Tuesday, May 19, 2009

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.

Friday, May 15, 2009

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.

(Cross-posted at Blogging for MI.)

Thursday, May 14, 2009

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.)

Wednesday, May 13, 2009

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.

Tuesday, May 12, 2009

Michigan Has Become a Buyer-Beware State

Michigan has a dirty little secret and it's driving people out of our state.
Lindsay Duneske said she discovered how weak Michigan's Consumer Protection Act has become after the company that built her new home in Milan kept putting off needed repairs.

She said she and her husband bought the house in 2007 for $306,000, after receiving assurances that the builder would fix buckling roof shingles and vinyl siding, leaky windows and other problems.

After the builder reneged, Duneske said, she couldn't find a lawyer to help her because home builders are no longer covered by the Consumer Protection Act.

She said the builder eventually went out of business and its lawyer got a court order to stop her from pestering him.

"We have been totally and completely cheated," Duneske said, adding that she feels betrayed by state officials. "We are looking to move, and it will be anywhere but Michigan." [emphasis mine]
Builders aren't the only ones exempted from the law. Banks, mortgage brokers, debt collectors, finance companies, home improvement contractors, new and used car dealers, auto repair shops, funeral homes, and plumbers and electricians are included. And according to a State Bar of Michigan Consumer Law Section study, consumers are at risk:
The study, titled "Consumers at Risk: Are Most of Michigan's Worst Business Practices Exempt from Our Consumer Protection Act?", examined businesses on the state Attorney General's list of top 10 consumer complaints for 2008. It found that 72 percent of businesses generating the most complaints are exempt from the state's Consumer Protection Act due to Michigan Supreme Court decisions. [emphasis added] That includes nearly all the businesses in the top three complaint categories – credit and finance; gasoline, fuel and energy; and telecommunications, satellite and cable TV.
Michigan Supreme Court decisions (a Republican Supreme Court majority installed by former Gov. John Engler) in 1999 and 2007 turned the law into mush according to former State Attorney General Frank Kelley, leaving people in the lurch. Frank says he's "sick about what happened," and he added that, in his judgment, the court's interpretations have "been against the public."

A decade ago we had some of the nation's best consumer protection laws on the books, now we're ranked with Rhode Island as "the Terrible Two" by the National Consumer Law Center.
"While these two states have UDAP statutes that appear strong on paper, they provide almost no actual protection to consumers," the Boston-based advocacy group said. Such statutes are known in the consumer protection community as Unfair and Deceptive Acts and Practices (UDAP) laws.

"In fact, the UDAP statutes in these states are worse than ineffective, as they give the appearance of providing protection for consumers while actually providing nothing."
Where has AG Mike Cox been this whole time? He's been busy keeping his name in the papers and doing seminars on worthy projects which might just propel him to be the governor someday. And attempts to fix the law have gone nowhere because business groups and the MICOC oppose any changes.
"The Chamber of Commerce has a long-standing policy in opposition to expanding the Consumer Protection Act," said its Lansing lobbyist, Wendy Block, who spoke out against a 2007 measure to restore the act. She said the legislation would open the flood gates to needless lawsuits.
Because of their opposition, consumers are left holding the bag when unscrupulous companies take advantage of them.

State Rep. Robert Jones (D-Kalamazoo) introduced corrective measures to protect consumers, but these groups opposed the plan and it died. The Democratic House plans to reintroduce the measure soon, not just to protect consumers, but also honest businesses that Jones says, "often can't compete with fly-by-night operations whose promises – although deceptive – sound better than the offers of honest merchants."

The Free Press says it's time to pass the legislation. They also have some questions for Mike Cox, Mike Bishop and their Republican colleagues:
Is it really their intent to exempt three-quarters of Michigan businesses from the ethical rules laid down in the MCPA? Or did the justices who defanged the state's consumer protection overreach?
My money is on exempting three-quarters of Michigan businesses. When did Republicans ever do anything for consumers?

Wednesday, May 06, 2009

Passing the Healthy Families Act is Sensible

The swine flu (aka H1N1) appears to be milder than experts initially anticipated, but what if it had turned out to be much worse? What if people felt early symptoms coming on and had to chose between staying home from work or going in and exposing their coworkers? That could be problematic.
...millions of Americans can’t just stay home because they’re under the weather. When EPI looked at corporate sick leave policies in 2007 it found that some 43% of all private-industry workers have no paid sick days. Rather than the common sense precaution the President advices, these workers have a more difficult choice of going to work sick or staying home without pay and risk losing their jobs. In this current climate of high unemployment and even higher job insecurity, workers without any formal sick leave are even less likely to risk taking a day off.

Even more problematic, access to time off for health reasons is especially rare in low-paying jobs. In a 2006 compensation survey, the Bureau of Labor Statistics found that 79% of those earning more than $29.47 per hour had sick time, but only 16% of those earning less than $7.38 an hour had the same benefit.
The EPI also points out what a challenge it is for working parents if their children get sick.
The Huffington Post, citing data from the Institute for Women’s Policy Research, notes that fewer than one in three U.S. workers who do have sick leave are allowed to use that time to stay home and care for a sick child.
The Institute argues that "workers who lack paid sick time are more likely to go to work with a communicable illness, and parents who cannot stay home with a sick child are more likely to send them to school or day care." That just spreads germs around even more.

In Michigan, 1,725,000 residents — 48 percent of Michigan workers — are not able to take a paid sick day when they are ill.

It's time to revisit "the Healthy Families Act, which Sen. Ted Kennedy (D-MA) and Rep. Rosa DeLauro (D-CT) plan to reintroduce in Congress next month. The bill would “guarantee workers up to seven paid sick days a year to recover from an illness or care for a sick family member.”

There is also an economic advantage to passing the legislation.
According to the National Partnership for Women and Families, “when sick workers are on the job, it costs our national economy $180 billion annually in lost productivity. For employers, this costs an average of $255 per employee per year and exceeds the cost of absenteeism and medical and disability benefits.”
At least 139 other countries already provide some paid sick leave to workers as a matter of national law, and four out of five Americans think paid sick days should be a basic labor standard, so passing the legislation should be a no-brainer. This is clearly one of those "changes" Americans voted for last November.

Tuesday, May 05, 2009

Washington Has Public Health Care, So Should We

Forty-eight million Americans now lack health insurance and 73% of voters want a choice of a private or public health plan. Support for that choice is bipartisan too - Democrats 77%, Independents 79%, and Republicans 63%.

With that kind of consensus, you'd think health care reform would be a slam dunk, right? Think again. There are lots of rotten apples in the bushel (insurance, big Pharma and for-profit corporations) trying to sink public health care and their rot is spreading to Republicans and Democrats.

Convert Arlen Specter is one example. He recently told David Gregory that he would not support a public plan. (News flash, Arlen. You're not really a Democrat, you're an opportunist.)

Sen. Evan Bayh of Indiana said he is “agnostic” about having a public plan as part of health care reform, and Senate Finance Committee Chairman Max Baucus of Montana said that he believes health care reform can be accomplished “without” a public option. Ha-ha. Baucus is a real comedian. Private health insurers have been cherry-picking patients, denying claims and refusing to insure people for years, and their costs are higher than public plans like Medicare. In fact, when Republicans opened Medicare to private insurers in the name of competition, it ended up costing the federal government 12 percent more. That's not reform.

Private insurers don't want to see their gravy train end and they're spending big money trying to keep public health care from expanding, just ask Sen. Ben Nelson of Nebraska. His biggest campaign donor is the insurance industry. According to Open Secrets, Nelson received $608,709 from the insurance industry in 2007-2008. That money won him over. Nelson said he's not interested in a public option. HuffPost explains why:
Nelson’s problem, he told CQ, is that the public plan would be too attractive and would hurt the private insurance plans. “At the end of the day, the public plan wins the game,” Nelson said. Including a public option in a health plan, he said, was a “deal breaker.”
So let me get this straight. Our politicians have the best public health care plan taxpayer money can buy, yet they're essentially saying we can't have it because they want to protect private insurers. What hypocrites. Americans voted Republicans out of power because they kowtowed to corporate greed and now we have Democrats doing the same thing. It looks like we need to do some housecleaning and throw some more rotten apples out of office.