U.S. Economic/Financial News
Senator Clinton Calls for Marshall Plan for Auto Industry
Senator Hillary Clinton (D-NY) strongly endorsed the United Auto Workers' call on Congress for "a Marshall Plan for the U.S. auto industry," the Detroit Free Press reported Feb. 9. Clinton addressed the last day of a four-day UAW legislative conference Feb. 5-9, attended by 1,600 union organizers in Washington, D.C., saying, "The manufacturers and the UAW have called for a Marshall Plan. Let's marshal our forces and get it done." She said that the American economy cannot sustain itself without manufacturing, and that the Bush Administration is trying to "undo the work of the 20th century": "They want to dismantle the structure of opportunity that has enabled most of us to live better than our parents and our grandparents."
The Bangkok Post took sharp notice of Clinton's speech because she called for protectionism for the auto industry against Thai exports, particularly pickup trucks, which the White House is proposing to free from tariffs and duties. "The Bush Administration is allowing U.S. manufacturing to wither away," the Post quoted her as saying.
Hedge-Fund Pirate Kerkorian Tightens Grip on GM
At the General Motors board meeting Feb. 6, corporate pirate Kirk Kerkorian pushed his right-hand man, Jerry Yorktermed a "fanatical corporate cutter and downsizer" by the Detroit Free Press of Feb. 7onto the Board, replacing a Merrill Lynch representative. Also at that meeting, GM decided to cut its dividend in half, and cut some of its executive salariesboth demands of Kerkorian/York. The elevation of York supposedly involved his agreement not to discuss confidential GM matters with Kerkorian, now its largest shareholder, and York's boss at Tracinda Corp.!
Kerkorian is trying to play the (UAW president Ron) Gettelfinger card, calling his policy "equality of sacrifice," and calling it an equitable solution for the United Auto Workers. Gettelfinger on Feb. 6 said he is in favor of GM adopting some of the steps recently proposed by Kerkorian. After speaking to the UAW CAP (Community Action Program) national lobbying conference in Washington (Feb. 5-9), he said "the UAW has already taken the hit needed to help restore GM to health by granting the no. 1 auto maker significant health-care concessions. Now, he said, GM's executives and board members "should share with sacrifices of their own.
This idea is above all a distraction from the LaRouche policy of Congressional intervention to retool auto for a national infrastructure-building policya policy which was much in discussion at the UAW national meeting, where LaRouche representatives held many discussions about LaRouche's policy initiatives. UAW members were lobbying offices of the House and Senate Feb. 7. Their legislative agenda's first point is "A new Marshall Plan for the U.S. Auto Industry."
Equally important to Kerkorian and York, they and their associated hedge funds want to control the sale of 51% of GMAC, GM's finance arm, and push up its price. This sale was to be "reviewed" with York at the Board meeting's second day on Feb. 7. Several conditional bids seem to have been made, including one by Citicorp and the Cerberus Capital Fund in New York, sometimes called the world's biggest hedge fund.
Bush Budget Busts Entitlements, Congress; Backs 'Long War'
President Bush's fiscal 2007 budget, sent up to Capitol Hill Feb. 6, attempts to resurrect the dead Social Security privatization proposal, using exactly the same arguments as last year, and also proposes "reforms" that would reduce Medicare spending by $36 billion over the next five years, and a total of $65 billion from all mandatory programs. On the discretionary side, it proposes $15 billion in cuts, all to support making the 2001 and 2003 tax cuts permanent and continuing the wars in Afghanistan and Iraq, for which the budget asks for $70 billion in 2006 and another $50 billion in 2007. The defense budget tops out at $439 billion, a 7% increase over 2006. It continues the reorientation of the military toward Defense Secretary Donald Rumsfeld's "long war," with large increases for Special Operations, including psychological operations and civil affairs, intelligence and surveillance capabilities, and the reorganization of the Army into information-age modular brigades.
The budget also proposes a number of draconian measures to "enforce spending restraint." Among these are a resurrection of the line-item veto, and a joint budget resolution which would require the signature of the President. These two reforms, along with others also proposed, would bring the Executive branch even more intimately into the process of legislating spending, yet another clear violation of the separation of powers and Congress's constitutionally mandated power of the purse.
LaRouche Proposal for Cutting the Budget
In response to Bush's new budgetary assault on the General Welfare (see above), Democratic Party elder statesman Lyndon LaRouche on Feb. 6 proposed a better way to cut costs: Get rid of the White House. After all, he mused, you don't need a marble palace to house a padded romper room.
Luxury Homebuilder Sees New Orders Plunge
Toll Brothers, the nation's leading builder of luxury homes, said Feb. 7 that new orders plunged 29% nationwide in the first quarter. The drop, compared to the level of a year ago, was a whopping 41% in the mid-Atlantic regionWashington, D.C./Northern Virginia/Maryland. The number of contracts signed to buy its houses fell to 1,544, down from 2,173 in the same quarter a year earlier. Many speculators are now selling the houses they bought to "flip," at the same time that purchase demand from investors is drying up.
Meanwhile, mortgage loan applications fell for a second straight week, led by a drop in home purchase loans. The Mortgage Bankers Association said its index slid 1.2% in the week that ended Feb. 3.
Mine Safety Agency Reinstates Air-Mask Supply Rule
The Mine Safety and Health Administration (MSHA) has reestablished the rule requiring the placement of extra air masks in mines, and training of miners in their use, which it wiped off the books eight months after Bush's 2001 inauguration.
The rule was reinstated after a Jan. 12 accident at the Aracoma Alma mine at Melville, in Logan County, West Virginia, where sources say two miners died because of difficulty getting the air masks on. In 1999, Clinton's MSHA proposed having caches of extra masks, and providing training.
David Lauriski, the head of MSHA under George W. Bush, was the official who rescinded the rule. In 1984, Lauriski was the safety and training director for a company owning a Utah mine where a disaster killed 27 miners in 1984. A 1987 study of this disaster concluded that there were too few of the devices in place, and that the miners were not adequately trained to use them. This history appears to answer in the affirmative Lyndon LaRouche's question, "Is the Bush Administration guilty of willful, criminal negligence in the death of miners?"
Bush's 'Job Creation' Is Lowering Wages
A report issued in January, "The Role of Metro Areas in the U.S. Economy," prepared for the U.S. Conference of Mayors, states that the 10 sectors of the economy that lost the most jobs between 2000 and the end of 2003, paid an average of $43,629 per year; while the 10 sectors with the largest job increases pay an average annual salary of $34,378, or 21% less.