The UAW’s Bailout Deal – Sacrifice or Surrender?

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Is it sacrifice or surrender?

And is it a sign of things to come, for other workers across the country?

The recent Auto bailout has come with some hard-to-swallow terms. According to reports, “The $17.4 billion federal loan agreement does keep the domestic auto industry alive. But the terms of that loan also insist that the wages and benefits for union workers be lowered to "equal" the average of nonunion workers, specifically, those at the U.S. plants of Nissan, Toyota and Honda."

The fact is, that there are ONLY TWO possible solutions to America’s domestic auto crisis; (1) either the UAW shops have to be coerced into working for the same $50/hour wage, health and pension package as the non-Union Toyota, Nissan, and BMW shops, OR, (2) all those non-Union shops have to be either coerced OR tariffed/taxed into paying the same amount for THEIR labor. OTHERWISE the UAW shops will NEVER be able to compete.

The language of the current loan agreement is clear in that it sets a number of specific "restructuring targets" that General Motors and Chrysler must use their "best efforts" (whatever THAT means) to meet. Compensation must be made "equal" to the nonunion workers, and work rules must be "competitive" with those at nonunion plants. The companies also must reduce compensation to workers who have been laid off — the jobs bank and at least half of the company's payments into retiree health care must be made in stock, not cash.

Can this agreement be made to work?

We’ll see by March, when the “loans” come due and the Big Three will certainly come begging for more.

Municipal Pension Reform is Coming...

There seems there’s just no getting around it - pension reform is coming to the public sector. In the midst of the current economic crisis, that’s a virtual given.

In a recent Op-Ed New York City’s Mayor, Mike Bloomberg wrote, “...right now, New York City is spending so much money on pensions - $6.3 billion, a 10-fold increase from the $695 million we spent in 2000 - that we have far less to spend on core services, such as public safety, education, parks and senior centers. That defies common sense, and it's hurting our city.”

He notes that, “For instance, the city now has to spend more money on pensions and fringe benefits for firefighters than we pay in salaries for firefighters.”

Mayor Bloomberg is hawking NY Governor David Patterson’s current proposal, which the Bloomberg administration helped craft and now strongly supports, which Mayor Bloomberg claims would create immediate savings that would reach $540 million annually after 20 years. The Patterson proposal comes in two parts;

“The first part would eliminate for future employees two pension sweeteners that the state enacted during the boom years of the last decade. One sweetener allows employees to stop contributing to their pensions after 10 years of service; the other expands pension eligibility by reducing the required number of years of city service from 10 to five. Together, they have cost the city and state $1.8 billion since 2000.”

The second part of the governor's plan would modernize a pension system that hasn't been updated in 25 years and no longer makes sense, given longer life expectancies. Right now, uniformed city workers can retire after only 20 years of service. That means government is paying full pension benefits to many people whose retirements begin in their early 40s (although most continue working full-time in other jobs) and stretch for more than 40 years.

I believe that - again, only for future hires - we should raise the number of years required for a full pension for uniformed workers from 20 to 25, and provide retirement benefits to these future employees only after they reach 50.

Mayor Bloomberg brings up the specter of bankruptcy that plagued the City during the 1970s. “New York City can't continue to offer the next generation of workers gold-plated pension benefits that even the most successful companies can't afford today.

“The Big Three automakers offer some of the best pension plans in the private sector, yet even they cannot match the generosity of New York state government. And Detroit's expensive pension plans are part of the reason why the automakers are teetering on bankruptcy and pleading for a bailout in Washington.

“New York went down that road in the 1970s, and we can't afford to go back.

“Back then, thankfully, city and state leaders came together to deal with the structural causes of the fiscal crisis, adopting long-term measures to address them, including pension reforms.”

Is pension reform/modification coming to New York and other Municipalities across the country?

It certainly appears so.

One thing we can be sure of is that Municipal workers will be looking at whether or not the politicians (government workers) who enact these reforms, reform/scale-backs of their own pension programs, as well.

The Rick Warren Flap is a Lame Attempt to Re-Write Obama's Views on gay Marriage...

What’s the big deal?!

ALL religions rightly teach that the act of homosexuality is a “sin.” I’ve never heard ANY gays have a problem with that...In fact, I believe they actually like the taboo.

Not only THAT, but Barack Obama’s stated position on the issue – OPPOSING gay Marriage, while supporting civil unions is EXACTLY the same position that both Arnold Schwartzenegger and G W Bush have on the same issue!

Moreover, Reverend Rick Warren is one of the most influential religious leaders in the nation, and as such, he’s has championed issues such as a reduction of global poverty, human rights abuses and the AIDS epidemic. In fact, ironically enough, he’s done more to combat AIDS then most gay organizations have!

What’s Behind the Falling Price of Oil?...Oh Yeah, Falling DEMAND, of Course!

This is for all those nitwits who cried that “George Bush and his oil buddies were behind the rising price of oil,” over the past few years!

Dopey people believe dopey things.

You only have to look to the “9-11 Truthers” for proof of that.

Oil spiked to a record high (close to $150/barrel) earlier this year on China’s stockpiling oil ahead of the Bejing Olympic Games. That DEMAND, along with that generated by the rapid industrialization of developing nations, most notably, India and China, had driven the global price of oil, which is ALWAYS predicated on SUPPLY and DEMAND, inexorably upwards over the past decade.

Yesterday, according to Bloomber News, “Crude oil fell in New York on speculation that declining fuel demand because of the global economic recession will outweigh cutbacks in output by OPEC.

“Crude pared yesterday’s 10 percent gain, which came after Saudi Arabian Oil Minister Ali Al-Naimi said the kingdom had delivered the reductions promised to the producer group. Initial jobless claims in the U.S., the world’s biggest energy consumer, surged more than forecast last week to a 26-year high.

“If you look at the overall big picture, the demand collapse is still the overriding issue,” said Tony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “What producers can do is break the momentum of the fall but getting this thing back up is going to be tough.”

In fact, global oil demand is expected to decline slightly in 2008 and 2009, for the first drop in a generation, as the most severe economic crisis since the late 1970s pinches consumption across the developed world.

According to a Reuters poll of 11 industry analysts, banks and industry groups, worldwide demand will decline by 20,000 barrels per day (bpd) in both 2008 and 2009 to 86.03 and 86.01 million bpd respectively.

Even that slight fall is a huge shift from an August Reuters poll of experts, which forecast that demand would increase by nearly 1 million bpd next year.

The global demand for crude oil has not declined since the early 1980s, following the 1979 oil crisis and a severe recession in the United States.

SUPPLY and DEMAND...that’s what increases the price of oil and it’s what decreases it as well.

Governments and politicians have virtually NO/ZERO impact on commodities prices. Sure, governmental policies (like the U.S. refusing to drill for much of its estimated 1.6 TRILLION barrels of domestic crude oil) can impact supply and demand, but outside of impacting supply and demand, there is no way for politicians or speculators to increase or decrease the price of ANY given commodity.

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Falling oil prices have drastically reduced inflation, especially here in the U.S. and that's GOOD for Americans. Of course, not everyone's happy about that. The same Luddites who've fought against America drilling for more of its own HUGE domestic supply, are now appalled at falling oil and gas prices and are busy lobbying for higher gasoline taxes...deliberately to harm the same Americans they so often claim to care about.

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Again, dopey people tend to believe in and support dopey things.

Islamic Justice CAN be Wise...

On November 26th of this year, a three-judge panel in Iran ruled unanimously that Majid (a man who’d stalked and been jilted by an Iranian woman, Ameneh Bahrami) should be blinded with acid himself, as well as being forced to pay compensation for the injuries to Bahrami's face, hands and body caused by the acid.

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(Above is a picture of a woman disfigured by acid)

.The woman, Ameneh Bahrami, had refused to accept "blood money." Insisting instead that her attacker suffer a fate similar to her own "so people like him would realize they do not have the right to throw acid in girls' faces," she told the Tehran Provincial Court.

Her attacker, a 27-year-old man identified in court papers as Majid, admitted throwing acid in her face in November 2004, blinding and disfiguring her. He said he loved her and insisted she loved him as well.

I guess every culture has its strong points.

I’d earlier lauded Iran’s Islamic justice that had a pedophile scourged by the mother’s of his victims, before being hung with a slip know from a crane.

Violent crimes must be punished with similar violence. It is the ONLY way to balance the scales of true justice.

IRONIES...

Now that we have a more monolithically Liberal government than at any time since 1980, the Obama’s, Patterson’s, Patrick’s and others are finding that the money for their Keynesian programs has already been spent!

Moreover, the Keynesian overspending that’s gone on over the last six years, the last TWO in earnest, has already, quite literally “broken the bank” and fiscal discipline is now mandatory for our very survival!

This is almost certainly what the great Maggie Thatcher meant when she said, “Reality is Conservative.”

For indeed, the fiscal realities we all face, are indeed Conservative in that they require Conservative principles to navigate them.

In New York, Governor David Patterson, has come into office having to deal with a fiscal crisis that threatens to be bigger than that of the 1970s, that nearly bankrupted New York City.

For years Conservatives, BOTH Republican and Democrat have been calling for massive budget cuts on all levels of government. What we got was ever more government spending to go with the ever increasing revenues generated by the housing boom, the Wall Street boom and the massive revenue increases from the Bush tax cuts.

On the federal level, Barack Obama and company face pretty much the same dismal fiscal realities.

For the first time in my life (and I’ve been around over half a century now) I’m hearing Democrats calling for huge budget cuts, layoffs of Municipal workers and both healthcare and pension fund relief!

After six years of Bush’s Keynesian policies, that were initially masked by increasing tax revenues from his only Supply Side policies (the across the board income tax rate cuts AND the Capital gains rate reduction), and only imploded over the last two years when Bush was able to cooperate with a more Keynesian Pelosi-Reid Congress, we are facing a 1970s redux! G W Bush, like his father, are devout Keynesians, who see government as a tool with which to do the public good. Bush Sr., railed against Ronald Reagan's Conservatism and called Supply Side policies "Voodoo Economics," before returning to those failed Keynesian policies (via the Kennedy-Bush Sr tax hikes) and presiding over four straight years of double digit Misery Indexes himself.

The irony is that NOW, at the hour of their biggest victory, America’s Liberal elite is faced with bare cupboards and the necessity for austerity.

There’s nothing I can think of that is more ironic than that.

Wall Street’s BIGGEST Con Unravels!...

According to the Times Online, “Some of America’s wealthiest socialites were facing ruin last night after the arrest of a Wall Street big hitter accused of the largest investor swindle perpetrated by one man.

“Shock and panic spread through the country clubs of Palm Beach and Long Island after Bernard Madoff, a trading powerbroker for more than four decades, allegedly confessed to a fraud that will cost his wealthy investors at least $50 billion – perhaps the largest swindle in Wall Street history.

“Mr. Madoff, 70, a former Nasdaq stock chairman, was apparently turned in by his two sons and arrested on Thursday morning at his Manhattan apartment by the FBI. Andrew Calamari, a senior enforcement official at the US Securities and Exchange Commission, described the scheme as “a stunning fraud that appears to be of epic proportions”.

“The FBI’s criminal complaint states that when two federal agents arrived at Mr Madoff’s apartment, he told them: “There is no innocent explanation.” The agents say that he told them “he paid investors with money that wasn’t there”, that he was “broke” and that he expected to go to jail.”


Captain Capitalism put it well;


Wall Street = Morons

http://captaincapitalism.blogspot.com/2008/12/wall-street-morons.html

I've said it before, and I'll say it again, I don't care if they went to Harvard or Yale or the Ivy League.I don't care if they work at Goldman Sachs.In the end, these people are not "intelligent" or "smarter" or "better."They're absolutely inferior people compared to the rest of the US and only got by on connections.And the Wisconsin hick fly over kid selling lemonade at his stand making a profit is a better businessMAN than any one of these schmucks will ever be.


Yet ANOTHER way to see that development is as a form of natural selection.

Ever wonder how the spoiled wealthy scions of families who hadn’t really “earned” in generations kept accruing wealth despite having little involvement and even less knowledge about finance or even their own family finances?

People like Bernie Madoff are part of the reason.

Wealth is never erased, it is merely transferred and that’s what we are witnessing now, a major transfer of wealth from one segment of society to another.

Olde Wall Street never recovered from the bloodletting of 1929 and beyond. Old monied families were supplanted by the likes of the Sach’s and the Kennedy’s and J P Morgan and other old line robber barons got on board with the likes of Bernard Baruch in engineering a “new economy” and a “new social order.”

Now a new investor class is supplanting what has become the old one.

I’d like to say that the new one could hardly be any worse than the old one, but only time will tell.

Right now, a lot of families that made their fortunes in the early parts of the 20th Century are in for a dramatic fall and a new breed of smart young investors are supplanting them.