Increase the Train Fund, Give the Work to Detroit

A journalist writing in The Atlantic argues that the relative chump change being thrown at high speed rail (AIG and Citibank got 55 times as much, roughly $460 billion vs $8 billion) could become diluted across so many states that no one "will end up with a top-of-the-line system that could provide thousands of new jobs and an envy-inducing model for America." He offers a better alternative that benefits Michigan.

Instead of scattering nickels and dimes across dozens of states, a better idea would be to increase the train fund at least tenfold so America can have at least one legitimate high-speed rail line like Spain’s Madrid-to-Seville train, which runs at 186 mph (Amtrak averages only 79 nationwide). And let this man-on-the-moon project start in Detroit.

Yes, Detroit. The city that was once part of FDR’s “Arsenal of Democracy,” for its part in retooling auto plants to make World War II tanks and bombers, has easily a dozen empty auto plants that could be making train engines and train cars.

We also have the trained workforce. According to UAW Local 651 President Art Reyes, he has “a workforce of 900 that’s been downsized from 9,000, but every one of them is computer-literate and ready for cutting-edge, green-technology stuff, whether it’s wind turbines, next-generation auto batteries, or rail."

Increasing the train fund tenfold is a nice dream, but I doubt there's the political will, especially on the right. That's too bad, because - once again - we lag behind the rest of the world in progress. This is China's plan.

China, as part of their two-year stimulus plan, is poised to spend 3% of their GDP a year on public investments in renewable energy, low-carbon vehicles, high-speed rail, an advanced electric grid, efficiency improvements, and other water-treatment and pollution controls. This is about $12.6 million every hour. In the United States, the American Recovery and Reinvestment Act invests about half as much as China on comparable priorities. This represents less than half of one percent of our 2008 gross domestic product.

There is good news though. The Midwest appears to be a frontrunner in the race for $8 billion in funds because we're part of the Midwest Interstate Passenger Rail Commission, along with seven other states, and federal guidelines give an edge to states that have banded together. It's a start.

Cross-posted at Blogging for Michigan.)

Who Do Americans Trust On Health Care Reform?

Gallup asked Americans who they trust to make the right recommendations on health care reform. Guess who came in last. Republicans. Behind insurance companies!


Why don't Americans trust Republicans? Possibly because they continue to peddle lies and scare stories (socialism, socialism!).

Or because the Medicare Advantage program they rammed through during Bush's first term will give insurance companies "an estimated $177 billion in excess payments over 10 years to compete with Medicare - subsidies that Obama would sensibly cut to help pay for health care reform."

Or because Republicans blocked Medicare from negotiating for lower drug prices, blocked importing drugs from Canada or Mexico, and argued that competition would lower prices. How did that work out?

Today, seniors pay 60% more for the same drugs than the price charged veterans because the Veteran's Administration does negotiate lower prices.

Republicans just aren't credible. They had an opportunity to do something good for seniors and they blew it, choosing instead to side with powerful pharmaceutical lobbyists.

The GOP's One Unforgivable Sin

Sen. John Ensign's confession that he had an extramarital affair with a member of his campaign staff is a good news/bad news story. It's good news for Romney, Gingrich, Palin and other Republicans hoping to unseat Obama, but it's bad news for a party that continues to lose voters.

This is their problem, according to The Las Vegas Sun.

The Republican Party didn’t make a deal with the devil.

It made a deal with God, or at least people who said they were God’s representatives — a certain class of very political and ideological preachers.

The deal, engineered by Republican operatives such as Lee Atwater and Karl Rove, went like this: Be against gays and abortion and for prayer in the schools, and in return, those preachers would proclaim the GOP the party of God and deliver millions of suburban and rural voters — enough to win elections for three decades.

But the deal carried a risk: Any behavior by Republican officeholders or public figures that seemed at odds with a certain kind of Old Testament morality — a tryst in an airport bathroom, a painkiller addiction, a sexual harassment lawsuit — and voters might feel betrayed and manipulated.

And the deal would collapse.

The last couple of elections show that the deal has been collapsing for sometime, and it's not just among Bible believing Republicans. As the LVS points out, voters are leaving the party because of their one unforgivable sin: Hypocrisy.

People are disgusted with Republicans. Instead of attacking other people's patriotism, morals, marriages, work ethics, etc., the GOP needs to get their own house in order. Calling for Ensign to resign is a good first step. After all, it was Ensign who called for Bill Clinton to resign, and it would certainly go a long way toward fulfilling the Senator's vision of "people who are in office who will hold themselves to a little higher standard."

Or do higher standards only apply to other people?

A.M.A. Opposes Public Health Care Plan - Again

Joining Big Pharma and the insurance industry, the AMA announced it is opposed to public health insurance.

"The A.M.A. does not believe that creating a public health insurance option for non-disabled individuals under age 65 is the best way to expand health insurance coverage and lower costs," read an organizational statement to the Senate Finance Committee. "The introduction of a new public plan threatens to restrict patient choice by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans."

Aside from the fact that public plans do not restrict patient choice, this isn't the first time the AMA (which ranks second only to the U.S. Chamber of Commerce over the last ten years in the amount it has spent to influence Congress) has spoken out against public health insurance.

Forty years ago, the AMA declared its opposition to creating a public health insurance option people over age 65, complete with dire predictions of the destruction of American medicine.

Going back further, the "AMA has fought almost every major effort at health care reform of the past 70 years."

The group's reputation on this matter is so notorious that historians pinpoint it with creating the ominous sounding phrase "socialized medicine" in the early decades of the 1900s.

"The AMA used it to mean any kind of proposal that involved an increased role for the government in the health care system," Jonathan Oberlander, a professor of health policy at the University of North Carolina, told NPR in a 2007 interview. "They also used it to mean things in the private system that they didn't like. So, at one point, HMOs were a form of socialized medicine."

Their latest opposition is based on the belief that without private insurers in the market, "the corresponding surge in public plan participation would likely lead to an explosion of costs that would need to be absorbed by taxpayers." Critics disagree:

Indeed, in mid-February, the Commonwealth Fund put out a report on the most cost-effective ways to revamp the health care industry. The public plan, it concluded, "plays a central role in harnessing markets for positive change" by lowering premiums for many Americans by, potentially, $1,000 a year. In addition, the Commonwealth Fund added, a public plan would help decrease the number of uninsured in the country from "an estimated 48 million in 2009 (16 percent of the U.S. population) to 4 million by 2012."

Will the AMA's opposition carry any weight with Obama or Congress? This doctor says the AMA is no longer the force in American medicine that it was in the past.

In the 1960's, at the height of opposition to Medicare, the AMA claimed at least 70 percent of American doctors as members. Today, the AMA represents only a third of American doctors, most of them elderly. Almost 90 percent of doctors over age of 70 are members, but fewer than 35 percent of those aged 30 to 49 belong to the AMA.

They're also out-of-step with more than half of the of U.S. doctors who now favor switching to a national health care plan, as well the 67 percent of Americans who support creating a government-administered public health insurance option similar to Medicare to compete with private plans.

Don't cave to special interest groups like the AMA, Washington. Instead, take to heart the words of Dr. Marcia Angell who spoke before the House HELP Committee earlier this week.

I want to mention one final and very important reason for enacting a nonprofit single-payer health program. We live in a country that tolerates enormous and growing disparities in income, material possessions, and social privilege. That may be an inevitable consequence of a free market economy. But those disparities should not extend to denying some of our citizens certain essential services because of their income or social status.

One of those services is health care. Others are education, clean water and air, equal justice, and protection from crime, all of which we already acknowledge are public responsibilities. We need to acknowledge the same thing for health care. Providing these essential services to all Americans, regardless of who they are, marks a decent and cohesive society. It says that when it comes to vital needs, we are one nation, not 300 million individuals competing with one another.

The special interests opposing public health insurance are motivated by money and profits. There are some things more important in life than money, and health care is one of them.

Auto Industry Problems Prolong Nation's Misery

The NY Times has an article about our state's efforts to remake ourselves without "King Auto" that touches on things most of know - film incentives, green jobs, battery production, and worker retraining. It also touched on the fact that our problems are impacting the country as a whole.

On a broader level, the troubles of the auto industry are having a profound impact on the overall United States economy. The industry — with Michigan as its center — now accounts for only 1.5 percent of the nation’s economic output, down from 3 percent in 2007 and 5 percent at its peak in the 1950s.

The automakers have historically played a big part in ending recessions. Car companies, in the past, would increase production and add workers to satisfy pent-up consumer demand after a downturn. But now, the industry’s troubles may be prolonging the misery.

“If not for the problems in the auto industry, this recession would have been much milder,” said Ben Herzon, an economist at Macroeconomic Advisors, in St. Louis. [emphasis added]

Okay, that's something most of us know too, but I pointed it out for all the Limbaugh and Hewitt trolls that might be reading this. Hoping that GM or Chrysler fails is not in the best interest of the country. When we lose jobs, we lose money, and in turn we stop spending. When we stop spending, businesses lose money and they're forced to layoff people or cut wages. Unless you're independently wealthy, the pain will eventually trickle down to you too. Understand?

Follow G.M. Restructing on the Web

I'm still recharging my batteries and taking a break from blogging, but I thought I'd pass along a few links regarding GM that I thought you might find useful.

You can follow the GM bankruptcy proceedings online at GM Reinvention.com. The website answers questions about their restructuring and will post updates as they become available.

Want instant updates? Turn to Twitter.com/GMBlogs.

Finally, you can also check out FastLane Blog where Fritz Henderson had this to say:

We’re committed to open communications and I am personally putting a high priority on transparency. One way we’ll do this is by launching a series of live web chats on this website. I’ll kick things off later this week for one hour on Thursday, June 4 at 3 p.m. EDT. Following me, a steady stream of GM leaders from throughout the company will host additional chats, about two a week, on whatever topics are of most concern to you.

The weekly chats are a great idea and so is the high priority on transparency. It sounds like G.M. learned something from the Obama administration.

Taking a break

William Wordsworth's sonnet, "The world is too much with us," reflects his longing for a much simpler time. I long for that simpler time too.

As many of you know, I lost my mother in February, welcomed a new granddaughter into the world in April, and have been living with uncertainty about my husband's job for what seems forever (he works for General Motors). And next week, we will finally put my mother to rest in the Keweenaw Peninsula, which is at the very top of Michigan. We had to wait for the 282 inches of snow they received this winter to melt before the cemetery could bury her.

All of this stress, excitement and uncertainty have taken a toll on me and I need a break from the world. That means no blogging or other unnecessary "stuff" for the time being. Keep up the good fight while I'm gone.

A High Stakes Game of Chicken

Remind me never to play poker with President Obama. I have a feeling he's good.

After receiving $25 billion in taxpayer-funded TARP funds, greedy J.P. Morgan Chase decided to play hardball with the auto task force when it came time to negotiate over debt recovery before and during the Chrysler bankruptcy. According to the WSJ:

President Barack Obama's auto task force heard a blunt message early this spring from J.P. Morgan Chase & Co., the largest lender to Chrysler LLC. In any deal to remake the troubled auto maker, Chrysler would have to repay its lenders all $6.9 billion it owed.

"And not a penny less," said James B. Lee Jr., vice chairman at the bank, in a call to auto task-force boss Steven Rattner on March 29.

The next day, Mr. Obama called the banker's bluff. The president stepped before a podium to announce that Chrysler could face a disorderly bankruptcy or even liquidation. His meaning was clear: If that happened, the lenders would get nowhere near $6.9 billion.

A few hours later, Mr. Lee called Mr. Rattner back. "We need to talk," he said.

The banker's about-face was a vivid example of the government's tightening grip on a humbled financial industry. Pulling a trick from the hedge-fund playbook, the government used its leverage as the sole willing lender to Chrysler, either in bankruptcy court or out, to extract deep concessions from some of the country's biggest banks.

h/t to Epicurean Dealmaker who explains that the WSJ made it appear that almost all the lenders involved understood exactly what type of game they were playing:

Many of the lenders believed the administration wouldn't let Chrysler file for bankruptcy. "The plan was to call the government's bluff. The game was to game the government," said a manager of a distressed-debt fund.

Gaming the government is essentially the same as gaming the taxpayers. The good news according to E.D. is that the system worked exactly as it should.

The government simply did what any hedge fund driven by fiduciary duty and self interest would have done if it held the reins: it dictated the terms it wanted to see, and it told the creditors to pound sand if they didn't like it. The creditors, on the other hand, seemed to sally forth onto the field of battle without fully considering who was supplying their reinforcements (the Treasury), where they were fighting (in the forum of public opinion, as well as the arena of commerce), and the outside chance that their primary opponent might be smarter than a bag of hammers (and therefore realize and exploit its advantages). In return, they got schooled, but good.

Oh, yeah, he also had a comment for the whiners complaining about the government's involvement in economic affairs:

Deal with it. Buck up, and move on. Find a less lopsided game to play in.

Because I can guarantee you the government and 95% of the people who elected it to power don't give a rat's ass that you're going to lose money on your Chrysler bonds.

Yeah!


(Cross-posted at Blogging for MI.)

The Crime No One Talks About - Wage Theft

I haven't had much time to read lately, but Kim Bobo's book, Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid - And What We Can Do About It, will be the next one I pick up. Bobo is the Executive Director of Interfaith Worker Justice.

Here's a short synopsis from Joe's Union Review:

Bobo says wage theft in America is the crime wave no one talks about, and she is right. Billions of dollars' worth of wages are stolen from millions of workers in the United States every year. The scope of these abuses is as staggering as it is wrong - paying workers far less than the legal minimum wage, purposefully misclassifying employees as independent contractors, and illegally denying workers overtime pay. But now people are starting to take notice -- and it is my hope that they do so starting with this very good book.

Chapter 5: Organizing to Stop Wage Theft: Why Unions Matter, starts with a story of 39 year-old Mercedes Herrerra. She came to this country from Mexico, lives in Houston since 1994 and works as a janitor for staffing agencies cleaning buildings and sports facilities. Bobo says she was never paid for overtime!

Her employers would tell her, "There is no overtime. After 40 hours you work for someone else." (This is not legal).

The story continues that after Hurricanes Katrina and Rita, the worker was hired by a cleaning firm contracted to clean the Reliance Center. She was in charge of keeping the bathrooms clean. Her staffing agency charged her $100 per week for her shoes, gloves, masks, cleaning supplies, and shuttle rides to the Center. She wasn't told when she was hired that such charges would be taken from her paycheck. As a result, her hourly wage fell significantly below minimum wage. (This is not legal).

The lower paid workers in our country are treated like crap. Union activists have been saying this for a long time. Some claim we blow it out of proportion or distort the reality -- for Herrerra, according to Bobo, worse than the wages stolen was her ill treatment. Managers would scream at her and her colleagues. Some would tell workers they were old and worthless.

You can read more here and here. Ted Kennedy has said the book offers "bold, practical, and progressive solutions for how policymakers and advocates can end the growing crisis of wage theft in America."

(Cross-posted at Blogging for MI.)

Buy It Here; Build It Here

USW President Leo Gerard is a soft-spoken man, but he has some blunt words about General Motors restructuring plans:

The proposition General Motors has presented to the United Auto Workers and American taxpayers in its latest restructuring plan is simple: You must pay for your own execution.

GM, which already took $15.4 billion in bailout money, wants another $11.6 billion and is offering in return this deal: It will close 16 of its American manufacturing plants, terminate 21,000 of its factory workers and double the cars it builds in low-wage Mexico, China and South Korea and ships back to the U.S. to sell.

There it is: GM is demanding that Americans pay to send their own jobs overseas.

In the world where corporate executives live, the one in which boards of directors grant CEOs multi-million dollar bonuses even after companies tank, maybe that’s not a perverse proposition.

But in the world where real Americans live, we’ve had enough of this crap. Decades of foolish tax and other federal policies that encouraged American manufacturing firms to throw Americans out of work and expatriate were bad enough. To expect American taxpayers to bankroll GM’s plans to layoff American workers and move their jobs overseas goes too far.

Gerard goes on to point out that this isn't just about the UAW or GM. This is about American manufacturing and the millions of people in good-paying jobs who depend on the auto industry - steelworkers, rubber workers, glass workers, healthcare, education, retail - a total of more than 7 million people.

What will we be left with if manufacturing dies? "America is in danger of attempting to subsist on an economy based on nothing more than amorphous derivatives, credit default swaps and Ponzi schemes." Manufacturing jobs helped millions of people achieve the American Dream and that dream is now under assault.

In just the past eight months of this recession, caused in huge part by recklessness on Wall Street, this country has lost 1.2 million manufacturing jobs, according to the U.S. Department of Labor. GM cannot take tax dollars to slash more. Former U.S. Labor Secretary Robert B. Reich agrees. Here’s what he told the Washington Post, “. . . it raises fundamental questions about the purpose of bailing out these big companies. If GM is going to do more of its production overseas, then why exactly are we saving GM?”

Gerard says, "We have no intention of buying our own noose. We intend to win this fight." He's being joined in that fight by Sen. Debbie Stabenow, the Rev. Jesse Jackson, actor Danny Glover and Lansing Mayor Virg Bernero, as well as the USW, the Alliance for American Manufacturing, and the Mayors and Municipalities Automotive Coalition, among others. They're conducting an 11-state, 32-city protest bus tour: “Keep it Made in America.” The idea is simple. If we buy it here, we should build it here, which Gerard points out is not impossible for a U.S. auto company to do.

Ford Motor Co., which is not taking any bailout money, is investing $500 million in retooling its Michigan Truck plant outside Detroit so that it can make small cars that it will sell worldwide, including its next-generation, battery-electric Focus. And Chrysler, which is getting bailout money, has made a deal with Fiat under which the Italian car company will manufacture a small car in one of Chrysler’s U.S. assembly facilities, which, along with other long-term commitments, will eventually create 4,000 U.S. jobs.

At each stop along the tour, people are being asked to sign their petition supporting "Buy it here; build it here." Please click over and add your name too. They'll present the petitions at a teach-in conference in Washington, D.C. on May 19 when they'll explain to elected officials why GM’s plan fails America and why they must require GM to submit a new plan supporting American jobs.