BLOGS

Notes and cases for:

• Universal Health Care (7 myths)
• Michigan Health Care (2005)
  
• (Dan Butts'
  Integrative pharmacies & Community Health Centers)
  
• electoral reform
  The Climate crisis:
  
• 10-24 blog
  
• climate change: other effects
• carbon tax faq
• Nuclear power?
  War & peace:
  
• GH Peace Project
• Permanent US military bases in Iraq (Dan Butts)
  

Events and meetings

read the news, oh, boy

Links:
ecology
social justice
grassroots
peace/nonviolence

local area political directory

QUESTIONS THAT WE NEED ANSWERED ASAP.

1. How much larger would the stimulus package need to be in order to put enough people back to work to make an actual difference?

In a recent article published in Washington Monthly, James Galbraith quotes Marshall Auerback on the New Deal Jobs programs:
"[Roosevelt's] government hired about 60 per cent of the unemployed in public works and conservation projects that planted a billion trees, saved the whooping crane, modernized rural America, and built such diverse projects as the Cathedral of Learning in Pittsburgh, the Montana state capitol, much of the Chicago lakefront, New York's Lincoln Tunnel and Triborough Bridge complex, the Tennessee Valley Authority and the aircraft carriers Enterprise and Yorktown. It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers, rebuilt the country's entire rural schools system, and hired 3,000 writers, musicians, sculptors and painters, including William de Kooning and Jackson Pollock."(1)

Just staying on the safe side and taking 60% of the unemployed, as a vague but possible benchmark, points to the scale that could be necessary to get past the current economic downturn. If we count everybody, including the people no longer in the labor force, not to mention the underemployed, working part time, workers, we could be looking at as many as 20 million people. That could mean that the number of jobs we may need to create could be as high as 12 million. It's not necessarily the case, but erring on the safe side, we perhaps should be prepared for it. The actual number could be substantially lower and still be much higher than what is promised under the stimulus package already passed.

Then, additionally, there is still another weakness of the present stimulus package.. The people put to work in the Roosevelt era worked in a much more labor intensive way than would be the case in many of the stimulus projects today. Many of the latter, particularly in construction or demolition, call for more heavy equipment operators than anyone else. It's also the case that since the projects are chosen on the local level, there is also almost a clarion call for local corruption, modified only by reports to the Feds on recovery.gov.

2. Does anyone in the Obama administration know the difference between these two Roosevelt era agencies: the Public Works Administration and the Works Progress Administration? Would they have the courage to choose the right one for a model, if they did know the difference?

Apparently not. The Public Works Administration was the first Roosevelt administration jobs agency, and it worked entirely through the private sector. It succeeded in barely putting to work 100,000 workers in over six months, but that could be more than what the present stimulus plan will end up accomplishing in the same time frame. (2).

The Works Progress Administration, on the other hand, simply put the workers on the federal pay roll, and was not required therefore to negotiate a few reams of contractual material, before they could start. The money went into the pockets of the workers and was spent to take care of their needs, so added almost immediately to demand. Likewise for the CCC (Civilian Conservation Corp)

The stimulus package relies on a as problematic as anything model of the government contractor, which the roads we drive on daily are an abysmal example of. Shoddy engineering and workmanship are practically guaranteed by the need to establish one nearly permanent job site after another, to keep the whole business alive.

This leads me to a wholesale, stick-my-neck-out, sans crystal ball stab at the future. If anything like full employment is any part of our future, the ironclad link between jobs and commercial interests will have to be at least relaxed, if not eliminated. When jobs are off-shored, as even such things as US income tax services and investment reports are today (to India), demand in the US drops down to dangerous levels, to some extent, leaving almost nothing left except the luxury market. As Michel Chossudovsky of Global Research in Canada has pointed out, in the race to the bottom, the endless competition as to who will work for the least heats up, the same thing happens to demand globally. It goes down. (3)

We may end up in the US needing a permanent jobs program, along the line of the WPA or the CCC, paying out in livable wages, not in the minimum wage or less. Speaking of which, if and when we get anything much like green jobs here in the US, we need to enact protection of the wage structure. The mere fact that those jobs can't be off-shored won't be enough, if Mexicans or people from Asia can be imported to do them.

3. Do the recent reports of healthier than suspected banks, suddenly becoming profitable, e.g. Citigroup, Wells Fargo, point to signs of possible progress towards recovery as the administration claims or are they further examples of creative accounting and unsubstantiated rumor?

Who knows? I say that not just because the claim that the banks are healthier is simply public relations for the Obama administration, but because we still haven't really seen the books on these banks. Even the examiners likely haven't seen nearly everything there is to see.. According to former senior bank examiner, William Black, " best known for his thwarted but later vindicated efforts to prosecute S&L crisis fraudster Charles Keating," there are not any real stress tests going on (4). It's an obviously believable charge, since examining an entity the size and scope of, say Citigroup, would surely take more highly skilled manpower and more time than has so far been allotted. Very little information is getting through on the stress tests, such as they are, for that matter.

The Tarp Oversight Board, to which appointments were rather slowly made in the first place, has complained that both Paulson and Geithner have ignored them when the board requested information. They have stated that they lack "the information they need to perform their duties." (5)

On ABC News, April 17, it was revealed that there was indeed some creative accounting in the unexpected profits of the major banks. These changes in the accounting rules, which "now allow Citigroup and other banks to subtract less of those toxic assets and loses in computing those profits. If they tally that in, plus what Citibank owes all of its investors in dividends, they actually posted a loss." (But then, they will gladly accept the resultant gain in the prices of their stocks, based on that "profit.") The accounting change plus the clear lack of new lending, commented on by Steve Leeb of Leeb Capital Management in the same segment, seem to altogether deny the idea that the banks have suddenly become healthy.