Stabenow and Peters Talk Bankruptcy on "The Ed Show"

Sen. Debbie Stabenow was on the Ed Show Monday night and Rep. Gary Peters was on last night. They discussed a possible GM bankruptcy, which could jeopardize the pensions of 670,000 retires, with 335,000 seeing benefit cuts.

Both lawmakers agreed that bankruptcy should be a last resort, but Ed characterized Obama's Auto Task Force as throwing workers under the bus when it comes to their pensions. Stabenow had a different perspective:

SCHULTZ: But what about those retirees—senator, I have to ask you, what about these retirees. They didn‘t vote to have their benefits cut. These are your constituents in Michigan.

STABENOW: No question. If you‘re asking me, do I think bankruptcy is a good idea? The answer is absolutely not. I don‘t support bankruptcy as an option. And the reality is that taxpayers shouldn‘t either, because we‘re talking about 670,000 people with pensions with General Motors alone that would become potentially a federal responsibility. [...]

SCHULTZ: -- that if it goes to the Pension Guarantee Corporation, and people have to take a cut, I don‘t know how they are going to be motivated to come back and vote for the Democrats.

STABENOW: Well, first of all, people took a pay cut to get that pension, and they should not be cut in their pensions, period. People took pay cut after pay cut to keep their health care and to keep their pensions. And so there is a way to do this, even going into a bankruptcy.

Northwest Airlines, based out of Detroit substantially, went into bankruptcy, kept their pension obligations. We worked with them to help protect their pensions. They came out of bankruptcy. They kept their pension commitments. So it is possible to do that. And I am strongly urging the administration, whatever happens, to keep those pensions intact, because people have worked hard all of their lives for those.

Bloomberg reports that GM’s plan is in relatively better shape than others, because it’s about 87 percent-funded, but they also point out that as many as half of GM’s 670,000 pension-plan participants could see their benefits trimmed if the PBGC takes over the plan. Jack Dickinson, president of an advocacy group called Over the Hill Car People says, “Nobody really knows” what would happen with GM pensions in a bankruptcy." (The DetNews has more on how bankruptcy could affect workers' pensions.)

One thing struck me in the interview above. Schultz wondered why people would be motivated to vote for Democrats if General Motors files bankruptcy. Is Ed serious? As the Free Press recently pointed out...

Moreover, the government's track record setting policy that affects the auto industry is atrocious. Car companies have been flogged for not producing enough small, efficient vehicles, but the government eschews a national gas tax that would keep demand for such vehicles high. The companies have been derided for exorbitant labor costs, but in too many instances, government trade policy doesn't help them by holding other countries to decent labor standards.

Democrats and Republicans are responsible for that track record, but Republicans have been in control of the White House for the past 8 years and in control of Congress for almost 20 years. They were the ones actively pushing their free trade, anti-tax, kill the unions, drill, baby, drill rhetoric all that time. And when the chips were down last fall and the auto industry needed help, it was Republicans who pulled the plug on the industry and voted no.

If McCain had won the election, I have no doubt GM and Chrysler would be history already and the Republicans and their US Chamber of Commerce cronies would be giving one another high-fives.

And I won't soon forget how Republicans voted on minimum wage, SCHIP, equal pay, etc. They don't even feel we should have universal health care.

A vote for any member of the GOP is a vote against the middle-class, and General Motors filing for bankruptcy won't change how I feel about them. The lawmaker who does the most for the middle-class gets my vote, and the majority of the time that's a Democrat.

Takin' It To The Streets

This goes out to DJ, who's angry with conservative ideology that favors the rich over the poor and middle-class, and to Bruce Fealk, who wonders why Republicans "want to be so unpatriotic as to think Americans shouldn't earn good wages, have access to health care and a decent pension to live on during their golden years."

Bruce also asks, "When do we take to the streets en mass and call these idiots out? When do we say, ENOUGH!"

That day may be coming soon if Europe is any indication. Large demonstrations sparked by the economic crisis broke out recently in France, Greece, Iceland and Russia, and only a couple of weeks ago thousands of people marched in Dublin.

MORE than 120,000 workers surrounded the Dail, or Irish Parliament, to protest against bail-outs for wealthy bankers, soaring unemployment and the Fianna Fail government's attempts to force public-sector workers to take a pay cut. [...]

"There is anger, because everybody knows that this crisis is not our fault, that a business elite has destroyed our economy and has as yet to be made accountable for it," Mr Begg told the huge rally at Merrion Square in the heart of Dublin.

Workers are angry because the government plans on docking 7 percent from the paychecks of 350,000 Irish workers "amid revelations of shady dealings and irresponsible lending at banks now getting taxpayer's help." Sound familiar?

The Irish Times labeled it "a case of the bankers’ billions versus the worker’s mite."

The General Secretary of the Irish Congress of Trade Unions, David Begg, said "those involved in what he called corruption had done huge damage to Ireland and described their actions as economic treason." Addressing the rally, Begg also added that "there is anger, because everybody knows that this crisis is not our fault, that a business elite has destroyed our economy and has as yet to be made accountable for it."

And Patricia McKeown, president of the ICTU, decried the "casino capitalism that has brought this country to its knees."

"An economy cannot be built on shady financial deals, privatisation of public services and the ever insatiable greed of the very, very wealthy," she insisted.

"But we face a government which wants the workers who built the economy to now sacrifice while it protects and bankrolls those who wrecked it. We are not prepared to live in that type of society," Ms McKeown declared.

Ironically, John McCain bragged about Ireland's economy on the campaign trail last year, pointing to their low business taxes as an example of what they can do for a country. Just like DeVos missed indications that Michigan wasn't the only state showing signs of economic stress, McCain missed signs that Ireland was having problems too.

The roots of Ireland’s fall date to more than 20 years ago, when a clutch of economists, politicians and civil servants put their heads together in this very pub and planted the philosophical seeds for the Irish economic miracle. ....

Known widely as the “Doheny & Nesbitt School of Economics,” these beery musings soon became government policy that chopped taxes in half, sharply reduced import duties and embraced foreign investment...

So how is Ireland's economic miracle working out? Their housing prices have fallen by as much as 50 percent, bank shares have plummeted by more than 90 percent, and unemployment is approaching 10 percent. No wonder one of London's senior police officers is warning that law-abiding middle-class individuals who would never have considered joining demonstrations may now seek to vent their anger through protests this year.

The public's rage with the banks and the Government is growing by the day. Thousands are losing their jobs through no fault of their own ... Homes are being repossessed across the country, but not the penthouse flats and country piles of bank bosses who thought nothing of taking home vast seven-figure bonuses, and consider £1 million a year a modest income.

The innocent are being punished while the guilty continue to lead affluent lives.

British police are preparing for a "summer of rage" as people protest the growing economic crisis. Europeans have had enough. Americans have had enough too, and as David Sirota says, "It is only going to get worse if genuine change doesn't happen in short order."

(Cross-posted at BFM.)

Republicans turn their backs on the middle class

Joe Biden is right. It's time to put the middle class front and center. That's the goal of the Obama administration which seeks to put people back to work immediately and create economic growth, and long-term make sure the benefits of that growth reach the people responsible for it - the lower and middle class workers.

I have a question for Republicans. Why are you treating us like the enemy? Some of you are threatening to filibuster the recovery bill and others are complaining the plan is too expensive and could be done cheaper (ergo, the middle class is only worthy of crumbs). Meanwhile, Sen. Jim DeMint (R-SC) offers an alternative plan that would actually cost 3.5 times as much as Obama's. I guess it's okay to spend trillions more if corporations and the rich are the main beneficiaries, eh?

The only comprehensive alternative being offered by Senate conservatives is DeMint’s “American Option: A Jobs Plan That Works,” a series of permanent tax breaks for corporations and wealthy Americans. A new analysis from the Center for American Progress Action Fund finds that the DeMint plan would cost over $3.1 trillion over ten years — more than three times the amount of President Barack Obama’s plan — and be largely ineffective at creating jobs.

The DeMint plan includes permanently cutting the corporate tax rate, totally eliminating the Alternative Minimum Tax, lowering income tax rates for the wealthiest Americans, and eliminating scores of tax deductions that help students pay for college, sick families pay medical bills, and teachers purchase supplies for their classrooms.

How many times does this need to be repeated?

Permanent tax cuts are one of the least effective ways of stimulating the economy according to both Moody’s Economy.com and the Congressional Budget Office. Furthermore, slashing government revenues this permanently would leave deep structural deficits for generations to come.

The whole purpose of DeMint's plan is to make the tax policy changes of 2001 and 2003 permanent. Let's revisit that era, shall we?

"The economy has slowed down, in which case we need to accelerate tax cuts," Bush said in a March 2001 radio address. "You see, tax relief will put money in people's pockets, which will help give the economy a second wind." "By ensuring that Americans have more to spend, to save and to invest, this legislation is adding fuel to an economic recovery," announced Bush in 2003, as he signed his tax cut legislation.

That's not how ten Nobel Laureates saw it. They signed a letter saying the Bush tax cuts were wrong, and 450 economists across the nation agreed.

They were right and Bush and the Republicans were wrong. Bush's tax cuts didn't work.

As Center for American Progress Senior Fellows Christian Weller and John Halpin noted in 2006, the outcome of the 2001 tax cuts was "the weakest employment growth in decades." The 2003 tax cuts didn't fare much better, resulting in job creation that was "well below historical averages." When Bush's White House proposed the 2003 cuts, they promised that it would add 5.5 million new jobs between June 2003 and the end of 2004. But "by the end of 2004, there were only 2.6 million more jobs than in June 2003." As Paul Krugman has pointed out, the belief that Bush's tax cuts successfully stimulated the economy is a form of mythology. CAP's Michael Ettlinger and John Irons wrote in September, "Economic growth as measured by real U.S. gross domestic product was stronger following the tax increases of 1993 than in the two supply-side eras" that followed Reagan's 1981 tax cuts and Bush's 2001 tax cuts. Indeed, employment growth was much stronger post-1993 than post-2001. The average annual employment growth was 2.5 percent after 1993 and just 0.6 percent after 2001. Unfortunately, the supply-side myth that tax cuts cure all still lives on today, as conservatives complain about progressive approaches to fixing the mess left by Bush.

Middle class misery is real. We need real solutions, not mythological ones of the sort being pushed by Republicans. If they really cared about the pain being felt by families across America, they'd stop the games, grow up and get serious about helping us. That hasn't happened and leads me to believe they don't give a damn.

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.

Labor Gets an Early Christmas Gift

This is a good argument in favor of unions. h/t Kevin Drum

Felix Salmon, after noting that FedEx has announced across-the-board pay cuts for just about everyone:

There's been a huge shift in power in recent years from labor to capital: corporate profits have been rising much faster than wages for some time now. It makes sense that capital would make use of its newfound power to reduce labor costs in a deflationary environment of rising unemployment. During the boom, companies laid off workers because those workers demanded, and cost, too much money. Now that workers have lost their negotiating leverage, we might start seeing more across-the-board pay cuts.

Drum summed it up perfectly: Heads I win, tails you lose! In boom times you get laid off, in slack times you get your pay cut.

Labor may finally be gaining an ally in Washington. Rep. Hilda Solis of California will be nominated as labor secretary by President-elect Barack Obama. Solis co-sponsored the Employee Free Choice Act in the 110th Congress and earned a 100% rating from the AFL-CIO last year.

Maybe there really is a Santa Claus after all.

(More on Solis at BFM.)

Thanks for nothing, senators

Author and Free Press columnist Mitch Albom wrote a response to the senators who killed the auto loan deal last week and it's generating a lot of attention here in Michigan. (It's been recommended more than 1,000 times so far.) He pretty much expresses the collective outrage most of us have been feeling since Friday, starting with the title - Hey, you senators: Thanks for nothing.

Here's a sample of what Albom had to say. Click over to read the rest.

Kill the car, kill the country. History will show that when America was on its knees, a handful of lawmakers tried to cut off its feet. And blame the workers. How suddenly did the workers — a small percentage of a car’s cost — become justification for crushing an industry?

And when did Detroit become the symbol of economic dysfunction? Are you kidding? Have you looked in the mirror lately, Washington?

In a world where banks hemorrhaged trillions in a high-priced gamble called credit derivative swaps that YOU failed to regulate, how on earth do WE need to be punished? In a bailout era where you shoveled billions, with no demands, to banks and financial firms, why do WE need to be schooled on how to run a business?

Who is more dysfunctional in business than YOU? Who blows more money? Who wastes more trillions on favors, payback and pork?

At least in the auto industry, if folks don’t like what you make, they don’t have to buy it. In government, even your worst mistakes, we have to live with.

Ain't that the truth. Remember Iraq, senators? That was supposed to be cheap, and quick too. The only thing cheap about that mistake was the way you tried to cut corners and save money at the expense of our troops. From inadequate bullet proof vests and armored trucks to the horrid conditions at Walter Reed Hospital, you turned your backs on the soldiers just like you turned your back on middle-class jobs last week.

And don't try to sell us the idea that your vote was designed to protect taxpayer money. The same day the Free Press ran Albom's column, they also ran one by Susan Tompor describing the financially struggling Pension Benefit Guarantee Board, who may also find themselves needing a bailout. Allowing the Big 3 to fail would only add to the problem according to one expert:

He said that the PBGC could inherit more than $100 billion of pension obligations if Ford or GM filed for bankruptcy and the pension funds were turned over to the agency.

That $14-25 billion bridge loan is chump change by comparison. Add in unemployment compensation, increased Medicaid spending, the loss of tax revenues, etc., and that loan looks like a better deal by the moment.

Adding another 2-3 million people to the ranks of the unemployed is a huge mistake too. Obama wants to pass a stimulus package pushing $1 trillion dollars in order to create 2.5 million jobs, which won't even replace the jobs lost under the Bush administration. How does killing even more jobs help? Washington might as well double that package to $2 trillion if the Big 3 go down.

Thanks for nothing, senators. Do me a favor and take Albom's advice.

You’re so fond of the foreign model, why don’t you do what Japanese ministers do when they screw up the country’s finances?

They cut their salaries.

Or they resign in shame.

In order to resign in shame, these senators would have to feel some shame first. And in order to feel shame they would have to care. They don't.

The legacy of WWII veterans

Today is the anniversary of Pearl Harbor and the Flint Journal observed it by telling the story of one man who survived the attack, Staff Sgt. Ward Anderson of Chesaning.

It was 7:55 a.m., Dec 7, 1941 and Anderson and some friends had just left church and were thinking about going to the PX for breakfast.

Suddenly planes appeared overhead, flying low and loud. The men didn't pay much attention at first.

"We thought it was probably Navy maneuvers," said Anderson, then 20.

Then they noticed "big red suns" painted on the planes' wingtips: The Rising Sun emblem of Japan.

"I said, 'Oh, hell,'" Anderson said. "Or probably something worse."

Anderson counts himself lucky to have survived the first foreign attack on U.S. soil, which claimed the lives of more than 2,000 and pulled America into the second World War -- 67 years ago today.

His service to our country does not go unnoticed. Anderson wears his "Pearl Harbor Survivor" hat while out in his community and he's often approached by grateful people, rightly so, but we shouldn't let this day pass by without recognizing the sacrifice and service of an industry that has been maligned quite a bit lately - the Big 3. The Detroit News stepped up and recognized them in an editorial today: Remember the Arsenal of Democracy

We note with considerable irony that today, as the fate of Detroit's automakers rests in the hands of Congress, the nation marks the 67th anniversary of the Japanese bombing of Pearl Harbor.

In the days after that attack, as the nation geared up for war, the federal government turned to Detroit's automotive industry and asked it to convert its factories to produce military hardware.

In a matter of weeks, Ford, Chrysler, General Motors and the other automakers of the time were churning out tanks, planes, Jeeps and other machinery of war. They stopped making passenger cars and turned their full energies toward defending the nation, and agreed to only a minimal profit for their work.

When America's survival was on the line, Detroit didn't ask questions; it pitched in with all its industrial might to save the country. The Big Three's survival is now on the line. We hope Congress remembers the sacrifice the auto industry has made for America and considers carefully whether it would ever want to go into a war of that magnitude again without the Arsenal of Democracy.

I hope Congress also remembers the survivors of WWII, who came home after the war and worked in factories across the country to build a better future for their children and grandchildren. Unionization grew to one-third of the workforce, every income group grew (incomes grew fastest for the lowest-income Americans) and most middle-class Americans had good health care and could look forward to a secure retirement.

The "Greatest Generation" fought in WWII because it was the right thing to do, and they came home and fought for shared prosperity and better living standards for everyone because that was the right thing to do too. As Americans, we honor them by fighting to protect what they worked so hard to give our country.

Millionaire McCain doesn't care about average Joe

McCain didn't even try to hide his contempt for the middle-class when CNBC's Maria Bartiromo interviewed him yesterday. When asked about the Employee Free Choice Act, McCain said he would veto it “in a New York minute.”

I will do everything in my power to block such legislation. And imagine, Sen. Obama and Nancy Pelosi and Harry Reid pushing the union agenda, it would be very, very, very unfortunate.

Got that? McCain will do everything in his power to prevent you from having a job with good wages, health care and a retirement plan.

The Employee Free Choice Act would level the playing field for workers who say they'd join a union if they could, and there's a very good reason our young people may want to do just that - Unionization Substantially Improves the Pay and Benefits of Younger Workers.

According to the Center for Economic and Policy Research, a large wage and benefit advantage exists for young workers in unions relative to their non-union counterparts, and younger workers are earning about 10 percent less than their counterparts did in 1979, despite impressive gains in young workers' educational attainment over the same time period.

The report, "Unions and Upward Mobility for Young Workers," found that young unionized workers - those age 18 to 29 - earned, on average, 12.4 percent more than their non-union peers. In addition, young workers in unions were much more likely to have health insurance benefits and a pension plan.

The report, which analyzed data from the Census Bureau's Current Population Survey (CPS), found that unionization raises the pay of young workers by about $1.75 per hour. According to the report, young workers in unions were also 17 percentage points more likely to have employer-provided health insurance and 24 percentage points more likely to have an employer-provided pension plan than young workers who were not in unions.

Unionized workers in typically low-wage occupations benefited too.

Among young workers in the 15 lowest-paying occupations, union members earned 10.2 percent more than those workers who were not in unions. In the same low-wage occupations, unionized young people were 27 percentage points more likely to have employer-provided health insurance and 26 percentage points more likely to have a pension plan than their non-union counterparts.

Union jobs provide decent wages, health care and retirement security in return for our hard work. So, who really cares about the middle-class? Barack Obama said he will sign the Employee Free Choice Act. John McCain said he would veto it “in a New York minute.” That puts him at odds with the middle-class and those young people struggling to have a decent life. No wonder they're overwhelmingly siding with Barack Obama.

Lobbyists and corporations love McCain

This is McCain's idea of putting the middle-class first.

The non-partisan group Campaign Money Watch has come up with another startling figure for those who follow the presidential money chase.

According to an analysis performed by the group, McCain's top fundraisers and aides have collected nearly $1 billion in fees from U.S. companies in the past decade -- specifically, $930,949,819. Using numbers provided by the Center for Responsive Politics, the group also found that officials of those very same companies have given nearly $12 million to McCain's presidential campaign, so far.

"The McCain campaign relies on big money lobbyists, and they'll rely on him," said David Donnelly, director of Campaign Money Watch. "In the 'you-scratch-my-back, I'll-scratch-yours' world of Washington, $931 million gets the special interests the best government money can buy. But just think of the payday these lobbyists might expect in a McCain Administration."

That's good news for lobbyists, not so much for the rest of us. To add insult to injury, McCain wants to cut taxes on corporations, in spite of the fact most corporations, including a large majority of foreign companies doing business in the United States, pay no income taxes.

The Government Accountability Office (GAO) reported that two-thirds of both American and foreign companies doing business here end up avoiding all income tax obligations to the federal government, despite corporate sales totaling $2.5 trillion.

According to the GAO, each year from 1998 to 2005, an average of 68 percent of the foreign companies operating in the United States paid zero federal income taxes. During the same period, 66 percent of U.S. domestic corporations paid no federal income taxes to the government.

The only thing the middle-class can expect from McCain is crumbs.

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.

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?

Fighting over crumbs

Here's something to ponder as you're filling up your gas tank or digging deep into your pocket to pay for groceries.



In case you're interested, the gentleman in the video has a blog:
The Hillbilly Report.

Can President Bush dance?

Yep. Bush is an expert at the Limbo Rock. So, how low can he go? Really low according to a new AP-Ipsos poll taken from April 7-9:

A survey released Thursday showed 28 percent approve of the overall job Bush is doing. That was statistically tied with his previous low in the poll of 30 percent last month and in February.

Only 27 percent are happy with his job on the economy, which threatens to enter a recession and which many national surveys show is voters' top worry. That was worse than his previous low of 29 percent approval for handling the economy set in February, and down 4 percentage points from last month.

Sadly, Bush is taking us down with him:

Confidence among U.S. consumers sank to a 26-year low in April as the labor market continued to deteriorate and gasoline prices rose.

The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.2 from 69.5 in March. The reading was below the lowest forecast in a Bloomberg News survey and the weakest since March 1982.

Oh, yeah, one more thing - we haven't hit bottom yet.

According to a new Wall Street Journal forecasting survey, by a 3-to-1 ratio, economists say “the economy is in a recession, and almost three-quarters [say] the economy hasn’t yet hit bottom.”

Norquist Approves of McCain

Grover Norquist loves John McCain because he wants to make Bush's tax cuts permanent and reduce the corporate rate from 35 percent to 25 percent. (Have to boost those bottom lines so CEOs can pocket more money.)

From Think Progress: McCain Adopts ‘Entire’ Norquist Agenda, Will Double The Bush Tax Cuts

So what will McCain's plan do for the middle-class families left behind by the Bush administration all these years?

According to a new analysis released today by the Center for American Progress Action Fund, McCain’s new proposals would do the following:

Double the size of the Bush tax cuts, costing more than $2 trillion in their first decade.

Do virtually nothing for the middle class: only 12 percent of the tax cuts will go to the bottom 80 percent of households, while 58 percent will go to the top 1 percent of households. [emphasis mine]

Follow Norquist’s blueprint that’s been called a “stealth approach to tax reform” – and that aims to abandon progressive taxation in favor of a wage tax imposed mainly on low- and middle-income households.

In other words, McCain won't do a thing for the middle-class. McCain=Bush=McSame.

Depression and Bush go hand in hand

If I had to come up with one word to define Bush's legacy, I'd have to go with "depression." I can hardly pick up a newspaper anymore without reading about new levels of this and new levels of that not seen since the Great Depression. Consider this startling statistic in today's NY Times.

Not since the Depression has a larger share of Americans owed more on their homes than they are worth. With the collapse of the housing boom, nearly 8.8 million homeowners, or 10.3 percent of the total, are underwater.

Houses have been more than shelter for many Americans, they've also been piggybanks. People used home equity loans to pay for college tuition, home improvements, etc., and now they're stuck owing more in loans than their houses are worth. They can always turn to their savings to help out though, right? Maybe, but savings are at their lowest rate since the Great Depression.

Well, at least people can still depend on hard work to get ahead - or not. Inequality has risen to heights not seen since before the Great Depression.

Work no longer guarantees financial security. Consider what Rep. Charles Rangel recently said:

"Millions of families are left out because of their stagnant wages and the erosion of their retirement benefits," Rangel said. "The share of pretax income going to the top 1 percent of households is at the highest level since 1929." The stock market crash of 1929 preceded the Great Depression of the 1930s.

"We know what happened in 1929; we don't want to go back there, but there is something wrong with the picture if we find so many people going into poverty," Rangel added.

I've always heard that suicides skyrocketed during the depression, which makes this news all the more disturbing.

An analysis of U.S. death rates by the national Centers for Disease Control and Prevention found that the suicide rate among 45- to 54-year-olds rose nearly 20 percent from 1999 to 2004, more than all age groups.

This talk of depression isn't all bad though. Eli Lilly & Co recently announced their fourth-quarter profit was up, in part due to revenue from sales of Cymbalta, a drug used to treat depression.

Yep, when history books get written, Bush and depression will definitely be mentioned on the same page.

Update: One more: Ohio Job Losses Worst Since Great Depression

1.8 million veterans lack health care

Add veterans to the list of uninsured Americans, middle-class veterans with jobs:

Study: More veterans are uninsured

About one of every eight veterans under the age of 65 is uninsured, a finding that contradicts the assumption many have that all vets qualify for free health care through the Veterans Affairs Department, says a new study.

Researchers at Harvard Medical School projected that about 1.8 million veterans overall lack health coverage. That's an increase of 290,000 since 2000. The researchers said most uninsured veterans are in the middle class and are ineligible for VA care because of their incomes. Still others cannot afford their copayments, or lack VA facilities in their community.

"Like other uninsured Americans, most uninsured vets are working people — too poor to afford private coverage but not poor enough to qualify for Medicaid or means-tested VA care," said Dr. Steffie Woolhandler, an associate professor and a physician at the Cambridge Health Alliance.

Republicans like to say they support our troops, yet according to American Legion spokesman Peter Gaytan, veterans now making as little as $24,000 a year in some regions still don't qualify for health coverage from the V.A.

Sadly, as Gaytan points out, "The number of uninsured vets could rise in coming years if soldiers returning from Afghanistan and Iraq have trouble getting back their old jobs. It will be an increasing issue that needs to be dealt with."

The Harvard researchers said the best solution would be universal health coverage in the United States. It sounds like a plan to me, one that would not only help the veterans left behind by the Bush administration, but all Americans.

Two Michigans

Recent events in Michigan got me thinking about John Edward's "Two Americas" and it saddened me to realize Michigan could claim a similar title - Two Michigans.

Yesterday, the UAW went on strike against GM in an attempt to hold onto their jobs and keep them from being outsourced to China or Mexico. Meanwhile, our state still faces a shutdown if legislators can't come to an agreement on the budget. Republicans want to cut Medicaid funding, state police, and education, among other things. They also want to eliminate 2,232 jobs. To add insult to injury, today we learned that Bank of America plans to layoff 1500 workers in Michigan over the next two years. Too bad all these people don't have a union working on their behalf. These cuts will drastically affect the lives of average citizens just trying to give their families a decent quality of life on increasingly stagnant or falling wages.

Contrast that to the lifestyles of those Republicans who would like to be our next president. They recently gathered on Mackinaw Island to hold their Republican Leadership Conference and it was quite the aristocratic affair according to this article in Salon:

The GOP gets gaudy in Michigan

How do Republican presidential candidates woo the beleaguered voters of what may now be a crucial primary state? Party like aristocrats!

For about 36 hours beginning Friday afternoon, more than 2,000 politicians and party activists passed through the Grand Hotel, boozing and slapping backs in one of America's last bastions of Victorian aristocratic nostalgia. One by one, the leading Republican presidential candidates came as pilgrims to pay homage to the gaudy affair. At times, the scene recalled Jack Nicholson's ballroom hallucinations from the 1980 horror movie, "The Shining."

Built in 1887, the Grand Hotel is columned and cavernous, with a candy-striped interior, a pink hair salon, a maroon wine bar and a jewelry store named "The Colony Shop," which was sold out of canary diamonds for the weekend. The wait staff, imported from Jamaica on temporary visas, was entirely black, and they served food to invariably white Republicans while wearing white-tie tuxedos with jackets the color of AstroTurf. (Brochures left in the guest rooms explained that the Jamaican help is provided with laundry and "recreational facilities" at their on-island dormitories.) Croquet and bocce ball could be played down in the Tea Garden, which was decorated with abundant blooming flowers and bushes shaped like horses. At tea time, a harpist in heels played "Somewhere Over the Rainbow" while women in maid costumes served tea cakes and champagne just a few steps from an exhibit of vintage oil paintings that showed young girls in lace dresses and young boys with spent shotguns and dead birds. [...]

The candidates' appearances, however, were almost tangential to the real point of the weekend, which was to celebrate the pleasures of money and privilege. The diners supped on cold strawberry soup, prosciutto, and pecan-coated ice cream balls. People did not use the word "money" when they talked about money. "Everyone in this room understands the importance of resources, the importance of finance, in winning campaigns," said Dick DeVos, the son of the billionaire founder of Amway, who lost a costly race for governor last year, which he funded with $35 million of his own fortune.[...]

Yep, two Americas: Those who have the money and power - and the rest of us, the ones who need unions or PACs like MoveOn in order to be heard.

Cross-posted at Blogging for Michigan.

A new special interest group: The Working Poor

Of all the dumb comments I've heard from politicians, State Sen. Nancy Cassis wins the prize. Cassis wants to delay the onset of a promised earned income tax credit meant to give relief to Michigan's lowest-paid workers until the state's rainy day fund is restored to $250 billion, which last happened in 2001.

Why did Cassis zero in on the working poor? From the Flint Journal:

[...] Cassis cynically refers to these working poor as just one more "special interest" among many seeking relief.

Special interest? Cassis must be confusing the working poor with Dick DeVos and his All Children Matter PAC. They're throwing around some serious money in Utah trying to win their voucher referendum.

In a post titled, Why Is Michigan Money Coming Here?, Accountability points to the DeVos family who, "has spent a good chunk of their fortune on the PAC. Along with them, Wal-Mart heirs Jim and John Walton are frequent donors, giving more than $3 million to the PAC in 2004."

Utah isn't the sole beneficiary of their influence, Florida, Louisiana, Ohio, Missouri, Virginia, Wisconsin and Michigan have all received funds too.

Why is DeVos' PAC spending money in Utah? Accountability sees it this way:

[...] it makes it clearer to me why Utah was picked for this voucher plan: It's considered a "small state" by the people who fund All Children Matter, so it would be cheaper here to run a voucher plan through the legislature and past Utah voters, and then use that victory to build momentum for campaigns in bigger states. It means this a national campaign, not just an idea that grew from Utah voters or lawmakers.

And what does this say about our legislature, that this organization targeted us -- a small, cheap state -- to pour money into some legislative campaigns in order to protect or win enough votes to get a voucher plan through the assembly? What does it say that for a few million dollars, these people from Michigan got exactly the bill they wanted, House Bill 148, by a one-vote margin in the House this winter?

Nancy Cassis knows the answer to those questions. She's a Republican. Cassis knows that money talks and money buys influence.

The special interest working poor? They don't have a chance as long as people like Cassis remain in government.

AFL-CIO: Quality health care for ALL in 2009

Earlier this week, the Census Bureau released figures showing the number of Americans without health insurance increased for the sixth straight year to 47 million people. The problem isn't limited just to the poor either. The fastest growing group of people without health insurance includes those in households making $75,000 or more.

Having a job used to pretty much guarantee you'd have health insurance. That's no longer the case, and it's gotten the attention of labor unions. Michigan Liberal reports the following from Mark Gaffney, President of the Michigan AFL-CIO:

Union members are very concerned about the cost of health care and if they become unemployed, its availability. Polls show union members generally are favorable towards their own coverage, but understand the crisis of the un-insured. Unionized workers generally have better coverage and unionized employers generally cover more of the cost of health insurance. Yet unions and their members understand America needs a national solution to our nationwide problem.

John Sweeney, President of the AFL-CIO, is speaking out too: In America, No One Should Go Without Health Care

[...]One of the greatest economic burdens working families face today is the insane, out-of-control cost of health care. One in four Americans say their family has had a problem paying for medical care during the past year. The cost of health care -- rising far faster than workers' wages or inflation -- is a major factor in housing problems and bankruptcies. In fact, every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

Meanwhile, insurance and drug companies are making stunning profits, health insurance CEOs averaged $8.7 million in 2006 compensation and pharmaceutical company CEOs pulled down an average of $4.4 million.

The rest of us aren't faring so well. The annual premium cost for a family health plan has close to doubled since 2000, from $6,351 to an astonishing $11,480. Soaring health coverage costs are crippling U.S. companies' ability to compete internationally -- health benefits accounted for an estimated $1,300 of the cost of a new car made by the Big Three in 2005, for example. As costs grow higher, fewer employers are providing health coverage for employees--and fewer workers are able to afford their share of the costs or to buy policies on their own. The outrageous price tags on insurance policies are driving increases in the number of people without coverage. The federal government just let us know that another 2.2 million people -- including 600,000 more children -- lost health insurance last year, meaning 47 million of us now cannot afford to get sick.

In the wealthiest, most powerful nation on earth, that is just not acceptable. In America, no one should go without health care.

The union is doing more than simply talking, they're putting their words into action:

The AFL-CIO is turning Labor Day 2007 into the start of a drive to win quality health care for all in 2009. With 10 million members and nearly 3 million union retirees, we intend to make the 2008 elections a mandate on health care. The union families who made up a quarter of voters last year are going to mobilize as never before to elect a Congress and a president who will enact the kind of real health care reform America needs.

You don't have to look far to see that winning health care for all is going to be tough. President Bush has vowed to veto legislation that would extend health care to millions more children -- now, that's cold! He's protecting insurance interests rather than children's health, saying this could be a dangerous first step toward health care for all. He's right -- getting this legislation passed and overriding a Bush veto is the first step.

This fall and throughout 2008, union members will be mobilizing in their workplaces, in their neighborhoods and in their communities to demand that candidates and elected officials at every level commit to work for working families.

You can sign their petition asking for quality, affordable health care too. That's the first step. The next step is to vote only for those politicians willing to bring serious solutions to the table - solutions that leave no one uninsured.