Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

January 21, 2009



Christian Science Monitor - The smallest and most endangered of Detroit's three major carmakers, Chrysler forged a major alliance Tuesday with Fiat, in which Chrysler grants the Italian automaker a 35 percent ownership stake. The partnership promises to help the storied Chrysler brand name survive - something some analysts saw as doubtful without an alliance or merger. The deal will help Chrysler bring more fuel-efficient cars to market, plugging a big gap in its product line. And it will help the most domestic of America's Big Three to become more global. . . The United Auto Workers union voiced support for the deal, echoing the theme of job preservation. . . Fiat, a specialist in small cars, gives Chrysler the chance to piggyback design and production efforts with its new partner and shift its product lineup in an era when consumer preferences and government policies may push carmakers toward fuel-efficient vehicles.

Pro Publica - The TARP hasn't saved the nation's major banks, and the Obama administration doesn't know what to do to save them. That is the unusually sober takeaway in the morning's major papers, following yesterday's sharp decline for banks in the stock markets. . .

Not surprisingly, "fear" and "nationalization" are the words that crop up the most -- as in investors' fear of being wiped out by a government takeover. As the Journal puts it, "The fact that nationalization is considered by some to be possible and is roiling markets reflects the failures of repeated government interventions to stem a widening crisis of confidence in the banking system."

So far, the Treasury Department has spent roughly $230 billion pumping money into the nation's banks (billions more have gone to the auto companies and AIG). But as the Washington Post puts it, that money "did not succeed in stabilizing the industry," and according to unnamed Obama administration officials, it's "increasingly likely" that the remainder of the $700 billion in bailout money won't do the trick either.

The New York Times, Post and Journal all juggle a variety of alternative solutions: they range from the apparently leading contender of creating a "bad bank" to house the banks' toxic assets to nationalization.

The underlying choice there is whether to protect shareholders or taxpayers. The "bad bank" model would involve the government buying and holding the banks bad assets -- but there are worries the government would overpay. In another case of unusual bluntness, the Times reports:

If policy makers were even remotely honest, [financial industry] analysts said, they would force banks to take huge write-downs and insist on a high price in return for taking bailout money. For practical purposes, that could mean nationalization or partial nationalization for many banks.

But as the chorus of calls for nationalization grows, the Journal notes a reluctance among U.S. officials' to take "the most extreme step -- nationalizing banks altogether -- worried about the government's ability to run them. The challenges of running Fannie Mae and Freddie Mac, the two large mortgage-finance firms the government took over last fall, are seen as evidence of that."

Chief Organizer - A report has detailed the extensive efforts by companies around the USA in actually lowering wages by 10-15% across the board marking a trend not seen since the Great Depression. Part of the story focused on even union agreements, including one in the core trucking industry represented by the Teamsters, where the union had agreed to a 15% wage rollback in hopes that the company could survive, rather than see its drivers walking, rather than riding, the streets in this recession.

This is not the concessionary two-tiered bargaining that we all remember from twenty years ago. In those days senior workers might be red-circled at their current rates or frozen for some time, while newer workers were brought in at a lower rate and staggered over years in an on-going catch-up, but there is no way to paint a smile on a wage reduction.

Middle Class - $350 billion have been distributed to the nation’s largest financial institutions so far. Yet, struggling middle-class homeowners have enjoyed no apparent benefit from an expenditure of taxpayer dollars sold to them with a promise to pursue foreclosure mitigation efforts. . . In the next five years, 8.1 million homes of all mortgage types will be lost to foreclosure. [Neither] the Treasury Department, Congress, nor financial institutions have been held accountable for the lack of action on this housing crisis.

Nearly eight in ten seriously delinquent homeowners are not on track for any loss mitigation, a figure that has worsened over time. One in five loan modifications made in the past year is currently delinquent. Thus, not only are government efforts to prevent initial foreclosures falling short, but loan modification programs are failing to keep homeowners in their homes in the long term.


Noam Levey, LA Times - More than a million giddy spectators convened on the national mall to watch Barack Obama take the oath of office today, but it is unclear if the crowd surpassed the record believed to have been set three and half decades ago at Lyndon B. Johnson's 1965 inauguration. Though early estimates Tuesday ranged as high as 2 million, satellite images of Obaam's swearing-in suggested the actual size of the throng may have been closer to half that, according to Clark McPhail, a sociologist who has been analyzing crowds on the mall since the '60s.

"It was sparser than I thought," said McPhail, an emeritus sociologist from the University of Illinois. "There were lots of open spaces.". . . Tuesday morning, the hometown Washington Post initially cited security sources who put the crowd at 1.8 million. The Associated Press, which did its own analysis, estimated "more than 1 million.". . . Johnson's inaugural crowd was estimated at 1.2 million. . . McPhail pointed to relatively uncrowded sections of the mall between the Capitol and the Washington Monument and to thin crowds along the parade route to explain his estimate.


Soothe ice cream headaches - Press your tongue flat against the roof of your mouth, covering as much as you can. "Since the nerves in the roof of your mouth get extremely cold, your body thinks your brain is freezing, too," says Abo. "In compensating, it overheats, causing an ice-cream headache." The more pressure you apply to the roof of your mouth, the faster your headache will subside.

Best times to memorize things - "If you're giving a speech the next day, review it before falling asleep," says Candi Heimgartner, an instructor of biological sciences at the University of Idaho. Since most memory consolidation happens during sleep, anything you read right before bed is more likely to be encoded as long-term memory.


Daily Star, UK - Coastguards have been told to fill in a form before setting off on rescues. Britain's 400 lifesaving units must complete "vehicle pre-journey risk assessments" Bosses want the teams to describe the type of rescue and journey they are about to undertake. The forms ask for the date and time, reasons for journey and any risks they might encounter. Rescuers have to fill in "actions taken to mitigate risk", before deciding if the risk is "acceptable". One coastguard said: "When we were first told about this, we simply couldn't believe it. When we get a call asking us to go out and rescue someone, we need to go there without delay.But they are asking us to waste time in the office filling out this stupid form. Also, none of us really knows what we are realistically meant to fill in. I mean, how are we meant to know what risks there might be before we get there? And do they expect us to get a full weather forecast before we go out? It's ridiculous. All we want to do is save lives. The impression we get is that the bosses are doing everything they can to make sure their hands are legally clean if there is any kind of problem."


Anonymous Anonymous said...

Oh my eyes are popping out
Oh my teeth are gonna crack
Oh I ate that ice cream fast
Mama, I've got Brain Freeze!

January 21, 2009 10:17 PM  

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