Tuesday, December 9, 2008

FREE MARKET FREE FALL

Stanley Kutler, Truth Dig - The New York Mets have announced that their new stadium will still be called Citi Field. According to news reports, Citigroup will pay the Mets a trifling $400 million over 20 years for the naming rights to the new ballpark. Small change. The Mets added that the government bailout of Citigroup will help the bank survive the 'economic crisis.

CBS - Lawmakers and civil rights leaders are trying to help save hundreds of jobs at Republic Windows and Doors, which closed late last week. The Rev. Jesse Jackson and U.S. Rep. Jan Schakowsky met Sunday with union workers as they were in the third day of a sit-in protest. . .

The Rainbow-PUSH Coalition donated some 300 turkeys, and bags of food passed hand to hand. It's the only assembly line running here since the plant shut down Friday, reportedly because Bank of America - which received billions in the government bailout of financial institutions -- would no longer extend the company's line of credit.

It's a situation Jackson calls unacceptable. "The money went to the banks to lend," he said. "Rather than lend, they acquired more banks and drove smaller banks out of business. In the meantime, even President Bush had to say we got the deal through for you to lend, but they would not lend. So if banks would not lend, they are holding capital and making money off of government investment.". . .

Also Sunday, President-elect Barack Obama called for more oversight of bank bailout funds and for the workers at Republic Windows to be given the pay and benefits they've earned.

AP - Just months after riding an incredible high, the recycling market has tanked almost in lockstep with the global economic meltdown. As consumer demand for autos, appliances and new homes dropped, so did the steel and pulp mills' demand for scrap, paper and other recyclables. Cardboard that sold for about $135 a ton in September is now going for $35 a ton. Plastic bottles have fallen from 25 cents to 2 cents a pound. Aluminum cans dropped nearly half to about 40 cents a pound, and scrap metal tumbled from $525 a gross ton to about $100.
. . . The recycling market has gotten so bad that haulers in Oregon and Nevada who were once paid for recyclables are now getting nothing or in some cases are having to pay to unload their wares.

The Newspaper - Just one week after receiving a pledge of $306 billion in support from US taxpayers, Citigroup announced the intended $10 billion acquisition of a debt-laden Spanish toll road group. Citi Infrastructure Partners will hand over $3.6 billion in cash and assume $6.3 billion in debt from Sacyr Vallehermoso, the parent company of the Intinere Infraestructuras toll road group. Itinere operates 32 toll roads in Brazil, Chile, Costa Rica, Portugal and Spain and Ireland. Another twelve concessions are under construction. Sacyr today issued a statement to Spanish investors noting that the company succeeded in offloading 37 percent of its total debt to the US firm. . .

Independent, UK - Credit card companies are facing an investigation by competition watchdogs after defying government warnings to improve their lending practices. An analysis by The Independent has found that the cost of card borrowing has risen over the past three months despite three cuts to the Bank of England base rate. Cardholders are now facing average interest rates of 17.7 per cent on credit cards, up from 16.6 per cent 12 months ago.

The Business Secretary, Lord Mandelson, had given providers two weeks to come up with fair principles to help cardholders manage their debts following a summit with card providers in November. The Government is expecting proposals from the industry on how it will implement fair principles on existing debt, responsibly provide credit and support households in difficulty.

Failing to do so could see the card companies facing investigation by the Office of Fair Trading, but so far card providers have made no move to reduce the expensive lending rates which so often plunge debtors into further financial hardship.

One government source said last night: "We are not backing off. If the companies don't move, if necessary, we will go down the OFT route."

Frank Hammer, Center for Labor Renewal - The reluctance to bail out GM and the other Detroit automakers has everything to do with the UAW, as if the impending collapse is the fault of the workers at the bottom of the heap. The "free market" types want to use the current auto industry crisis to force a "restructuring" of the companies' "relationships" - principally with the UAW. We hear a chorus about "bloated UAW contracts", contract terms that "GM can't live with," or references to "overpaid" autoworkers, etc. Never mind that just one year ago UAW autoworkers agreed to huge concessions in what President Ron Gettelfinger describes as a "transformative agreement" (for which, in the Detroit media, he was heralded "man of the year."). That agreement, according to Gettelfinger, was designed to make the UAW labor force cheaper than their non-union brethren at Honda, Toyota, etc. This from a once proud union which set the industry standard.

Before the 2007 agreements were negotiated, the average total UAW labor cost per vehicle was $2,400, or a little over 8% of the price of a vehicle. UAW workers then were among the most productive in the world, producing value added worth $206 per worker per . . . The margin of difference in labor costs with non-union Toyota before the transformative agreement was already then just $250-$300!

The free marketers also complain about the "lavish" costs of autoworker healthcare, obscuring the fact that the UAW accepted all the risk for their retirees' health care when it agreed - to a "Voluntary Employee Beneficiary Association," or VEBA at the Big Three's behest. To the forces which have conspired for many years to establish a "union-free" domestic auto industry, none of these concessions matter.

Campbell Brown, CNN - You know, it may be we have been looking at the economic picture all wrong. The notion that perhaps things really aren't so awful as all that popped into our heads today when we heard the CEO of Merrill Lynch was putting in for a $10 million bonus for 2008 -- mostly because, in 2008, he adeptly held Merrill Lynch down to a loss of only $11.67 billion.

Now, put it in context. This was at a time when Wall Street rivals like Lehman Brothers and Bear Stearns collapsed entirely. John Thain is the CEO we are talking about, and he also argued he was able to arrange the sale of Merrill Lynch to Bank of America during these troubled times. And that orchestrating the sale of an outfit that had lost more than $11 billion surely ought to be worth some big bonus cash.

One of my neighbors worked for Merrill Lynch, and she recently got laid off. Literally thousands of Merrill employees are likely to be let go because of the sale to Bank of America. And the CEO wants a $10-million bonus.

BoinG Boing The powerful and innovative Service Employees International Union is trying to unionize bank workers, saying that if the banks are going to get a public bailout, workers should have a seat at the table. "We believe there is special responsibility for companies who receive taxpayer dollars to ensure their workers have a voice on the job," SEIU's Lynda Tran said. "And those workers should have a seat at the table at the companies where decisions that impact the future of their families and the companies that employ them" are made.

0 Comments:

Post a Comment

<< Home