Week In Review

A Weekly Column by Bill Onasch
November 23, 2008

Peace President Picks Doves
His vanquished opponent for the Democrat nomination, who has spoken of “obliterating” Iran, will lead the new search for “diplomatic solutions.” Bush’s current Defense Secretary, who spoke this past week of a surge of 20,000 more GIs to Afghanistan, will be retained. A former Marine Corps Commandant, and NATO commander who advised both McCain and Obama during the campaign will head National Security.

And His Dismal Scientists
It would have been awkward for the President-designate to appoint his closest economic adviser–Robert Rubin–to the Treasury Secretary job he held in the Clinton administration. Since 1999, Rubin has been on the Board, as Senior Financial Advisor, at Citigroup–which can no longer disguise enormous losses related to subprime scams, is laying off tens of thousands of workers, and will have to ask for a big bailout.

Instead, Obama tapped Timothy Geithner for the nominally top financial position. After serving as an undersecretary at Treasury in the Clinton regime Geithner did a stretch at the IMF before being appointed head of the New York division of the Federal Reserve Bank. Recently, he was the key architect of the 30 billion dollar bailout of Bear Stearns which served as a model for “rescues” of Freddie, Fannie, and AIG.

Heading up the National Economic Council in the West Wing will be Lawrence Summers. His parents were both economics professors and his uncle, Paul Samuelson, authored a textbook read by millions of Economics 101 students over decades. By his mid-30s he had risen to chief economist at the World Bank, pioneering the expansion of globalization. Summers became Clinton’s Treasury Secretary after Rubin, his long time mentor, departed. More recently he served as president of Harvard–a post he left after the university faculty voted an unprecedented motion of “lack of confidence.”

And the Labor Guy
Obama also made his first appointment of someone coming out of the labor movement–sort of. The Wall Street Journal reports, “Airline consultant Duane Woerth, who was president of the Air Line Pilots Association from 1999 to 2006, has met with House Transportation and Infrastructure Committee Chairman James Oberstar and has his tentative support [to head up the FAA].” Woerth gained attention for two things while serving as ALPA’s president–advocating that pilots be allowed to tote guns in the cockpit and being very collaborative with the carriers in negotiating give-backs. The latter is what led to union members voting for his career change to “airline consultant.”

Bloggers are also reporting that Patrick Gaspard, who was political director of SEIU 1199 before becoming political director of the Obama campaign has been selected White House political director. I’m not sure what a political director does but this might be labor’s most important appointment.

Can He Get Vouchers?
Whatever else one might say about former President Jimmy Carter, when he moved in to the White House his daughter Amy went to a D.C. public school. The new President has instead chosen to follow the example of the Clinton years by sending his daughters to an elite private school at an annual cost of nearly sixty thousand.

Next Time They Should Drive
Plunging sales, downgraded credit ratings, and tanking stock value, is burning through Big Three cash reserves at the speed of a California wildfire. The bean counters project GM will likely be dead broke–with little in the way of credit life lines–by the end of the year. Chrysler is in about the same predicament. Only Ford, while not in great shape, is not in imminent danger.

Still, the Titans of Detroit were not unduly alarmed. If mere lenders and insurance companies could be considered “too big to fail,” getting emergency government rescue programs now funded with over a trillion dollars, surely the iconic Big Three automakers should have no trouble getting another measly 25 billion. Undoubtedly, that’s what their CEOs must have thought as they each swooped in to Washington in their private jets.

They insisted their UAW “partner,” Ron Gettelfinger, accompany them on their visit to Capitol Hill. Their mission had already been vaguely blessed by president-designate Obama a few days earlier on Sixty Minutes. Several governors of both parties had endorsed their appeal and the House Democrats had all their ducks lined up–or so they thought.

But other factors led to an unaccustomed welcome for this party of four from Detroit. Polls show deepening public suspicion and opposition to the whole bailout approach. The CEO of Bank of America, fresh from picking up Merrill Lynch for a song, declared that no more than one of the Big Three deserved to survive. Former Massachusetts governor and failed presidential contender Mitt Romney–the son of an automaker CEO-- extolled the virtues of corporate bankruptcy. He urged the Big Three to exploit this tool–as his own private equity strip and flip ventures have profitably done.

So, just as some had initially rebelled against Pelosi on the scam that ultimately became the 700 billion TARP, Democrat as well as GOP representatives cynically grandstanded with some rude shots at the men from Motor City–instead of their usual fawning.

“There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand...It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious,.” quipped Long Island Dem Gary Ackerman, best known as a super-hawk supporter of Bush’s war drive in the Middle East.

Perhaps the dazed looking brother Gettelfinger would have got more attention and respect if he, instead of sitting shoulder to shoulder with these down at heel plutocrats decked out in thousand dollar suits, had invited his members to knock off work for a few days to join him in meeting with Ackerman & friends.

Whether pre-planned or improvised, Speaker Pelosi soon stepped in to make clear the rules of the game had now changed. She summoned the visitors from Michigan for a private meeting where she told them the lame duck session was being immediately adjourned with no action taken. She gave them an ultimatum–come back with a recovery plan that includes “shared sacrifices” by December 2 or forget about any aid until some time next year. She then went to the press saying “they’ve got to show us their plan before we show them any money.”

It might be mildly amusing to watch the haughty bosses get their comeuppance, even at the hands of unsavory politicians, if this was just a performance for reality TV. Go ahead, kick ‘em off the island.

But this was neither entertainment nor mere gratuitous insults. While clearly bristling, the Titans took a hit for their class to help set the stage for a new assault on our class. Out of sight of the cameras was the real target--millions of blue and white collar workers and retirees, most with families, whose lives are now threatened with disaster. They live in dozens of cities, especially in the Midwest, that are fretting about becoming ghost towns. And, with the globalization of the auto industry, this hardship will be strongly felt in Canada, Mexico, and other countries as well.

The smart aleck Democrats are dead serious about wanting a Big Three loan plan that includes more “tough love” major concessions from the UAW. They’re talking a minimum of eliminating the Job Bank, Supplemental Unemployment Benefits, and restrictions on plant closings that are still retained in the union contract. Some want much more: reducing the company payments due to the VEBA established for retiree healthcare (some payments have already been deferred with the union’s agreement), making current workers pay more of healthcare costs, and even outright wage cuts.

The palpable threat of bankruptcy, where judges can throw out union contracts and impose even harsher conditions–even liquidation of the company–is presented as the only alternative to the UAW surrendering what little is left.

But if Pelosi can change the rules why not us? I’m not the only one to talk about nationalizing the industry and converting it to be a part of a needed green restructuring of our economy. Dan LaBotz , writing in  MRZine,

“The best solution to the crisis of the auto industry -- for the workers, for our citizens, and for the future of the world environment -- would be for the U.S. government to takeover the auto companies. Let Congress nationalize these companies but also socialize them by creating a board of union members, environmentalists, and consumers to run them. Let us own and run the auto companies....Congress should transform the nationalized auto industry to become the U.S. Auto, Mass Transport, and Energy industry, to rebuild our infrastructure and begin to solve our environmental crisis.”

Right on, Dan.

A Healthy Response
A Labor Campaign for Single-Payer national conference has been called in St Louis January 10-11. The conference website is still “under construction,” but we’ve posted a flyer with the basics online
here. We should have more information next time.

Speaking of conferences, our plans for the “New Crises, New Agendas” conference in Kansas City April 3-4 are slowly but steadily coming together. Among the speakers now confirmed: Donna Dewitt, president South Carolina AFL-CIO; Labor Notes director Mark Brenner; Macalester history professor and leader of labor and immigrant rights solidarity campaigns Peter Rachleff; Labor Party national organizer Mark Dudzic; Christine Frank, Minneapolis unionist and coordinator of the Climate Crisis Coalition of the Twin Cities; rail unionist and labor historian David Riehle; and yours truly. We’re awaiting some more confirmations, and narrowing our selection process for a site, and hope to post a full schedule and details soon.

Being a good union man, I’ll be taking Thursday–Thanksgiving in the USA–off. Otherwise, we will continue updating our Daily Labor News Digest by 7AM Central, Monday-Friday.

That’s all for this week.

Demand Guaranteed Healthcare on a SinglePayer model for everyone in America, for life.

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