Article 43
Saturday, February 28, 2009
The California Budget and Class War
By Ann Robertson
Information Clearinghouse
February 26, 2009
ON FEBRUARY 19, the California legislature, after weeks of wrangling, passed a special budget to address the historically high $42 billion deficit. It represents an unadulterated WASHOUT FOR WORKING PEOPLE who are attacked on almost every front by the Democratic Party, which controls a broad majority in the legislature.
For example, public educations $58 billion budget for K-12 (kindergarten through high school) will be slashed by $8.4 billion, even though California currently allocates less money than almost all other states to education. The state college and university systems will be cut $163 million and $115 million respectively, resulting in many faculty and staff layoffs, despite the fact that both systems are currently turning away qualified students, due to lack of funding. Meanwhile, student tuition will be raised.
Regressive taxes will be imposed, meaning that they will represent a heavier burden on working people and the poor than on the rich, including a sales tax increase from 8.5 to 9.5 percent and a vehicle license fee increase.
But while paying more, working people will receive considerably less from the state. Public transportation will be slashed while health and human services will be gouged by a $1.6 billion cut. And state employees will continue to be forced to take two days off per month, with no pay, of course.
But what went unreported by The New York Times and the San Francisco Chronicle is that those on the other side of the class ledger - the corporations enjoyed a startlingly different fate. According to the Los Angeles Times, about $1 billion in corporate tax breaks directed mostly at multi-state and multinational companies is tucked into the proposal. Not only were corporate taxes not raised, they were actually reduced, thereby contributing to the deficit rather than alleviating it. And this corporate welfare comes on the heels of a steady decline in corporate taxes.
In the 1980’s, 9 percent of corporate profits were taxed by the states. In 2001, it dropped to 6 percent, meaning that in that year and every year thereafter, California lost $1.34 billion in revenue (see The New York Times, July 16, 2003).
Evidently The New York Times and the San Francisco Chronicle viewed the corporate largess concocted by California politicians in this current budget as nothing new and consequently unworthy of reporting.
The moral of this budget is clear. Corporations are well organized and consequently have successfully pressed for their own narrow interests. LACKING ANY SOCIAL CONSCIENCE, which should surprise no one, they fail to pursue the common good but REMAIN FIXATED ON EVER-GREATER PROFITS FOR THEMSELVES.
In order to avoid a repeat of this disaster and actually reverse this course of events, working people will need to organize themselves in order collectively to insist that society operate in the interests of the majority. This should begin with a demand that the government tax the rich who have acquired unprecedented wealth during the past three decades ֖ in order to fund social services.
Taxing the rich and transferring wealth to working and poor people makes both sound moral and economic sense. When inequalities in wealth are allowed to grow unchecked, THE MORAL FABRIC OF SOCIETY IS STRAINED. Members of the same society no longer find themselves sharing common interests or goals, due to their STARKLY DIFFERENT ECONOMIC POSITIONS. When working and poor people have more money in their pockets, they tend to spend it immediately, thereby stimulating the economy. The rich, with their hundreds of millions if not billions of dollars, have a substantial cushion and hence are not compelled to curtail their consumption when their taxes increase. And many of the rich are the bankers who triggered this economic disaster. They should be required to pay for it.
When working people are united, they have the power to take history into their own hands. After all, there can be no corporate profits, let alone business as usual, if workers collectively refuse to work. Now is the time to organize!
Ann Robertson is a teacher at San Francisco State University and a writer for WORKERS ACTION. She can be reached at aroberts45 at aol.com
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California Jobless Hits Double Digits
Crumbling housing and consumer sectors propel unemployment rate to 10.1%, the highest in 25 years.
CNN Money
February 27, 2009
SAN FRANCISCO (Reuters)—California’s unemployment rate rose to 10.1% in January, its highest level in a quarter century, as recession tightened its grip on the most populous U.S. state.
Weakness in the housing and consumer sectors helped drive the jobless rate up from a revised 8.7% in December and 6.1% in January 2008 and to above the national average in January of 7.6%, state officials said Friday.
Economist Jon Haveman of the consulting firm Beacon Economics said he expects California’s jobless rate will climb to the mid-10% range and settle there for much of this year.
“It’s headed north,” Haveman said, noting his outlook reflects Friday’s report that the U.S. economy in the fourth quarter shrank at a 6.2% annual rate, the deepest contraction since early 1982.
“Things are just simply worse out there than anticipated,” Haveman said. “The outlook for this quarter has certainly got to be awful and we likely won’t see positive GDP growth until the first quarter of 2010, and that’s when we would expect the unemployment rate to turn around” in California.
Consumer spending across California has plunged in the wake of Wall Street’s turmoil, and payrolls have been thinned at a rapid pace in recent months. The state, the world’s eighth largest economy, is also suffering from a prolonged housing downturn.
“There is continued weakness in housing-related sectors and we’re also seeing weakness in consumer-related sectors,” said Kevin Callori, a spokesman for the state’s Employment Development Department. “The credit crunch is making consumers less confident, so that’s affecting businesses in wholesale and retail trades.”
“Basically about a third of the losses (over the past year) have been in consumer-oriented industries,” Callori said. “Another third have been in housing and housing-related industries like construction and financial services.”
State officials said California lost 79,300 nonfarm payroll jobs in January from December and a total of 494,000 nonfarm jobs from a year earlier, or 3.3% of the state’s nonfarm payrolls.
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Deep Cuts Threaten to Reshape California
By Jennifer Steinhauer
NY Times
May 31, 2009
Gov. Arnold Schwarzenegger did not get the election results he sought. Now he seems determined to show California voters the consequences.
In a special election on May 19, voters rejected a batch of measures on increasing taxes, borrowing funds and reapportioning state money that were designed to close a multibillion-dollar budget gap. The cuts Mr. Schwarzenegger has proposed to make up the difference, if enacted by the Legislature, would turn California into a place that in some ways would be unrecognizable in modern America: poor children would have no health insurance, prisoners would be released by the thousands and state parks would be closed.
Nearly all of the billions of dollars in cuts the administration has proposed would affect programs for poor Californians, although prisons and schools would take hits, as well.
Government doesn’t provide services to rich people, Mike Genest, the state’s finance director, said on a conference call with reporters on Friday. It doesn’t even really provide services to the middle class. He added: “You have to cut where the money is.”
In less than two weeks, the administration has gone from warning residents that a vote against the budget measures would send the state - some $24 billion in the red into utter turmoil to sanguine acceptance that דthe people have spoken and that the government must move on.
And so it is that administration officials have been sent off to talk to the Legislature and hold conference calls about the latest proposed blows to state programs, while Mr. Schwarzenegger largely tends to other aspects of governing. “He was in Livermore on Friday dedicating the world’s largest laser system (for sustaining nuclear fusion), and has updated his Twitter feed. Backstage at the Tonight Show,” one tweet said.
The measures proposed by the administration to balance the budget, including the $2.8 billion in cuts outlined on Friday, are unlike any proposed to the states social services in a generation.
Mr. Schwarzenegger, a Republican, is threatening to eliminate the Healthy Family Program, the state’s health insurance program that covers over 900,000 children and is financed with state and federal money, as well as the states main welfare program, known as Cal-Works, which provides temporary financial assistance to poor families and a caregiver for the severely disabled.
The $1 billion in cuts to programs for the poor would be met with $680 million in new cuts to education and a 5 percent salary reduction for state employees, many of whom are already enduring furloughs.
These proposals, as well as those that would make cuts to state parks, the prison system and other state agencies, are winding their way through Sacramento now, where they will be voted on by committees and eventually the full Legislature.
Some of the proposed cuts are clearly saber rattling on the governor’s part, but there is a nervous acceptance among lawmakers, advocates for the poor and outside budget experts that the state is out of money and time.
If lawmakers sign off on closing the health insurance program for children whose families make too much to qualify for Medicaid, California would be the first state in the nation to close the popular program. Begun in 1997, the program, known as S-CHIP, reimburses states at a higher rate than for Medicaid to deliver health insurance to children and teenagers. With the cuts to Medicaid, the state would probably increase its number of uninsured people by nearly 2 million, the California Budget Project says.
“As the nation is debating how to move forward to provide broader health care coverage,” said Diane Rowland, the executive vice president of the Kaiser Family Foundation, “for a state to be scaling back coverage for children would be a major challenge. This program means a lot to working families. It is well run and well liked by people on both sides of the aisle.”
Further, the governor has gone after some spending not covered by mandates enacted by voters through ballot measures, a quirk of California budgeting that has helped create the mess the state is in.
“Certainly the programs that were targeted are not protected by the California Constitution or required by federal law,” said Jean Ross, the executive director of the California Budget Project, a left-leaning policy organization that analyzes the budget.
The Democratic-controlled Legislature has been uncharacteristically silent on most of the cuts, most likely because lawmakers know that tax increases are not politically palatable, that huge cuts in some form are in the offing no matter what, and that any program they wish to spare will quite likely have advocates among their ranks.
“There is no drawing lines in the sand,” said Alicia Trost, the spokeswoman for State Senator Darrell Steinberg, a Democrat and president pro tem. “Everyone knows we’re the majority, and we all know where we stand.”
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Friday, February 27, 2009
Letter To Kathy
More than any time in history, mankind now faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray that we have the wisdom to choose correctly.
- Woody Allen
Here’s some excerpts from a letter written by this CUSPER to an old friend today highlighting the plight of SOME OF US AMERICANS struggling to survive.
I’M SURPRISED there’s still a middle class to TALK ABOUT.
Kathy,
- snip -
President Bush SNEAKED SOME STUFF into law right before he left. I thought that included poor people getting free medical and their PILLS taken care of.
- snip -
It’s a foregone conclusion the building where I work is closing in a few months, and work moved to company-owned buildings in other states.
We don’t know yet who’ll be offered jobs in the other places, or if RELOCATION money offered to anyone, but doubt I’ll be offered either, since the other places already have PEOPLE THAT DO MY JOB, and the company layed off a bunch of them last year.
In 2003 AT&T MANAGEMENT tried to coax us to move to a company-owned building in Conyers Georgia, with a (hollow and worthless) verbal promise of employment longevity if we’d relocate, and offered $20K bonus to anyone that volunteered. The veiled threat behind it meant certain doom for those that said no. Those who took the bait moved - got the $20K - and just about all of them got LAYED OFF within a year, not much later than those of us that didn’t.
I’m near certain the larger plan with the company I work at today is to CONSOLIDATE OPERATIONS IN AMERICA, and OUTSOURCE WHAT’S LEFT until just about everything is out of the United States, so if they offer something like AT&T did, I’ll probably say no. MOVING OUT OF A HOUSE TO A NEW STATE costs tens of thousands of dollars that I don’t have, plus there’s an eight month glut of homes for sale in ORLANDO, and I’m still trying my coax my mom to move down here with me.
- snip -
Your husband’s two year job search, although very sad, isn’t uncommon to us former middle-class techies.
It gotta be killing him on the inside. Thank goodness he has you to lean on.
If misery loves company, he has lots of it.
Highly-skilled professionals I got layed off with five years ago are STILL LOOKING for good jobs. Another marriage is breaking up. That’s two people I worked with at AT&T whose families fell apart from FINANCIAL STRESS. The guy drives a limo now for $10/hr. This must be his tenth job in five years. The other poor soul was out of work since his last temp job at Cingular (now AT&T) ended 13 months ago. He finally got a part time job a few weeks ago cleaning toilets at Disney three nights a week at $7.65/hr. He’s living in his brother’s house for free, after loosing everything, and sleeps in his car in the parking lot on alternate days with the sun beating down on his head to save money on gas, and have enough to pay child support for his baby girl after his marriage’s breakup.
I think you’re both lucky that your family hasn’t been torn apart from money issues.
Steve
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What’s A Typical House Just Outside Of Orlando Worth These Days?
Let’s take my house as an example.
It’s worth about $160K today - $180K a year ago, and $250K two years ago.
According to a report HERE, it would take almost a year to sell - ASSUMING of course the DEPRESSION our country’s in doesn’t get any worse.
If that chart keeps going down, pretty soon I’ll owe more on it than it’s worth.
And if I got no job, and NO HOPE OF GETTING A JOB, it may be time to WALK AWAY from it, and all those pesky credit card bills whose INTEREST RATES JUST WENT UP.
If the feds BAILED OUT YOU AND ME instead of BIG BUSINESS, we’d be MUCH BETTER OFF.
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Trial And Error
“The rich will strive to establish their dominion and enslave the rest. They always did...they always will. They will have the same effect here as elsewhere, if we do not, by the power of government, keep them in their proper spheres.”
- Gouverneur Morris (1752-1816)
Trump: Obama “absolutely right” on executive pay cap
CNN
February 5, 2009
Donald Trump, businessman and CEO of The Trump Organization, knows a little something about money.
Trump spoke with CNN’s Larry King about whether there should be executive pay limits, if there should be a stimulus plan and when there could be an end to the economic downturn. The following is an edited portion of the interview.
Larry King: Is Obama right or wrong to go after these executives with salary caps?
Donald Trump: Well, I think he’s ABSOLUTELY RIGHT. Billions of dollars is being given to banks and others. You know, once you start using taxpayer money, it’s a whole NEW GAME. So I absolutely think he’s right.
King: What about the whole concept of bailouts?
Trump: Well, it’s a little bit different. A lot of people are not in favor of BAILOUTS. You know, we talked about all the different things going on in this country. Let’s face it, Larry, we are in a depression.
If they didn’t do the bailout, you would be in depression No. 2 and maybe just as big as depression No. 1, so they really had to do SOMETHING. The problem is they’re giving millions and billions of dollars to banks and the BANKS aren’t loaning it.
If you are a prime customer of a bank and if you need 10 cents, you can’t get it. The banks are out of business. They’re not loaning. Now, billions of dollars has been given. They’re supposed to be loaning out that money and they’re using it for other purposes, so it is a real mess.
King: If you were in the Senate, would you vote for the stimulus plan?
Trump: Well, I’d vote for a stimulus plan. I’m not sure that all of the things in there are appropriate. Some of the little toys that they have are not really appropriate, and they’re a little surprising that they seem to want it, because the publicity on it has been terrible.
I would certainly vote for a stimulus, but I would really vote for banks having to loan out the money because they’re not doing that.
King: In your adult career, have you ever seen it worse?
Trump: No, this is the worst ever. This is the worst I’ve ever seen. 1990 was a bad period of time, but this is far worse, and this is worse on a really global basis. I’m looking at different countries. Every country is bad. Now they’re blaming us because of what happened. You know, why not blame the United States? But every country is in trouble.
King: Can you put the blame anywhere?
Trump: Well, look, it’s something that, to a certain extent, happens. You go up, you go down. You have recessions. If you just look at the charts over the period of 150 years, you’ve had good times (and) you’ve had bad times.
Certainly, there’s been a lot of greed. There’s been a lot of stupidity. You know, like I say, today the banks don’t have money, they don’t loan money. But if you went to a bank two years ago and you wanted a $300 million loan, they’d say ‘No, we don’t want to do that, but we’ll give you $400 million,’ so I guess, to a certain extent, that’s part of the problem.
King: If you had the power, if you could wield, what would you do?
Trump: Well, the biggest problem we have is it’s trial and error, Larry. I mean we’ve never had anything like this before. It is absolute trial and error. They’re trying. The new president is trying. Bush left him with a mess—a total mess in many different ways. I really think he’s doing the best he can, but it is trial and error.
They try something, if it works, great. If it doesn’t work—and the problem is you don’t really know if it’s going to work for quite some time. If it’s really wrong—and it could be wrong—we’re going to really have a mess in two years.
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Stimulus Plan Explained
Shortly after class, an economics student approaches his economics professor and says, “I don’t understand this stimulus bill. Can you explain it to me?”
The professor replied, “I don’t have any time to explain it at my office, but if you come over to my house on Saturday and help me with my weekend project, I’ll be glad to explain it to you.” The student agreed.
At the agreed-upon time, the student showed up at the professor’s house. The professor stated that the weekend project involved his backyard pool.
They both went out back to the pool, and the professor handed the student a bucket.
Demonstrating with his own bucket, the professor said, “First, go over to the deep end, and fill your bucket with as much water as you can.”
The student did as he was instructed.
The professor then continued, “Follow me over to the shallow end, and then dump all the water from your bucket into it.” The student was naturally confused, but did as he was told.
The professor then explained they were going to do this many more times, and began walking back to the deep end of the pool.
The confused student asked, “Excuse me, but why are we doing this?”
The professor matter-of-factly stated that he was trying to make the shallow end much deeper.
The student didn’t think the economics professor was serious, but figured that he would find out the real story soon enough.
However, after the 6th trip between the shallow end and the deep end, the student began to become worried that his economics professor had gone mad. The student finally replied, “All we’re doing is wasting valuable time and effort on unproductive pursuits. Even worse, when this process is all over, everything will be at the same level it was before, so all you’ll really have accomplished is the destruction of what could have been truly productive action!”
The professor put down his bucket and replied with a smile, “Congratulations. You now understand the stimulus bill.”
Anonymous
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Thursday, February 26, 2009
No Severance Pay For Nortel Employees
Bankrupt Nortel will fire 3,200 more, and they won’t get severance pay
Nortel Networks plans to eliminate 3,200 more jobs over the next several months, as the telecom equipment vendor tries to restructure under bankruptcy court protection.
By Dial Zero
February 26, 2009
The layoffs are IN ADDITION to 1,800 job cuts the company announced last year. Nortel won’t be paying severance to the employees who lose their jobs.
Once Nortel completes the job cuts, the company’s work force will have dropped to about 25,000. During its heyday in the 1990s, Nortel employed about 93,000 people.
The company filed for bankruptcy protection in Canada and the US in January and has been delisted from the New York Stock Exchange. It still trades on the Toronto Stock Exchange, and was at 8 US cents Wednesday.
Chief Executive Mike Zafirovski said Wednesday that executives were working to have a restructuring plan ready in March. “We are moving with speed, but we are not moving in haste,” he said. He didn’t rule out future rounds of layoffs.
Zafirovski said one priority was trying to keep Nortel’s current customers on board, but admitted that few were willing to invest in the company’s new technologies. He declined to say whether the company would stake its future on selling network gear and services to telecom carriers or to corporations running private networks, where it competes against giant Cisco Systems.
Since its filing, Nortel has suspended plans to sell its promising Metro Ethernet business, leading some analysts to believe that Nortel will focus on its shrinking but highly profitable wireless business.
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IBM Reinvests In America
By Patrick Thibodeau
Infoworld
February 24, 2009
IBM plans IT center in Iowa—and job applications pour in
Iowa state funding and lower IT wages provide incentives for IBM to employ 1,300 workers to provide support for its U.S. outsourcing clients
By Patrick Thibodeau
February 23, 2009
With $12 million in state funding as an incentive, IBM is building an IT center in Dubuque, Iowa, that it says will employ 1,300 workers providing support to IBM’s U.S. OUTSOURCING CLIENTS.
The state finalized the agreement to contribute to the project on Thursday. And while the money Iowa is pitching in is clearly an incentive for IBM to locate in Dubuque, another reason for the company’s interest may be the state’s lower IT wages.
Indeed, IBM’s decision to locate in a renovated building in downtown Dubuque, which has a population of just under 60,000 people, may be part of a trend by vendors to expand in lower-cost—and lower-wage—regions of the United States.
Mike Blouin, president of the Greater Dubuque Development Corp., said that as part of the deal IBM is obligated to offer salaries that begin in the low-$30,000 range and go all the way up to $70,000 or so, with the average salary in the mid-$40,000.
The Greater Dubuque Development Corp. was involved in the talks surrounding the project. IBM officials declined to comment on the wage agreement.
IBM has already received some 3,000 applications for positions so far, with a third meeting meeting basic requirements for work, said Blouin. Hiring will begin this spring.
Blouin said that 10 percent of IBM’s workforce will come from the company’s existing labor pool, with the remainder hired locally and from two- and four-year colleges within 100 miles of Dubuque. In fact, IBM has already started recruiting students from nearby Kirkwood Community College.
The lower cost of living was a factor in IBM’s decision, said Blouin. The company “is clearly trying to demonstrate that they can bring work to the U.S. shores and do it competitively,” he said.
IT salaries in the Midwest can be 20 percent to as much as 50 percent below the wages paid on the East and West coasts, said Nate Viall, a Des Moines-based recruiter who specializes in finding candidates for IBM’s i (formerly i5/os) mid-range application development jobs.
IBM, which has some 80 global delivery centers worldwide, said growth in its services business is creating the need for expansion. The types of jobs at the new center will include systems management services and operations, database management and project management services.
A labor group, the Alliance@IBM, said that more than 4,000 IBM employees have been laid off in recent months. IBM won’t confirm those figures, but said any cuts are part of an ongoing shift in business. A spokesman for the union said that some employees have been offered jobs in Dubuque, but the union was unsure exactly how many had received offers.
IT services providers have been turning to relatively rural areas to cut costs. PEROT SYSTEM in Plano, Texas, for instance, last fall announced it was adding 90 jobs to a services center it has in Bowling Green, Ky., bringing employment at that site up to 300.
According to the Foreign Labor Certification Data Center Online Wage Library, whose prevailing wage data is used by companies that hire H-1B workers, an entry-level computer programmer job in Des Moines starts at around $42,800. That same job in the Newark, N.J., area would begin at $55,000.
INTEL REINVESTS IN AMERICA
ALCATEL-LUCENT CLOSING IT’S HISTORIC FLORIDA TRAINING CENTER
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