U.S. Economic/Financial News
Federal Judge Blocks Furloughs of New York State Workers
May 28 (EIRNS)Federal Judge Lawrence Kahn of the Northern District of New York blocked a measure May 28 that would have forced hundreds of thousands of state government employees to take several days off without pay.
Kahn's ruling blocks controversial workers' furloughs that were approved by the New York legislature's Democratic-dominated lower chamber on May 10. The measure would have forced state employees to be given obligatory one-day unpaid holidays per week. The move enraged public employee unions across New York. The Civil Service Employees Association sued Gov. David Paterson.
Communication Workers of America (CWA) president Danny Donohue, a plaintiff, released a statement saying: "Today's decision is a victory for the rule of law in New York, and should make it clear that no governor can run roughshod over people's rights."
Paterson said the furloughs need to continue until squabbling state leaders solve New York's $9.2 billion budget deficit. The CWA said New York is not in a fiscal crisis. The judge did not agree with the unions' position that the State is not experiencing a fiscal crisis. Kahn granted his preliminary injunction on the grounds that: "The State of New York is party to collective bargaining agreements with a variety of public employee organizations," noting that May 10 legislation "enacted unpaid furloughs, a wage freeze, and a benefits freeze on certain groups of state employees in contravention of a number of such contracts." He concluded, "The Court finds it is substantially unlikely ... that the challenged provisions before it will be upheld." On that basis, the judge blocked implementation of emergency measure provisions dealing with workers' furloughs and wages.
Reich Slams Dodd Bill; Repeats Glass-Steagall Call
May 24 (EIRNS)Former Clinton Labor Secretary Robert Reich on May 24 published a frontal attack on his blog, against the Dodd bill, citing three devastating shortcomings that all represented Obama capitulations to Wall Streetand Obama's own shortcomings. Overall, Reich said that the Dodd bill failed to change the fundamental character of the banking system, imposing, instead, regulations that can be easily bypassed. He cited three specific flaws in the bill: It failed to deal with the "too big to fail" problem, by allowing the banks to remain exactly thattoo big to fail. Second, the bill failed to impose Glass-Steagall standards for breaking off commercial banking functions from the rest. And third, the bill failed to shut down the derivatives trade, on the specious claim that derivatives are a necessary instrument for the banks.
Reich, in contrast, argued that the banks are desperate to retain their highly profitable derivatives operations, and want to have the guarantees that, ultimately, taxpayers will foot the bill if another derivatives blowout occurs.
Ultimately, Reich concluded that Obama was just too big a coward to directly take on Wall Street and the banks, which would have been required if he was willing to actually change the structure of the banking business.