Week In Review
A Weekly Column by Bill Onasch
November 28, 2007
Jobs Not Careers
I want to thank my friend Andy Pollack for passing along a perceptive article from the Buffalo News about the impact of the new contracts on the GM and Ford plants in that city. It goes beyond the spin that these deals will mean the auto companies will be hiring again.
Most of the hiring in Buffalo will be to replace about a quarter of the workforce expected to retire during the 4-year term of the agreements. That means six or seven hundred new hires in an industrial city that has lost many jobs over the past twenty years. But the writer, Fred O. Williams, makes it clear that the exchange rate for money in the local economy won’t be very favorable. These new workers will earn about half of what those they replace did. “‘Obviously, it’s going to affect GM’s payroll, which in the past has been as high as $250 million a year,’ Town of Tonawanda Supervisor Ronald Moline said. The reduced economic jolt from auto plants will be felt throughout the economy, he said, as workers have less to spend at stores, restaurants and ticket booths.”
A subheading in the article reads “New Jobs Not Careers.” That sums it up pretty well. The new wage rate is less than the average wage for industrial workers in the U.S. It won’t come close to maintaining the kind of “middle class” life styles that auto workers have historically enjoyed. Instead of planning to spend thirty years of hard labor at these plants, as those they replace did, the new hires will be constantly looking elsewhere.
I hope to have Part Two of my article, Big Three Get Big Deal, posted before the next WIR.
A Prime Mess
The U.S. Conference of Mayors was founded during the Great Depression to lobby for federal help for cities. At that time a major problem was massive foreclosures and evictions sending working class families in to the streets. In some areas neighbors united to move families back in to their homes, sometimes leading to confrontations with evictors and the police.
Now the Mayors have released a report they commissioned from Global Insight on today’s mortgage crisis. While it’s not yet back to the level of the 1930s the projections are grim:
* 1.4 million foreclosures over the next year.
* A national average decline in home property values of at least seven, perhaps fifteen percent.
* Economic growth down by a third in major metro areas because of housing.
* All this will lead, of course, to sharp declines in tax revenues for already strapped local governments.
This crisis was first called the “sub prime” bubble burst and its victims were castigated for being so dumb as to take out loans they could never repay. But the worst charge that could be made against these mainly working class families trying to become home owners is naivete in believing the sales pitch of the most reputable realtors and lenders–a group whose greed certainly exceeded their IQ. Big names are in big trouble because of these questionable loan practices. Yesterday it was announced that CitiBank had to go hat in hand to Middle East oil barons for a very high interest loan to cover their mortgage venture losses.
But low income workers were not the only ones hit by the Adjustable Rate Mortgage scam. Many yuppies saw this as an investment opportunity and bought up houses to put on the rental market. When foreclosures come on these properties the chief victims are the renters, evicted from homes where they have faithfully paid rent.
Housing in general is a vast, complex challenge. In the short term there should be a moratorium on all foreclosures and evictions from primary residences.
If These Scientists Are So
Smart How Come They’re Not Rich?
UN scientists say we probably have a decade–no more–to come up with a solution to human contributions to the global warming crisis. But the rich and wannabe rich aren’t buying all this gloom and doom.
Investor's Business Daily, in a piece entitled “Global Warming Shakedown Begins,” complains “the nonstop propaganda on global warming has become almost intolerable.” They assure us “there isn't a shred of science to back it up -- only spurious ‘models’ based on an incomplete picture of how nature and the climate work.” Sounds like the biggest fraud since the government faked those films of the astronauts walking on the Moon. They continue, “If you don't believe us, just ask any of the politically hand-picked U.N. scientists who concocted these models if they can tell you, within one degree, what the temperature in your town will be one week from today -- or one month. The answer will be no.”
I wonder if these scientist-journalist-investor experts at IBD can predict the Dow-Jones closing within a point for the end of any given day? If they say no does this mean we should trash all of their spurious predictions of market trends? The Nobel laureates among the UN’s global warming team are not weather forecasters. But, as someone once said you don’t need to be a weatherman to know which way the wind’s blowing. The scientists weren’t politically picked but their reports were politically edited--not to exaggerate but to understate the magnitude and urgency of the problem.
Not many still try to use “junk science” dismissal of the consensus of the world’s top scientists. Most defenders of corporate destruction of the environment rely on fear of job loss. The Chamber of Commerce and National Association of Manufacturers are partnering up on full page newspaper ads and sixty-second TV spots, warning that passage of the Lieberman-Warner bill would cost millions of jobs and deny us enough fuel to drive our cars or even heat our homes.
As a matter of fact the Lieberman-Warner Bill doesn’t do very much. It establishes a “cap and trade” scheme that Friends of the Earth correctly predict “the biggest polluters will become the biggest winners.” The Chamber’s opposition resembles the reflex response of the health insurance industry to Hillary Clinton’s reforms back when she was First Lady. Let’s don’t rock our good thing boat. Today the health care robber barons shower Hillary with generous contributions. Eventually the Chamber will undoubtedly see the benefits of cap and trade scams as well.
In the meantime that ten-year clock is running.
Return of Rickets
Rickets, which can cause serious bone deformities in children, was once a common affliction among the kids of the urban poor. In 1931 they started fortifying milk with Vitamin D and most schools developed physical education classes where kids could get some exercise. By the time my generation came along rickets had become rare in this country.
It is yet another measure of degeneration of our society that rickets is making a comeback in the USA. Fewer kids are drinking milk and fewer yet are getting outdoor exercise in the sun. Perhaps Microsoft and Sony could start inserting subliminal messages in video games–Drink Milk, Play In the Sun.
Les Leopold On the Air
The author of the just released biography of Tony Mazzocchi (see our review) will be interviewed tomorrow (Thursday, November 29) on the Heartland Labor Forum radio show, 6PM, KKFI, 90.1 in Kansas City. If you are outside the listening area check out the web site for how you can hear it online.
That’s all for this week.
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