and our allies and organizations, and many are already doing this, is to continue to exert pressure to protect and expand these programs and to participate in providing counsel and support to the President-elect in any efforts he makes that move in that direction.

The President-elects outlook is

"The theory behind it is I set the tone," Obama said. "If the tone I set is that we bring as much intellectual firepower to a problem, that people act respectfully towards each other, that disagreements are fully aired, and that we make decisions based on facts and evidence as opposed to ideology, that people will adapt to that culture and we'll be able to move together effectively as a team."

This non-partisan, anti-ideological, managerial approach implies that one can in fact come to an understanding of data without applying an interpretive structure. Ideology or philosophy define the priorities and the goals of a decision making process. It causes concern to some that the President-elect sees himself in this anti-ideological context because to address the issues of the day demands a clear set of goals and a clearly defined context in which to make the decisions required to achieve those goals. Many of these questions create situations where win-win doesn't work because of the contradictions in the social structure. Where will the money for Medicare come from if it to be protected and expanded? From the beleagured backs of working families or from the overflowing coffers of the rich. If neither is an option, do we jettison the program? Does it get morphed into something very different? Just as with President Clinton's "welfare reform" initiative, can Social Security and Medicare be protected and expanded or will they be gutted or transmogrified in the name of fiscal responsibility?

There are fundamentally opposing interests at play in our society and our economy. These large questions about the "entitlement" programs and unionization could be viewed more fundamentally as discussions about the priorities for this nation. Do we want to continue the increasing accumulation of wealth in the hands of 1% of the nation's people while the other 99% see a continuing real loss in spending power? Do we see providing health care to the people of the nation as enough of a priority to challenge the insurance companies which, like vampires, feed off the financial blood of the healthy and leave the sick to rot untreated. Each solution to a problem involves winners and losers when an economy gets to the point we're in today, where there is little room left for padding.

The President-elect is a man of compassion and intelligence. In just a few days he will be the acting President of the United States. Let's look forward with positive anticipation to a humane and supportive administration crafting programs that benefit working families. We are all invited to participate through the Change.gov web site, participating in the policy discussion, and by participating in the Renew America Together days of service. However, keeping in mind the President-elect's background as a community organizer, we can also all participate by working in our neighborhoods and work places to build and expand a people's movement to help the new administration win the fights they must take on, and to provide pressure to ensure that working families needs are the priority for the next challenging period in our nation's history.

Bank of America Posts Loss as It Gets New Aid

On January 17, 2009 the New York Times reported that "Bank of America Posts Loss as It Gets New Aid" in an article by LOUISE STORY, ERIC DASH and ANDREW ROSS SORKIN.

The new bailout includes "a fresh $20 billion capital injection and absorb as much as $98.2 billion in losses on toxic assets."

"The second lifeline brings the government’s total stake in Bank of America to $45 billion and makes it the bank’s largest shareholder, with a stake of about 6 percent."

Thus one financial organization has received a commitment from the US federal government for $45 billion in direct cash and $92 billion in indirect support, or a total of $143 billion.

This represents 20% of the amount that is being proposed to help put the millions of people who are now out of work back to work. In real terms, it shows that the current capitalist system has a much greater commitment to maintaining its own structures than to addressing the needs of the people.

While many voices across the political spectrum talk about the need to help working families, they at the same time talk about being careful about debt. The sense of a total commitment to helping working families such as that expressed for protecting banking institutions is lacking.

As quoted in the article:

“The U.S. government will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks,” regulators said.

With losses mounting in the financial industry, other banks may eventually feel compelled to turn to the government for assistance, and the program could to used for other big banks. Taxpayers could end up guaranteeing hundreds of billions of dollars of banks’ toxic assets.

“The financial services sector still needs more equity,” said Frederick Cannon, the managing director at Keefe, Bruyette & Woods. “TARP was announced in mid-September and most of the initial decisions were based on the state of the economy then. The economy has gotten a heck of a lot worse.”

The question remains, why is this total commitment lacking when it comes to industry and to working families. This highlights a fundamental problem with the capitalist system; the prioritization of profits over people.

While we struggle as a society to find funding for the human needs of the vast majority of the people, needs like health care, housing, education, and addressing hunger, the coffers have no bottom when it comes to bailing out the rich and their institutions.

Socialism realigns the social priorities toward meeting the needs of the majority of the people and limits exploitation for private profit. Fundamental change is needed today. We in the United States can move forward together to figure out how to meet our needs and dump those who exist to exploit and legally rob off our backs.

Construction braces for slowdown in Northwest Indiana

Construction braces for slowdown in Northwest Indiana
(http://www.post-trib.com/news/1372558,construction.article)

January 12, 2009

By Erik Potter

Post-Tribune staff writer

Local and national experts expect the economic turmoil that first hit the residential housing market in 2007 to spread to the commercial construction market this year.

The Associated Builders and Contractors, a national trade group for construction firms, issued a report last month detailing the expected business climate in 2009.

The forecast is almost universally gloomy across all sectors of the industry: a 20 percent fall in retail and restaurant construction from 2008, a 20 percent decline in hotel construction, a 15 percent to 25 percent drop in office construction, and a 25 percent  to 35 percent fall for manufacturing construction. Institutional buildings, such as schools and hospitals, will likely see a 5 percent slip from 2008. The one bright spot is power construction, especially in alternative energy, which is expected to grow.

Industry fortunes will continue to sour in 2009 and 2010, predicted Associated Builders and Contractors Chief Economist Anirban Basu in the group's annual report.

Locally, the current crop of construction projects, arranged before the credit crunch hit in the summer of 2007, are nearly all completed, and tight credit markets and a skittish business climate mean new projects aren't coming up to replace them.

"There's not an abundance of work out there to bid (on)," said Jeff Brant, vice president of Schererville-based Brant Construction. "Projects -- banks, churches -- are really down right now. Everybody is holding onto their money."

Locally, the $3.8 billion BP Whiting expansion will help mitigate the drop in construction opportunities elsewhere, but the strict qualifications for bidding on the BP project likely mean those benefits will be concentrated to a few firms, Brant said.

Statewide, construction backlogs -- the number of projects firms have on their books for the next year -- is down 5 percent to 15 percent, estimated J.R. Gaylor, president and CEO of Associated Builders and Contractors of Indiana.

"It's really the availability of credit and investment that's hurt us across the board,"?Gaylor said, adding that lines of credit and bonding is what allows developers to finance new buildings on the speculation that someone will buy or lease them.

A stimulus package focused on infrastructure in the new Congress could help the construction industry, which saw its national unemployment rate (not seasonally adjusted) jump from 9.6 percent in December 2007 to 15.9 this past December. Indiana saw 5.7 percent fewer construction jobs in November versus the previous year.

But the time involved for a Barack Obama administration to get sworn in, negotiate a stimulus bill, choose the projects to fund and get those projects under way could stretch into the latter portion of 2009.

"That's why our outlook for 2009 remains quite bleak,"?Basu said.

William Putz, president and owner of Trinity Construction Corp. in Merrillville, said he hopes to see a capital gains tax abatement as part of a stimulus package. "Business will jump on that and that will help," he said.

Looking long-term, Putz took an optimistic view. Eventually, people will have to start replacing their worn-out goods, factories will modernize and the economy will recover. "General Motors, Ford, (they) will have to redo and retool and rebuild their plants. Auto workers don't do that. Construction workers do that."

Contact Erik Potter at 648-3120 or epotter@post-trib.com.

 

Disaster: Unemployment at 7.2 Percent. Real Rate 13.5 Percent

The extent of the human toll of the financial crisis on working families in the United States is immeasurable. While the press covers the occassional and tragic suicide of a billionaire, the day to day impact on working people of the stress of losing our homes, of losing our jobs, is less discussed.

One of the most distressing aspects of the financial crisis is the huge job losses both in the this country and world wide. Few life events are more devestating than a job loss.

As Tula Connell reported in the AFL-CIO Now Blog on January 9, 2009,

The jobless numbers out today are worse than even the most pessimistic analysts imagined: 524,000 jobs lost in December, pushing the nation’s unemployment rate to 7.2 percent. Under the Bush administration, 2008 has become the worst year for job loss since 1945, with nearly 2.6 million jobs lost last year alone. The federal Bureau of Labor Statistics reports that 11.1 million of America’s workers are unemployed.

December was the 12th straight month of job loss and included a loss of 21,400 jobs in auto and parts industries. From Bloomberg:

Manufacturing, which makes up 12 percent of the economy, shrank in December at the fastest pace in 28 years, Institute for Supply Management figures showed. Payrolls at builders dropped by 101,000 after decreasing 85,000. Financial firms reduced payrolls by 14,000, after a 28,000 loss the prior month. Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 273,000 workers after a decline of 402,000.


Employment in retail trade declined by 67,000 in December and by 522,000 for all of 2008. More than half of the losses in 2008 occurred in the last four months of the year.

And it’s taking longer and longer to find a job, as National Employment Law Project Executive Director Christine Owens notes:

It is particularly telling that the number of Americans who have been looking for work for more than six months skyrocketed to a whopping 2.6 million, now accounting for nearly one in four of the unemployed.

As bad as the official 7.2 percent unemployment rate is, the situation for unemployed or underemployed is actually far worse. The official unemployment rate of 7.2 percent does not include underemployed workers and those who are discouraged, and if they were included, analysts estimate the U.S. unemployment rate would be 13.5 percent, up 6 percentage points from 2007.

(Dakine01 at Oxdown describes what it’s really like to be among the long-term jobless. Read his diary here.)

But it looks like the Bush legacy of job destruction will continue long after he’s gone. Meeting last month, the Federal Reserve predicted the U.S. economy is likely to deteriorate further this year and unemployment will rise into 2010.

AFL-CIO President John Sweeney today spelled out the steps needed for long-term economic health:

Broad-based economic changes must be made to ensure sustained economic growth and broadly shared prosperity. We must restore American competitiveness to deal with our country’s unsustainable trade deficit. We must guarantee affordable, quality health care coverage for everyone. We must thoroughly reform our financial regulatory system to provide more transparency and effective government oversight and regulation. And to ensure that the middle class is rebuilt, we must pass the Employee Free Choice Act so workers can bargain collectively with their employers for better lives.

Yesterday, President-elect Barack Obama urged Congress to act quickly on an economic recovery package before it’s too late. Already, some in the Senate want to slow the process, delaying passage until mid-to-late February. As Obama puts it:

I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.

In short, a bad situation could become dramatically worse.

Many working people are holding our breath, waiting for the nightmare of the Bush administration to end, and for the new direction that the Obama administration represents to start turning our country, including our economy, around. Its just a little more than a week until inauguration day. While changing the direction of our economic devestation will take some time, after January 20th, when President-elect Obama takes office, we can look forward to efforts to help and sensitivity to the issues that are impacting so many of us as workers and members of working families.

Worsening poverty calls for united effort in region

While Governor Daniels and his Republican allies move forward with ramming their service-cutting budget down the throats of the working families of Indiana, a budget that State Senator John Broden said "almost turns into an anti-stimulus package", it is clear that poverty is becoming the hallmark of the state's inhabitants.

As has been documented in another post on this blog, roughly 40% of children state-wide are living in dire straits.

Mark Heckler in the Post-Tribune today highlights the worsening poverty in the NW Indiana region and calls for a united effort in response.

Some facts from the article:

Approximately 1.4 billion people live in poverty, which the World Bank defines as per capita incomes of between $1.25 and $2 per day.

In 2007, the U.S. Census Bureau defined poverty for a family of four at an annual income level of $21,027. According to the soon-to-be-released 2008 Quality of Life Council Indicators Report, 14 people out of 100 fall within this category in Northwest Indiana. This is up substantially from the 9 percent poverty rate for our region in 2005.

Northwest Indiana's children fare far worse. Among children under the age of 18, nearly one in four children in our communities lives in poverty.

As the article points out, these statistics put numbers to a stark, devestating, and harsh reality that NW Indiana working and poor families face; a reality that includes homelessness, hunger, joblessness, and the inability to meet the basic needs of survival for one's family.

And these statistics date from 2007, prior to the current financial crisis which is exascerbating the problems.

The article encourages action along the following lines:

-- volunteer time to support organizations fighting poverty
-- give money and food to those who cook meals and maintain food pantries to feed the hungry
-- support economic development efforts to attract, keep and diversify businesses in our region
-- bring more affordable housing online

These are excellent steps in a positive direction, but larger scale responses are needed as well.

President-elect Obama's plans to put people back to work are a good step.

A massive federal/state jointly funded program to build low-cost quality housing in NW Indiana would put many to work and provided living space for people living in bad conditions or homeless today.

A single-payer national health care system similar to Canada's would help everyone financially by relieving them of the devestating health care expenses that either prevent people from getting care or drive many into bankruptcy.

Winning the Employee Free Choice Act (EFCA) would go a long way toward helping to ensure that working people got paid a living wage, and would help to lift many now living in poverty to a better life.

Peace and an end to the massive military expenditures that undermine our economy, our position in the world, and create so much unjust and unneeded death and destruction would help us meet our domestic needs.

Hope is in the minds of many as we near the inauguration day and President-elect Obama gets closer to taking office. While a tempered outlook is required due to the political realities that the President-elect faces, there is every reason to hope that help in terms of job programs and an economic stimulus will make a positive difference to the lives of the working people of Indiana.

We have the right to expect that our Governor create a budget that augments the direction that President-elect Obama is charting rather than attempting to undermine it, and to voice that expectation to the Governor.

Finally, many are asking what is wrong with capitalism itself, as a system. Was it greed that created the current crisis, and will increased transparency and regulation ensure that this never happens again? These are good questions that deserve to be asked and explored further.

Central Indiana Home Sales Down

According to the Indianapols Star article Hope rises for Central Indiana home sales in 2009,

home sales in Central Indiana dropped 29 percent during November compared with the same month last year

. For the year, home sales are down 16%.The article predicts that home sales will rise in 2009 due to the lowest mortgage rates in 50 years. However, if the current trends in job loss and economic decline are not stemmed, the cuts in mortgage rates will have minimal effect on home sales. Further, as the article points out, the rate cuts have the effect of

cutting the cost of buying a home mortgage and giving homeowners with good credit an opportunity to refinance their mortgages.

The key phrase there is "homeowners with good credit." In order to encourage a widespread renewal in the home market, its important to keep up the push for government intervention to create and protect jobs at living wages. Its also important to recognize the impact of falling home prices.

The average sales price in the 13-county study fell from $143,182 to $128,867, a 10 percent drop, from November 2007 to November 2008.

When a home owner with a mortgage can't sell their house for as much as the mortgage buy-out they are effectively locked into their home. This issue needs to be addressed. At the end of the day, the current economic crisis has not responded to fiscal stimulous efforts. This is a structural crisis that can only be resolved by putting working families back to work at a living wage, providing universal quality affordable health care, and protecting people's retirement funds and expanding Social Security benefits, including raising Social Security retirement payments.