Thursday, January 29, 2009

Jobless rolls climb, Republicans don't care

Unemployment rolls continue to soar.
The number of people remaining on the benefits roll after drawing an initial week of aid, or continued claims, rose 159,000 to a higher-than-forecast 4.776 million in the week ended January 17, the most recent week for which data is available.

The Labor Department said this was the highest reading since its records on this series began in 1967.
Jobs. People need jobs. Last Monday saw 77,000 layoffs in one day alone, and it seems as though no profession is safe:
IBM workers are shocked at job cuts straight after the company issued glowing fourth quarter financial results, says employee union Alliance@IBM.

The first cuts of an expected 16,000 layoffs have been made in the Software Group and Sales and Distribution in the US and Canada.
And four U.S. Bureau of Labor Statistics analysts predict that recent telecommunications advances, especially the internet, could theoretically put more than 30 million U.S. jobs at risk of being exported overseas.
The 160 occupations considered capable of being performed in other countries account for some 30.3 million workers, one-fifth of total U.S. employment and cover a wide array of job functions, pay rates and educational levels.

More than half of the vulnerable jobs in the BLS study are professional and related occupations, including computer and mathematical science occupations and architecture and engineering jobs, and many office and administrative support occupations also are considered susceptible.
Whether blue-collar or white-collar, President Obama and Democrats understand the gravity of our situation and devised a plan that would save or create more than 3 million jobs. House Republicans voted unanimously against that plan. Will Senate Republicans vote against jobs too?

UPDATE: Following the Republican's unanimous no vote, economist Lawrence Mishel said it's time to rescind the wasteful business tax cuts from the stimulus package.
The Wednesday night vote in the House on the economic recovery package is astonishing in that no Republicans voted for the legislation. This, despite there being large scale, and wasteful, business tax cuts in the legislation that were seemingly included solely to attract Republican votes.

The lesson that might be drawn is to not water down your own program in the hopes of attracting a bi-partisan coalition. It only makes sense now to remove those tax cuts from any Senate legislation to make the recovery effort more effective. It could matter a lot. The amount of stimulus in this fiscal year and next (through the end of September 2010) is $525 billion and the Senate bill provides for $107 billion of business tax cuts with limited effectiveness, leaving only $418 billion of real stimulus over the next eighteen months.

Filling the space taken by the business tax cuts with infrastructure and other spending that will create jobs could make the effort 25% more effective. The best economic and political logic now seem aligned.

Friday, January 23, 2009

Fair Pay Act Passes Senate

Change is coming in the area of wage discrimination and it's long overdue. The Lilly Ledbetter Fair Pay Act passed the Senate yesterday.
The Senate approved landmark worker rights legislation on Thursday that will make it easier for those who think they've endured pay discrimination to seek legal help. The vote was 61-36.

The House of Representatives approved a similar measure on January 9, three days after the 111th Congress convened. Because the Senate made modest changes in the House version, the House must pass it again. Once it does, as is assured, this will be one of the first bills that President Barack Obama signs into law.
Senators Levin and Stabenow voted yes, as did all the other female senators and Democrats (except for Kennedy and two vacant seats). Five Republicans supported the bill - Collins, Hutchison, Murkowski, Snowe, and Specter - and 35 Senate Republicans voted against it, including Alabama's two senators, Richard Shelby and Jeff Sessions. Here's the roll call.

(When the House voted earlier this month, Michigan Republicans Ehlers, Hoekstra, Camp, McCotter, Miller, Rogers and Upton voted no.)

Senate Majority Leader Harry Reid predicts President Obama will sign the bill because "this administration stands for equality and fairness."

Those Republicans who voted against the bill aren't too concerned with fairness and equality.
"This bill is about effectively eliminating the statute of limitations on pay discrimination," said Senate Minority Leader Mitch McConnell, R-Ky. "Job creators have enough to worry about these days. We shouldn't add the threat of never-ending lawsuits."
Great. Not one ounce of concern for workers like Ledbetter who have been victims of discrimination. Mitch and other Republicans are clueless, or missing the point as Steve Benen puts it.
To hear opponents of the bill tell it, making it easier to challenge pay discrimination will lead to more lawsuits. That's almost certainly true. But therein lies the point -- if American workers are facing unjust wage discrimination, there should be more lawsuits. Those are worthwhile lawsuits, challenging an injustice. Ideally, employers would stop discriminating, as most already do, and in turn, there'd be fewer lawsuits.
Challenging injustice. Ending discrimination. That's the kind of change Americans want. Haven't Republicans been paying attention?

(Cross-posted at Blogging for Michigan.)

Thursday, January 22, 2009

Not so smart Republican economic calls

Time Magazine looks back at what they see as Bush's biggest economic mistakes, adding that "by almost every measure — GDP growth, jobs, median incomes, financial-market performance — he stacks up as probably the least-successful President on the economic front since Herbert Hoover. ... As the decider in the White House for the past eight years, George Bush made some economic calls that don't look smart today. Here are eight of them."

The Big Picture clicked through the list so we wouldn't have to.
1. The Return to Deficits: Bush’s tax cuts and spending increases — and clear disdain for the pay-as-you-go approach that had brought deficits down in the 1990s — brought a return to permanent deficits.
2. Iraq: Even if you think the war did bring benefits to the U.S., they would have to be pretty gigantic to justify the costs of $1-3 trillion dollars;
3. Tax Cuts for the Rich: Bush came to Washington facing almost diametrically opposing economic conditions, yet he offered up the same solutions as Reagan.
4. Financial Regulation: What is true is that most Bush-era financial regulators were less than enthusiastic about the very act of regulating, and that Bush’s “ownership society” push glossed over a lot of potential dangers.
5. Telling Us to Go Shopping: After the 9/11 terrorist attacks, President Bush didn’t call for sacrifice. He called for shopping.
6. Energy Policy: Not much to say here, except that there wasn’t an energy policy.
7. A State of Denial: Every Administration spins and sugarcoats the economic truth. But the Bush White House took this disingenuousness to new levels.
8. The Muddled Bailout: The main problem has been the ambivalence with which both Paulson and the White House have approached the financial rescue.
Bush was the decider, but Republicans were the enablers. They rubber-stamped every idea Bush threw their way, and questioning or discussing the merit behind his plans was verboten or "unpatriotic." After all, Republicans must not be challenged or questioned. They know best.

It turns out they weren't so smart after all, so why do they feel they deserve to be heard?
Republicans, who said they were receptive to Obama's call for a "unity of purpose," promptly tested the day-old administration. They criticized Democratic spending initiatives and requested a meeting with the president to air their tax-cutting plans.
There they go again! Tax cuts, tax cuts, tax cuts. I hope Obama politely listens and then tells them don't let the door hit you "thanks, but no thanks." Why? I'll let this economist speak for me:
Tax cuts won't build schools, or any other public good.

And right now, with so much of our infrastructure in need of attention, we need public goods.

We tried the tax cut approach to stimulating the economy once, we had no choice since Bush and the Republicans would not have passed any other type of stimulus package.

Guess what? It didn't work very well, and we have little to show for it. Had we, say, rebuilt water systems instead, at the very worst we'd have better water.
Republicans, please go back and read #7 above. You don't deserve to be heard as long as you continue to sing the same old song.

Friday, January 16, 2009

Oh, My God

That was House Minority Leader John Boehner's reaction yesterday after Democrats unveiled their $825 billion stimulus plan, which includes twice as much money for spending vs. tax cuts. He's not happy with the all the spending and told PBS NewsHour's Margaret Warner "that we need more in tax relief."

Oh, my God. Is that the only answer Republicans have for every problem? In this case, their answer is wrong according to Joseph Stiglitz (Nobel Prize in economics in 2001) who warns we should not squander America’s stimulus on tax cuts.
What is clear is that tax cuts will not help much. ...

Tax cuts have increased our national debt. They encouraged America to live beyond its means, increasing our liabilities without commensurate increases in assets. Further tax cuts would do the same. Good accounting looks at assets and liabilities. Spending on infrastructure, education and technology create assets; they increase future productivity.

Some of the spending in the stimulus serves multiple ends. Increased unemployment benefits have the largest multiplier effects – cash-strapped families spend every cent given – and meet vital social needs. It is imperative to provide health insurance to the unemployed: without that, a single serious incident can push a family into bankruptcy. Helping the unemployed meet house payments reduces foreclosures, addressing one of the underlying causes of the crisis. There are thus triple benefits.

We are in uncharted territory in this crisis. But household tax cuts, except for possibly the poorest, should have no place in the stimulus. Nor should business tax breaks, except when closely linked with additional investment. The one tax cut that should be included is a temporary incremental investment tax credit; it provides a big bang for the buck, encouraging companies to invest now when the economy needs the spending. Increased investments in infrastructure, education and technology, relief to states, and help to the unemployed need pride of place.
Stiglitz has some expert advice for state Republicans who also see cutting taxes as the only solution to budget problems.
Joseph Stiglitz of Columbia University, and Peter Orszag, until recently director of the Congressional Budget Office and now the nominee to direct the federal Office of Management and Budget — wrote during the last recession that spending cuts could actually be more harmful for a state’s economy during a recession than tax increases. ...

“The conclusion is that, if anything, tax increases on higher-income families are the least damaging mechanism for closing state fiscal deficits in the short run. Reductions in government spending on goods and services, or reductions in transfer payments to lower-income families, are likely to be more damaging to the economy in the short run than tax increases focused on higher-income families.
And if Republicans think they're appealing to voters with their continual tax cut rhetoric, they're wrong again. By a nearly 2-to-1 ratio, people preferred government spending to create jobs over tax cuts to give Americans more money to spend.

Tax cuts for people who don't have jobs is not the answer. Most Americans understand that. Republicans don't.

Thursday, January 15, 2009

Dreaming of a large screen TV?

This is something to consider if you're in the market for a new television, especially one of those behemoth plasma models.
European Union countries are close to agreeing upon minimum energy performance standards for televisions, according to reports this week in the British press. It’s likely the largest plasma models will be outlawed under the new requirements because of the extraordinary amount of electricity these units consume.

On the whole, plasma televisions use about 50 percent more power than those with liquid crystal displays.
Yikes. That's a lot of energy being consumed, especially if your household is anything like mine and the television stays on whether it's being watched or not. Exactly how much energy is being wasted? the US, 275 million televisions gobble up as much electricity as is produced by 10 coal-fired power stations.
According to the NYT, the creation of national efficiency standards for televisions is in stand-by mode in this country, although California regulators are proposing state standards that would require all new TVs use 50 percent less energy by 2013.

In the meantime, if you're worried about the environment and your electric bill, there are a couple of things you can look for when buying a television. The familiar Energy Guide labels provide specific information on how much electricity an appliance is likely to use annually and how much the operating costs are likely to be; however, the standards used for television efficiency date back more than 30 years.

A better choice according to the EPA is to look for the Energy Star label.
Televisions that meet the new Energy Star specification will be up to 30 percent more energy efficient than conventional models. If all televisions sold in the United States met the new Energy Star requirements, the savings in energy costs would grow to be about $1 billion annually and greenhouse gas emissions would be reduced by the equivalent of about 1 million cars.
More information about Energy Star televisions (and other products) can be found here. Energy efficiency does make a difference. The EPA said "in 2007 alone, Americans, with the help of Energy Star, saved $16 billion on their energy bills while reducing greenhouse gas emissions equivalent to those from 27 million vehicles."

(Cross-posted at Blogging for Michigan.)

Friday, January 09, 2009

Must See TV: No Reservations (Detroit)

Hmm... From my keyboard to Anthony Bourdain's ears maybe? This is what I wrote in December 2007:
Just in case Anthony Bourdain is looking for a place to shoot next, I'd like to recommend Michigan. From pierogies in Hamtramack to pasties in the U.P., we have plenty of food and culture - and "no reservations" are required.
And this is what the Free Press wrote today:
Chef and culinary adventurer Anthony Bourdain, visiting Detroit this week to film part of an episode for his Travel Channel series “No Reservations,” says “the city fathers are not going to be happy” with the places he has chosen to feature in the show. [...]

“I’m not interested in places where we sell each other cheeseburgers,” he said. “I’m interested in places where people make things, and where Mom and Pop businesses grow up around those businesses to feed the people who make the things. … And Detroit is full of those,” he said.

Among the places he visited, he said, are Hamtramck’s Polonia restaurant, where he had “fantastic” duck’s blood soup, and Family Donut Shop, where he tried paczki as well the phyllo-wrapped pastries called bourek.
The "city fathers" may not be happy, but Hamtramck and other suburbs are "Detroit" in my mind. We're all one big family.

And although I'm not too crazy about the title of the three-city episode featuring Baltimore, Buffalo and Detroit, the “Rust Belt show, I have no doubt Bourdain will portray us realistically, rust and all. That's what I love about his show. He gets down and dirty and shows us the heart of the areas he visits.

BTW, it's due to air early next summer.

Thursday, January 08, 2009

Congress doesn't think much of American workers

GM and UAW officials are holding meetings because, under terms of the bailout approved by the Bush administration, GM must bring its own hourly wage costs in line with those of Toyota and other Japanese automakers that operate nonunion factories in the United States. Aside from the fact that I find it outrageous foreign companies have been allowed to push our wages down in this country, I'm also outraged by Congress.

I'm not the only one. Check out this editorial from The Livingston Daily: FEDERAL PAY RAISES: Pay hikes show what Congress thinks of American workers
Remember, during the whole debate over a bridge loan for auto companies, how members of Congress kept saying autoworkers are overpaid? Some U.S. senators and representatives claimed United Auto Workers members were knocking down $73, even $75, per hour.

That led federal lawmakers, like U.S. Sen. Bob Corker, R-Tenn., to call for a cut in pay for auto workers as a condition of the "bailout."

It turns out the figure was wildly wrong. You can only get to figures that high if you include all kinds of things not typically considered wages — health care, benefits, vacation time, pension costs, retirees' health care, etc.
The paper did the math and pointed out that full-time workers actually earn between $58,240 and $61,942 annually, which they point out is a decent living but won't make a person rich. Compare that to our lawmakers in Washington.
Still, it is a far cry from the $169,300 that U.S. senators and representatives were paid this year. If Congress members really work 40 hours a week for 52 weeks out of the year (and they don't), it is well over the $73 per hour rate they so objected to. It would in fact be more than $81 per hour, and that's not counting their benefits, their health care or their pension costs.

What's more, lawmakers are going to get a raise. Yup, that $81 an hour isn't good enough for them. They deserve more. Come January, U.S. senators and representatives get an additional $4,700 in their yearly paycheck, bringing their annual haul to $174,000. Assuming again, a 40-hour week for 52 weeks, that pay rate comes to a whopping $83.65 per hour.
They drew the following conclusion:
So let's make sure we have the logic correct — people who actually build things, in this case automobiles, deserve a pay cut from their $29.78 an hour ... it is lawmakers who deserve a boost in pay to $83.65 an hour ... for getting their facts wrong when they debate issues, like how much autoworkers get paid.
Yep, that pretty much sums it up. Lawmakers get raises when they make mistakes and spread lies. They even get them in the midst of the worst recession since the Great Depression. That's a sweet deal.

Hypocrisy aside, higher pay was supposed to translate into better government when Congress voted to raise their pay in 1989 from $89,500 to $135,000 annually. So much for that theory. We're fighting a war based on lies, inequality is at levels not seen since the Depression, our economy is in a deep recession, unemployment numbers could be 10% or higher by summer, millions of people have lost their homes to foreclosure, and millions more live in poverty and/or without health insurance.

In the real world, they'd be fired for such gross negligence.

Tuesday, January 06, 2009

Bush's biggest (failed) domestic accomplishment

At a recent lunch at the White House, President Bush cited his push to privatize Social Security as his biggest domestic policy accomplishment:
On domestic policy, Bush was asked if he made progress in some areas for which he hasn’t and probably won’t get credit. Topping his list was his unsuccessful drive in 2005 to reform Social Security. Bush said his effort showed it’s politically safe to campaign on changing Social Security and then actually seek to change it.

He also said it was important to have raised private investment accounts as an attractive option in reforming Social Security.
An attractive option for whom? The thousands of Wall Street brokers who stood to make lots of money off fees and commissions?

We're lucky Bush was unsuccessful or we could be experiencing what people in Italy are facing today.
Italy did for retirement financing what President George W. Bush couldn’t do in the U.S.: It privatized part of its social security system. The timing couldn’t have been worse.

The global market meltdown has created losses for those who agreed to shift their contributions from a government severance payment plan to private funds meant to yield higher returns. [...]

Prime Minister Silvio Berlusconi’s administration is now considering ways to compensate as many as 1.2 million people who made the switch, giving up a fixed return for private plans linked to financial markets.
According to a Milan law firm, “The reform didn’t help anyone. ... Not the government, which was hoping everyone would make the switch to take the strain off its coffers, nor the workers who have not resolved the problem of needing a supplement to their social security pensions.” One 43-year-old father of three said he "would sign with “two hands and two feet” if he could switch back."

McCain proposed privatizing social security too. Thank goodness he lost and Bush is retiring to his $2.1 million dollar house in Dallas. Let's hope that puts the whole notion in the circular file for good.

Friday, January 02, 2009

Economic laughs and realities

The Financial Post has a compilation of "The best financial jokes of 2008" gathered from e-mail messages that made the rounds throughout the year.

These were some of my favorites:
"Get my broker, Miss Jones."
"Yes sir. Stock, or Pawn?"

The market may be bad, but I slept like a baby last night. I woke up every hour and cried.

The credit crunch has helped me get back on my feet. The car's been repossessed.
This was funny too.
President Bush said that he is saddened to hear about the demise of Lehman Brothers. His thoughts at this time go out to their mother as losing one son is hard but losing two is a tragedy.
Bush isn't the only clueless leader in Washington. Fortune Magazine reminds us of the "21 Dumbest Moments in Business 2008," including this one:
At least he warned us: On the morning of Sept. 15, as Lehman Brothers declares bankruptcy, Republican presidential candidate John McCain declares "the fundamentals of this economy are strong."

By day's end, the Dow falls more than 500 points, the date becomes known as Black Monday, and McCain starts backpedaling fast.

Maybe we should have seen this coming: In late 2007, McCain admits "the issue of economics is not something I've understood as well as I should," adding, "I've got Greenspan's book." -- By Nina Easton, Fortune Washington editor
Don't feel bad, John. The issue of economics is something your fellow Republicans don't understand either.

(Cross-posted at BFM.)