American Axle strike paid off for one already rich man

Remember the American Axle strike earlier this year? Workers settled after 11 weeks for a contract that cut wages as much as $10 an hour, froze pensions for those with less than 20 years seniority, and scheduled two plants for closure.

Union workers ratified the contract, but the fallout continues:

American Axle & Manufacturing Holdings Inc shares surged 10 percent on Wednesday after analysts said the parts supplier plans to eliminate about 670 salaried jobs on top of factory job cuts now underway.

Analysts at Lehman Brothers and JPMorgan said in research notes that hourly headcount cuts will be accompanied shortly by white-collar cuts at a three-to-one ratio, citing a meeting with American Axle's executives late on Tuesday.

There was one person who came out smelling like a rose. [my emphasis]

American Axle and Manufacturing Holdings Inc. Chairman and CEO Richard Dauch has been awarded an $8.5 million bonus in part for leading the auto parts supplier through a bitter strike.

The bonus revealed Friday in a filing with the Securities and Exchange Commission is in addition to his earlier reported 2007 compensation valued at $5.55 million.

And the rich get richer...


(Cross-posted at BFM)

Good news, bad news about the economy

Incomes surged in May after the government sent out $48 billion in tax stimulus checks. Personal income rose 1.9%, the largest increase since September 2005, and after taxes and adjusted for inflation, real disposable income increased 5.3%, the biggest increase since 1975. Good news, right? Not so fast.

Excluding the impact of the rebates and inflation, real disposable incomes were flat.

And looking ahead, there's little reason to be optimistic according to this economist:

Over the next few months we'll see a return to non-stimulus numbers. And those probably won't be that good. Why you ask? How can someone get a raise when the job market is deteriorating?

Year over year job growth has been deteriorating for a long time, and unemployment is increasing. This is not an environment where an employee can say, "I need a raise."

Wages and salaries grew just 0.3 percent in May according to the Commerce Department, and inflation only increased 0.1 percent, but that's not taking into consideration food and fuel inflation. (Inflation is actually above 5%.) The middle-class is barely treading water, and in many cases we're drowning.

There is one group that's doing well according to the EPI - the wealthy. [my emphasis]

Inequality in the United States continues to worsen. Huge gains at the top of the income scale have been fueled by, among other things, a surging inequality in wages (illustrated in the chart below). The ratio of the wage income of the top 1% of earners to that of the bottom 90% more than doubled between 1979 and 2006, increasing from a ratio of 9.4-to-1 to 19.9-to-1. [...]

But when it comes to the wage income of the highest of the high earners, the staggering gap has become a chasm: in 2004 the upper one-tenth of 1% earned 70.4 times as much as the average person in the bottom 90% of the income scale. Just 25 years earlier in 1979, the ratio that was only 21.0-to-1. In other words, in 1979 it took the highest-paid earners 12.4 days to make what most other earners did in a year, but by 2004 that feat was accomplished in a mere 3.7days.

No wonder the University of Michigan's latest survey shows consumers are growing more pessimistic.

The consumer sentiment index fell to 56.4 in June from 59.6 in May and 56.6 in mid-June. It's the lowest since 1980 and the third-lowest reading in the 56-year history of the survey.

Also...

"Moreover, gas prices have risen to an all-time peak, food prices posted the largest increases in decades, home prices have fallen faster than any time since the Great Depression, and there has been widespread distress associated with foreclosures," the report added.

You know conditions are bad when middle-class professionals resort to sleeping in their cars.

Disability experts or cronies?

Pres. Lyndon Johnson signed the Architectural Barriers Act in 1968 so buildings would be accessible to people with disabilities, and forty years later Washington still can't get it right.

Disabled employees at Department of Transportation headquarters are most unhappy these days with their new digs down by the Navy Yard in Southeast Washington.

Agency officials say the building -- the first entirely designed and constructed for a federal agency since 9/11 -- was built with guidance from disability experts and help from the U.S. Access Board and the General Services Administration.

But dozens of employees with disabilities began to have problems -- some caused by security precautions -- as soon as the 6,000 workers moved in last summer. There were several safety issues, such as fire alarms without blinking lights for the hearing-impaired, and there were doors that required too much strength to open.

Employees were especially frustrated by cafeteria tray slides that are so high that employees who use wheelchairs cannot reach their food, a violation of standards and a constant annoyance.

Who was their disability expert? Michael Heckuva-Job Brown? I bet he/she made sure employees could get to their desks to do their work though. Eating in the cafeteria? Not a priority.

I wonder if it occurred to anyone to ask the disabled employees for feedback and suggestions. Who better to evaluate accessibility than a disabled person?

To make matters worse, Assistant Secretary for Administration Linda Washington sent an e-mail with "an outline of how cafeteria staff and DOT employees needing assistance can work together to provide employees with a positive experience" getting their meals. These were some of her suggestions:

When in the cafeteria [employees needing assistance] should let a cashier... know by politely requesting assistance.

Whenever possible, employees are encouraged to visit the cafeteria during 'non-peak' times to ensure the most efficient use of their time and prompt service. This would be prior to 12:00 pm and after 1 pm.

Employees can also consider visiting the cafeteria with a co-worker.

Someone near and dear to me is disabled, so I feel qualified to translate:

Disabled employees are normally rude, so this is a reminder to them to use some manners.

Disabled employees (who didn't create this problem) create a lot of work for the cafeteria staff during peak hours. They should come in early or eat late so they don't inconvenience anyone.

If a disabled employee can impose on a co-worker to help them get their food, all the better for us.

As you might have guessed, the department started sensitivity training after that e-mail went out. I hope part of that training includes eating in the cafeteria during "non-peak" times. I bet they'll get an earful from the disabled employees eating with them!

Blackwater Seeks Shari'a Law Defense

I've gotta hand it to Blackwater Worldwide. They get more free publicity than John McCain. The latest news is courtesy of Voice of Mordor:

Erik Prince (prince in name, not in nature), brother-in-law to the leaseholders of the Michigan Republican party, is fighting a lawsuit against his mercenary business in Afghanistan, brought by widows of three American soldiers who died when a plane owned by a sister corporation to Blackwater, Presidential Airways [crashed].

The companies lawyers are arguing before a US federal court that Shari'a law should be applied, and not the current legal standard found in the United States of America.

Why is Blackwater seeking to hide under a burqa to have the judge apply Islamic law? Because Shari’a law does not hold a company responsible for the actions of employees performed within the course of their work. Blackwater would be off the hook and could pocket even more money.

Oh, oh. Now they've opened Pandora's box. Or, as Attaturk at Firedoglake said:

Don't let too many Republicans know this, but Shari'a law is apparently great for business and bad for the most evil people on earth, not Al Qaeda silly, AMERICAN TRIAL LAWYERS. [...]

If this becomes well-known, the GOP's corporate base will become fundamentalist Muslims faster than you can say Mecca Oil & Gas.

(Cross-posted at BFM.)

Defense contractor loophole closed

According to the AP, President Bush closed a loophole yesterday that defense contractors had been using to avoid paying millions of dollars in payroll taxes. [emphasis mine]

Bush signed into law the Heroes Earnings Assistance and Relief Tax Act, which provides tax relief for military families. Included in the legislation is a provision that would treat foreign subsidiaries of U.S. government contractors as American employers. That means they now have to pay the taxes that finance Social Security and Medicare programs. [...]

Lawmakers wanted to end the practice, which has become widespread among American businesses. The Senate Finance Committee estimates that thousands of companies have registered in the Caymans to dodge taxes. The losers, the committee said, are ordinary Americans who foot a larger share of the bill to pay for programs that benefit the elderly and the disabled.

In an example of how much tax revenue was being lost, the Boston Globe reported in April that Kellogg, Brown, and Root, which receives an estimated $16 billion a year for defense contracts in Iraq, avoided close to $100 million a year in payroll taxes by hiring workers through foreign shell companies. That's a large chunk of the nearly $846 million in revenues that The Joint Committee on Taxation estimates will be brought in over the next 10 years by shutting that loophole.

I'm not sure if this will affect Blackwater Worldwide since they're headquartered in Moyock, N.C., but it should since they're violating IRS laws too according to Rep. Henry Waxman.

In a letter to Erik Prince, the Chairman of the Prince Group, which owns Blackwater, Rep. Henry Waxman wrote:

"I have received documents which suggest that Blackwater may have engaged in significant tax evasion. According to an IRS ruling in March 2007, Blackwater violated federal tax laws by treating an armed guard as an “independent contractor.” The implication of this ruling is that Blackwater may have avoided paying millions of dollars in Social Security, Medicare, unemployment, and related taxes for which it is legally responsible.

And according to McClatchy Newpapers:

Waxman’s staff looked at the most recent State Department contract and estimated that between May 2006 and March 2007, Blackwater avoided paying $15.5 million in Social Security and Medicare taxes and $500,000 in unemployment taxes.

That's a lot of tax money they owe the country, but Blackwater can afford it. Since 2001, they've been granted federal contracts worth more than $1 billion - contracts that are being paid for by taxpayers.

As Sen. John Kerry said earlier this year, "Failing to contribute to Social Security and Medicare thousands of times over isn't shielding the taxpayers they claim to protect, it's costing our citizens in the name of short-term corporate greed."


(Cross-posted at Blogging for Michigan.)

Obama talks about fair trade

Obama addressed more than 1,000 people at Flint's Kettering University today. Christine from Blogging for Michigan attended and took some pictures that you can check out, and I helped do some live blogging and posted my comments there too.

Obama's speech was: "Renewing American Competitiveness." How appropriate for Flint and Michigan in general. Manufacturing jobs have been leaving here for years and being sent to places like Mexico and China, and along with those jobs went pensions and health care. Workers are ready for change because, as Obama noted, we've "lost confidence in that fundamental American promise that our children will have a better life than we do."

Click the link above to read his speech. There's something in there for everyone. Obama touches on health care (he states he will push for universal coverage), green jobs and energy policy, broadband access, education (college education must not be a privilege of the few – it should be a birthright of every single American), jobs, trade and more. Because trade is responsible for decimating manufacturing jobs here in Michigan, I pulled out that part of his speech for you to read.

But even as we welcome competition, we need to remember that our economic policies must be supported by strong and smart trade policies. I have said before, and will say again – I believe in free trade. It can save money for our consumers, generate business for U.S. exporters, and expand global wealth. But unlike George Bush and John McCain, I do not think that any trade agreement is a good trade agreement. I don't think an agreement that allows South Korea to import hundreds of thousands of cars into the U.S., but continues to restrict U.S. car exports into South Korea to a few thousand, is a smart deal. I don't think that trade agreements without labor or environmental agreements are in our long term interests

If we continue to let our trade policy be dictated by special interests, then American workers will continue to be undermined, and public support for robust trade will continue to erode. That might make sense to the Washington lobbyists who run Senator McCain's campaign, but it won't help our nation compete. Allowing subsidized and unfairly traded products to flood our markets is not free trade and it's not fair to the people of Michigan. We cannot stand by while countries manipulate currencies to promote exports, creating huge imbalances in the global economy. We cannot let foreign regulatory policies exclude American products. We cannot let enforcement of existing trade agreements take a backseat to the negotiation of new ones. Put simply, we need tougher negotiators on our side of the table – to strike bargains that are good not just for Wall Street, but also for Main Street.

I think that last sentence makes an important point. It's too late to put the genie back in the bottle and rescind NAFTA and other trade agreements, but there's no reason we can't change those agreements so that labor gets their fair share of the pie too.

This is how the system works now according to Ezra Klein:

Put broadly, opening ourselves up to trade is really good for people who buy things, and less good for people who make things. Now, a lot of folks both buy and make things, so the story is complicated. But one reason the elite classes are so hegemonically enamored with trade is that they don't really make anything at all, and so experience none of the downsides of trade. As Dean Baker likes to point out, we've structured our trade deals such that unskilled manufacturers face a lot of international competition while reporters, say, face almost none.

If we really value all work in this country, then tweaking these trade agreements is the only right thing to do.

McCain to Gov. Blunt: Wassup?

Missouri Gov. Matt Blount had been mentioned as a possible running mate for McCain; however, that was prior to InBev of Belgium's unsolicited bid to talk over St. Louis-based Anheuser-Busch. You see, McCain denounces protectionism, while Gov. Blunt favors it:

“I am strongly opposed to the sale of Anheuser-Busch and today’s offer to purchase the company is deeply troubling to me. I have said that while I am supportive of action to prevent the sale there is no immediate tool available at the state level to block it.

“I have directed the Department of Economic Development to explore every option and any opportunity we may have at the state level to help keep Anheuser-Busch where it belongs - in St. Louis, Missouri.”

Ironically, Blount recently criticized Obama for being a protectionist:

"Now is not the time to adopt the policies of Herbert Hoover -- of protectionism.

The sudden flip-flop is puzzling since Republicans have never been too concerned about sending jobs out of the country any other time. On the other hand, flip-flopping is a Republican trait typical of McCain too, so Blount may still have a chance after all.

Getting back to Anheuser-Busch, the Economist had the money quote about the possible sale:

Could anything symbolise America’s loss of economic supremacy more clearly than for its favourite beer to fall into foreign hands?

Army Career Counselors Harass Parents

I know our military is stretched thin and recruiters are under a lot of pressure to sign people up, but what happened to Brandon Friedman's mother (Friedman is the Editor of VetVoice and a Captain in the Individual Ready Reserve) is unacceptable and way out of the bounds of common decency in my opinion. In Friedman's words (my emphasis):

My mom called me on Friday afternoon. She was slightly upset, but mostly angry. I asked her why.

She said that two soldiers had come to the house looking for me.

Now, this doesn't surprise me at all. It's not the first time that's happened. In fact, they'd shown up at my parents' house twice before. The Army is so desperate for warm bodies that recruiters and career counselors will pretty much go anywhere if they think they can get somebody to sign up. And I'm still in the IRR, so that makes me a prime target--even though I've already served two tours in combat. But that's not the issue here.

The issue is how these two guys acted. My mom--who rarely gets flustered--explained that the two NCOs who'd come to the house were Army Reserve Career Counselors from the 90th Regional Readiness Command. They had shown up at my parents' house in an attempt to lure me back into a unit. But they didn't just ask.

Instead, according to my mom, they proceed to play good cop/bad cop with her. Sergeant First Class M. played the good cop. He explained that they were just there to let me know what options were available to me, should I want re-join a unit. He handed her his card.

The task of playing bad cop, however, fell to Master Sergeant N. Hovering over her in the driveway, Sergeant N. leaned in and told my mother--at her house, in the absence of both me and my father--that he could "make it easy" on me, and that he could give me "alternatives" if she would put them in contact with me. The implication was clear to my mother: If she wasn't willing to put them in contact with me, it would not be "easy" for me. He wasn't saying it specifically, but, as we all know, he was suggesting that if I wasn't willing to come off the IRR and join a unit, then I'd likely be recalled to Active Duty involuntarily and deployed for a third time.

To a mother who doesn't understand how the Army works, it was easy for him to make her think that he had some sort of say in the process. This is a common technique.

Irritated by his vague threats and intimidation, my mom told them she didn't have any contact information for me. Then she expressed to them that they could leave her home. She called me a while later.

Now, I can tell you, my mom doesn't need the added stress of having soldiers appear at her door. She doesn't need these guys telling her that her twice-deployed son could be sent back to Iraq if she doesn't give out his personal information. And she certainly doesn't need it done in the moderately threatening tone she described.

The tactic is clear according to Friedman: "Use the threat of an involuntary mobilization to coerce a soldier into joining a unit."

As you might have guessed, Friedman didn't let the incident pass. He called the Sergeants and ended up giving them a piece of his mind, and he also read them e-mail messages from other soldiers who were victims of these tactics. This was not an isolated incident. You can read those e-mail messages online too.

The bottom line is that the Army needs to address these tactics. As a mother, I think the Army needs to make it clear that parents are off limits. Harassing and intimidating a soldier's parents is not only morally wrong, it's unprofessional and unethical. Our country deserves better.

Friedman has a few suggestions of his own too:

Get rid of policymakers who use the military so carelessly that the mission cannot be accomplished without sending the same soldiers back into combat over and over and over.

Get rid of policymakers who allow the Individual Ready Reserve and the National Guard to be used in non-emergency situations and in elective wars.

If a war is necessary, and none of the above actions work, then initiate a draft.

If it wasn't for those "policymakers" above, this problem wouldn't have existed in the first place.

(Cross-posted at BFM.)

Obama nomination is historical

Barack Obama is the Democratic presidential nominee. What a historical moment for our country! Growing up in Detroit and living through the civil rights era, I never thought I'd live to see this day. Sure, I heard family and friends talk about equal rights in public, but they changed their tune behind closed doors. That was okay. I couldn't condemn them for their prejudice because I understood they were raised to think that way, which motivated me to raise my children differently, as it did millions of other Americans. Our efforts have reaped results.

Two bloggers wrote posts that illustrated to me just how far we've come. This was written by Kvatch, who plans on voting for Barack Obama precisely because he's black:

Now before you get yourself in a tizzy—screaming at me about reverse racism or how I’ve reduced Obama down to one banal fact—think about this: The one inescapable truth is that Obama’s perspective as president will be different than all who’ve preceded him, a truth that applies equally well to Senator Clinton. These presidential candidates simply aren’t crusty old white guys. Their experience and their outlook are fundamentally different than a Bush, or a Reagan, a Kennedy, or a Johnson.

Whether or not Obama brings change is unimportant. He is change.

For all the change Obama represents, Ezra Klein is surprised by how predictable and normal it feels.

Obama's speech tonight was powerful, but then, most all of his speeches are. This address stood out less than I expected. It took me an hour to realize how extraordinary that was. I had just watched an African-American capture the Democratic nomination for the Presidency of the United States of America, and it felt...normal. Almost predictable. 50 years ago, African Americans often couldn't vote, and dozens died in the fight to ensure them the franchise. African-Americans couldn't use the same water fountains or rest rooms as white Americans. Black children often couldn't attend the same schools as white children. Employers could discriminate based on race. 50 years ago, African Americans occupied, in effect, a second, and lesser, country. Today, an African-American man may well become the president of the whole country, and it feels almost normal.

It was, to be sure, not entirely unpredicted. On March 31st, 1968, Martin Luther King Jr. preached his final Sunday sermon. "We shall overcome," he said, "because the arc of the moral universe is long, but it bends toward justice." Four days later, he was murdered. But 40 years later, his dream is more alive than he could have ever imagined. Not only might a black man be president, but at times, many forget to even be surprised by it.

We're not perfect yet, but we've come a long way.


(Cross-posted at BFM.)

Obama favors talking to our enemies

There was a rally for Barack Obama today at a high school in Troy, MI and wizardkitten from BFM was there to take pictures and do some live blogging. At least that was the plan, until her internet connection went down and we were forced to go with plan B - me. I found two live streaming sights that were quirky and kept stopping and starting, but I managed to live blog a good portion of his speech and the Q & A session that followed. Click the BFM link above if you're interested in reading about it.

One of the questions asked today came from an Egyptian-born woman who is now a citizen. She asked Barack what we could do to change public opinion about us abroad. Obama said we needed to initiate more aggressive diplomacy by talking not just to our friends, but also to our enemies.

That opinion is shared by a majority of Americans according to a recent Gallup Panel survey:

Large majorities of Democrats and independents, and even half of Republicans, believe the president of the United States should meet with the leaders of countries that are considered enemies of the United States. Overall, 67% of Americans say this kind of diplomacy is a good idea.

This sentiment applies to Iran too.

About 6 in 10 Americans (59%) think it would be a good idea for the president of the United States to meet with the president of Iran. This includes about half of Republicans, a majority of independents, and most Democrats.

McCain? He mocks the idea of presidential talks with enemies. McCain is as out of touch with what Americans want as the rest of his Republican pals.